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Techies Wary Of Defense Bill Provisions
by Greta Wodele
House lawmakers this week are primed to negotiate with their Senate counterparts over legislation to authorize funding for Pentagon programs in fiscal 2005.
The House-passed bill contains a number of controversial provisions that quickly attracted a veto threat from the White House and sparked concern among the high-technology community.
"If the final version of the bill contains such provisions, the president's senior advisers will recommend that he veto the bill," says the White House's statement of administration policy issued on May 19 -- the day before the House passed the bill by a 391-34 vote. The Senate has not passed its version of the legislation, but is expected to take up the bill soon.
The administration condemned the bill for limiting the Pentagon's flexibility to hire commercial contractors instead of federal employees and restricting exports of certain technologies as well as the inclusion of "Buy America" provisions, which require the Pentagon to buy technologies and equipment from U.S. manufacturers.
Harris Miller, president of the Information Technology Association of America (ITAA), which represents more than 500 IT companies, also expressed concern with the bill.
"There is an incredible amount of micromanaging going on," said Miller, arguing the provisions would waste taxpayers' dollars and decrease the Pentagon's flexibility to manage its resources.
'Competitive Sourcing' Triggers Veto Threat
The so-called competitive sourcing provisions -- one of which would require a certain percentage of work currently contracted to the commercial sector to be done by federal employees -- triggered the veto threat from the White House.
"Arbitrary quotas concerning commercial work to be performed by federal employees would undermine the department's ability to redirect its manpower to military activities," argued the administration in its policy paper.
The White House's Office of Management and Budget (OMB) backed its position with a study that found competitive sourcing would yield $1.1 billion in savings over the next three to five years. The prediction took into account more than 650 commercial activities completed in fiscal year 2003 and several competitions completed in the first quarter of fiscal year 2004. According to the report, in-house government employees fared well under the competition, offering the best service for 89 percent of positions up for competition in fiscal year 2003.
But Rep. Jim Langevin, D-R.I., who co-authored the amendment, said it would ensure that civilian employees would be "granted equal opportunity and access to compete for their own jobs" Langevin cited a General Accounting Office (GAO) report that found more than 11,500 jobs of federal employees were contracted out in fiscal years 2002 and 2003 -- 75 percent of them by the Pentagon.
Jim Serafin, vice president of governmental affairs for the Electronic Information Association (EIA) - whose members include defense contractors like Boeing and Lockheed Martin -- said the House provision would undo the benefits of competitive sourcing, echoing the OMB's findings that it would cause inefficiencies and waste of military resources.
Serafin said Massachusetts Democrat Sen. Edward Kennedy plans to offer a similar amendment to Langevin's when the Senate resumes debate on the bill this week.
California Republican Duncan Hunter, chairman of the House Armed Service Committee and lead negotiator with the Senate to draft the final version, opposes the restrictions on competitive sourcing, according to his spokesman.
'Buy America' A Negative Signal?
While Hunter may work to remove the competitive sourcing restrictions from the bill, he penned the so-called Buy America provisions that the White House also opposes.
One provision would aim to curb the Pentagon's reliance on foreign suppliers by requiring the Defense secretary to ensure contracts with foreign suppliers match contract deals signed between U.S. defense companies and foreign countries. Some foreign countries require companies to transfer manufacturing jobs and technology to the country as a condition of purchase. The provision would require the secretary to ensure the "offset" regulations are reduced to the same level as the domestic content requirements of the United States.
"We need a policy based on the principle of fair trade and reciprocity," said Hunter on May 20 on the House floor.
The White House disagreed, saying it would negatively impact sales of U.S. military equipment to key allies and seriously undermine foreign policy and national security objectives as well as limiting the military's ability to purchase "best value" products.
The technology community said while the provision would not directly impact their bottom line, it would send negative signals to foreign allies and trading partners.
"It colors negotiations in a bad way," said Joe Tasker, ITAA's senior vice president for governmental affairs.
The Senate bill currently does not include the Buy America provisions, but Tasker said some senators support the idea.
On export control regulations, the White House argued requiring export licenses for technologies on the military's "critical technologies list" severely would damage its ability to administer export control programs for munitions and technologies that could be used as weapons to balance U.S. national security interests while allowing U.S. companies to effectively compete in the international market.
The administration also had concerns with $750 million less in funding in the Pentagon's information technology budget than Bush requested earlier this year.
"Over 80 percent of the department's IT budget is spent in direct or indirect support of the warfighter - through investments in national security systems, telecommunications systems, and information assurance activities to protect those systems," argued the administration.
Much of that cut in information technology funding came from business enterprise programs, an aide for Massachusetts Democrat Martin Meehan, ranking member of the House Armed Services Terrorism, Unconventional Threats and Capabilities Subcommittee, said last month.
But Miller argued the cut is not "chump change" and it could have a negative impact on ITAA's technology vendors, because the Pentagon spends 50 percent of the federal government's IT budget.
On technologies for transforming the military to face future threats, the Bush administration urged Congress to restore $221 million for the DD(X) destroyer, an advanced multimission warship armed with array of weaponry for long-range precision firepower, and $107 million in construction funds for the Littoral Combat ship, a small, stealthy and highly-maneuverable surface combatant designed to counter anti-access threats close to shore. The administration said the proposed cuts would delay plans to begin constructing the vessels in 2005.
While House lawmakers cut funding for the two programs, they added $25 million for the transformation office's microsatellite program. The office's first satellite, which is slated to launch this summer, would be used for operational commanders in the field to access data and satellite images in "real time."
Although the administration did not request the additional funding, both the House and Senate added it to the bill. The House and Senate committees also met the office's request for $19 million in research and development and $9.9 million for new transformation initiatives.
S&T Gets Slight Boost, But DARPA Down
The House bill increased the overall budget for science and technology programs at the Pentagon by nearly $1 million above Bush's request of $10.6 billion to $11.1 billion.
But programs to develop advanced technologies at the Defense Advanced Research Projects Agency (DARPA) were cut 5 percent. The bill would authorize $180 million less than the $3.1 billion requested by President Bush for the program.
House lawmakers doubled funding for the "smart machine platform initiative," which aims to develop breakthrough technology for defense manufacturing to reduce the cost and time to develop defense products. The panel authorized $23.2 million -- an increase of $12 million over Bush's request.
They also increased funding by $20 million over Bush's $41 million request for applied research in electronics to develop emerging battery and non-battery power technologies. The bill also included $4 million above Bush's requested $46 million to research wide band gap semiconductor electronics.
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