I

103D CONGRESS

1ST SESSION H. R. 1880

To mitigate the adverse effects on defense contractors and defense workers

of reductions in defense spending.

IN THE HOUSE OF REPRESENTATIVES

APRIL 28, 1993

Mr. BACCHUS of Florida introduced the following bill; which was referred

jointly to the Committees on Armed Services, Small Business, Education

and Labor, Energy and Commerce, Science, Space, and Technology, and

Banking, Finance and Urban Affairs

A BILL

To mitigate the adverse effects on defense contractors and

defense workers of reductions in defense spending.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Defense Workers Eco5 nomic Reinvestment Act of 1993’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Definitions.
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TITLE I—DEFENSE PROCUREMENT SPECIFICATIONS

Sec. 101. Examination of Department of Defense procurement specifications.

Sec. 102. Greater defense use of commercially available systems, supplies, and

services.

TITLE II—RETRAINING DEFENSE WORKERS FOR NEW

EMPLOYMENT

Sec. 201. Training Oversight and Administration Office.

Sec. 202. Retraining and other transition assistance programs.

Sec. 203. Eligible defense workers.

TITLE III—COMMERCIALIZATION AND DUAL-USE RESEARCH OPPORTUNITIES FOR DEFENSE CONTRACTORS AND SMALL BUSINESS

Sec. 301. Promotion of commercialization opportunities for qualified defense

contractors.

Sec. 302. Defense and energy dual-use research under the Small Business Innovation Research Program.

Sec. 303. Commercialization loans.

Sec. 304. Promotion of industrial parks.

Sec. 305. Defense commercialization award.

TITLE IV—FAST RESPONSE STATE TECHNOLOGICAL

COMPETITIVENESS GRANTS

Sec. 401. Purpose.

Sec. 402. Uses of funds.

Sec. 403. Funding formula.

Sec. 404. State eligibility.

Sec. 405. Authorization of appropriations.

1 SEC. 3. DEFINITIONS.

2 For purposes of this Act:

3 (1) The term ‘‘critical technology’’ has the

4 meaning given that term in section 2491(6) of title

5 10, United States Code.

6 (2) The term ‘‘dual-use’’ has the meaning given

7 that term in section 2491(2) of title 10, United

8 States Code.

9 (3) The term ‘‘eligible defense worker’’ means

10 an employee of a qualified defense contractor or a ci-
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1 vilian employee of the Department of Defense who

2 is eligible for assistance under title II.

3 (4) The terms ‘‘Military-Civilian Integration

4 and Technology Transfer Advisory Board’’ and ‘‘Ad5 visory Board’’ mean the Military-Civilian Integration

6 and Technology Transfer Advisory Board established

7 under section 2516(a) of title 10, United States

8 Code.

9 (5) The terms ‘‘Office of Training Oversight

10 and Administration’’ and ‘‘Office’’ mean the Office

11 of Training Oversight and Administration estab12 lished under section 201.

13 (6) The term ‘‘qualified defense contractor’’

14 means a private business producing goods or services

15 for the Department of Defense that, during the

16 three years immediately preceding the date of the

17 enactment of this Act—

18 (A) obtained at least 30 percent of its

19 gross income from defense contracts or sub20 contracts; or

21 (B) had at least 30 percent of its

22 workforce actively engaged in work directly re23 lated to defense contracts or subcontracts.
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1 TITLE I—DEFENSE PROCURE2 MENT SPECIFICATIONS

3 SEC. 101. EXAMINATION OF DEPARTMENT OF DEFENSE

4 PROCUREMENT SPECIFICATIONS.

5 (a) EXAMINATION.—Not later than one year after the

6 date of the enactment of this Act, the Secretary of Defense

7 shall complete an examination of all existing procurement

8 contracts of the Department of Defense to determine

9 whether those contracts which apply to dual-use tech10 nologies contain overly restrictive specifications on sys11 tems, supplies, and services that are also available com12 mercially.

13 (b) REPORT.—Upon completing the examination re14 quired by subsection (a), the Secretary of Defense shall

15 submit a report to the Congress detailing the results of

16 the examination. In the case of each contract examined

17 under subsection (a) which exceeds $100,000 and contains

18 Department of Defense specifications precluding the pur19 chase of commercial sector products, the report shall in20 clude the justification for developing a different specifica21 tion and the reasons for the unsuitability of commercial

22 specifications.

