Buy American amendment dies in Congress

Technology industry lobbyists have emerged victorious from the fight over "Buy American" provisions included in the Defense Authorization Act for fiscal 2004.

Provisions added to H.R. 1588 by Rep. Duncan Hunter, R-Calif., were eliminated or significantly altered in final language adopted by House-Senate conference committee Nov. 7.

A provision was eliminated that required the Defense Department to buy only products made in the United States, and required American-made content to account for 65 percent of the cost of those products, up from 50 percent.

A provision was altered that required contractors and bidders to identify the countries of origin of all essential components of systems worth $25,000 or more sold to the Defense Department for national security purposes.

Now the burden is on the Defense Department to use existing data to determine, for each prime contract worth more than $25,000, whether the contractor is American or foreign, the principal place of performance of the contract, whether the contract was awarded on a sole-source basis or after receipt of competitive offers, and the dollar value of the contract.

The conferees dropped "the most potentially harmful components of the House 'Buy American' provision, which sought to increase U.S.-made content of all weapons systems procured by the Defense Department," said John Douglass, president and chief executive officer of the Aerospace Industries Association of Washington.

The result is a "common-sense approach that won't hurt current programs and won't hamper our ability to compete in the global marketplace," Douglass said.

Hunter, chairman of the House Armed Services Committee, had said he proposed the provisions because he is concerned the United States is losing its capability to produce critical components at home.

Information technology industry officials argued that because so many IT components are made overseas, the made-in-America requirements would make it virtually impossible for the Pentagon to acquire commercial IT products. They also supported removal of the industry-reporting requirement, but did not like the compromise language.

"The philosophy of the compromise is that the use of offshore components is excessive, and we cannot rely on our allies. That's why industry generally is opposed to the compromise," Joe Tasker, senior vice president for government affairs at the Arlington, Va., Information Technology Association of America, said last month.