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REAUTHORIZING THE DEFENSE 

PRODUCTION ACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

MONETARY POLICY AND TRADE 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

MAY 8, 2013 

Printed for the use of the Committee on Financial Services 

Serial No. 113–18 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

JEB HENSARLING, Texas, Chairman 

GARY G. MILLER, California, Vice Chairman 

SPENCER BACHUS, Alabama, Chairman 

Emeritus 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

KEVIN McCARTHY, California 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

ROBERT HURT, Virginia 

MICHAEL G. GRIMM, New York 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

MARLIN A. STUTZMAN, Indiana 

MICK MULVANEY, South Carolina 

RANDY HULTGREN, Illinois 

DENNIS A. ROSS, Florida 

ROBERT PITTENGER, North Carolina 

ANN WAGNER, Missouri 

ANDY BARR, Kentucky 

TOM COTTON, Arkansas 

MAXINE WATERS, California, Ranking 

Member 

CAROLYN B. MALONEY, New York 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

STEPHEN F. LYNCH, Massachusetts 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JAMES A. HIMES, Connecticut 

GARY C. PETERS, Michigan 

JOHN C. CARNEY, JR., Delaware 

TERRI A. SEWELL, Alabama 

BILL FOSTER, Illinois 

DANIEL T. KILDEE, Michigan 

PATRICK MURPHY, Florida 

JOHN K. DELANEY, Maryland 

KYRSTEN SINEMA, Arizona 

JOYCE BEATTY, Ohio 

DENNY HECK, Washington 

SHANNON MCGAHN, Staff Director 

JAMES H. CLINGER, Chief Counsel 

(III) 

SUBCOMMITTEE ON MONETARY POLICY AND TRADE

JOHN CAMPBELL, California, Chairman 

BILL HUIZENGA, Michigan, Vice Chairman 

FRANK D. LUCAS, Oklahoma 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. GRIMM, New York 

STEPHEN LEE FINCHER, Tennessee 

MARLIN A. STUTZMAN, Indiana 

MICK MULVANEY, South Carolina 

ROBERT PITTENGER, North Carolina 

TOM COTTON, Arkansas 

WM. LACY CLAY, Missouri, Ranking 

Member 

GWEN MOORE, Wisconsin 

GARY C. PETERS, Michigan 

ED PERLMUTTER, Colorado 

BILL FOSTER, Illinois 

JOHN C. CARNEY, JR., Delaware 

TERRI A. SEWELL, Alabama 

DANIEL T. KILDEE, Michigan 

PATRICK MURPHY, Florida 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

May 8, 2013 ....................................................................................................... 1 

Appendix: 

May 8, 2013 ....................................................................................................... 21 

WITNESSES 

WEDNESDAY, MAY 8, 2013 

Kaufman, David J., Associate Administrator, Policy, Program Analysis and 

International Affairs, Federal Emergency Management Agency, U.S. Department of Homeland Security .......................................................................... 5 

Lambert, Brett B., Deputy Assistant Secretary of Defense, Manufacturing 

and Industrial Base Policy, U.S. Department of Defense ................................. 7 

Wolf, Hon. Kevin J., Assistant Secretary of Commerce, Export Administration, U.S Department of Commerce .................................................................... 3 

APPENDIX 

Prepared statements: 

Kaufman, David J. ........................................................................................... 22 

Lambert, Brett B. ............................................................................................. 25 

Wolf, Hon. Kevin J. .......................................................................................... 36 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Grimm, Hon. Michael G.: 

Written responses to questions submitted to Brett B. Lambert ................... 43 

(1) 

REAUTHORIZING THE DEFENSE 

PRODUCTION ACT 

Wednesday, May 8, 2013 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON MONETARY

POLICY AND TRADE, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 2:01 p.m., in room 

2128, Rayburn House Office Building, Hon. John Campbell [chairman of the subcommittee] presiding. 

Members present: Representatives Campbell, Huizenga, Lucas, 

Posey, Fincher, Stutzman, Mulvaney, Pittenger, Cotton; Clay, and 

Perlmutter. 

Chairman CAMPBELL. The subcommittee will come to order. 

Without objection, the Chair is authorized to declare a recess of the 

committee at any time. 

And we now have all three witnesses, so that is just in the nick 

of time. 

The Chair recognizes himself for 5 minutes for an opening statement. Good afternoon, and thank you to our distinguished panel for 

appearing today before this subcommittee. 

Shortly after the outbreak of the Korean War, the Federal Government sought powerful authorities to mobilize the U.S. economy 

for the war effort in order to enhance military preparedness and 

ensure that we have the means to defend this Nation and its interests. 

Congress granted these powers to the President through the Defense Production Act, which we will probably throughout this hearing call the DPA for short because we have to have an acronym for 

everything. 

So for the Defense Production Act or the DPA, many of these expensive authorities have been abandoned and allowed to expire 

over time but others remain essential to providing for national security and defense, protecting critical infrastructure, and bolstering 

disaster relief capabilities. 

The three DPA titles that remain active are due to expire in 

2014 and this subcommittee will be considering their reauthorization. Possessing exclusive jurisdiction over this statute in the 

House of Representatives, the Financial Services Committee can 

best ensure that these powers are exercised with the least possible 

distortions on the broader economy. That is why we have the jurisdiction over these titles and over the DPA. 

2 

I hope to gain a better understanding from our witnesses’ testimony about how government is using DPA authorities today and 

what systems and policies are in place to ensure that they are only 

exercised in the circumstances for which they are truly warranted. 

In addition, periodic reauthorizations of statutes provide Congress the opportunity to review the effectiveness of these programs 

and identify problems. 

Since the DPA was enacted in 1950, Congress has taken advantage of this opportunity to strip out provisions that were no longer 

relevant and add additional provisions to mitigate the risk of outsized or unintended consequences. 

I will be looking for our panel of witnesses to provide their expert 

opinions on what is working and what is not with regard to the 

DPA in order to help the committee identify appropriate solutions 

that we can implement in this reauthorization. 

Thank you again to the witnesses and the agencies they represent for appearing before this panel. I look forward to this 

thoughtful discussion on the Defense Production Act or DPA. 

I yield back my time, and I would like to yield 5 minutes now 

to the gentleman from Missouri, Mr. Clay, the ranking member of 

the subcommittee. 

The gentleman is recognized for 5 minutes. 