23 (c) CONSULTATION.—The Secretary of Defense shall

24 consult with the Military-Civilian Integration and Tech25 nology Transfer Advisory Board in conducting the exam-
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1 ination required by subsection (a) and the report required

2 by subsection (b).

3 SEC. 102. GREATER DEFENSE USE OF COMMERCIALLY

4 AVAILABLE SYSTEMS, SUPPLIES, AND SERV5 ICES.

6 Section 2305(a)(1)(B) of title 10, United States

7 Code, is amended—

8 (1) by striking out ‘‘and’’ at the end of clause

9 (i);

10 (2) by striking out the period at the end of

11 clause (ii); and

12 (3) by adding at the end the following new

13 clause:

14 ‘‘(iii) encourage the use of commercially avail15 able systems, supplies, and services.’’.

16 TITLE II—RETRAINING DEFENSE

17 WORKERS FOR NEW EMPLOY18 MENT

19 SEC. 201. TRAINING OVERSIGHT AND ADMINISTRATION

20 OFFICE.

21 (a) ESTABLISHMENT OF OFFICE.—The Secretary of

22 Defense shall establish an Office of Training Oversight

23 and Administration to coordinate and oversee retraining,

24 placement, and other transition assistance activities for el25 igible defense workers. The Office shall be under the su-
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1 pervision of the Assistant Secretary of Defense for Force

2 Management and Personnel and shall be consolidated with

3 existing transition assistance programs for eligible defense

4 workers that are currently the responsibility of the Assist5 ant Secretary.

6 (b) INFORMATION ON RETRAINING OPPORTUNI7 TIES.—The Office shall disseminate information to quali8 fied defense contractors and to civilian employees of the

9 Department of Defense concerning the availability, scope,

10 and rules governing the retraining and other transition as11 sistance programs for eligible defense workers established

12 under—

13 (1) section 202;

14 (2) section 1598 or 2410c of title 10, United

15 States Code; or

16 (3) section 325 or 325A of the Job Training

17 Partnership Act (29 U.S.C. 1662d, 1662d–1).

18 (c) PLACEMENT ASSISTANCE.—The Office should en19 sure that each qualified defense contractor informs all em20 ployees of the contractor regarding the programs referred

21 to in subsection (b). The Office shall facilitate placement

22 of eligible defense workers by acting as a repository for

23 employment opportunity information and publicizing the

24 availability of qualified employees.
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1 (d) INFORMATION COLLECTION.—The Office shall

2 maintain statistics to analyze the effectiveness of the re3 training and placement programs in order to assist the

4 Assistant Secretary and provide any other information

5 that the Assistant Secretary may request.

6 SEC. 202. RETRAINING AND OTHER TRANSITION ASSIST7 ANCE PROGRAMS.

8 (a) SKILLS DEVELOPMENT PROGRAMS.—The Office,

9 in cooperation with other Federal agencies, may enter into

10 agreements to carry out skills development programs for

11 the provision of retraining assistance to eligible defense

12 workers in skills identified by the Office as being, or pro13 jected to be, in short supply in the area in which the pro14 gram operates. A skills development program may be de15 veloped and taught pursuant to the agreement by any

16 Federal agency, State and local governments, institutions

17 of higher learning (especially associate-degree granting

18 colleges), educational consultants, or qualified defense

19 contractors. The Office shall have principal responsibility

20 for transition assistance to eligible defense workers se21 lected to participate in such a skills development program

22 and should consult with the Secretary of Labor to avoid

23 duplication with services provided by the Department of

24 Labor under section 325 or 325A of the Job Training

25 Partnership Act (29 U.S.C. 1662d, 1662d–1).
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1 (b) SCHOLARSHIP PROGRAMS.—The Office may

2 award one-year and two-year scholarships to eligible de3 fense workers to assist the recipients of the scholarships

4 to attend educational institutions. The scholarships shall

5 be awarded on the basis of a competitive selection process,

6 except that the Office may give a priority—

7 (1) for scholarships in certain critical occupa8 tions, as determined by the Office; and

9 (2) to eligible defense workers who seek voca10 tional training offered by associate-degree granting

11 colleges.

