Date: 2004-05-19
Speaker: TOM DAVIS (republican)
Chamber: H
State: Virginia

Mr. Chairman. I rise in support of H.R. 4200. "The National Defense Authorization Act for Fiscal Year 2005". I would like to start off by commending Chairman DUNCAN HUNTER and the entire Committee on Armed Services for all of the hard work on this legislation. A bill of this magnitude requires an enormous bipartisan effort. The result here is legislation that will provide the resources necessary for U.S. military forces to protect and defend this country both at home and abroad. I am concerned. however. with several provisions in this bill affecting the acquisition system. The first provisions interfere with the Department of Defenses competitive sourcing program. The second group of provisions represent an illconsidered attempt to protect domestic jobs. We can all agree that the Federal government should do as much as it can to support jobs inoAmerica. However. tacking on onerous provisions to the acquisition system to protect a handful of jobs is not the right approach. It costs moneytaxpayers money. The acquisition systems purpose is to procure the best value goods and services with taxpayers dollars. not to protect jobs. Most important. we have learned time and time again that provisions restricting our ability to tap the resources of the global market in the name of saving jobs result in retaliation from our trading partners. costing us more jobs in the long run. First. we have the provisions of the Langevin amendment included in the Committee mark. These provisions. if enacted. would require sweeping changes to the Administrations critical competitive sourcing program and hamstring the Defense Departments ability to manage its programs and workforce. Our economy is based on a free market system where competition is essential to maintaining vibrancy and productivity. Who can argue with the idea that a little competition is needed to spur efficiency in Government? The problem is that. despite having considerable input into the revised OMB Circular A76 that provides the procedural framework for the competitive sourcing program. its opponents have mounted an attack on competitive sourcing. They equate "competitive sourcing" with "outsourcing" or "privatization." or at least they say they do. But words matter. and competitive sourcing is simply not the same as outsourcing or privatization. Outsourcing assumes up front that the private sector can perform activities better. cheaper. and/or faster than a government organization. Competitive sourcing does not assume the private sector is the preferred provider. Its purpose is not to downsize the government workforce. It uses competition to decide. Opponents argue that competitive sourcing takes jobs away from Federal employees. This is simply untrue. In most cases. the Federal employees involved in the competition either retain their jobs if the agency team wins or are rehired if the private sector wins. In fact. according to agency data from a recent GAO report. inhouse teams win most of the competitions. retaining almost 76 percent of the positions competed. The key point is. publicprivate competitions result in substantial savings in the activity competed. regardless of who wins the competition. The Langevin language would cripple the competitive sourcing program at the Department of Defense. It would. for example. prevent the Department from making reasoned management decisions for the benefit of our Armed Forces and the American taxpayer by prohibiting the Defense Department from making any reorganization of a function so that it would be performed by 10 or fewer employees unless it conducts a public/private competition. Think about this: under this provision. the Secretary of Defense is prohibited from paring his office staff from 12 people to 9. Further. the Langevin amendment unfairly tilts publicprivate competitions toward the Federal employees and introduces into private businesses right to offer their employees a total compensation package by prohibiting the A76 cost comparison from including any savings that could be attributable to a businesses use of a worker health plan that is different than that provided to Federal government employees. This would establish a Federal mandate to private industry and cripple the ability of small businesses to participate in this program. That. Mr. Chairman. is not good govemment. The Langevin provision also would require the Department of Defense to establish a pilot program to conduct an arbitrary number of public/private competitions for new work and work currently performed by contractors. This would mandate that the Department expend resources so that Federal workers can compete with the private sector to perform new commercial work. Dont our Federal workers have enough to do in fulfilling their current responsibilities? Interestingly. the requirements would not extend to any work to be performed by a contractor whose workers are represented by a privtesector labor union. Finally. the Langevin amendment imposes a mass of