Mr. CLAY. Thank you, Chairman Campbell, and thank you so 

much for conducting this hearing. I will not take the total 5 minutes. The title of the hearing is, ‘‘Reauthorizing the Defense Production Act.’’ And as you stated, it gives the President broad powers to implement. 

There are three titles that need to be reauthorized, and as you 

know, Presidents have used the authorities granted under this Act 

in many ways. 

President George H.W. Bush used the Act during Operation 

Desert Storm. President Clinton used his authority under the Act 

during the Bosnian conflict. 

President George W. Bush used his authority during the Iraq 

and Afghanistan wars. Also, Presidents have used their powers 

under the Act in the wake of natural disasters. 

Congress last reauthorized the Act in 2009, and the Act is up for 

reauthorization when it expires at the end of 2014. 

So, again, thank you, Mr. Chairman, and I look forward to the 

witnesses comments. I yield back. 

Chairman CAMPBELL. The gentleman yields back. I would now 

like to recognize for an opening statement, also for 5 minutes, the 

gentleman from Michigan, the vice chairman of the subcommittee, 

Mr. Huizenga. 

Mr. HUIZENGA. Thank you, Chairman Campbell. I appreciate 

that, and I also thank Ranking Member Clay. 

I do have a longer statement that I would like to submit into the 

record. Nobody wants to sit here through all this, but I do appreciate us holding this hearing. 

The fact that the Financial Services Committee is sort of one of 

the places where this resides and has the responsibility for this reauthorization is really testimony to how strongly our defense capabilities depend on our Nation’s economic strength, and I think that 

just underscores how important this is. 

3 

We cannot prepare for war without the private sector. We simply 

cannot. Coming from Michigan, being the home of the arsenal democracy, that is something that was drilled into us from a very 

early age, and we still see the remnants of that, but there have 

been some very challenging times, and we know that we have to 

make sure that we have that robust private sector. 

When it was first passed, this Act empowered the Administration’s ability to force private industry to give priority to defense 

and homeland security contracts and to allocate those resources. 

We need to make sure that we are using those very powerful authorities to meet those critical needs, but also make sure that we 

are doing that in a way that deals with the private sector. So we 

are glad that we are going to be able to move forward on this. 

This is a very important element, and clearly these are worthy 

priorities, and I look forward to hearing from the members of the 

Departments of Homeland Security, Commerce, and Defense today. 

I yield back. 

Chairman CAMPBELL. The gentleman yields back. 

Are there any further opening statements? 

If not, then we will proceed to the witnesses. Each of you will be 

recognized for 5 minutes for an oral presentation of your testimony. 

Without objection, each of your written statements will be made a 

part of the record. 

On your table, there is a light. It will start out green, when it 

turns yellow you have 1 minute to sum up, and when it turns red, 

please suspend. 

As I discussed with you all before, we are expecting votes to be 

called in about an hour. So I am going to dispense with your all 

of your impressive bios and just go straight to each of you by title 

because we would like to see if we can get everybody in before the 

votes are called in about an hour. 

We will begin with the Honorable Kevin Wolf, Assistant Secretary of Commerce for Export Administration. 

Secretary Wolf, you are recognized. 

STATEMENT OF HONORABLE KEVIN J. WOLF, ASSISTANT SECRETARY OF COMMERCE, EXPORT ADMINISTRATION, U.S DEPARTMENT OF COMMERCE 

Mr. WOLF. Thank you very much, Chairman Campbell, Congressman Clay, and members of the subcommittee. 

I appreciate the opportunity to testify before the subcommittee 

this afternoon on the important role of the Defense Production Act, 

which it continues to play in supporting our national defense. 

The Department of Commerce plays several roles in implementing DPA related to the defense industrial base. First, under 

Title I, the Department administers the Defense Priorities and Allocations System. 

Second, under Title VII, the Department submits an annual report to Congress in the offsets of defense trade. 

Third, also under Title VII, the Department analyzes the health 

of the U.S. defense industrial base. 

All three DPA authorities need to be reauthorized before September of 2014. My written remarks go into each of these in more 

detail so I will just provide a summary of some of the key proviVerDate Nov 24 2008 17:23 Aug 30, 2013 Jkt 081753 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 K:\DOCS\81753.TXT TERRI
4 

sions and elements, and I will be happy to discuss them as you 

would like. 

Title I of the Defense Production Act authorizes the President to, 

as you summarized, require acceptance and priority performance of 

contracts and orders, other than contracts for employment, to promote the national defense over the performance of other contracts 

or orders and to allocate materials, services, and facilities as 

deemed necessary or appropriate to promote the national defense. 

These authorities to prioritize contracts and require allocations 

for industrial resources were most recently delegated to the Secretary of Commerce by an Executive Order in 2012. 

Today, Commerce’s Bureau of Industry and Security implements 

these authorities through the Defense Priorities and Allocations 

System regulation, commonly known as the DPAS regulations, and 

they establish procedures for the placement, acceptance, and performance of priority-rated contracts and orders and for the allocation of materials, services, and facilities which are regularly used 

to support the acquisition of industrial resources needed to support 

the U.S. national defense requirements. 

The Department of Defense is our primary user of the DPAS. 

Our industrial base is well-versed in the DPAS and has more than 

60 years of experience in receiving and placing priority-rated contracts and orders to support the Department of Defense requirements. 

The private sector also appreciates that the DPA includes a protection against claims in the event that a contractor is required to 

reschedule an unrated order after receipt of a rated order. 

My Department also works closely with the Department of 

Homeland Security’s Federal Emergency Management Agency 

(FEMA) through the DPAS to support emergency preparedness and 

critical infrastructure protection and restoration requirements. 

My colleagues will highlight several examples in their testimony 

demonstrating how the DPAS is being used to support our national 

defense including military and homeland security requirements. 

If the DPA’s Title I authority were to lapse, Commerce would be 

forced to rely on the limited priority authority it is delegated under 

the Selective Service Act of 1948 to administer the DPAS. The Selective Service Act authority may only be used to support procurement of products and materials for the exclusive use of the U.S. 

Armed Forces and may not be used to support emergency preparedness homeland security program requirements. 

In addition, the Selective Service Act does not provide contractors with protection against claims. Under Section 705 of the DPA 

and the Executive Order, the Department also conducts survey assessments of defense-related industries and technologies, and these 

surveys are routinely requested by the Department of Defense to 

help with the analysis and development and strengthening of our 

industrial base. 

