U.S. Defense Priorities and Allocations System (DPAS)

The U.S. Defense Priorities and Allocations System (DPAS) is a regulatory system administered by the U.S. Department of Commerce. It implements the priorities and allocations authority of Title I of the Defense Production Act of 1950, so that contracts supporting approved national defense, emergency preparedness and energy programs receive preferential treatment across the U.S. industrial supply chain. The rules are codified at 15 CFR part 700. BIS describes the program as the vehicle for that authority.

DPAS is not a Canadian program, but it reaches Canadian suppliers through cross-border defence trade. Canadian programs can use DPAS priority ratings when buying in the United States, and Public Services and Procurement Canada (PSPC) coordinates with U.S. authorities on how that works. The CanadaBuys page on U.S. defense-related procurement is the Government of Canada starting point for this area.

Legal basis and administration of DPAS

Executive Order 13603 delegates the priorities and allocations authority for industrial resources to the Department of Commerce. Commerce exercises it through the Bureau of Industry and Security (BIS), and specifically its Office of Strategic Industries and Economic Security. The text of 15 CFR part 700 sets out the rules, and section 700.1 states that the part implements DPAS under BIS administration.

A program must first be determined, in writing, to be necessary or appropriate to promote the national defense. That determination comes from the Secretary of Defense, Energy or Homeland Security. Commerce then delegates authority to place ratings to agencies such as the Department of Defense, Department of Energy, Department of Homeland Security and Health and Human Services. U.S. federal contracting rules support this in FAR Subpart 11.6, which requires contracting officers to include DPAS notices and clauses in rated solicitations and contracts.

DO and DX ratings and the elements of a rated order

A priority rating has two parts: a rating symbol, either DO or DX, and a program identification symbol such as A1 for aircraft or A3 for ships. All DO rated orders have equal priority with each other and take precedence over unrated orders. DX rated orders rank above both DO rated orders and unrated orders. The program symbol identifies the program but does not set the priority level.

A rated order is a prime contract, subcontract or purchase order issued in support of an approved program under part 700. According to the BIS DPAS FAQ, every rated order must carry four elements:

• a priority rating
• required delivery dates
• an authorized written or digital signature
• a certification statement that the order is placed under priority rating authority

Without these elements, the order is not a DPAS rated order. Priority rating authority cannot be self-assigned. It requires written authorization from Commerce or BIS.

Acceptance deadlines and flowdown to subcontractors

Suppliers must accept or reject a rated order in writing. The Defense Contract Management Agency gives the deadlines as 15 working days for DO rated orders and 10 days for DX rated orders. A rejection must state the reasons and any alternative delivery date the supplier can offer. Accepted orders must be scheduled ahead of unrated orders so that delivery dates are met. Where conflicts among rated orders of equal priority cannot be resolved, the supplier should request special priorities assistance from Commerce or the relevant delegate agency.

Recipients of rated orders must also extend the rating to their own U.S. subcontracts and purchase orders for items needed to fill the order. This is called flowdown. It carries the priority down to the lowest-tier vendor. DoD guidance holds that when ratings are properly applied and extended, the system is largely self-executing.

How DPAS applies between Canada and the United States

DPAS applies to entities physically located in the United States, regardless of ownership. It has no legal standing outside U.S. territory. A Canadian company or a foreign subsidiary located outside the United States is not subject to the regulation and cannot be compelled by it. Ratings therefore cannot be used to buy items from suppliers in Canada. A U.S. company that needs help obtaining items in Canada submits Form BIS-999 to Commerce for special priorities assistance, and Commerce coordinates with Canadian authorities.

DoD Manual 4400.01-M, which devotes a subsection to priority rating authority between the United States and Canada, sets out the cooperative arrangement. DoD components may not place rated orders with Canadian suppliers. They tell the supplier the items are for U.S. defence purposes and advise it to contact PSPC (formerly PWGSC) for authority to place rated orders in the United States. Commerce authorizes PSPC to use ratings for three categories of Canadian programs: D1 for military programs, D2 for production and construction, and D3 for the atomic energy program. PSPC's role rests on the Defence Production Act of Canada, described in the department's legal authorities documentation.

What DPAS means for a supplier bidding on Canadian public contracts

If you bid on Canadian defence work that depends on U.S. inputs, ask the contracting authority whether PSPC rating authority applies to your U.S. purchases. If your Canadian operation sells into a U.S. defence program, expect the buyer to direct you to PSPC rather than issue a rated order to you directly. A subsidiary located in the United States must comply with DPAS, including the acceptance deadlines and flowdown. Check each rated order for the four required elements before you commit to a delivery date.