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

Subtitle G — Governmentwide Acquisition Improvements

DHNDAA Section

House Armed Services Report 110-652

SEC. 886. REVIEW OF IMPACT OF COVERED SUBSIDIES ON ACQUISITION OF KC-45 AIRCRAFT.

(a) Review of Covered Subsidies Required- The Secretary of Defense, not later than 10 days after a ruling by the World Trade Organization that the United States, the European Union, or any political entity within the United States or the European Union, has provided a covered subsidy to a manufacturer of large commercial aircraft, shall begin a review, as described in subsection (b), of the impact of such covered subsidy on the source selection for the KC-45 Aerial Refueling Aircraft Program.

(b) Performance of the Review- In performing the review required by subsection (a), the Secretary of Defense shall consult with experts within the Department of Defense, the Office of Management and Budget, the Office of the United States Trade Representative, and other agencies and offices of the Federal Government, and with such other experts outside the Government as the Secretary considers appropriate, on the potential impact of a covered subsidy on the source selection process for the KC-45 Aerial Refueling Aircraft Program.

(c) Completion of Review- The Secretary of Defense shall complete the review required by subsection (a) not later than 90 days after the World Trade Organization has completed ruling on all cases involving the allegation of a covered subsidy provided to a manufacturer of large commercial aircraft pending at the World Trade Organization as of the date of the enactment of this Act.

(d) Report on Review- Not later than 30 days after the completion of the review required by subsection (a), the Secretary of Defense shall provide a report to the congressional defense committees on the findings of the review, together with any recommendations the Secretary considers appropriate.

(e) Definitions- In this section:

(1) The term `covered subsidy' means a subsidy found to constitute a violation of the Agreement on Subsidies and Countervailing Measures.

(2) The term `Agreement on Subsidies and Countervailing Measures' means the agreement described in section 101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(12)).

(3) The term `source selection', with respect to a program of the Department of Defense, means the selection, through the use of competitive procedures or such other procurement procedures as may be applicable, of a contractor to perform a contract to carry out the program.

This section would require the Secretary of the Air Force, within 10 days after a ruling by the World Trade Organization that the United States, the European Union, or both have provided an illegal subsidy to a manufacturer of large commercial aircraft, to begin a review on the impact of the illegal subsidy on the source selection for the KC-45 aerial refueling aircraft program. This section would require that the review include an opportunity for public comment on the effect of illegal subsidies on the program, consultation with experts within the federal government on the effect of illegal subsidies, and consultation with each of the offerors in the source selection process. This section would require that the review be completed within 90 days of a final ruling by the World Trade Organization on all illegal subsidy cases involving large commercial aircraft that are pending as of the date of enactment of this Act. This section would further require the Secretary of the Air Force to determine whether the illegal subsidy had a material impact on the source selection process sufficient to bring its fairness into question, and upon making such a determination, to take such measures as are necessary and appropriate to ensure that the effect of the illegal subsidy is removed and the source selection process is fair to all offerors. This section would define an illegal subsidy as a violation of the Agreement on Subsidies and Countervailing Measures of the Uruguay Round of the General Agreement on Tariffs and Trade and would include subsidies provided by any political subdivision of the United States or any member government, subcentral government, or combination of member governments of the European Union.