Agency responsible for coordinating government purchases and wartime production.
As a result of the proliferation of economic agencies during World War II, the size of the federal bureaucracy nearly quadrupled. Frequent organizational changes and overlapping jurisdictional claims engendered numerous interagency conflicts. In January 1941, President Franklin D. Roosevelt established the Office of Production Management (OPM) to centralize direction of federal procurement programs and quasi-war production (that is, production taking place prior to the formal declaration of war). Under the executive order establishing the OPM, the armed services and the War Department cleared all contracts above $500,000 with the OPM’s Division of Purchases. The OPM also spread government procurement contracts as widely as possible to alleviate the hardships of the small businesses whose peacetime lines of production had been either curtailed or prohibited. The armed services promoted subcontracting of government procurement by primary contractors (mostly large manufacturers) to small businesses. For this purpose, the OPM created the Defense Contract Service in February 1941 and established field offices in the Federal Reserve banks. The perceived interference by civilian officers of the OPM in military procurement elicited frequent protests from the military. The OPM’s indirect involvement in government procurement programs in a supervisory capacity represented a model collaboration between the public and private sectors that contrasted with the model of the War Finance Committee, whose members (officials from the Department of the Treasury) worked directly with business and financial leaders in the sale of bonds.
In January 1942, about a month after the United States had formally entered World War II, Roosevelt issued Executive Order No. 9040, creating the War Production Board (WPB) to supersede the OPM. The WPB’s chair, Donald Nelson, received sweeping powers over the economic life of the nation—now on an official war footing—to convert and expand the peacetime economy to maximum wartime production.
