Title: Made in America Shipbuilding Act of 2018
Policy area: Government Operations and Politics

Summary:
Made in America Shipbuilding Act of 2018
This bill: (1) prohibits an executive agency from entering into a contract for the acquisition, construction, or conversion of a vessel unless the vessel is to be constructed or converted in the United States, and (2) lists components that may be procured for vessels only if manufactured in the United States.
An agency may waive such limitation upon determining that: (1) application of the limitation would increase the cost of the overall acquisition by more than 25% or cause unreasonable delays to be incurred, would result in the existence of only one domestic source for the item, or is not in U.S. national security interests; or (2) satisfactory quality items manufactured by a domestic entity are not available or domestic production of such items cannot be initiated without significantly delaying the project.
An agency may not (with exceptions) enter into a contract: (1) for the procurement of end items or components for ships that contain a specialty metal not melted or produced in the United States; and (2) for the construction of a vessel unless the steel, iron, aluminum, and manufactured products to be used in the construction are produced in the United States.
If a court or federal agency determines that a person intentionally affixed a label bearing a "Made in America" inscription to specified products sold in or shipped to the United States that were not made domestically, that person shall be debarred from contracting with the government for at least five years.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2731 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 2731

     To expand domestic content requirements for certain shipboard 
                  components, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 23, 2018

  Ms. Baldwin introduced the following bill; which was read twice and 
referred to the Committee on Homeland Security and Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
     To expand domestic content requirements for certain shipboard 
                  components, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Made in America Shipbuilding Act of 
2018''.

SEC. 2. DOMESTIC SHIPBUILDING REQUIREMENT.

    (a) In General.--The head of an executive agency may not enter into 
a contract related to the acquisition, construction, or conversion of a 
vessel unless the vessel is to be constructed or converted in the 
United States.
    (b) Executive Agency Defined.--In this section, the term 
``executive agency'' has the meaning given the term in section 133 of 
title 41, United States Code.

SEC. 3. DOMESTIC SOURCING REQUIREMENT FOR SHIPBOARD COMPONENTS.

