Back to NDAA Contents

TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Public Law 108-136

House Conference Report 108-354

SEC. 812. ASSESSMENT OF UNITED STATES DEFENSE INDUSTRIAL BASE CAPABILITIES.

(a) ASSESSMENT PROGRAM- (1) The Secretary of Defense shall establish a program to assess--

(A) the degree to which the United States is dependent on foreign sources of supply; and

(B) the capabilities of the United States defense industrial base to produce military systems necessary to support the national security objectives set forth in section 2501 of title 10, United States Code.

(2) For purposes of the assessment program, the Secretary shall use existing data, as required under subsection (b), and submit an annual report, as required under subsection (c).

(b) USE OF EXISTING DATA- (1) At a minimum, with respect to each prime contract with a value greater than $25,000 for the procurement of defense items and components, the following information from existing sources shall be used for purposes of the assessment program:

(A) Whether the contractor is a United States or foreign contractor.

(B) The principal place of business of the contractor and the principal place of performance of the contract.

(C) Whether the contract was awarded on a sole source basis or after receipt of competitive offers.

(D) The dollar value of the contract.

(2) The Federal Procurement Data System described in section 6(d)(4)(A) of the Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4)(A)), or any successor system, shall collect from contracts described in paragraph (1) the information specified in that paragraph.

(3) Information obtained in the implementation of this section is subject to the same limitations on disclosure, and penalties for violation of such limitations, as is provided under section 2507 of title 10, United States Code. Such information also shall be exempt from release under section 552 of title 5, United States Code.

(4) For purposes of meeting the requirements set forth in this section, the Secretary of Defense may not require the provision of information beyond the information that is currently provided to the Department of Defense through existing data collection systems by non-Federal entities with respect to contracts and subcontracts with the Department of Defense or any military department.

(c) ANNUAL REPORT- (1) Not later than February 1 of each year, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the assessment program covering the preceding fiscal year. The first report under this subsection shall cover fiscal year 2004 and shall be submitted to the Committees no later than February 1, 2005.

(2)(A) The report shall include the following with respect to contracts described in subsection (b):

(i) The total number and value of such contracts awarded by the Department of Defense.

(ii) The total number and value of such contracts awarded on a sole source basis.

(iii) The total number and value of contracts described in clause (ii) awarded to foreign contractors, summarized by country.

(iv) The total number and value of contracts awarded to foreign contractors through competitive procedures, summarized by country.

(B) The report also shall include--

(i) the status of the matters described in subparagraphs (A) and (B) of subsection (a)(1);

(ii) the status of implementation of successor procurement data management systems; and

(iii) such other matters as the Secretary considers appropriate.

The House bill contained a provision (sec. 811) that would direct the Secretary of Defense and the secretaries of each military department to establish a program to assess the ability of the United States industrial base to produce military systems necessary to support national security requirements.

The Senate amendment contained no similar provision.

The Senate recedes with an amendment that would modify the provision's reporting requirements.

House Report 108-106

SECTION 811--ASSESSMENT OF UNITED STATES DEFENSE INDUSTRIAL BASE CAPABILITIES

This section would direct the Secretary of Defense and the secretaries of each military department to establish a program to assess the ability of the United States industrial base to produce military systems necessary to support national security requirements.

This section would also require the Secretary of Defense and the Secretary of each military service to designate a person with the authority and responsibility to maintain an awareness of the degree to which the United States is dependent on foreign sources for military products, and pursue initiatives to bolster United States industrial base capabilities.

This section would further require the Secretary of Defense to collect data with respect to the procurement of covered military systems. The data collected would include information about the critical item or items included in that system, whether the items in question are from domestic or foreign sources, the identification of foreign contractors and the reason for the selection of that contractor, and the location of work to be completed by a U.S. contractor outside the United States. Based on this data collection, the Secretary of Defense would submit an assessment of his findings to the Senate Committee on Armed Services and the House Committee on Armed Services. This report would be required every two years, with the first report due on November 1, 2004, covering the fiscal years 2002 and 2003. This first report would provide critical baseline data for understanding the current strengths and vulnerabilities of the defense industrial base and for measuring the impact of initiatives undertaken through other sections in this subtitle.

The committee is concerned that the U.S. industrial base is becoming more dependent on foreign sources and that there are fewer indigenous capabilities available for the design and fabrication of critical components, systems, and materials used in military systems. The committee is aware that the U.S. needs to maintain sovereign capabilities to design, develop, test, integrate, and manufacture military systems in the quality and quantity necessary to support war time requirements.