So, in sum, the DPA provides authority for a variety of programs 

at the Department of Commerce and is of substantial importance 

to U.S. national security. The DPAS continues to facilitate the 

timely delivery of industrial resources to support the Department 

of Defense, coalition partners, and increasingly meet Homeland Security requirements. The DPA also facilitates valuable assessments 

5 

of the impact of offsets in defense trade and the health of key sectors of the defense industrial base. 

We look forward to working with the subcommittee on its reauthorization, and I am ready to answer whatever questions you may 

have after the opening statements. Thank you. 

[The prepared statement of Assistant Secretary Wolf can be 

found on page 36 of the appendix.] 

Chairman CAMPBELL. Thank you, Secretary Wolf. 

Next, we have Mr. David Kaufman, who is the Associate Administrator for Policy, Program Analysis and International Affairs at 

the Federal Emergency Management Agency, FEMA. 

Mr. Kaufman, you are recognized for 5 minutes. 

STATEMENT OF DAVID J. KAUFMAN, ASSOCIATE ADMINISTRATOR, POLICY, PROGRAM ANALYSIS AND INTERNATIONAL AFFAIRS, FEDERAL EMERGENCY MANAGEMENT 

AGENCY, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. KAUFMAN. Thank you. 

Good afternoon, Chairman Campbell, Ranking Member Clay, and 

members of the subcommittee. It is a pleasure to be here today before you, and I appreciate the opportunity to testify in support of 

the Defense Production Act and its importance to homeland security and emergency preparedness and response. 

The DPA is the primary source of Presidential authorities to expedite supply of materials and services needed for both military 

and civil emergency preparedness and response. 

Expiration of this authority would seriously hinder our ability to 

prepare for and respond to natural disasters and other threats including catastrophic disasters such as a major earthquake, a major 

hurricane strike, or an incident involving a weapon of mass destruction. 

As discussed already, the use of DPA authorities has evolved 

over time, and while these authorities are used primarily to support Department of Defense programs, they are also used today to 

support disaster preparedness and response, critical infrastructure 

protection and restoration, including physical and cyber-based assets, as well as other homeland security activities. 

Title I of the DPA authorizes the priority treatment of contracts 

and orders. The priority rating is one that we invoke rarely in the 

civil departments but the availability of this authority is essential 

to ensure timely delivery of needed resources 

The priorities authority has gained increased importance for 

homeland security purposes. As with rated orders in support of 

military programs, rated orders for homeland security programs 

are used to ensure on-time performance when delays could place 

lives and property at greater risk. Ongoing or recent use of priorities authority for various homeland security purposes includes: the 

U.S. Army Corps of Engineers program to repair and restore 

floodwalls and levees after Hurricane Katrina; Aircraft for the U.S. 

Customs and Border Protection; and the emergency preparedness 

and critical infrastructure protection activities of the Architect of 

the Capitol. 

6 

The priorities authority is also used, on an as-needed basis, to 

protect and restore critical infrastructure operations and to respond 

to and recover from domestic emergencies and disasters. 

Examples of these uses include: thermal imaging camera systems 

for perimeter security at both airport and seaport facilities in the 

Boston region; equipment to enable the rapid restoration of rail 

service in the Gulf Coast region after Hurricane Katrina; and components of weather satellites that help detect, monitor, and track 

severe weather for early warning to protect lives and property. 

While the use of the priorities authority for homeland security 

purposes is limited, it is still important. The DPA priority authority is essential, as we discussed, to ensuring our ability to respond 

to disasters, rapidly restore and protect critical infrastructure, and 

ensure that timely development of emergency preparedness and 

protection measures to protect lives and property can be enabled. 

Along with other FEMA responsibilities to coordinate Federal 

emergency preparedness and response activities, FEMA provides 

government-wide coordination and guidance for the use of DPA authorities on behalf of the Secretary of Homeland Security pursuant 

to Executive Order 13603 

To date, our use of these authorities has been limited primarily 

to resources falling under the jurisdiction of the Department of 

Commerce. These include most manufactured goods and services. 

The Department of Commerce has delegated authority to DHS to 

place priority ratings on contracts and orders to support emergency 

requirements, critical infrastructure protection and restoration, and 

homeland security programs. 

FEMA is continuing to work with all six resource departments 

that have been delegated priorities and allocations authority by the 

President to ensure the effective use of this authority, and we will 

continue to work with the appropriate Federal departments and 

agencies to ensure the proper implementation of DPA authorities 

and incorporate the DPA as an important planning tool for emergencies. It is a critical tool in our toolbox for preparing for, responding to, and recovering from disasters. 

Without the DPA, that critical authority to ensure timely procurement of materials and services to protect and restore critical 

infrastructure operations, whether they are key transportation capabilities, floodwalls, or levees, would be lost. 

Without the DPA, we would have no authority to prioritize contracts for resources needed to respond to and recover from a major 

natural disaster or act of terrorism. 

In closing, I urge Congress to reauthorize the DPA authorities 

which remain so critical to our homeland security. 

Thank you, Mr. Chairman, for the opportunity to appear before 

you today. And I would also be pleased to answer any questions 

that members of the subcommittee may have. 

Thank you. 

[The prepared statement of Mr. Kaufman can be found on page 

22 of the appendix.] 

Chairman CAMPBELL. Thank you, Mr. Kaufman. 

And last but not least, Mr. Brett B. Lambert is the Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base 

Policy for the U.S. Department of Defense. 

7 

Secretary Lambert, you are recognized for 5 minutes. 

STATEMENT OF BRETT B. LAMBERT, DEPUTY ASSISTANT SECRETARY OF DEFENSE, MANUFACTURING AND INDUSTRIAL 

BASE POLICY, U.S. DEPARTMENT OF DEFENSE 

Mr. LAMBERT. Thank you. 

Thank you, Mr. Chairman, and members of the subcommittee, 

for this opportunity to talk about this very important Defense Production Act in supporting the Nation’s defense needs. I have a prepared testimony that goes into a lot more details, but I am sure 

you want to get to your questions, so I will keep this brief. 

The DPA provides important authorities to the Department, both 

to ensure timely delivery of equipment and services essential to our 

Armed Forces and to promote domestic industrial capabilities to 

produce superior defense systems at affordable costs. 

My testimony today will focus on the priorities authorities provided in Title I and the business incentives provided in Title III, 

but I will also note that Title VII provides a number of important 

authorities that support our capabilities to maintain and strengthen our defense industrial base. 

DOD supports the 5-year reauthorization of all the DPA 

precisions which are scheduled to expire in September of 2014. 

