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When the Senate resumes debate on the fiscal 2005 defense authorization bill next week, several members are expected to offer amendments to so-called "Buy American" provisions in the bill.

Among approximately 160 amendments filed earlier this week is one by Sen. Christopher Dodd, D-Conn., to discourage the Pentagon from contracting with foreign companies whose governments demand hefty industrial compensation packages when purchasing U.S. weapons and equipment.

Dodd's amendment mirrors language in the House version of the bill that the Bush administration strongly opposes. Including either in the final version of the bill could draw a presidential veto.

In a May 28 letter to Senate Armed Services Committee Chairman John Warner, R-Va., Michael Wynne, the Pentagon's acting acquisition chief, said nearly all U.S. defense trading partners impose some sort of offset requirement for defense purchases outside their country.

Wynne said language drafted by House Armed Services Committee Chairman Duncan Hunter, R-Calif., would harm U.S. coalition capabilities and force the department to qualify alternative suppliers, if available, for follow-on contracts. This could lead to higher costs, less capability, delayed programs and the "scuttling" of international cooperative programs such as the Joint Strike Fighter, Wynne wrote.

But Hunter and other "Buy American" enthusiasts say the Pentagon's reliance on foreign suppliers could jeopardize national security by allowing critical industrial-base capabilities to be outsourced overseas.

A second amendment, filed by Sen. Mark Dayton, D-Minn., would strike two provisions in the bill to enhance the Pentagon's ability to deal with foreign sources of supply.

Dayton's targets, included in the Senate version of the bill by Sen. John McCain, R-Ariz., and backed by Warner, would allow the Defense secretary to waive domestic source or content requirements for 21 countries that maintain memoranda of understanding supporting reciprocal defense procurement agreements with the United States. They also mandate that domestic source requirements for defense equipment and services be consistent with U.S. trade obligations.

But even if Dayton's "Buy American" measure gains approval from the full Senate, McCain has some industrial-base amendments of his own. One would allow the Defense secretary to waive most domestic source restrictions for the 53 countries supporting U.S. efforts in Operation Iraqi Freedom and Operation Enduring Freedom.

A second amendment, similar to a provision in last year's authorizing legislation, allows the secretary to waive domestic source requirements for the six countries that hold "Declaration of Principles" agreements with the United States. And a third amendment would actually repeal several industrial-base provisions Hunter included in last year's defense authorization bill.

McCain, Warner, elements of the Bush administration and numerous U.S. allies strongly opposed the provisions, which called for a Pentagon assessment of the U.S. defense industrial-base capabilities, a database of foreign and domestic suppliers of military essential systems, a fund to encourage reconstitution of U.S. industrial base capabilities and a section that requires the Pentagon to identify unreliable foreign sources of supply.

COMMENTS

• Congress get your heads out of the sand. Defense materials and services contracts only should be awarded to operations located in the USA (ownership is not the issue!). If a foreign firms wants a US defense contract (or any other government contract as we see with the $10billion Accenture award) they should operate in the continental USA. If the award is to a foreign firm the government should withhold all income tax and social security and medicare taxes on the contract. We do not want buy American - we want build it in America and pay American taxes! Otherwise do not bid on contracts for defense or any other government RFP! tax payer Posted June 10, 2004 6:22 AM