I 
110TH CONGRESS 
2D SESSION 
H. R. 6426 
To prohibit the use of funds by the Department of Defense on the KC– 
X tanker contract, and for other purposes related to that contract. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 26, 2008 
Mr. TIAHRT (for himself, Mr. MORAN of Kansas, Mr. SHIMKUS, Mr. 
REICHERT, and Mr. LAHOOD) introduced the following bill; which was 
referred to the Committee on Armed Services 
A BILL 
To prohibit the use of funds by the Department of Defense 
on the KC–X tanker contract, and for other purposes 
related to that contract. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘KC–X Tanker Recompete Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. KC–X Tanker contract. 
Sec. 3. Independent cost estimate. 
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Sec. 4. Requirement to offset illegal subsidization to foreign persons partici-
pating in KC–135 replacement competition. 
Sec. 5. Ensuring fair competition. 
Sec. 6. National security considerations. 
Sec. 7. Industrial base considerations. 
Sec. 8. Loss of employee tax revenue. 
Sec. 9. Loss of corporate tax revenue. 
Sec. 10. Regulatory burden. 
Sec. 11. Foreign Corrupt Practices Act. 
Sec. 12. Covered contractor definition. 
Sec. 13. Report. 
SEC. 2. KC–X TANKER CONTRACT. 
(a) PROHIBITION.—No funds may be used by the De-
partment of Defense on the KC–X tanker contract. In this 
subsection, the term ‘‘KC–X tanker contract’’ means the 
contract awarded by the Department of the Air Force on 
February 29, 2008, for the next generation air-refueling 
tanker aircraft. 
(b) REPLACEMENT.—If the Department of the Air 
Force chooses not to exercise its authority to award a new 
contract for the KC–X tanker to the bidder whose protest 
of the February 29, 2008, award was sustained by the 
Government Accountability Office on June 18, 2008, the 
Secretary of Defense, using competitive procedures, shall 
award a contract for a replacement for the KC–135 tank-
er. Such funds as may be necessary are authorized to con-
duct the competition for such contract. 
SEC. 3. INDEPENDENT COST ESTIMATE. 
As part of the acquisition process for the award of 
a contract for a replacement for the KC–135 tanker, as 
required by section 2(b), the Secretary of Defense and the 
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source selection authority shall ensure that an inde-
pendent cost estimate is completed. The cost estimate 
shall include an estimate of— 
(1) all costs borne by the suppliers; 
(2) all costs borne by foreign governments; 
(3) all costs borne by domestic suppliers (if the 
proposal involves any domestic suppliers); and 
(4) all costs covered by cost accounting stand-
ards under the Federal Acquisition Regulation. 
SEC. 4. REQUIREMENT TO OFFSET ILLEGAL SUBSIDIZA-
TION TO FOREIGN PERSONS PARTICIPATING 
IN KC–135 REPLACEMENT COMPETITION. 
(a) REQUIREMENT.—As part of the acquisition proc-
ess for the award of a contract for a replacement of the 
KC–135 tanker, as required by section 2(b), the Secretary 
of Defense shall, in conducting the cost or price evaluation 
of any proposal submitted by a subsidized person, increase 
the cost or price of the proposal by the amount of illegal 
subsidization. 
(b) ILLEGAL SUBSIDIZATION.—For purposes of sub-
section (a), the amount of illegal subsidization with re-
spect to a proposal submitted by a subsidized person is 
the amount of the illegal subsidy referred to in subsection 
(c), as determined jointly by the Secretary of Commerce 
and the United States Trade Representative after receipt 
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of a request from the Secretary of Defense for such a de-
termination. 
(c) SUBSIDIZED PERSONS.—With respect to any pro-
posal submitted to the Department of Defense for a con-
tract for a replacement of the KC–135 tanker, a sub-
sidized person is any of the following: 
(1) FOREIGN
PERSON.—A foreign person to 
which the government of a foreign country that is a 
member of the World Trade Organization has pro-
vided a subsidy for the tanker if— 
(A) the United States has requested con-
sultations with that foreign country under the 
Agreement on Subsidies and Countervailing 
Measures on the basis that the subsidy is an il-
legal subsidy under that Agreement; and 
(B) the World Trade Organization has 
ruled that the subsidy provided by the foreign 
country is an illegal subsidy under the Agree-
ment on Subsidies and Countervailing Meas-
ures. 