Let’s start with Title I. Title I of the Defense Production Act is 

vital to ensure timely DOD access to industrial resources during 

both peacetime and periods of conflict. It authorizes the President: 

one, to require acceptance and priority performance of contracts 

and orders; and two, to allocate materials, services, and facilities, 

as necessary or appropriate to promote the national defense. 

These Presidential authorities are delegated to the Department 

of Commerce with respect to industrial resources. Commerce has 

re-delegated to the Department of Defense authority under the Defense Priorities and Allocations System—another acronym; DPAS— 

to place priority-rated contracts and orders for industrial resources 

in support of DOD-approved programs. 

DPAS priority ratings help to ensure that rated orders will be 

performed on time. For the most part, contractors and suppliers act 

on their own to fulfill their obligations under rated orders, without 

further action required by the Government. However, when problems occur that cannot be resolved by the contractors and suppliers, the DPAS provides for special priorities assistance, whereby 

problems can be resolved with the assistance of DOD or, ultimately, the Department of Commerce. 

Although important in peacetime, DPAS is indispensable in 

times of conflict. It provides the authority and flexibility to address 

the critical procurement needs to our warfighters. Even though this 

authority was first enacted over 60 years ago, experience with providing direct support to the operations in Afghanistan and Iraq 

demonstrates its continued importance today. 

The DPAS played an important role during these operations in 

expediting delivery of equipment needed to counter new threats 

and protect the lives of our Armed Forces overseas. 

The DPAS, under Title I authorities, was instrumental in speeding the deployment of new and increased quantities of personal 

body armor, Counter Improvised Explosive Device or IED systems, 

8 

MRAPs, Mine Resistant Ambush Protected Vehicles, and ISR platforms, night vision equipment, submarine environmental controls, 

weapons targeting systems, and many other items necessary to 

support our warfighters. 

Title III of the Defense Production Act authorizes various actions 

by the President to develop, maintain, modernize, restore, and expand the productive capacities of domestic sources for critical components, critical technology items, materials, and industrial resources essential for the execution of our national security strategy 

in this country. 

The Title III authorities were initially used, as was pointed out, 

during the Korean War era to establish the industrial infrastructure needed to transition aircraft production into the jet age and 

for other industrial base needs. 

Much of the U.S. processing capabilities for these and dozens of 

other key materials can trace their roots to Title III projects that 

were undertaken during the 1950s. The national defense and the 

U.S. economy overall are still reaping enormous benefits from these 

historical Title III actions. 

Today, Title III projects continue to support us in the transition 

of new and next-generation technologies that are essential to meeting the national security requirements identified by government 

customers. 

I suspect most people in this hearing room are carrying a device, 

which performs better and is cheaper, due to a Title III project that 

was completed several years ago. The project involved manufacturing capabilities for gallium arsenide wafers. The primary purpose of the project was to support defense needs of advanced integrated circuits, but gallium arsenide integrated circuits are also 

important components in your cell phones. 

U.S. Title III contractors more than doubled their share of the 

world market for gallium arsenide wafers over the course of the 

Title III efforts and reduced the wafer price by more than onethird. So everyone’s cell phone is cheaper, performs better, and is 

more likely to contain integrated circuits fabricated and domestically-produced largely as a result of Title III actions. 

Most provisions of the Defense Production Act are now permanent law but must be renewed periodically by Congress. We request that the provisions scheduled to expire at the end of the next 

fiscal year be extended. 

The U.S. industrial base continues to be the cornerstone of our 

national defense structure and the Defense Production Act continues to provide unique and important authorities to establish, expand, maintain, and modernize critical elements of the base. 

Title I authorities play an important role to allow us timely access to domestic production. Title III authorities are important to 

expedite the transition of new and advanced technologies into defense systems that also have an economic benefit overall. While the 

primary purpose of Title III actions is to support the national defense, these actions also contribute, I believe, to a stronger, more 

competitive U.S. industrial base. 

I am happy to answer any questions you have regarding this 

issue. 

9 

[The prepared statement of Deputy Assistant Secretary Lambert 

can be found on page 25 of the appendix.] 

Chairman CAMPBELL. Thank you, Mr. Lambert. 

And thank you to the panel. 

I will now recognize myself for 5 minutes for questioning. 

Mr. Lambert, you just mentioned that you request that these 

three titles of the DPA be reauthorized as is. Is that the position 

of the DOD? Is that the position of the Administration? Is there an 

Administration request coming? Are any of you aware of what the 

Administration is actually going to request? 

Mr. LAMBERT. Congressman, I am not. We are working within 

the structure we have. We believe that we have the flexibility within the structure as currently written. I would look forward to a dialogue of where there may be instances where we could collectively 

agree on how to adjust given the changes of time and effort, but 

there is nothing I am aware of, a proposal at this time that would 

change what we currently have in statute. 

Chairman CAMPBELL. Okay. 

Are any of the rest of you aware of the Administration’s position 

on what their request is that we do with the DPA? 

Mr. WOLF. I am aware of no other position within any other department requesting any change other than reauthorization. We 

will ask around. There are different parts of the U.S. Government 

with equities in this and I will survey them, but as of now, I am 

not aware of any. 

Chairman CAMPBELL. All right, thanks. 

Just for the record, for the Administration, I haven’t been particularly good at sending up formal requests so that we know, okay 

here is our request, here is what we want, and so we would like 

to have that request. We would prefer to not let this reauthorization sit until the last minute as I know you would—you all would 

not like to see happen either. 

Okay. With these—you guys have all talked about when this 

thing—each one of you gave an example of when it has been used, 

when the DPA has been used, and how it has worked kind of as 

intended and so forth. 

Can any of you give any examples where you think the DPA fell 

short one way or another, either you weren’t able to implement 

something that you wanted to or where the implementation didn’t 

go right, or the other way around, where the implementation went 

too far or it caused ripple effects that you didn’t anticipate? 

Mr. Kaufman? 

Mr. KAUFMAN. For my part, no. I don’t have any example that 

comes to mind where we feel like the authority fell short. 

Chairman CAMPBELL. Okay. 

Mr. WOLF. I would have the same answer. I was just checking 

with my staff, and we are unaware of any examples that would 

meet that definition. It has otherwise operated efficiently as far as 

we can tell. 

Chairman CAMPBELL. Okay. 