12 (c) FEDERAL SHARE.—The Federal contribution to

13 a skills development program conducted under subsection

14 (a) may not exceed 50 percent of the costs of the program.

15 (d) ALLOWED EXPENSES.—Funds provided under

16 this section for a skills development program may be used

17 to pay employee certification, apprenticeship, or profes18 sional registration costs incurred by an eligible defense

19 worker receiving retraining to enter a new profession. The

20 Secretary may also share any other subsistence costs asso21 ciated with employee transition so long as the Federal

22 funding share does not exceed 50 percent of such costs.

23 Extended income support requirements can be reduced by

24 the employer through early retraining prior to employee

25 termination.
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1 (e) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to the Secretary of De3 fense for each of the fiscal years 1994 through 1996—

4 (1) $50,000,000 for skills development pro5 grams under subsection (a); and

6 (2) $25,000,000 for scholarships under sub7 section (b).

8 SEC. 203. ELIGIBLE DEFENSE WORKERS.

9 (a) ELIGIBILITY REQUIREMENTS.—To be eligible for

10 selection to participate in a skills development program

11 under section 202(a) or receive a scholarship under section

12 202(b), an individual must be—

13 (1) a full-time employee of a qualified defense

14 contractor for at least three years who—

15 (A) is directly involved with a Department

16 of Defense funded project which is canceled or

17 experiences a reduction in Federal funds equal

18 to at least 25 percent of the Federal funds re19 ceived for the project the previous year; and

20 (B) as a result of the cancellation or re21 duction, is terminated or identified by the em22 ployer as likely to be terminated within one

23 year; or
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1 (2) a civilian employee of the Department of

2 Defense who is eligible for transition assistance

3 under rules established by the Secretary of Defense.

4 (b) NOTIFICATION.—A qualified defense contractor

5 shall make a good faith effort to identify as early as pos6 sible employees who meet the eligibility requirements of

7 subsection (a)(1), advise such employees on retraining op8 tions, and allow such employees to participate in skills de9 velopment programs and other transition assistance pro10 grams.

11 (c) CERTAIN PREVIOUSLY TERMINATED EMPLOY12 EES.—An employee of a qualified defense contractor who

13 was terminated during the one-year period ending on the

14 date of the enactment of this Act shall be eligible for as15 sistance under section 202 if the Office determines that

16 the employee—

17 (1) was a full-time employee of a qualified de18 fense contractor for at least three years;

19 (2) was directly involved with a Department of

20 Defense funded project; and

21 (3) was terminated as a result of the cancella22 tion or a funding reduction of that project.
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1 TITLE III—COMMERCIALIZATION

2 AND DUAL-USE RESEARCH

3 OPPORTUNITIES FOR DE4 FENSE CONTRACTORS AND

5 SMALL BUSINESS

6 SEC. 301. PROMOTION OF COMMERCIALIZATION OPPORTU7 NITIES FOR QUALIFIED DEFENSE CONTRAC8 TORS.

9 (a) PROMOTION PROGRAMS.—The Secretary of Com10 merce shall establish a program to assist qualified defense

11 contractors to participate in the Advanced Technology

12 Program of the National Institute of Standards and Tech13 nology established under section 28 of the National Insti14 tute of Standards and Technology Act (15 U.S.C. 278n)

15 and other appropriate programs of the Department of

16 Commerce to commercialize significant new scientific dis17 coveries and technologies. The Secretary shall include lan18 guage in the solicitations and announcements of such pro19 grams to encourage proposals concerning critical tech20 nology and technology transfers from military to civilian

21 applications.

22 (b) NOTIFICATION OF ADVISORY BOARD.—The Sec23 retary of Commerce shall inform the Military-Civilian In24 tegration and Technology Transfer Advisory Board of the

25 status of projects involving qualified defense contractors.
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1 SEC. 302. DEFENSE AND ENERGY DUAL-USE RESEARCH

2 UNDER THE SMALL BUSINESS INNOVATION

3 RESEARCH PROGRAM.

4 (a) ENCOURAGEMENT OF PROPOSALS WITH DUAL5 USE APPLICATION.—The Secretary of Defense and the

6 Secretary of Energy, in consultation with the Adminis7 trator of the Small Business Administration, shall include

8 language in solicitations of the Small Business Innovation

9 Research Program conducted by the Department of De10 fense and the Department of Energy encouraging research

11 proposals involving dual-use applications and proposals in12 volving military to civilian conversion. This subsection

13 shall apply with respect to solicitations for projects to be

14 funded in fiscal year 1994 and subsequent fiscal years.