(2) JOINT VENTURES.—Any joint venture, co-
operative organization, partnership, or contracting 
team of which a foreign person described in para-
graph (1) is a member. 
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(3) SUBCONTRACTS.—Any person proposing to 
use a foreign person described in paragraph (1) or 
an entity described in paragraph (2) as a subcon-
tractor in performing the contract for which the pro-
posal is submitted. 
(d) DEFINITIONS.—In this section: 
(1) The term ‘‘Agreement on Subsidies and 
Countervailing Measures’’ means the agreement de-
scribed in section 101(d)(12) of the Uruguay Round 
Agreements Act (19 U.S.C. 3501(d)(12)). 
(2) The term ‘‘illegal subsidy’’ means a prohib-
ited subsidy or an actionable subsidy under the 
Agreement on Subsidies and Countervailing Meas-
ures. 
(3) The term ‘‘foreign person’’ means— 
(A) an individual who is not a United 
States person or an alien lawfully admitted for 
permanent residence into the United States; or 
(B) a corporation, partnership, or other 
nongovernmental entity which is not a United 
States person. 
(4) The term ‘‘United States person’’ means— 
(A) a natural person who is a citizen of the 
United States or who owes permanent alle-
giance to the United States; and 
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(B) a corporation or other legal entity 
which is organized under the laws of the United 
States, any State or territory thereof, or the 
District of Columbia, if natural persons de-
scribed in subparagraph (A) own, directly or in-
directly, more than 50 percent of the out-
standing capital stock or other beneficial inter-
est in such legal entity. 
(5) The term ‘‘cost or price evaluation’’ means 
an evaluation conducted by a source selection au-
thority pursuant to subpart 15.305(a)(1) of the Fed-
eral Acquisition Regulation. 
SEC. 5. ENSURING FAIR COMPETITION. 
As part of the acquisition process for the award of 
a contract for a replacement for the KC–135 tanker, as 
required by section 2(b), the Secretary of Defense and the 
source selection authority shall ensure that any covered 
contractor, foreign or domestic, for the contract, as part 
of the cost criteria, is evaluated both on the cost borne 
by the supplier and any cost borne by a foreign govern-
ment that is not borne by a government (local, State, or 
Federal) in the United States. The costs considered in the 
evaluation shall be consistent with the costs estimated in 
the independent cost estimate completed pursuant to sec-
tion 3. 
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SEC. 9. LOSS OF CORPORATE TAX REVENUE. 
As part of the acquisition process for the award of 
a contract for a replacement for the KC–135 tanker, as 
required by section 2(b), it is the responsibility of the De-
partment of Defense to take into consideration the impact 
of lost corporate tax revenues to the United States, as a 
result of awarding defense contracts to foreign entities. 
SEC. 10. REGULATORY BURDEN. 
As part of the acquisition process for the award of 
a contract for a replacement for the KC–135 tanker, as 
required by section 2(b), it is the responsibility of the De-
partment of Defense to take into consideration the impact 
of all regulations waived or that are not applicable with 
respect to foreign entities. These regulations include cost 
accounting standards, Buy America provisions, specialty 
metal provisions, the Foreign Corrupt Practices Acts, and 
compliance with the International Traffic in Arms Regula-
tion. 
SEC. 11. FOREIGN CORRUPT PRACTICES ACT. 
(a) CONDITION FOR PROSPECTIVE AWARD OF CON-
TRACT.— 
(1) IN GENERAL.—As part of the acquisition 
process for the award of a contract for a replace-
ment for the KC–135 tanker, as required by section 
2(b), the Secretary of Defense and the source selec-
tion authority shall require that any contractor or 
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subcontractor described in paragraph (2) that is not 
already covered by the Foreign Corrupt Practices 
Act shall be required, as a condition of the contract, 
to comply with the requirements of such Act. 
(2) CONTRACTOR
AND
SUBCONTRACTORS
DE-
SCRIBED.—A contractor or subcontractor described 
in this paragraph is any of the following: 
(A) A prospective defense contractor that 
is part of an internationally controlled group of 
entities. 