reporting and tracking requirements. which in a number of cases duplicate requirements that are currently in chapter 146 of title 10. The only point of these is to gum up the competitive sourcing program. A number of these mandates would apply whenever a service contract is awarded by the agency. whether or not as the result of a competitive .sourcing study. So not only are the Langevin supporters interested in hamstringing the competitive sourcing program but also in reversing the recently passed reforms in service contracting. Secondly. section 811 of the bill. titled Defense Trade Reciprocity. would prohibit DoD from purchasing any defense article or service -from any company in a country (including our NATO allies. our coalition partners. and Israel) that within one year does not have an offset policy toward U.S. companies that is comparable to U.S. offset policy. This provision is ill advised. would severly limit the ability of the Department of Defense to cooperate with our allies and operate overseas. and would undercut the ability of our defense industry to compete in selling to our allies. Last fall. the Congress passed two provisions dealing with offsets. In the extension of the Defense Production Act. we asked the Commerce Department to complete a study by this August on the impact of offsets on the supplier base and required the Administration to discuss with our trading partners ways to reduce the "adverse" impacts of offsets. Congress is to receive periodic reports on how such discussions are progressing. In last years Defense Appropriations Act. we required the Department of Defense to prepare a report by March 1 on the impact of offsets on .the defense industrial base and make any appropriate recommendations. We ought to at least wait for the results of the actions we demanded of the Executive Branch only a few months ago before taking premature actions on offsets. In fact. while offsets distort international defense trade. concern about the impact of offsets is overblown. The annual Commerce Department review of offsets that is required by a provisionof the Defense Production Act consistently concludes that defense sales that have associated offset provisions produce approximately 30.000 U.S. jobs. and the offsets reduce that figure by about 9.000 jobs. for a net gain to the U.S. of 21.000 jobs. Any actions that jeopardized those sales could result in a net loss of jobs and an erosion of the U.S. defense industrial base. . The U.S. currently enjoys a trade balance in defense exports of 61 in its favor with respect to Europe and around 121 with respect to the world. In a time when we worry about ballooning trade deficits. the U.S. aerospace industry delivers the largest export surplus of any sector in the economy with over a $25 billion trade surplus in 2003. Policies that restrict the ability of U.S. companies to continue making such sales will hinder interoperability with our allies. reduce U.S. jobs. and undercut the supplier base. The simple fact is that restrictive provisions such as this are selfdefeating. Cold War anachronisms that cripple our participation in the Global Market and jeopardize defense exports--one of the major sectors of our economy. Finally. the Manzullo amendment. to be considered on the floor. would add the creation of jobs in the U.S. as one of the instances that the Secretary of Defense could use in a determination under 10 U.S.C. 2304(b)(1) to exclude a source to establish or maintain alternative sources of supply. The 10 U.S.C. 2304(b)(1) is seldom used and it is discretionary. but it could be used to justify a solesource contract award under the guise that it created jobs. Moreover. the amendment would add "the creation of jobs" to the list of required evaluation factors for all negotiated acquisitions under 10 U.S.C. 2305(a)(3)(A). This would mandate that the creation of jobs be a factor in the selection of the winning offeror in a competitive acquisition. The problem here is that we would be requiring the consideration of a factor that has nothing whatever to do with the merits or cost of the proposal. Again we are burdening our acquisition system with a requirement that is not related to the acquisition of best value goods and services for the government. Additionally. I am concerned with Chairman HUNTERS amendment that adds money for the Patriot missile and uses a $48 million cut to the KEI program as one of the offsets. The KEI program will play a crucial role in our Nations security by providing enemy ballistic missile defense. Any cut in funding will hinder this programs advances in the area of antiballistic missiles. I also want to offer my support to the Wamp amendment. which makes improvements to the Energy Employees Occupational Illness Compensation Act. The amendment addresses statutory problems that have created significant bottlenecks for thousands of claims being made under this important DOE program. Mr. Chairman. in closing. I want to again commend Chairman HUNTER for this bill in its entirety. despite my opposition to some of its specifics.