    (a) In General.--Chapter 47 of title 41, United States Code, is 
amended by adding at the end the following new section:
``Sec. 4713. Domestic sourcing requirement for shipboard components
    ``(a) Requirement for United States Manufacture.--
            ``(1) Limitation on procurements.--The head of an executive 
        agency may procure any of the following components for vessels 
        only if the items are manufactured in the United States:
                    ``(A) In general.--The following components for 
                vessels:
                            ``(i) Air circuit breakers.
                            ``(ii) Welded shipboard anchor and mooring 
                        chain with a diameter of four inches or less.
                            ``(iii) Auxiliary equipment, including 
                        pumps, for all shipboard services.
                            ``(iv) Propulsion system components 
                        (engines, reduction gears, and propellers).
                            ``(v) Shipboard cranes.
                            ``(vi) Spreaders for shipboard cranes.
                            ``(vii) Capstans.
                            ``(viii) Winches.
                            ``(ix) Hoists.
                            ``(x) Outboard motors.
                            ``(xi) Windlasses.
                    ``(B) Other components.--The following components 
                of vessels, to the extent they are unique to marine 
                applications: gyrocompasses, electronic navigation 
                chart systems, steering controls, pumps, propulsion and 
                machinery control systems, and totally enclosed 
                lifeboats.
                    ``(C) Valves and machine tools.--Items in the 
                following categories:
                            ``(i) Powered and non-powered valves in 
                        Federal Supply Classes 4810 and 4820 used in 
                        piping for naval surface ships and submarines.
                            ``(ii) Machine tools in the Federal Supply 
                        Classes for metal-working machinery numbered 
                        3405, 3408, 3410 through 3419, 3426, 3433, 
                        3438, 3441 through 3443, 3445, 3446, 3448, 
                        3449, 3460, and 3461.
            ``(2) Applicability to certain items.--Paragraph (1) does 
        not apply to a procurement of spare or repair parts needed to 
        support components for vessels produced or manufactured outside 
        the United States.
            ``(3) Waiver authority.--The head of an executive agency 
        may waive the limitation in paragraph (1) with respect to the 
        procurement of an item listed in that paragraph if the head of 
        the agency determines that any of the following apply:
                    ``(A) Application of the limitation would increase 
                the cost of the overall acquisition by more than 25 
                percent or cause unreasonable delays to be incurred.
                    ``(B) Satisfactory quality items manufactured by a 
                domestic entity are not available or domestic 
                production of such items cannot be initiated without 
                significantly delaying the project for which the item 
                is to be acquired.
                    ``(C) Application of the limitation would result in 
                the existence of only one domestic source for the item.
                    ``(D) Application of the limitation is not in the 
                national security interests of the United States.
            ``(4) Implementation of waiver authority.--
                    ``(A) Non-delegation of authority.--The head of an 
                agency may not delegate the waiver authority under 
                paragraph (3).
                    ``(B) Publication.--Not later than 30 days after 
                exercising the waiver authority under paragraph (3), 
                the head of the agency shall publish in an easily 
                identifiable location on the website of the agency 
                information regarding the waiver, including a detailed 
                justification for the waiver.
            ``(5) Annual report.--Not later than 180 days after the end 
        of each fiscal year, the head of each executive agency that has 
        used a waiver described in this section in the fiscal year 
        shall submit to the Committee on Homeland Security and 
        Governmental Affairs of the Senate and the Committee on 
        Oversight and Government Reform of the House of Representatives 
        a report on the total amount of waivers used and detailed 
        information regarding and justification for the waiver.
    ``(b) Components Containing Specialty Metals.--
            ``(1) Limitation on procurements.--The head of an executive 
        agency may not enter into a contract for the procurement of end 
        items or components for ships that contain a specialty metal 
        not melted or produced in the United States.
            ``(2) Availability exception.--
                    ``(A) In general.--Paragraph (1) does not apply to 
                the extent that the head of an executive agency 
                determines that compliant specialty metal of 
                satisfactory quality and sufficient quantity, and in 
                the required form, cannot be procured as and when 
                needed. For purposes of the preceding sentence, the 
                term `compliant specialty metal' means specialty metal 
                melted or produced in the United States.
                    ``(B) Applicability.--This paragraph applies to 
                prime contracts and subcontracts at any tier under such 
                contracts.
            ``(3) Exception for certain acquisitions.--Paragraph (1) 
        does not apply to the following:
                    ``(A) Acquisitions outside the United States in 
                support of combat operations or in support of 
                contingency operations.
                    ``(B) Acquisitions for which the use of procedures 
                other than competitive procedures has been approved on 
                the basis of section 3304(c) of this title, relating to 
                unusual and compelling urgency of need.
            ``(4) Exception relating to agreements with foreign 
        governments.--Paragraph (1) does not preclude the acquisition 
        of a specialty metal if--
                    ``(A) the acquisition is necessary--
                            ``(i) to comply with agreements with 
                        foreign governments requiring the United States 
                        to purchase supplies from foreign sources for 
                        the purposes of offsetting sales made by the 
                        United States Government or United States firms 
                        under approved programs serving defense 
                        requirements; or
                            ``(ii) in furtherance of agreements with 
                        foreign governments in which both such 
                        governments agree to remove barriers to 
                        purchases of supplies produced in the other 
                        country or services performed by sources of the 
                        other country; and
                    ``(B) any such agreement with a foreign government 
                complies, where applicable, with the requirements of 
                section 36 of the Arms Export Control Act (22 U.S.C. 
                2776) and with section 2457 of title 10.
            ``(5) Exception for small purchases.--Paragraph (1) does 
        not apply to acquisitions in amounts not greater than the 
        simplified acquisition threshold referred to in section 134 of 
        this title.
            ``(6) Exception for purchases of electronic components.--
        Paragraph (1) does not apply to acquisitions of electronic 
        components, unless the head of the agency, with the concurrence 
        of the Secretary of Defense and upon the recommendation of the 