(B) A prospective subcontractor that is 
part of an internationally controlled group of 
entities, provided that the subcontractor is at 
the second tier or higher and is to be used by 
the prospective defense contractor (as described 
in subparagraph (A)) to perform the contract. 
(b) COMPLIANCE PROGRAM.— 
(1) IN GENERAL.—With respect to compliance 
with the Foreign Corrupt Practices Act, the Sec-
retary of Defense shall require that all contractors 
and subcontractors described in subsection (a)(2) 
have a compliance program and certify in writing 
that they have completed an audit of that compli-
ance program. 
(2) DEBARMENT.— 
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(A) IN
GENERAL.—Any contractor de-
scribed in subsection (a)(2) that engages in 
conduct that violates the requirements of the 
Foreign Corrupt Practices Act or any similar 
applicable laws in foreign countries shall be 
debarred from contracting with the Department 
of Defense. 
(B) PERIOD OF DEBARMENT.—The period 
of debarment under subparagraph (A) shall be 
at least 3 years. 
(c) NATIONAL SECURITY WAIVER AUTHORITY.— 
(1) IN
GENERAL.—The Secretary of Defense 
may waive the applicability of subsections (a) and 
(b) in specific instances if the Secretary determines 
that the waiver is necessary in the national security 
interests of the United States. 
(2) NON-DELEGATION.—The Secretary of De-
fense may not delegate the waiver authority under 
paragraph (1). 
(3) NOTIFICATION.—Upon issuing a waiver 
under paragraph (1), the Secretary of Defense shall 
notify the appropriate Congressional committees in 
writing not later than 30 days after issuing such 
waiver. 
(d) DEFINITIONS.—In this section: 
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(1) FOREIGN CORRUPT PRACTICES ACT.—The 
term ‘‘Foreign Corrupt Practices Act’’ means— 
(A) section 30A of the Securities Exchange 
Act of 1934 (15 U.S.C. 78dd–1); and 
(B) sections 104 and 104A of the Foreign 
Corrupt Practices Act of 1977 (15 U.S.C. 
78dd–2). 
(2) INTERNATIONALLY CONTROLLED GROUP OF 
ENTITIES.—The term ‘‘internationally controlled 
group of entities’’ means a controlled group of enti-
ties the common parent of which is a company orga-
nized under the laws of a foreign government and to 
which the Foreign Corrupt Practices Act does not, 
by its jurisdictional terms, apply. 
(3) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—In this subsection, the term ‘‘appropriate 
Congressional committees’’ means— 
(A) the Committee on Armed Services, the 
Committee on Appropriations, and the Perma-
nent Select Committee on Intelligence of the 
House of Representatives; and 
(B) the Committee on Armed Services, the 
Committee on Appropriations, and the Select 
Committee on Intelligence of the Senate. 
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SEC. 12. COVERED CONTRACTOR DEFINITION. 
In this Act, the term ‘‘covered contractor’’, with re-
spect to a prime contract of the Department of Defense, 
means any of the following: 
(1) CONTRACTOR AND SUBSIDIARIES AND AF-
FILIATES.— 
(A) Any prospective contractor making an 
offer for the contract. 
(B) The contractor awarded the contract. 
(C) Any subsidiary or affiliate of the con-
tractor awarded the contract. 
(2) SUBCONTRACTORS AND SUBSIDIARIES AND 
AFFILIATES.— 
(A) Any subcontractor of a contractor de-
scribed in paragraph (1)(B) that is at the sec-
ond tier or higher and is to be used by the con-
tractor in the performance of the contract. 
(B) Any subsidiary or affiliate of any such 
subcontractor. 
SEC. 13. REPORT. 
(a) REPORT REQUIREMENT.—The Secretary of De-
fense shall submit to the congressional defense committees 
a report on compliance by the Department of Defense with 
the provisions of this Act during the acquisition process 
for the award of a contract for a replacement for the KC– 
135 tanker, as required by section 2(b). 
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(b) DEADLINE.—The report shall be submitted no 
later than the date of award of such contract. 
(c) CONGRESSIONAL DEFENSE COMMITTEES.—In 
this section, the term ‘‘congressional defense committees’’ 
means— 
(1) the Committee on Armed Services and the 
Committee on Appropriations of the Senate; and 
(2) the Committee on Armed Services and the 
Committee on Appropriations of the House of Rep-
resentatives. 
Æ 
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