House-Passed Defense Bill Provides for Iran Sanctions, Military Apparel, Buy American, DoD Export Reform Study

Although the House has passed H.R. 5136, it is not yet in effect. Generally, in order for a bill to be implemented, identical versions of that bill must be passed by both the House and Senate, and then the bill must be approved (enacted) by the President.

The Senate’s FY 2011 National Defense Authorization Act (S. 3454) has been reported by the Senate Armed Services Committee, but has not been considered by the full Senate.

Highlights of the trade-related provisions in H.R. 5136 include:

Iran Sanctions

Contracts with entities engaged in commercial activitiy in Iran’s energy sector. The Defense Secretary would be prohibited from entering into any contract with an entity (or successor entity) that engages in commercial activity in the energy sector of Iran.

(An entity engages in commercial activity in the energy sector of Iran if the entity, when entering into a contract with the DoD for goods and services, fails to certify to the contracting officer that the entity does not engage in an activity for which sanctions may be imposed under 50 USC 1701 note).)

H.R. 5136 contains provisions for (i) the termination of a contract or debarment/suspension of an entity from DoD contracting eligibility for up to three years if a false certification is made, (ii) certification waivers, (iii) etc.

Clothing

Authority to procure uniforms of foreign fire resistant rayon fiber. Authority for the Defense Secretary to procure fire resistant rayon fiber for the production of uniforms that is manufactured in a foreign country under certain circumstances would be extended until January 1, 2021 (such authority is set to expire on January 28, 2013). H.R. 5136 would also prohibit DoD contract solicitations issued before January 1, 2021 from including a provision which requires the use of fire resistant rayon fiber.

Study on expansion of Berry Amendment to include “allowance” clothing. H.R. 5136 would require the Government Accountability Office to conduct a study on whether there is sufficient domestic production of items purchased under the DoD’s clothing allowance provision (37 USC Section 418) to adequately supply members of the Armed Forces. The Defense Secretary would be required to submit to specified congressional committees an evaluation of whether such items should be made subject to the Berry Amendment.

(The Berry Amendment, the DoD requirement to give purchasing preference to items made in the U.S., does not extend to apparel purchased by service members using a clothing allowance (for apparel items not furnished by the DoD).

See ITT’s Online Archives or 05/04/10 news, 10050430, for BP summary of H.R. 5013, a House-passed bill which would require the same study/evaluation of expanding the Berry Amendment.)

DoD Export Control Reform Study

Report on DoD plans for export control reform. Not later than 60 days after the date of the enactment, the Defense Secretary would be required to submit to specified congressional committees a report on the DoD’s plans to reform its export control system which includes:

• an assessment of the extent to which the plans to reform the export control system will (i) impact DoD’s Defense Technology Security Administration; (ii) affect the role of the DoD with respect to export control policy; and (iii) ensure greater protection and monitoring of key defense items and technologies; and
• a description of the plans of the DoD to implement Presidential Study Directive 8.

Domestic Sourcing, Buy American Act, Berry Amendment

Bids from U.S. sources for procurement of articles outside U.S. DoD would be required to solicit bids from U.S. sources when procuring articles, materials, or supplies for use outside of the U.S., except if the articles, materials, or supplies to be procured are (i) not mined, produced, or manufactured in the U.S. in sufficient and reasonably available quantities; (ii) needed on an urgent basis and not acquired on a regular basis; or (iii) perishable, or will otherwise degrade because of the time involved in shipping.

Additional information on Buy American Act waiver list. 10 USC Section 2501 note would be amended to expand the requirement for an itemized list of all waivers granted with respect to such articles, materials, or supplies under the Buy American Act (41 USC 10a et seq.), to include (i) an analysis of the domestic capacity to supply the articles, materials, or supplies; and (ii) an analysis of the reasons for an increase or decrease in the number of waivers granted from fiscal year to fiscal year.

Contractor compliance with Berry Amendment, Buy American Act. H.R. 5136 states that it is the sense of Congress that DoD should (1) ensure full contractor and subcontractor compliance with the Berry Amendment (10 USC 2533a) and the Buy American Act (41 USC 10a et seq.); and (2) not procure products made by manufacturers in the U.S. that violate labor standards as defined under the laws of the U.S.

Miscellaneous

Transportation of commercial cargo, etc. on DoD vessels. 10 USC Section 2649, which authorizes the Defense Secretary to transport commercial cargoes and civilian passenger on DoD vessels in certain cases, would be amended to expand the means by which transportation may be provided to include vehicles and aircraft operated by the DoD.

H.R. 5136 also contains provisions regarding the amounts charged for transportation in emergency, disaster, or humanitarian response cases, transportation during contingencies or disaster responses, etc.

Updated strategic ports study. The Commander of the U.S. Transportation Command would be required to update the study entitled “PORT LOOK 2008 Strategic Seaports Study” to consider the infrastructure in the vicinity of a strategic port, including bridges, roads, and rail, and any issues relating to the capacity and condition of such infrastructure.

(See ITT’s Online Archives or 06/03/10 news, 10060244, for previous BP summary on this provision.)

(See ITT’s Online Archives or 06/01/10 news, 10060128, for previous BP summary on the passage of H.R. 5136.)