        Strategic Materials Protection Board pursuant to section 187 of 
        title 10, determines that the domestic availability of a 
        particular electronic component is critical to national 
        security.
            ``(7) Applicability to acquisitions of commercial items.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), this section applies to 
                acquisitions of commercial items, notwithstanding 
                sections 1906 and 1907 of this title.
                    ``(B) Exceptions.--This section does not apply to 
                contracts or subcontracts for the acquisition of 
                commercially available off-the-shelf items, as defined 
                in section 104 of this title, other than--
                            ``(i) contracts or subcontracts for the 
                        acquisition of specialty metals, including mill 
                        products, such as bar, billet, slab, wire, 
                        plate and sheet, that have not been 
                        incorporated into end items, subsystems, 
                        assemblies, or components;
                            ``(ii) contracts or subcontracts for the 
                        acquisition of forgings or castings of 
                        specialty metals, unless such forgings or 
                        castings are incorporated into commercially 
                        available off-the-shelf end items, subsystems, 
                        or assemblies;
                            ``(iii) contracts or subcontracts for 
                        commercially available high performance magnets 
                        unless such high performance magnets are 
                        incorporated into commercially available off-
                        the-shelf end items or subsystems; and
                            ``(iv) contracts or subcontracts for 
                        commercially available off-the-shelf fasteners, 
                        unless such fasteners are--
                                    ``(I) incorporated into 
                                commercially available off-the-shelf 
                                end items, subsystems, assemblies, or 
                                components; or
                                    ``(II) purchased as provided in 
                                subparagraph (C).
                    ``(C) Inapplicability to certain fasteners.--This 
                subsection does not apply to fasteners that are 
                commercial items that are purchased under a contract or 
                subcontract with a manufacturer of such fasteners, if 
                the manufacturer has certified that it will purchase, 
                during the relevant calendar year, an amount of 
                domestically melted specialty metal, in the required 
                form, for use in the production of such fasteners for 
                sale to executive agencies and other customers, that is 
                not less than 50 percent of the total amount of the 
                specialty metal that it will purchase to carry out the 
                production of such fasteners.
            ``(8) Exceptions for purchases of specialty metals below 
        minimum threshold.--
                    ``(A) In general.--Notwithstanding paragraph (1), 
                the head of an executive agency may accept delivery of 
                an item containing specialty metals that were not 
                melted in the United States if the total amount of 
                noncompliant specialty metals in the item does not 
                exceed 2 percent of the total weight of specialty 
                metals in the item.
                    ``(B) Exception.--This paragraph does not apply to 
                high performance magnets.
            ``(9) Streamlined compliance for commercial derivative 
        military articles.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                an item acquired under a prime contract if the head of 
                an executive agency determines that--
                            ``(i) the item is a commercial derivative 
                        military article; and
                            ``(ii) the contractor certifies that the 
                        contractor and its subcontractors have entered 
                        into a contractual agreement, or agreements, to 
                        purchase an amount of domestically melted 
                        specialty metal in the required form, for use 
                        during the period of contract performance in 
                        the production of the commercial derivative 
                        military article and the related commercial 
                        article, that is not less than the greater of--
                                    ``(I) an amount equivalent to 120 
                                percent of the amount of specialty 
                                metal that is required to carry out the 
                                production of the commercial derivative 
                                military article (including the work 
                                performed under each subcontract); or
                                    ``(II) an amount equivalent to 50 
                                percent of the amount of specialty 
                                metal that is purchased by the 
                                contractor and its subcontractors for 
                                use during such period in the 
                                production of the commercial derivative 
                                military article and the related 
                                commercial article.
                    ``(B) Determination of amount of specialty metal 
                required.--For the purposes of this paragraph, the 
                amount of specialty metal that is required to carry out 
                the production of the commercial derivative military 
                article includes specialty metal contained in any item, 
                including commercially available off-the-shelf items, 
                incorporated into such commercial derivative military 
                article.
            ``(10) National security waiver.--
                    ``(A) In general.--Notwithstanding paragraph (1), 
                the head of an executive agency may accept the delivery 
                of an end item containing noncompliant materials if the 
                head of the executive agency determines in writing that 
                acceptance of such end item is necessary to the 
                national security interests of the United States.
                    ``(B) Requirements.--A written determination under 
                subparagraph (A)--
                            ``(i) shall specify the quantity of end 
                        items to which the waiver applies and the time 
                        period over which the waiver applies; and
                            ``(ii) shall be provided to Congress prior 
                        to making such a determination (except that in 
                        the case of an urgent national security 
                        requirement, such certification may be provided 
                        to Congress up to 7 days after it is made).
                    ``(C) Knowing or willful noncompliance.--
                            ``(i) Determination.--In any case in which 
                        the head of an executive agency makes a 
                        determination under subparagraph (A), the head 
                        of the executive agency shall determine whether 
                        or not the noncompliance was knowing and 
                        willful.
                            ``(ii) Not knowing or willful 
                        noncompliance.--If the head of the executive 
                        agency determines that the noncompliance was 
                        not knowing or willful, the head of the 
                        executive agency shall ensure that the 