Mr. LAMBERT. I came from business, so I am always looking back 

to see what we could do better. Are there examples where we have 

executed programs where we could have done better, we could have 

implemented better practices, I think the answer to that should alVerDate Nov 24 2008 17:23 Aug 30, 2013 Jkt 081753 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 K:\DOCS\81753.TXT TERRI
10 

ways be yes, and if you can figure out what it is, you should go 

back and look again. 

I don’t know of any examples where we failed. I think we could 

have succeeded better in previous examples and we have incorporated that into our processes. 

Chairman CAMPBELL. Okay, and that is because of processes at 

the Department of Defense, not because of some weakness within 

the DPA itself— 

Mr. LAMBERT. That is correct. 

Chairman CAMPBELL. —is what you are saying. Okay. 

There has been a lot of controversy lately about Title III funds 

being used for biofuels. I am not going to get into that controversy 

at the moment. We can deal with that at a later time or as things 

go forward, but are there any other controversial issues in the past 

where the use of DPA authority became a controversial issue because of what the authority was used for? 

Mr. LAMBERT. Sir, not that I am aware of. I think this is unique. 

Proposals to DPA come from other government agencies. We give 

every agency the same look and review. 

We are very meticulous about how we review them. We restructure them. Just because somebody asks, it doesn’t mean we deliver. 

We take the same business—everyone has to apply the same business model and business case. 

It is a pretty set standard formula, but I am not aware in the 

past of anything being written about—I won’t say controversial, 

but I will say written about that particular issue. 

Chairman CAMPBELL. Okay. 

Mr. WOLF. With respect to the areas where the Commerce Department has a role, there are about 60 years’ worth of practice of 

experience working with industry on implementing and working 

through these authorities, and DOD places an estimated 300,000 or 

so rated contracts and orders annually. 

And the feedback we have been receiving as long as I have been 

in government, and I asked people before I arrived, has been generally positive, and the Commerce Department is there to sort of 

help people understand and work through the regulations, but we 

have no indication of a negative reaction to the way it is administered or to its content. It has been quite helpful, generally. 

Chairman CAMPBELL. Okay. My time has expired. 

I will now recognize the ranking member of the subcommittee, 

the gentleman from Missouri, Mr. Clay, for 5 minutes. 

Mr. CLAY. Thank you, Mr. Chairman. 

And I thank all of you for your testimony. 

Many DPA authorities have not been used by the Federal Government for years, even decades in some cases, though they remain 

in statute. Some of these less frequently used authorities include 

the Title III authority to provide loans and loan guarantees as well 

as the national defense executive reserve authority in Title VII. 

Could you please identify whether there are any authorities that 

you see as no longer needed for the national defense or perhaps redundant with other laws? I would like to hear from each one of 

you. 

Mr. LAMBERT. Yes, I am sorry, sir. I know the answer to that, 

but I don’t have it in front of me. There is a reason we have 

11 

stopped using loan guarantees. As I recall, in preparing for this, it 

was in the 1980s, and there was a reason that it ended, but I will 

have to get back to you for the record on that. 

Mr. CLAY. How about you Mr. Wolf? 

Mr. WOLF. The Commerce Department has no role with Title III, 

so I have nothing more to add. 

Mr. CLAY. Mr. Kaufman? 

Mr. KAUFMAN. Thank you, Congressman. FEMA also has no role 

with the Title III program. It is not an active program for us; no 

request for appropriations. 

Mr. CLAY. Hopefully, Mr. Lambert, that will be an area where 

you come back with recommendations to this committee on how we 

can improve on the Act. 

Mr. LAMBERT. Yes, sir. 

Mr. CLAY. Let me also look at under Title III, once a determination is made that a critical industrial resource is in short supply, 

what steps are taken to rectify the shortcoming, and is there a 

transparent competitive bidding process in place to ensure fairness 

among private market participants when the government determines a need for private direct support? 

Mr. KAUFMAN. Yes, sir. It is a very businesslike approach and 

here I would give a significant amount of credit to our executing 

agent, which is the Air Force Research Lab (AFRL.) 

A lot of business people and attorneys who scour—when we have 

a request, we go through a very methodical process. Is there a market out there? We usually go out with a request for information to 

determine whether this can be met by commercial needs. 

The request on behalf of the agency making the request or the 

service, and if that is not the case, we go through a very diligent— 

it is basically a due diligence process. We have laid it out. It is a 

format we have used for years and it has been very effective, but 

there is a process. Nobody gets special treatment. 

Mr. CLAY. Okay. Is that the case, Mr. Wolf? 

Mr. Kaufman? 

Mr. WOLF. Again, the Commerce Department has no role in Title 

III, so we have nothing to add. 

Mr. CLAY. Okay. 

Mr. Kaufman? 

Mr. KAUFMAN. Same for us. 

Mr. CLAY. All right. The Defense Production Act defines ‘‘domestic source’’ as both the United States and Canada. Can you explain 

how the authorities of the DPA function in the context of Canada? 

Mr. LAMBERT. Sir, I believe that is their—part of our North—it 

is in the North American, and Syd Pope will correct me if I am 

wrong, but North American industrial base. 

They are considered a part of our industrial base. They were instrumental, for instance to give you an example, in supporting us 

in this effort to provide MRAPS to servicemembers as we were trying to build up. So we do consider Canada part of our North American industrial base. 

Mr. CLAY. Okay. Any additional comment? 

Mr. Wolf? 

Mr. WOLF. That is a fair summary. 

Mr. CLAY. Mr. Kaufman? 

12 

Mr. KAUFMAN. Fair summary. Thank you. 

Mr. CLAY. Do any intergovernmental agreements or memoranda 

of understanding exist to allow the United States to prioritize contracts with Canadian companies? 

Mr. LAMBERT. Sir, not to my knowledge. I believe Canadian companies’ needs are treated no differently than U.S. companies for 

this purpose. 

Mr. CLAY. Okay. Can you give some examples of where DPA authorities have been used to provide military or critical infrastructure assistance to foreign nations in ways that advance our own 

self-interest? 

Mr. LAMBERT. Sir, I can give you—quickly, I can give you an example where DPS Title I authorities that came through our office— 

in the not-too-distant past—where we were asked to provide coalition forces with critical night vision equipment, and they were in 

theater, and we needed to work with the industry to assist them 

in providing that equipment to our coalition forces operating alongside of us, and we could not have done that without the authorities 

provided by Title I. 

Mr. CLAY. An essential piece of equipment that helped our forces. 

Mr. LAMBERT. Absolutely. 

Mr. CLAY. I thank the witnesses. 

And I yield back. 

