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'Buy American' dispute stalls delivery of 1,000 military trucks

Champion of restrictions says the Army is not interpreting new limits on metals from foreign suppliers correctly, and could get a temporary waiver.

House Armed Services ranking member Duncan Hunter, R-Calif., is taking the Army to task over 1,000 new military trucks that are collecting dust at a manufacturing plant in Sealy, Texas, even though they are urgently needed by stateside Army units.

The Army cannot take delivery of the trucks because their engines and transmissions contain metals from foreign suppliers -- a violation of restrictions pushed by Hunter and enacted in the fiscal 2007 defense authorization bill mandating that all "specialty metals" in U.S. defense hardware, such as steel and titanium, come from domestic sources.

Hunter, a longtime champion of "Buy American" laws, has chastised the Army for not taking advantage of waivers allowed by the legislation that would get the much-needed FMTV trucks -- military parlance for Family of Medium Tactical Vehicles -- to soldiers quickly.

Many of the trucks are tagged for the Army National Guard to replenish equipment stocks that have dwindled rapidly after six years of combat operations in Iraq and Afghanistan.

States have on average only 40 percent of their Army Guard equipment on hand for both training and disaster response. And the Guard has detailed a $24 billion equipment wish list over the next six years -- including $5.1 billion needed for more trucks.

As committee chairman last year, Hunter pushed for an even stricter specialty metal clause that drew a veto threat from the White House.

The language, said the White House in a Statement of Administration Policy, "could jeopardize our military readiness" and "unnecessarily add red tape to the procurement process."

Hunter's provision got watered down during often tense House-Senate negotiations on the bill. The two chambers agreed to allow more leeway in granting waivers to contractors and provide a four-year grace period to comply with the new restrictions.

Now, nearly a year after enactment, the Army, according to Hunter, is not interpreting the law correctly.

"I understand that the contracting officer and the FMTV program manager may believe that they are simply complying with the law," Hunter wrote in a letter Monday to Army Secretary Pete Geren.

"Nevertheless, I want to express my strong dismay that the Army has allowed this situation to develop, with every additional day of inaction worsening the problem, and my disagreement with the Army's apparent interpretation of the law."

To get the trucks off the lot at the BAE Systems' production plant in Sealy, the Army has several options at its disposal.

Geren could, for instance, circumvent a months-long bureaucratic process and quickly seek a limited, one-time waiver for the noncompliant parts that is restricted to a fixed period of time or a fixed number of vehicles.

"My intent has always been to ensure that the military has the material it needs when it needs it, which is why I believe we must preserve domestic access to certain specialty metals and technologies," Hunter wrote. "This is also why I believe that an interpretation of the specialty metals statute which delays delivery of war-time equipment is the very antithesis of congressional interest."

An Army official said this week that the service is processing waiver requests, which ultimately need approval from the office of the secretary of Defense. The service hopes to resolve the issue by Oct. 15, the official said.

The service is "expediting the processing of waivers" for both the transmission and engine and is looking into other options to speed the process, an Army spokesman said.

A spokesman for BAE Systems, the lead contractor on the program, likewise said company officials are "working with our customer and supplier to resolve the issue as quickly as possible." He declined to provide any additional details. Caterpillar Inc. makes the engines, while Allison Transmission Inc. produces the transmissions.

As the issue percolates, even those in the U.S. metal industry, which pushed last year for the stricter House language, do not want to see the new law adversely affect the military's already lagging readiness rates.

"The specialty metals industry fully supports a one-time waiver to get those fielded to troops who need them," said Jeff Green, a former House Armed Services staffer who now runs a lobbying firm that represents several small defense contractors, including metal producers. "Nobody, especially in the specialty metals industry, wants to see those held up."

If the matter is not resolved quickly, the foreign materials in the transmissions and engines could have a wider impact.

According to the information paper, the military cannot receive 2,198 FMTVs now under contract and BAE Systems cannot bid for any future FMTV work until the issue is settled.