15 (b) SPECIAL SET ASIDE.—Of the amount of the re16 search and development budget of the Department of De17 fense and the Department of Energy required under sec18 tion 9(f)(1) of the Small Business Act (15 U.S.C.

19 638(f)(1)) to be expended with small business concerns in

20 connection with the Small Business Innovation Research

21 Program—

22 (1) 10 percent of the amount set aside for fiscal

23 year 1994;

24 (2) 15 percent of the amount set aside for each

25 of the fiscal years 1995 and 1996; and
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1 (3) 20 percent of the amount set aside for fiscal

2 year 1997,

3 shall be reserved for projects involving dual-use applica4 tions and projects involving military to civilian conversion.

5 SEC. 303. COMMERCIALIZATION LOANS.

6 (a) LOANS AUTHORIZED.—The Secretary of Com7 merce may make loans to qualified defense contractors to

8 carry out commercialization projects. The potential for the

9 development of a product that has military applications

10 and nonmilitary commercial applications shall be a cri11 terion in the selection of projects for funding, although

12 not an absolute requirement. Other criteria should include

13 the risk of the project compared to the utility to consum14 ers and the United States.

15 (b) AMOUNT AND NUMBER OF LOANS.—A loan

16 under this section may not exceed $2,000,000 for any one

17 commercialization project. No more than three loans may

18 be made to any single company or joint venture.

19 (c) TERMS.—A loan under this section shall be made

20 under such terms and conditions as the Secretary of Com21 merce may require, including the payment of fair market

22 interest, except that repayment of the loan shall be com23 pleted within seven years after the loan is made.

24 (d) MATCHING REQUIREMENT.—The recipient of a

25 loan under this section shall be required to match the
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1 amount of the loan with an equal amount of non-Federal

2 funds specifically guaranteed for use in the project.

3 (e) AUTHORIZATION OF APPROPRIATIONS.—There is

4 authorized to be appropriated to the Secretary of Com5 merce for fiscal year 1994 $150,000,000 to carry out this

6 section. Funds appropriated pursuant to this subsection

7 shall be available until expended.

8 SEC. 304. PROMOTION OF INDUSTRIAL PARKS.

9 (a) PROMOTION.—The Secretary of Defense shall en10 courage the creation of industrial parks or technology in11 cubator centers, including prototyping facilities, to trans12 fer and spinoff technology from qualified defense contrac13 tors, including those operating national laboratories, to

14 small businesses.

15 (b) USES OF PATENT ROYALTIES.—The Secretary of

16 Defense may use up to 50 percent of the royalties from

17 the licensing of relevant Department of Defense and De18 partment of Energy owned patents to assist local tech19 nology transfer activities conducted in close proximity to

20 qualified defense contractor facilities and up to 25 percent

21 of such royalties to assist technology transfer activities

22 that are unrelated to the proximity of a qualified defense

23 contractor facility.
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1 SEC. 305. DEFENSE COMMERCIALIZATION AWARD.

2 (a) AWARD.—The Secretary of Defense, in consulta3 tion with the Secretary of Commerce, shall create and ad4 minister an awards program to foster and encourage inno5 vation and redirection efforts by qualified defense contrac6 tors in the area of commercialization. Criteria for selection

7 of award recipients shall include job creation, leverage of

8 Federal funding, and product quality.

9 (b) MODEL.—The Secretary shall model the awards

10 program after the Malcolm Baldrige Quality Awards pro11 vided under section 17 of the Stevenson-Wydler Tech12 nology Innovation Act of 1980 (15 U.S.C. 3711a).

13 TITLE IV—FAST RESPONSE

14 STATE TECHNOLOGICAL COM15 PETITIVENESS GRANTS

16 SEC. 401. PURPOSE.

17 The purpose of this title is to provide Federal assist18 ance directly to States for defense reinvestment programs

19 to improve existing programs and to create new initiatives.