Chairman CAMPBELL. The gentleman’s time has expired. 

The gentleman from Michigan, the vice chairman of the subcommittee, Mr. Huizenga, is recognized for 5 minutes. 

Mr. HUIZENGA. Thank you, Mr. Chairman. I appreciate that. 

I think Mr. Kaufman and Mr. Wolf are having an easier time 

here than Secretary Lambert. 

Mr. LAMBERT. I brought more people. 

Mr. HUIZENGA. I’m glad, and I hate to break that pattern, so my 

apologies to you, but Secretary Lambert and I had a chance to 

meet over an issue regarding A123 and its sale to Wanxiang a 

number of months ago and the—something called the Committee 

on Foreign Investment in the United States, CFIUS. 

So I am just wondering if you can give 30 seconds—just make 

sure all my colleagues know exactly, because I did not know about 

CFIUS or exactly the role it played until that had come up. So I 

wanted you to have an opportunity to describe that briefly and confirm my understanding that this is not a part of the reauthorization because it is part of permanent law, correct? 

Mr. LAMBERT. Correct. I believe it is Section 721. That is part of 

permanent law. I should start it out by saying the Department of 

Defense does not speak on behalf—this is the Department of the 

Treasury, so they are the only official party, I think by statute, 

that is allowed to speak on the matter but it is— 

Mr. HUIZENGA. Can you quickly describe CFIUS? 

Mr. LAMBERT. Sure. The Committee on Foreign Investment in 

the United States was established to ensure that national security 

concerns were resolved prior to any transaction that involved an 

international party that could affect national security. 

And it is a committee of government agencies that the Department of the Treasury is the chair of and is responsible for. We are 

one of many members that participate in that review process along 

13 

with Commerce and other agencies, but it is truly at the purview 

of the Department of the Treasury. 

Mr. HUIZENGA. All right, thank you. And I will get back to you 

on another issue. 

But Mr. Kaufman, I am curious. Being completely honest and 

transparent here, probably of all of the three of you up here describing your usages of this Act, the DPA, I am probably most concerned about Homeland Security and I am sorry with FEMA and 

what those applications are and it seems to me that there is a 

greater chance of sort of wandering outside of the parameters of 

what this program is really for, it seems to me, with application 

within FEMA. 

So if you could just describe exactly how you have been using it. 

I know you gave a couple of examples, and one of those was dealing 

with railroads post-Katrina, trying to get equipment and trains 

running there, but help alleviate my concern, please. 

Mr. KAUFMAN. I will be happy to, Congressman. 

Mr. HUIZENGA. In about 45 seconds. 

Mr. KAUFMAN. Noted. First off, I would say we use it on a very 

limited basis. In homeland security and emergency management 

space, something on the order of 16 uses since 2006, but when we 

do use it, it is for a very important purpose. 

And the purpose statements are accounted for in the amendments to the Act, or the reauthorization of the Act in 2009, which 

did expressly include homeland security, emergency preparedness 

and response, and critical infrastructure protection and restoration 

as part of the scope of the authority. 

So in support of that, in no particular order, but to give you a 

couple of other examples, most recently during Hurricane Sandy, 

we had a critical need to procure greater interpretive services, telephonic interpretive services. 

There are an awful lot of languages spoken in the New Jersey 

and New York region, and so that was something that we needed 

to ensure we had available in very short order to support response 

recovery operations. 

Mr. HUIZENGA. Just so I am understanding what you are saying, 

you basically jumped to the head of the line and said, sorry, hospitals that may need some of these translation services or whatever 

else, the government gets priority? 

Mr. KAUFMAN. Yes. In the case of that Act, and that disaster 

where we were in an all-hands-on-deck footing, we said we need to 

be able to ensure that we are providing support to the survivors 

of that disaster in the most expeditious manner possible. That is 

absolutely correct. 

Mr. HUIZENGA. All right. And I may want to unpack this a little 

more at some other point. 

But Mr. Lambert, getting back to you, and I am not trying to— 

I firmly believe that every garden party needs a skunk. All right? 

So, I am happy to be that skunk today. 

I want to read this—shortfall—so—the Title III expenditures reduced shortfalls of industrial resources, critical technology items, or 

essential materials needed for national defense purposes, and the 

chairman alluded to this. 

14 

I am baffled how under NDAA, where we put a specific congressional requirement for congressional approval for these biofuel 

projects to be moving forward with the funding, how the DOD has 

the ability, much less the gumption, to move forward with that. 

Chairman CAMPBELL. And the DOD will have to answer that as 

part of another Member’s questioning, because the gentleman from 

Michigan’s time has expired. 

I would now like to recognize the gentleman from Colorado, Mr. 

Perlmutter for 5 minutes. 

Mr. PERLMUTTER. Thanks, Mr. Chairman. If I could pass, I just 

want to listen and understand this a little more, and maybe it will 

trigger a question, but I don’t have any questions right now. 

Chairman CAMPBELL. Okay, then we will now turn to the gentleman from South Carolina, Mr. Mulvaney, for 5 minutes. The 

gentleman from Colorado yields— 

Mr. HUIZENGA. You could have recognized me to get the answer. 

Mr. PERLMUTTER. All right. I will recognize—if I could—I would 

recognize my friend from Michigan to finish his question. 

Chairman CAMPBELL. All right. If you can hold on just a moment, Mr. Mulvaney, then the gentleman from Colorado has recognized the gentleman from Michigan, whom I believe will allow Mr. 

Lambert to answer his question. 

Mr. HUIZENGA. I deeply appreciate my friend from Colorado, my 

former neighbor, who has moved up to better environs in Longworth, but thank you for this time. 

So, I would love to hear an answer. 

Mr. LAMBERT. I’m sorry, could you repeat the—no, I’m sorry. 

[laughter] 

Mr. HUIZENGA. Okay. Would you like the quote as well? I am 

happy to do that. 

Mr. LAMBERT. This is a very serious issue, and we don’t take it 

lightly. When we reauthorized in 2009, and if you look back at the 

legislation, energy was one of the important components of the Defense Production Act. We have done a lot of energy activity. 

Prior to the biofuels notification that we provided Congress on 

this current round, we had provided one in 2010, so there was a 

precedent. It was smaller, admittedly, but there is a precedent and 

there are are really only two factors by law that we look at and 

one is, is it something that—I am summarizing the language because I don’t have it in front of me, but in my head I say, does it 

make sense for the Nation? Is important to national security? 

