The House of Representatives in late July passed stopgap legislation
that would reauthorize the Export Administration Act through November
20. The act, Public Law 96-72, expired on August 20.
The measure now moves to the Senate, where Sen. Michael B. Enzi,
R-Wyo., opposes a short-term reauthorization. Enzi—cosponsor
of S.149, which would extend the Export Administration through 2004—argues
that the expired act needs a significant overhaul before it is renewed.
S.149 would do just that, he said. The Senate is expected to take
up his bill in September.
On August 1, the House International Relations Committee approved
a revision of the act that would strengthen restrictions on so-called
dual-use technologies, which have both military and commercial use.
Critics of the bill contend that commercial interests are undermined
by the emphasis placed on national security. The administration
supports the long-term renewal of the Export Administration Act
and has urged Congress to do so. Several members of Congress, however,
have expressed concern that the bill would allow the export of technology
that could be used by other nations to develop weapons.
TRAC Update
During floor debate in late July on the Treasury-Postal Appropriations
Act (H.R. 2590), Rep. Albert Wynn, D-Md., offered an amendment to
prohibit funds for any outsourcing activities unless there is a
full public-private competition under Office of Management and Budget
circular A-76. The amendment was defeated by voice vote.
Wynn—sponsor of H.R. 721, the Truthfulness, Responsibility
and Accountability in Contracting (TRAC) Act of 2001—has suggested
that the federal government is not saving money or receiving the
best possible value by contracting out. His legislation would require
all service contracts to undergo public-private competitions, as
well as the implementation of a centralized reporting and cost-accounting
system. The TRAC Act has nearly 200 cosponsors.
Sen. Richard Durbin, D-Ill., who has introduced similar legislation
in the Senate (S.1152), is expected to offer his bill as an amendment
to the fiscal year 2002 defense authorization measure when it comes
to the floor later this month. Durbin’s bill also would require
federal agencies to review all current service contracts signed
since 1980, in which federal employees had performed a service,
and to determine if further public-private competition is necessary.
S.1152 has 18 cosponsors.
Before the August congressional recess, the House Armed Services
Committee passed a TRAC-type amendment to its version of the fiscal
year 2002 defense authorization bill. The amendment offered by Rep.
Neil Abercrombie, D-HI, would prohibit Defense Department outsourcing
unless at least 10 percent cost savings are achieved through A-76
cost comparisons.
Opponents of the legislation, including NDIA, said that the TRAC
Act poses a threat to national security and would result in significant
delays in the acquisition process, thus driving up program and services
cost. If passed, the amendment would prevent the federal government
from capitalizing on the private sector’s capabilities and
its advanced technologies, as well as harm small business, according
to opponents.
BRAC Debated
Defense Secretary Donald Rumsfeld told the House Armed Services
Committee that additional rounds of base realignments and closures
(BRAC) would allow his department to improve its facilities dramatically.
The hearing, in late June, was one of several held by the armed
services committees to consider amending the 2002 defense budget.
The 2001 budget allows the Defense Department to replace its facilities
at the rate of once every 192 years, Rumsfeld testified. The department
would like to cut that time rate to 67 years, he said, noting that
the industry standard is 57 years.
To achieve that target rate would require an additional $7 billion
for the next nine years, Rumsfeld said. The administration’s
proposed budget amendment for 2002 and a new round of BRAC to reduce
under-used facilities by approximately 25 percent would lower the
replacement rate to 76 years, he said.
Chairman of the Joint Chiefs of Staff Gen. Henry R. Shelton also
testifying before the House Armed Services Committee, said that
an additional round of BRAC could save up to $3 billion per year.
Some members of Congress have criticized the BRAC process, arguing
that the Pentagon cannot point to significant savings from previous
closures. The process, they say, also requires significant up-front
investments that produce minimal long-term returns.
Organizations such as NDIA and Business Executives for National
Security (BENS) have formed a coalition in support of additional
base closures. The coalition insists that savings from base closures
and adjustments are needed to help fund modernization and transformation.
Maintaining unnecessary infrastructure comes at the expense of every
other defense account, including research and development, readiness
and procurement, according to the coalition.
Reining In Federal Prisons
In last month’s issue, we reported on the status of an NDIA
member company forced to lay off employees due to Federal Prison
Industry (FPI) expansion in the electronic component recycling industry.
On behalf of the member company, NDIA has begun a dialogue with
members of the House of Representatives, the Senate and the contracting
agency in an effort to mediate a solution.
NDIA, a strong supporter of H.R. 1577, legislation that would dramatically
overhaul the mandate of FPI, is committed to preventing FPI from
hurting the operations of defense contractors. Small businesses
are particularly vulnerable to FPI, NDIA said. Unlike large corporations,
small businesses often operate on a handful of government contracts.
The loss of one or two of those jobs could force a small business
into bankruptcy. FPI’s mandatory-source status allows it to
obtain federal contracts without entering into a competitive-bid
process.
Typical of many small businesses currently under contract with
the federal government, NDIA’s member company was launched
with loans from the Small Business Administration. NDIA has also
learned that a significant percentage of the company’s employees
are minorities. NDIA will continue to monitor the situation and
work for an amicable solution for all parties.