                        contractor or subcontractor responsible for the 
                        noncompliance develops and implements an 
                        effective plan to ensure future compliance.
                            ``(iii) Knowing or willful noncompliance.--
                        If the head of the executive agency determines 
                        that the noncompliance was knowing or willful, 
                        the head of the executive agency shall--
                                    ``(I) require the development and 
                                implementation of a plan to ensure 
                                future compliance; and
                                    ``(II) consider suspending or 
                                debarring the contractor or 
                                subcontractor until such time as the 
                                contractor or subcontractor has 
                                effectively addressed the issues that 
                                lead to such noncompliance.
            ``(11) Specialty metal defined.--In this subsection, the 
        term `specialty metal' means any of the following:
                    ``(A) Steel--
                            ``(i) with a maximum alloy content 
                        exceeding one or more of the following limits: 
                        manganese, 1.65 percent; silicon, 0.60 percent; 
                        or copper, 0.60 percent; or
                            ``(ii) containing more than 0.25 percent of 
                        any of the following elements: aluminum, 
                        chromium, cobalt, columbium, molybdenum, 
                        nickel, titanium, tungsten, or vanadium.
                    ``(B) Metal alloys consisting of nickel, iron-
                nickel, and cobalt base alloys containing a total of 
                other alloying metals (except iron) in excess of 10 
                percent.
                    ``(C) Titanium and titanium alloys.
                    ``(D) Zirconium and zirconium base alloys.
            ``(12) Additional definitions.--In this subsection:
                    ``(A) The term `United States' includes possessions 
                of the United States.
                    ``(B) The term `component' has the meaning provided 
                in section 105 of this title.
                    ``(C) The term `acquisition' has the meaning 
                provided in section 131 of this title.
                    ``(D) The term `required form'--
                            ``(i) shall not apply to end items or to 
                        their components at any tier; and
                            ``(ii) means in the form of mill product, 
                        such as bar, billet, wire, slab, plate or 
                        sheet, and in the grade appropriate for the 
                        production of--
                                    ``(I) a finished end item delivered 
                                to the executive agency; or
                                    ``(II) a finished component 
                                assembled into an end item delivered to 
                                the executive agency.
                    ``(E) The term `commercially available off-the-
                shelf' has the meaning provided in section 104 of this 
                title.
                    ``(F) The term `assemblies' means items forming a 
                portion of a system or subsystem that can be 
                provisioned and replaced as an entity and which 
                incorporates multiple, replaceable parts.
                    ``(G) The term `commercial derivative military 
                article' means an item procured by the Department of 
                Defense that is or will be produced using the same 
                production facilities, a common supply chain, and the 
                same or similar production processes that are used for 
                the production of articles predominantly used by the 
                general public or by nongovernmental entities for 
                purposes other than governmental purposes.
                    ``(H) The term `subsystem' means a functional 
                grouping of items that combine to perform a major 
                function within an end item, such as electrical power, 
                attitude control, and propulsion.
                    ``(I) The term `end item' means the final 
                production product when assembled or completed, and 
                ready for issue, delivery, or deployment.
                    ``(J) The term `subcontract' includes a subcontract 
                at any tier.
    ``(c) Use of United States Steel, Iron, Aluminum, and Manufactured 
Products.--
            ``(1) In general.--The head of an executive agency may not 
        enter into a contract related to the construction of a vessel 
        unless the steel, iron, aluminum, and manufactured products to 
        be used in the construction of the vessel are produced in the 
        United States.
            ``(2) Exceptions.--The provisions of paragraph (1) shall 
        not apply where the head of an executive agency finds--
                    ``(A) that their application would be inconsistent 
                with the public interest;
                    ``(B) that such materials and products are not 
                produced in the United States in sufficient and 
                reasonably available quantities and of a satisfactory 
                quality; or
                    ``(C) that inclusion of domestic material will 
                increase the cost of the overall project contract by 
                more than 25 percent.
            ``(3) Implementation of exceptions.--
                    ``(A) Non-delegation of authority.--The head of an 
                agency may not delegate the authority to make a finding 
                described in paragraph (2).
                    ``(B) Publication.--Not later than 30 days after 
                making a finding described in paragraph (2), the head 
                of the agency shall publish in an easily identifiable 
                location on the website of the agency information 
                regarding the finding, including a detailed 
                justification for the exception.
            ``(4) Annual report.--Not later than 180 days after the end 
        of each fiscal year, the head of each executive agency that has 
        made an exception finding described in paragraph (2) in the 
        fiscal year shall submit to the Committee on Homeland Security 
        and Governmental Affairs of the Senate and the Committee on 
        Oversight and Government Reform of the House of Representatives 
        a report on the total amount of exceptions used and detailed 
        information regarding and justification for the exceptions.
            ``(5) Calculation of component cost.--For purposes of this 
        subsection, in calculating components' costs, labor costs 
        involved in final assembly shall not be included in the 
        calculation.
            ``(6) Intentional violations.--If it has been determined by 
        a court or Federal agency that any person intentionally--
                    ``(A) affixed a label bearing a `Made in America' 
                inscription, or any inscription with the same meaning, 
                to any product used in projects to which this section 
                applies, sold in or shipped to the United States that 
                was not made in the United States; or
                    ``(B) represented that any product used in projects 
                to which this section applies, sold in or shipped to 
                the United States that was not produced in the United 
                States, was produced in the United States;
        that person shall be debarred from contracting with the Federal 
        Government for a period of not less than 5 years.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding after the item relating to section 
4712 the following new item:

``4713. Domestic sourcing requirement for shipboard components.''.

SEC. 4. CONFORMING AMENDMENTS RELATED TO DEPARTMENT OF DEFENSE 
              PROVISIONS.

    (a) Use of United States Steel, Iron, Aluminum, and Manufactured 
Products.--
            (1) In general.--Chapter 137 of title 10, United States 
        Code, is amended by adding at the end the following new 
        section:
``Sec. 2339a. Use of United States steel, iron, aluminum, and 
              manufactured products in shipbuilding
    ``(a) In General.--The head of an agency may not enter into a 
contract related to the construction of a vessel unless the steel, 
iron, aluminum, and manufactured products to be used in the 
construction of the vessel are produced in the United States.
    ``(b) Exceptions.--The provisions of subsection (a) shall not apply 
where the head of the agency finds--
            ``(1) that their application would be inconsistent with the 
        public interest;
            ``(2) that such materials and products are not produced in 
        the United States in sufficient and reasonably available 
        quantities and of a satisfactory quality; or
            ``(3) that inclusion of domestic material will increase the 
        cost of the overall project contract by more than 25 percent.
    ``(c) Implementation of Exceptions.--
            ``(1) Non-delegation of authority.--The head of an agency 
        may not delegate the authority to make a finding described in 
        subsection (b).
            ``(2) Publication.--Not later than 30 days after making a 
        finding described in subsection (b), the head of the agency 
        shall publish in an easily identifiable location on the website 
        of the agency information regarding the finding, including a 
        detailed justification for the exception.
    ``(d) Annual Report.--Not later than 180 days after the end of each 
fiscal year, the head of each executive agency that has made an 
exception finding described in subsection (b) in the fiscal year shall 
submit to the Committees on Armed Services of the Senate and the House 
of Representatives a report on the total amount of exceptions used and 
detailed information regarding and justification for the exceptions.
    ``(e) Calculation of Component Cost.--For purposes of this section, 
in calculating components' costs, labor costs involved in final 
assembly shall not be included in the calculation.
    ``(f) Intentional Violations.--If it has been determined by a court 
or Federal agency that any person intentionally--
            ``(1) affixed a label bearing a `Made in America' 
        inscription, or any inscription with the same meaning, to any 
        product used in projects to which this section applies, sold in 
        or shipped to the United States that was not made in the United 
        States; or
            ``(2) represented that any product used in projects to 
        which this section applies, sold in or shipped to the United 
        States that was not produced in the United States, was produced 
        in the United States;
that person shall be debarred from contracting with the Federal 
Government for a period of not less than 5 years.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by adding after the item 
        relating to section 2339 the following new item:

``2339a. Use of United States steel, iron, aluminum, and manufactured 
                            products in shipbuilding.''.
    (b) Miscellaneous Limitations on the Procurement of Goods Other 
Than United States Goods.--
            (1) In general.--Section 2534(a)(3)(A) of title 10, United 
        States Code, is amended by adding at the end the following new 
        clauses:
                    ``(iv) Auxiliary equipment, including pumps, for 
                all shipboard services.
                    ``(v) Propulsion system components (engines, 
                reduction gears, and propellers).
                    ``(vi) Shipboard cranes.
                    ``(vii) Spreaders for shipboard cranes.
                    ``(viii) Capstans.
                    ``(ix) Winches.
                    ``(x) Hoists.
                    ``(xi) Outboard motors.
                    ``(xii) Windlasses.''.
            (2) Applicability of previously sunsetted provisions.--
        Subsection (c)(2)(C) of section 2534 of title 10, United States 
        Code, is amended by striking ``shall cease to be effective on 
        October 1, 2005'' and inserting ``shall be in effect during--
                    ``(i) the period beginning on the date of the 
                enactment of this paragraph and ending on October 1, 
                1996; and
                    ``(ii) the period beginning on the date of the 
                enactment of the Made in America Shipbuilding Act of 
                2018.''.

SEC. 5. APPLICABILITY.

    The requirements under this Act and the amendments made by this 
Act--
            (1) apply to contracts entered into on or after the date of 
        the enactment of this Act; and
            (2) do not apply to--
                    (A) contracts entered into before the date of the 
                enactment of this Act; or
                    (B) options included as part of such contracts as 
                of such date of enactment.
                                 <all>