And then the more important question to me is, is this something 

the commercial market is not doing for some reason? And then in 

my mind, again coming from industry, this shouldn’t be a defense 

program. 

My goal and the goal of the Defense Production Act and everything that we do is we should be building facilities that we can utilize and then get out of, so they can be of use to the overall U.S. 

economy. Those are kind of the general things that I— 

Mr. HUIZENGA. Okay. The Department of Energy, the Department of Agriculture, people that you had previously been 

partnering with specifically have not been funded for this. 

It seems to me then we inserted language into NDAA that prohibited DOD to be able to do this, but you are going around that 

15 

language under this Title III authority to say well, we appreciate 

that, but we are going to use no year funding from 2012 to fund 

these programs that pretty clearly Congress has said this isn’t a direction we want to go and cellulosic ethanol plants are not that unusual. 

Mr. PERLMUTTER. If I could reclaim my time from my friend from 

Michigan, and I would just help him a little bit and help the panelists. Section 2(a)(6) of DPAS: ‘‘to further assure the adequate maintenance of the domestic industrial base to the maximum extent 

possible domestic energy supplies should be augmented through reliance on renewable energy sources (including solar, geothermal, 

wind, and biomass sources), more efficient energy storage and distribution technologies, and energy conservation measures.’’ It is in 

the law. So for them to pursue it, I am glad they are, because that 

is part of the DPAS as it sits today. 

Mr. HUIZENGA. Okay. Can I ask a question? 

Mr. PERLMUTTER. I would yield to my friend from Michigan. 

Mr. HUIZENGA. All right. I appreciate that. 

Mr. PERLMUTTER. Now, we are getting going. 

Mr. HUIZENGA. Now we are into something—yes, okay. My understanding is that might be a regulation, not the law. That is 

what I am being told. But— 

Mr. PERLMUTTER. ‘‘The Defense Production Act of 1950 as 

amended.’’ 

Mr. HUIZENGA. Okay. ‘‘As amended.’’ I guess the question to me, 

or I guess the problem I am having that I am trying to sort out 

then is it appears that we may have a conflict between what we 

have passed and in three different budgets, a DOD budget, an agriculture budget, and a Department of Energy budget with specific 

language in NDAA, so four different places that appear to be in 

conflict with that and— 

Mr. PERLMUTTER. Reclaiming my time, we may have a conflict 

and we should iron that conflict out. I like this section of the Defense Production Act of 1950 because I think from the national security basis we can’t just—I would like to see us rely on a variety 

of sources of energy, not just petroleum-based, which we spent 

$17.3 billion compared to like $46 million or something like that 

for biofuels. 

So, I appreciate the gentleman’s questions, and if there is a conflict, as Members of Congress it is our responsibility to iron those 

conflicts out, but this particular section, I believe, does benefit the 

national security of the Nation and it may—and homeland security 

may be benefited as well if a bunch of refineries, petroleum refineries were to be attacked or lost in an earthquake or whatever. So, 

I appreciate that. 

Mr. HUIZENGA. Will the gentleman— 

Mr. PERLMUTTER. Of course, I will yield to my friend. 

Mr. HUIZENGA. All right. I appreciate that and only to say this: 

my reading and understanding, and this is new territory for a lot 

of us I think, is that these are for some critical things that are not 

being done anywhere else in the economy. 

And that a production of something that may have gone out of 

production for example only because it has limited military use, 

16 

cellulosic ethanol is not just specifically a military use and there 

is private sector research and things that are happening. 

Mr. PERLMUTTER. I thank the chairman. And I will yield back. 

Mr. HUIZENGA. Thank you. 

Mr. PERLMUTTER. I appreciate the opportunity— 

Mr. HUIZENGA. I appreciate my friend. 

Chairman CAMPBELL. The gentleman who was not going to use 

any of his time has now used all of his time with the help of the 

gentleman from Michigan. 

Mr. PERLMUTTER. I took my 5 minutes. So now, I have had a 

chance to prepare for your questions. 

Chairman CAMPBELL. Now, we will go back—and I really mean 

it this time—to the gentleman from South Carolina, Mr. Mulvaney. 

You are recognized for 5 minutes. 

Mr. MULVANEY. I am not sure how I got dragged into that, but 

it was was fun to watch. Thanks, guys. 

Gentlemen, I congratulate you. You are actually seeing something that is rare in this process. I haven’t been here very long, but 

we are actually having a hearing to find out information. 

Ordinarily, we come into these things with these scripted questions and we already know what we want to ask, and this has actually been interesting to me, because I didn’t even know this thing 

existed until the chairman told us about it at the beginning of this 

year. 

So you are seeing Members of Congress doing things that they 

are not ordinarily comfortable doing, which is asking questions that 

they don’t know the answers to already. So I appreciate you participating in the process. 

I am going to start with Mr. Kaufman, because I am going over 

your testimony, Mr. Kaufman, and help me understand that—I 

think I grasp the role of the DPA under emergency or exigent circumstances. 

The examples you give in your testimony about restoring 

floodwalls and levees after Hurricane Katrina, and thermal imaging in Boston, make sense. I can follow them and they seem to 

make sense to me. 

I think I am having a more difficult time getting my head around 

your examples of aircraft for U.S. Customs and Border Protection 

and components for weather satellites to help detect moderate or 

track severe weather. Can you help me understand how those last 

two examples are things that are appropriate exercises of the DPA 

authority? 

Mr. KAUFMAN. I will be happy to. In the case of the aircraft for 

CBP, for Customs and Border Protection, those are their P-3 Orion 

aircraft and they needed critical parts for maintenance for those 

aircraft that actually if we hadn’t executed a priority rating for 

that contract, then they would have fallen into a lengthy delay because similar ratings were in place from the Department of Defense. So that is a perfect example of— 

Mr. MULVANEY. Okay. Thank you. I am going to cut you off because—and I want to let you go, but I want to cut you off there 

because it raises a really good point. Is that—we have had these 

things since what, the 1950s, their DC-6s, I think, or something 

like that modified. 

17 

Was the lack of spare parts simply lack of planning on somebody’s part and it turned out being—my secretary, when I first 

started practicing law, had a sign that said, ‘‘A failure to plan on 

your part does not constitute an emergency on my part.’’ Is that 

what we saw in that particular circumstance? 

Mr. KAUFMAN. No, I do not believe that is what we saw. I think 

what you saw in that circumstance is a small market with competing demands on that market. And a need to adjudicate what 

was most critical at a point in time. 

