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

Public Law 108-136

House Conference Report 108-354

SEC. 821. ELIMINATION OF UNRELIABLE SOURCES OF DEFENSE ITEMS AND COMPONENTS.

(a) IDENTIFICATION OF CERTAIN COUNTRIES- The Secretary of Defense, in coordination with the Secretary of State, shall identify and list foreign countries that restrict the provision or sale of military goods or services to the United States because of United States counterterrorism or military operations after the date of the enactment of this Act. The Secretary shall review and update the list as appropriate. The Secretary may remove a country from the list, if the Secretary determines that doing so would be in the interest of national defense.

(b) PROHIBITION ON PROCUREMENT OF ITEMS FROM IDENTIFIED COUNTRIES- The Secretary of Defense may not procure any items or components contained in military systems if the items or components, or the systems, are manufactured in any foreign country identified under subsection (a).

(c) WAIVER AUTHORITY- The Secretary of Defense may waive the limitation in subsection (b) if the Secretary determines in writing and notifies Congress that the Department of Defense's need for the item is of such an unusual and compelling urgency that the Department would be unable to meet national security objectives.

(d) EFFECTIVE DATE- (1) Subject to paragraph (2), subsection (b) applies to contracts in existence on the date of the enactment of this Act or entered into after such date.

(2) With respect to contracts in existence on the date of the enactment of this Act, the Secretary of Defense shall take such action as is necessary to ensure that such contracts are in compliance with subsection (b) not later than 24 months after such date.

The House bill contained a provision (sec. 823) that would require the Secretary of Defense to identify foreign countries that restricted the provision or sale of military goods and services to the United States because of the U.S. policy toward, or military operations in, Iraq after September 12, 2002 and prohibit the Secretary of Defense from procuring any items or components contained in military systems that were manufactured in the identified foreign countries. The Secretary could waive this requirement for an unusual and compelling urgency that would otherwise injure the United States.

The Senate amendment contained no similar provision.

The Senate recedes with an amendment that would require the Secretary of Defense in coordination with the Secretary of State to identify and list those countries that have restricted the provision or sale of military goods or services to the U.S. because of U.S. counter-terrorism or military operations after the date of enactment of this act and to provide for a process whereby the list can be periodically reviewed and countries can be removed from the list.

House Report 108-106

SECTION 823--ELIMINATION OF UNRELIABLE SOURCES OF DEFENSE ITEMS AND COMPONENTS

This section would identify foreign countries that restricted the provision or sale of military goods and services to the United States because of the U.S. policy toward, or military operations in, Iraq after September 12, 2002. On this date, President Bush addressed the United Nations Security Council and articulated the U.S. approach to dealing with the continued failure of Iraq to disarm itself of its weapons of mass destruction and to comply with 12 years of Security Council resolutions. This provision would prohibit the Secretary of Defense from procuring any items or components contained in military systems that are manufactured in these

countries. This provision would apply to all contracts in effect on the date of the enactment of this Act or entered into subsequently. This provision would, however, allow the Secretary 24 months to bring all contracts into compliance with this section. Finally, this section would provide the Secretary with the authority to waive this section if failure to do so would seriously injure the United States.

The committee notes that many countries stood with the United States in requiring the disarmament of Iraq and in acting to liberate the Iraqi people. Several other countries did not and chose to express their disagreement with U.S. policy by prohibiting the sale of military goods and services to the United States. The committee believes that U.S. defense funds should not be used to contract with companies from these countries, unless the need for the item from that source is of an unusual and compelling need that would harm our interests.