Letter to President Joseph R. Biden, Jr., The White House (February 5, 2021)

Summary

A letter dated February 5, 2021, to President Joseph R. Biden, Jr., whose signature block names Nydia M. Velázquez, Chairwoman, House Committee on Small Business, and Kweisi Mfume, Chairman, Subcommittee on Contracting and Infrastructure. The letter expresses the importance of including small businesses, specifically minority-owned small businesses, in any effort to leverage the Defense Production Act (DPA) to respond to the COVID-19 pandemic. It refers to the National Strategy for the COVID-19 Response and Pandemic Preparedness announced on January 21, 2021, and asks the President to exercise the small business preferences granted under the DPA. It states that from January 2020 through December 31 2020, the number of open small businesses decreased by 29.7%.

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February 5, 2021


President Joseph R. Biden, Jr.
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Biden,

Thank you for your principled leadership and for working to heal and unify the nation.

We write today to express the importance of including small businesses, specifically minority-owned small businesses,
in any effort to leverage the Defense Production Act (DPA) to respond to the COVID-19 pandemic.

On January 21, 2021, you announced the “National Strategy for the COVID-19 Response and Pandemic
Preparedness.”1 A focus of the National Strategy is to substantially increase production of critical medical supplies,
including testing supplies, vaccination supplies, and personal protective equipment (PPE), by leveraging the DPA.
Along with the National Strategy, you issued the “Executive Order on a Sustainable Public Health Supply Chain,” 2
which directs certain executive departments and agencies to identify shortfalls of critical COVID-19 related medical
supplies and to use “all available legal authorities, including the Defense Production Act, to fill those shortfalls as soon
as practicable by acquiring additional stockpiles, improving distribution systems, building market capacity,
or expanding the industrial base.”3
We commend you for the comprehensive National Strategy and the corresponding Executive Order. The previous
administration’s failure to consistently exercise its authority under the DPA remains a mystery to many of us.

With that said, we write to express our clear desire to have DPA powers, particularly those seeking to expand
production capacity and supply under Title III, used with large and small businesses alike. Specifically, we ask you to
exercise the small business preferences granted under the DPA, especially with minority-owned small businesses
which have been extremely impacted by the pandemic. These powers are found in various sections of the DPA
including in sections 108 and 701, 50 U.S.C. 4518; 4551. In particular, Section 701 of the DPA notes “small business
concerns shall be given the maximum practicable opportunity to participate as contractors, and subcontractors at
various tiers, in all programs to maintain and strengthen the Nation’s industrial base and technology base undertaken
pursuant to this Act.”4


1
  President Joseph R. Biden, Jr., National Strategy for the COVID-19 Response and Pandemic Preparedness, (Jan. 2021), available at:
https://www.whitehouse.gov/wp-content/uploads/2021/01/National-Strategy-for-the-COVID-19-Response-and-Pandemic-
Preparedness.pdf
2
  Exec. Order No. 14001, 86 Fed. Reg. 7219 (2021)
3
  Id.
4
  50 U.S.C. 4551
As you know, small businesses are bearing the brunt of the COVID-19 pandemic in many respects. From January 2020
through December 31 2020, the number of open small businesses decreased by 29.7%. 5 Many have gone through
severe financial hardship, with half of small businesses entering the COVID-19 crisis only with enough cash on hand
to cover less than 15 days of operations without revenue. 6

Minority-owned small businesses have been disproportionately affected by the pandemic. A National Bureau of
Economic Research study found that, during the first two months of the pandemic, 41% of African American Owned
Businesses and 32% of Hispanic-owned small businesses were forced to close their doors, compared to 22% of small
businesses overall. 7

Small businesses are resilient and proven innovators. Faced with adversity, several have even pivoted to manufacturing
medical supplies, including PPE, in order to fill the gaps and retain their workforce. 8 They have stepped up to the
challenge when our country needed it the most and are ready to stand with the Administration in the fight against
COVID-19.
Ensuring small businesses are part of any efforts to leverage the DPA against COVID-19 will serve to fully replenish
our stockpiles while strengthening our industrial base and supply chain. Moreover, it will ensure diversity in the
industrial base and supply chain for medical supplies, allowing it to remain nimble. Finally, it will pave the way to
address some of the small business inequities that have been exacerbated by the pandemic.

We remain available to assist the Administration in every way possible. Thank you for your time and attention to this
matter.


Sincerely,




________________________                                            __________________________
Nydia M. Velázquez                                                  Kweisi Mfume
Chairwoman                                                          Chairman
House Committee on Small Business                                   Subcommittee on Contracting and Infrastructure




5 Opportunity Insights, The Opportunity Insights Economic Tracker: Supporting the Recovery from Covid-19, available at:
https://tracktherecovery.org/
6
  Board of Governors of the Federal Reserve System, Monetary Policy Report, (Jun. 2020), available at:
https://www.federalreserve.gov/monetarypolicy/files/20200612_mprfullreport.pdf
7
  Robert W. Fairlie, National Bureau of Economic Research, The Impact of COVID-19 on Small Business Owners: The First Three
Months after Social-Distancing Restrictions, (Working Paper, Revised Aug. 2020), available at: http://www.nber.org/papers/w27462
8
  Jesse Noyes, Workest, There’s a shortage of PPE. These Small Businesses Pivoted to Fill the Gap (Apr 2020), available at:
https://www.zenefits.com/workest/small-business-shortage-ppe-choices-and-solutions/


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