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 NDIA comments on Buy American provisions 

Buy America Provisions Included in the FY2004 National Defense Authorization Act—A Defense Industry Train Wreck Looking for a Place to Happen

Buy American Provisions Update (November 12, 2003)

The House and Senate completed their negotiations on the National Defense Authorization Bill for fiscal year 2004, (HR 1588) on November 6. The House approved the conference report on November 7th by a vote of 362 to 40. The Senate approved the report on November 12th by a vote of 95 to 3. The bill now goes to the President for his signature and enactment into law.

The Buy America provisions as initially proposed in HR 1588 have been substantially changed—primarily due to efforts of multiple defense trade associations, including significant efforts by the member of NDIA, the Administration, and various foreign nations—including the European Union. What remains in the final version of the bill are several provisions that provide the foundations for Congress and industry to review the basic concerns intended in the original legislation.

The following is a brief summary of what remains in the bill. Anything contained in the original bill or other revisions not mentioned below, has been deleted:

Section 811: This makes anything in the entire Buy American section inapplicable if it is found to be inconsistent with U.S. obligations under current or future trade agreements.

Section 812: Requires DOD to assess US defense industrial base capabilities, but limits the assessment to currently existing data available to DOD, requirement for contractors or sub-contractors to provide data.

Section 813: Requires the identification of essential items, but limits DOD to the use of existing information currently provided to DOD.

Section 814: Establishes a Defense Industrial Base Capabilities Fund, but adds no funding. To be used for the purposes of enhancing or reconstituting U.S. industrial capabilities to produce military essential items.

Section 821: Requires DOD to keep a list of unreliable foreign sources, as of the date of enactment of the bill, of defense items, and may not purchase anything from any country on the list. An unreliable source would be a foreign country that has restricted the provision or sale of military goods or services to the U.S. due to U.S. counter-terrorism or military operations. The Secretary of Defense could remove a country from the list if it is in the interest of national security.

Section 822: Incentive program for major defense items contractors that use U.S. machine tools. DOD to provide consideration in source selection for any contractor agreeing to purchase and use U.S. machine tools and other capital equipment for use on the major defense program.

Section 823: Requires DOD to publish in the Federal Register information concerning the U.S. machine tool incentive program.

Section 824: Requires DOD to study the adequacy of the industrial base to meet defense requirements for Beryllium.

Section 826: Provides exceptions to the Berry Amendment for contingency operations and other urgent situations.

Section 827: Excludes from the Berry Amendment the procurement of waste and byproducts of cotton and wool fiber for use in the production of propellants and explosives.

Section 828: Provides an additional exemption from the Buy American restrictions for ball and roller bearings contained in systems and components supplied by our allies.

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