20 SEC. 402. USES OF FUNDS.

21 (a) IN GENERAL.—Funds made available under this

22 title shall be used by States to assist industries, workers,

23 and communities that have been adversely affected by the

24 overall reduction of defense spending in the State. States

25 may use such funds in conjunction with other Federal or

26 State assistance for programs within the public and pri-
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1 vate sectors, involving industry, communities, and edu2 cational institutions. Qualifying projects should stress eco3 nomic development, quality job growth, education and re4 training, technology transfer, technology infrastructure,

5 and enhanced competitiveness. Preference in the funding

6 of projects should be given to projects concerning the de7 velopment or improvement of transportation infrastruc8 ture or environmentally sustaining technologies.

9 SEC. 403. FUNDING FORMULA.

10 (a) ALLOCATION.—From the amount appropriated

11 under section 405 for a fiscal year, the Secretary of De12 fense shall allocate such amounts for distribution consist13 ent with the formula specified in subsection (b) for such

14 fiscal years. The Secretary shall make such allocation in

15 consultation with the Military-Civilian Integration and

16 Technology Transfer Advisory Board.

17 (b) FORMULA.—From the amount allocated for a fis18 cal year under subsection (a), the Secretary of Defense

19 shall distribute during such fiscal year fast response State

20 technological competitiveness grants to States whose rein21 vestment programs meet the requirements of section 404

22 as follows:

23 (1) 50 percent of the total allocation for that

24 year shall be distributed among the States pro rata

25 based on the ratio of the population of the State to
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1 the total population of all States, as determined by

2 the latest available Federal census.

3 (2) 50 percent of the total allocation for that

4 year to be distributed among the States pro rata

5 based on the ratio of the cumulative dollar amount

6 of Department of Defense purchases in the State for

7 fiscal year 1992 (including research and develop8 ment, procurement, operations and maintenance,

9 and construction) to the total dollar amount of such

10 Department of Defense purchases in all the States

11 as determined by the Department of Defense using

12 its most recent official data collected after fiscal

13 year 1990.

14 SEC. 404. STATE ELIGIBILITY.

15 (a) APPLICATION GUIDELINES.—The Secretary of

16 Defense, in consultation with the Advisory Board shall de17 velop and disseminate guidelines on State eligibility for

18 fast response State technological competitiveness grants.

19 The guidelines shall require the following:

20 (1) The State shall agree to contribute to the

21 defense reinvestment program of the State an

22 amount equal to at least 10 percent of the amount

23 of the technological competitiveness grant made to

24 the State.
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1 (2) Any program using funds provided under a

2 technological competitiveness grant that is assisting

3 a defense contractor shall require the contractor to

4 provide at least a $1 funding match for every $2 ex5 pended in grant funds to assist the contractor.

6 (3) In addition to the matching contribution re7 quired by paragraph (1), the State shall guarantee

8 to maintain its aggregate expenditures from all other

9 sources for programs which provide technical and fi10 nancial assistance to defense contractors at or above

11 the average level of such expenditures in the two fis12 cal years preceding the date of the enactment of this

13 Act.

14 (b) STATE RESPONSIBILITY.—Prior to receiving a

15 fast response State technological competitiveness grant,

16 the Governor of the State shall provide to the Secretary

17 of Defense information about the defense reinvestment

18 program conducted by the State. The State shall appoint

19 a single agency or entity within the State to be the recipi20 ent of the Federal funding and to administer and oversee

21 the State’s reinvestment program. Each State must annu22 ally report on the progress of its defense reinvestment pro23 grams back to the Secretary and supply any analysis data

24 that the Secretary may require for program evaluation.
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1 (c) WITHHOLDING OF GRANT FUNDS.—The Sec2 retary of Defense shall withhold a fast response State

3 technological competitiveness grant from any State if the

4 Secretary concludes that the State’s defense reinvestment

5 program or the progress of such program is unsatisfactory

6 relative to the published guidelines. In such a case, the

7 Secretary shall provide to the State the reasons for its dis8 qualification and provide a 90-day appeal period during

9 which the State shall be allowed to submit a revised pro10 posal for review by the Secretary.

11 SEC. 405. AUTHORIZATION OF APPROPRIATIONS.

12 (a) IN GENERAL.—There is authorized to be appro13 priated to the Secretary of Defense for the fiscal years

14 1994 through 1996 $1,000,000,000 for fast response

15 State technological competitiveness grants under this title.

16 (b) AVAILABILITY.—Amounts appropriated under

17 subsection (a) shall remain available until expended.

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