Invoking Title III of the Defense Production Act

With America’s adversaries becoming increasingly aggressive on the world stage, U.S. arms sales have hit an all-time high and the U.S. defense industry is struggling to keep up. To meet international demand for U.S. arms, the federal government has made efforts to expand U.S. defense industrial capacity by invoking Title III of the Defense Production Act (DPA) on multiple occasions. However, because the Pentagon’s DPA Investment Office—the office in charge of implementing Title III—is understaffed, it consistently struggles to spend even half of its congressionally allotted budget. To ensure the DPA’s effectiveness, the U.S. government should expand the DPA Investment Office by hiring more staff with various industrial expertise.

U.S. foreign military sales (FMS) take several years to complete—time that partner and ally countries like Ukraine, Israel, and Taiwan cannot afford. Taiwan for example, which made significant weapons purchases in 2019, is only now starting to see its first deliveries that will not be completed until 2026 at best. To address the production lag, the federal government has invoked Title III of the DPA multiple times to expand domestic production of certain mechanical parts like aviation components and critical raw materials like rare earths.

However, limited staffing and expertise at the Pentagon’s DPA Investment Office makes implementing Title III authorities and fully spending its budget difficult.

In a May 15^th speech at the Hudson Institute, Senator Tom Cotton (R-AR) noted that the DPA Investment Office consistently fails to spend even half of its budget. Indeed, the federal government has so far only obliged 24.8 percent of the DPA’s $2 billion budget this year. $981 million of this budget was carried over from last year.

According to Senator Cotton, the Pentagon’s DPA Investment Office currently has fewer than five employees—hardly enough manpower to efficiently implement its budget. Jeffrey Nadaner, the former Deputy Assistant Secretary of Defense for Industrial Policy, also acknowledged in an op-ed that the office will need to increase its staffing to meet the growing number of DPA applications and projects.

Compounding this, Title III applications cover various aspects of the defense industrial base—aspects for which the DPA Investment Office may not have staff with sufficient expertise. This includes everything from shipyards to ammunition plants and all the various parts and raw materials that go into creating their products. Within the past year alone, the DPA Investment Office has issued agreements to help expand production of items like titanium powder, turbine engines, circuit boards, and ball bearings. As demand for defense products continues to increase, the list of items that will benefit from Title III assistance will become even more diverse.

To ensure the DPA Investment Office has the expertise necessary to effectively implement Title III of the DPA, it will need to hire more industry-specific experts from the private sector. These would include experts from fields like mineral processing, shipbuilding, and manufacturing. Doing so would allow the DPA Investment Office to not only issue contracts more efficiently, but more strategically.

Hiring more staff may not even be an expensive fix. As Nadaner further noted, as few as twelve additional staff could make a significant difference—a small drop in the bucket compared to other major departments at the Pentagon that employ hundreds to thousands of civil servants. To expand the office, Congress should include funding and a requirement for the DPA Investment Office to increase its staffing in the 2025 DPA reauthorization bill.

Another option the federal government has is hiring contractors from various defense industry sectors. Unlike civil servants, contractors are not subject to civil service protections and are easier to bring in and out when needed. This would allow the DPA Investment Office to become more versatile in an era where there is an ever-growing need for U.S. defense production.

If the U.S. government is to sufficiently arm its partners and allies, it will need to expand its defense industrial base. One critical step in doing this is strategically implementing Title III of the Defense Production Act. However, to do that the federal government will first need to expand the Defense Department’s DPA Investment Office by authorizing the office to hire more staff and contractors in the 2025 DPA reauthorization bill.

Jonathan Harman is a Summer Fellow at the Global Taiwan Institute and student at Brigham Young University. He was previously an intern at the Heritage Foundation’s Center for National Defense.