House-Passed DoD Bill Has Procurement Changes, Report Requirements
On May 26, 2011, the House passed H.R. 1540 to authorize appropriations1 for the Defense Department for fiscal year 2012. H.R. 1540 includes procurement provisions affecting certain Chinese companies, para-aramid fiber and yarn, fire resistant rayon fiber, tents, etc. In addition, the bill would require DoD to submit various reports on the Defense supply chain and U.S. manufacturing industry to Congress.
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(Although the House has passed H.R. 1540, it is not yet in effect. Generally, in order for a bill to be implemented, identical versions of that bill must be passed by both the House and Senate, and then the bill must be approved (enacted) by the President.)
Senate Committee Working on its Own Version
According to Congressional sources, the Senate Armed Services Committee was scheduled to hold a closed mark up of its own National Defense Authorization Act for FY 2012 on June 15-17, 2011.
Highlights of the trade-related provisions of H.R. 1540 include:
Procurement, Including Berry Amendment, Buy American Act
Communist Chinese Military Companies
The prohibition on the procurement of goods and services listed on the International Traffic in Arms Regulations’ munitions list from Communist Chinese military companies (10 USC 2302 note) would be amended by revising the (i) conditions under which the prohibition can be waived and (ii) definition of Communist Chinese military companies.
Para-Aramid Fiber and Yarn
The current authority of the Secretary of Defense to procure articles containing para-aramid fibers and yarns manufactured in certain foreign countries (under certain circumstances) would be eliminated. DoD would also be prohibited from issuing a solicitation requiring proposals submitted pursuant to such solicitation to include the use of para-aramid fibers and yarns.
Fire Resistant Rayon Fiber
The Secretary’s authority to waive the Berry Amendment (10 USC 2533a) and procure fire resistant rayon fiber for the production of uniforms from foreign sources (under certain circumstances) would be made permanent. (The current authority for this waiver is scheduled to expire January 1, 2015.)
Tents, Tarpaulins or Covers
The Berry Amendment would be amended to clarify that the domestic source requirement for tents, tarpaulins, or covers includes their materials and components.
Buy American Act Waiver List
10 USC Section 2501 note would be amended to expand the requirement for an itemized list of Buy American Act waivers (41 USC 10a et seq.) to include (i) an analysis of the domestic capacity to supply the articles, materials, or supplies; and (ii) an analysis of the reasons for an increase or decrease in the number of waivers granted.
Assessments, Reports
Supply Chain Risk Assessment
The Secretary would be required to perform a risk assessment of the supply chain for certain critical items, including an evaluation of the extent to which (i) the supply chain could be disrupted and (ii) the industrial base obtains such items from foreign sources. A report on the assessment would have to be submitted to Congress and assessed by the Government Accountability Office.
Outsourcing, Rare Earths Access
The Secretary would be required to submit to Congress a report on the manufacturing policy of the U.S., no later than 180 days after date of enactment, which includes an analysis of the factors leading to the increased outsourcing of manufacturing processes to foreign nations, and an analysis of the ability of the U.S. to access necessary raw materials for the defense industry, including rare earth minerals. In addition, the President would be required to report to Congress on the objectives of U.S. policy regarding the manufacturing industry of the U.S.
1H.R. 1540 is the National Defense Authorization Act for Fiscal Year 2012. Note that authorization legislation can establish, continue, or modify an agency or program for a fixed or indefinite period of time. It may also set forth the duties and functions of an agency or program, its organizational structure, and the responsibilities of agency or program officials. Authorizing legislation also authorizes the enactment of appropriations for an agency or program. However, separate appropriations legislation is needed to actually fund an agency and provide it with budget authority.
(See ITT’s Online Archives or 05/27/11 news, 11052729, for BP announcement of the passage of H.R. 1540 by the House.)
H.R. 1540 available here
H. Rept. 112-78 available here