Mr. MULVANEY. Right, but again, that is a knowable thing, isn’t 

it? We have had these things for 60 years—why are you shaking 

your head, Mr. Lambert—I am not trying to be combative. I am 

just trying to— 

Mr. LAMBERT. No, it is a question about tempo and priorities, 

and in this particular case, as I recall, there were a lot of demands 

in a short period of time for these priorities. We were flying them 

or using them harder than we were prior and it was a question of 

how we adjudicated—from a business model perspective, your option is to build up a huge inventory of parts that may or may not 

be obsolete in a few years, which you pay a lot for, and then you 

store and manage, or to work with industry to do just-in-time 

prioritization, which the Title I authorities allow us to adjudicate 

that, that priority rating. 

Mr. MULVANEY. Okay, that helps. Thank you for that. I appreciate that. 

Mr. Lambert, that leads me to another question. You mentioned 

in part of your testimony, you said that agencies apply for DPA 

treatment. Have you ever turned anybody down? 

Mr. LAMBERT. Yes, sir. 

Mr. MULVANEY. And what is the—you said there is this two-part 

test about whether or not it is important for national security and 

whether or not it is something the private sector would do. Is it basically, fail one of those two tests? Is that the idea? 

Mr. LAMBERT. No, that is just to get into the gate. That is to 

make the application. So any service—first of all, you need a government customer, so that is the first basis. 

The U.S. Government has to be a customer because frankly, this 

is U.S. taxpayer money. And so when we go out and look, we ask, 

is there a U.S. customer? That is one of the first internal hurdles 

we look at. 

Is there a private industry willing to match? A really important 

part of DPA that people don’t appreciate is there needs to be a private sector contribution to this. 

Usually is more than one to one, but we strive to make it to give 

them incentive to get some skin in the game from the private sector. So it is not entitlement. 

We really are trying to transition a technology or capability from 

the government—something we need that isn’t performing, there is 

a market error—and we need to help correct the market, but then 

the market should take over. 

At the end of the day, we don’t want to be in this—we need to 

transition this to a commercial enterprise. So it needs to have a 

government customer. That is the first hurdle. 

18 

If we can’t find a sponsor for it, we get a lot of people coming 

in offering ideas. If there is no customer for it, even if it meets 

those first two DPA criteria, we will not fund it. We won’t even put 

it in our hopper. 

Mr. MULVANEY. Can you give me an example of something that 

failed the test within recent memory? 

Mr. LAMBERT. Sure, we have had—they tend to be smaller entrepreneurial companies which have grand ideas. We had one recently, and I need to go back, because it may have been something 

that worked on the classified program, but it seemed to have great 

promise but we ran it on to ground, we put together these IPT’s 

that are—we treat every inquiry very seriously. 

We put together an IPT and it was determined that there were 

alternatives—this was a good idea, but there were alternatives and 

the commercial market was already addressing that need for us, 

and so there was no need for government support. 

Mr. MULVANEY. And Mr. Lambert—one quick question if I may, 

Mr. Chairman. 

I’m sorry. I misunderstood. I thought you said earlier that the 

agencies make application to you. Are you telling us that individual 

companies, private companies come to you and ask for DPA treatment for the products? 

Mr. LAMBERT. Absolutely. Sometimes through Members. Historically, Members have provided us information about companies. 

Members tend to have a good ground sense of what is happening 

in their districts, and we always look and listen to those inquiries, 

but they run through the same process that if a government agency 

came to us, we would go through the same screening. 

Mr. MULVANEY. I thank the gentleman. 

Chairman CAMPBELL. The gentleman’s time has expired. 

And next, we have the gentleman from North Carolina, Mr. 

Pittenger. You are recognized for 5 minutes. 

Mr. PITTENGER. Thank you, Mr. Chairman. 

And thank you, Secretary Wolf, Secretary Lambert, and Mr. 

Kaufman for your testimony. 

I would direct my question, frankly, to any of you. As we reauthorize any statute in this case, we look for what changes we could 

make that would make it more effective, particularly as it relates 

to the economy, and I really would like to know from your experience, as you work with this statute on a daily basis, what constructive changes you would recommend that we could make at this 

time? 

Mr. LAMBERT. Again, it is an incredibly functionable statute right 

now. We have a great deal of flexibility as long as we are informing 

you and communicating with you about what we are doing. 

We believe we have all the authorities in place to meet the demands. If we have tweaks on the edges, I believe it is on us to get 

back to you and explain what those are, but as a general rule, we 

think the Act is quite constructive, particularly the changes that 

were made in 2009, which helped us a lot in cleaning up a lot of 

the language and streamlining a lot of our processes. 

Mr. WOLF. We have no suggestions to make, either. It works very 

efficiently. We have had nothing but good responses in working 

19 

with and educating industry about this and have no recommended 

changes. 

Mr. KAUFMAN. I would agree. The Administration did put forward proposals in 2009 that were adopted in the reauthorization, 

and we feel that the law works well as written. 

Mr. PITTENGER. Let me ask you this: Do you hear complaints 

from private industry? 

Mr. WOLF. No. In fact before coming here today, in anticipation 

of that question, I polled some of my staff. And other companies 

have used it and I have not heard any complaints from anyone in 

industry who used it. To the contrary, with the advice and assistance of my staff from the Commerce Department, it has worked 

quite efficiently and well. I have not received any complaints. 

Mr. PITTENGER. No threats, no challenges— 

Mr. WOLF. No, I am unaware of any threats or complaints, formal or informal. 

Mr. LAMBERT. Sir, I would add from DOD’s perspective that we 

do get complaints, but it is usually because we are not funding 

something. We put everything through the same rigorous process. 

Sometimes, we determine it is not in the best interest of the taxpayer or the warfighter to fund something. That is when we get 

complaints, but we have never had a challenge or a protest. 

Mr. PITTENGER. Thank you. 

Mr. Chairman, I appreciate it. I yield back my time. 

Chairman CAMPBELL. All right. The gentleman yields back, and 

seeing no other Members who wish to ask questions—I thought we 

would run right up against the votes, but we have managed to complete all questioning without the votes. 

So I thank the panel very much for being here today. 

The Chair notes that some Members may have additional questions for this panel, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to these witnesses and to place their responses in the record. Also, without objection, Members will have 5 legislative days to submit extraneous 

materials to the Chair for inclusion in the record. 

And without objection, this hearing is now adjourned. 

[Whereupon, at 2:55 p.m., the hearing was adjourned.] 

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