Part
B
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Defense Industrial Base
Expresses congressional findings for the essential need of a strong defense industrial base for the enahncement of U.S. national security.
Directs the Secretary to:
(1) provide overall policy guidance and direction to the military departments and the defense agencies on matters relating to the maintenance, expansion, and readiness of the defense industrial base of the United States;
(2) analyze the capabilities of the defense industrial base to fulfill requirements of the national defense strategy in time of peace or in time of war or national emergency;
(3) develop and direct the implementation of plans and programs that promote the ability of the defense industrial base to meet certain production and readiness requirements; and
(4) identify and plan for the procurement of items of supply that are suitable substitutes for military standards items of supply which are anticipated to be unavailable from existing sources in time of war or national emergency and which are commercially available from domestic sources.
Directs the Under Secretary to require that each defense acquisition program designated by the Under Secretary include a requirement for an analysis of the capability of the defense industrial base to develop, produce, maintain, and support the system to be acquired under such program.
Outlines factors to be considered as part of such analysis.
Provides that the Under Secretary shall be responsible for compiling and analyzing the data obtained from such analysis to ensure that:
(1) the capabilities of the defense industrial base to meet program requirements has been assessed by the military department or defense agency carrying out such program; and
(2) the capabilities of the defense industrial base to meet the aggregate requirements for all such programs has been assessed by the Office of the Secretary of Defense. Authorizes the Under Secretary to establish a defense industrial base office to be the principal office in DOD for the development of policies and plans regarding the conduct of programs for the improvement of the defense industrial base of the United States. Outlines action to be taken by the office in regard to the improvement and enhancement of the defense industrial base of the United States. Provides that the Under Secretary, during FY 1989, shall require each military department to initiate at least one analysis of the capability of the defense industrial base to develop, produce, maintain, and support systems to be acquired under acquisition programs carried out by such department.
Requires all such analyses to be completed no later than September 30, 1990.
Directs the Under Secretary, no later than February 1, 1991, to report to the defense committees on such analyses.
Prohibits DOD funds, during fiscal years 1989 through 1991, from being used to procure:
(1) piping valves for naval surface ships and submarines; and
(2) a certain Federal Supply class of machine tools that are not manufactured in the United States or Canada. Authorizes the Secretary to waive such prohibition if certain conditions exist.
Authorizes the renewal of such prohibition after FY 1991 if such restriction is determined to be in the national security interest.
Directs the Under Secretary, no later than March 15 annually, to report to the defense committees a plan for developing the 20 technologies considered by the Secretary and the Secretary of Energy to be the technologies most essential to develop in order to ensure the long-term qualitative superiority of U.S. weapon systems.
Requires both product and process technologies to be considered in selecting the technologies to be included in such plan.
Directs the Secretary, in the negotiation and renegotiation of memoranda of understanding between DOD and one or more foreign countries relating to defense research, development, or production of defense equipment, to:
(1) consider the effect of such memoranda on the defense industrial base of the United States; and
(2) regularly solicit information or recommendations from the Secretary of Commerce with respect to the effect on the U.S. industrial base of such memoranda of understanding.
Makes certain congressional findings with regard to DOD offset policy (the making of contracts with foreign firms where some or part of the work under such contract or investment under such contract must be performed by or invested in such foreign firm or foreign country).
Directs the President to establish a comprehensive policy with respect to contractual offset arrangements.
Prohibits any U.S. official from entering into a memorandum of understanding or other agreement with a foreign government that would require the transfer of U.S. defense technology to a foreign country or foreign firm in connection with a contract that is subject to an offset arrangement, if the implementation of such memorandum or arrangement would significantly and adversely affect the defense industrial base of the United States and would result in a substantial financial loss to a U.S. firm.
Waives such prohibition if such waiver will result in strengthening the national security of the United States and is so certified to the Congress by the Under Secretary. Requires any U.S. firm entering into a contract with a foreign firm subject to an offset arrangement exceeding $50,000,000 in value to notify the Secretary of the proposed sale.
Directs the President to enter into negotiations with foreign countries that have a policy of requiring an offset arrangement in connection with the purchase of defense equipment or supplies from the United States, pursuing an agreement to limit the effect of such arrangements on the defense industrial base of each such country.
Attempts to achieve, within two years after the enactment of this Act, an agreement limiting the adverse effects of such arrangements.
Directs the President to report to the Congress at least once each year for four years on the progress of such negotiations.
Directs the President, no later than November 15, 1988, to report to the defense committees on contractual offset arrangements required of U.S. firms for the supply of weapon systems to foreign countries or foreign firms.
Directs the President, no later than March 15, 1990, to report to the defense committees a discussion of appropriate actions to be taken by the United States with respect to purchases from U.S. firms by a foreign country when that country or firm requires an offset arrangement in favor of such country.
Requires that certain Federal regulations concerning the allowability of contractor costs shall provide that foreign selling costs shall be allowed to the extent that such costs are:
(1) allocable, reasonable, and not otherwise unallowable; and
(2) within dollar ceilings established in advance agreements negotiated between the Secretary and the contractor or subcontractor during the fiscal year covered by such arrangement.
Requires that certain Federal regulations concerning the allowability of contractor costs shall provide that foreign selling costs shall be allowed to the extent that such costs are:
(1) allocable, reasonable, and not otherwise unallowable;
(2) entered into after the Secretary determines that cost savings to the United States will result; and
(3) within dollar ceilings established in advance agreements negotiated between the Secretary and the contractor or subcontractor during the fiscal year covered by such arrangement.
Directs the Secretary to prescribe such regulations within 90 days after the enactment of this Act. Directs the Comptroller General and the Inspector General of DOD, within two years after this Act's enactment, to report to the defense committees on the appropriateness and effectiveness of such regulations.