Bush '02 Budget Proposes Short-Term Fixes.

President Bush's budget request for the Defense Department in fiscal year 2002, as outlined in his February address to Congress, contains three major initiatives aimed at alleviating some of the department's short-term needs:

* An increase of $400 million for construction, renovation and privatization of military housing in order to improve the quality of life for uniformed personnel.

* A $1.4 billion pay raise for military personnel to help address recruiting and retention issues.

* A $2.6 billion increase in research and development (R&D) spending. This would be the first installment of $20 billion that he has proposed to spend for defense-related R&D during the next five years.

The R&D funds would pay for work to develop a national missile defense system, counter-terrorism strategies focused on unconventional threats to national security, improvements to existing testing and research facilities and leap-ahead technologies for new weapons and intelligence systems.

Bush has said that he will not determine final funding levels for 2002 until Defense Secretary Donald Rumsfeld has completed a systematic review of the department's missions, structutes, processes and national security strategy.

Federal Prison Industries

Legislation has been introduced in the House of Representatives that would dramatically alter Federal Prison Industries (FPI). According to its co-sponsors, the bill--the Federal Prison Industries Competition in Contracting Act of 2001--would impose long-overdue and much-needed restraints on the FPI, which they charge inflicts unfair competition upon private-industry competitors. Original cosponsors are Reps. Peter Hoekstra, R-Mich.; Barney Frank, D-Mass.; Michael Collins, RGa., and Carolyn Maloney, D-N.Y.

The FPI, a government-owned corporation within the Justice Department's Bureau of Prisons, was created in 1934 to provide jobs for federal prisoners. By law, federal agencies are required to buy the goods that they need from the FPI, provided that those goods are "substantially similar in quality, cost and availability" to those provided by commercial suppliers.

With annual revenue of $600 million, the FPI currently makes more than 300 products. It sells approximately 40 percent of these goods to the Defense Department. The FPI's lock on this market has had a dramatic and debilitating affect on small and medium sized businesses that contract with the Federal Government, according to the bill's supporters.

The legislation--viewed as the first step in a wider reform of the FPI-has the backing of a coalition of more than 30 business and labor organizations such as the U.S. Chamber of Commerce, the AFL-CIO and the National Defense Industrial Association. It also has strong bipartisan support in the Senate and House.

Blacklisting Rules

All civilian agencies of the federal government are allowed to suspend implementation of new contractor-responsibility rules for as long as six months, according to the interagency Civilian Agency Acquisition Council (CAAC), which reviews all federal acquisition policy and regulation.

The rules--which were among the Clinton administration's final actions--permit contracting officers to eliminate contractors from bidding based on their performance record, effectively blacklisting them. These rules received critical responses from the federal contracting community, both within and outside the government. NDIA has opposed the regulations since they were proposed in 1999, asserting that they are unfair, arbitrary and circumvent the authority of Congress through administrative rule making.

Export Controls

Sen. Mike Enzi, R-Wyo., introduced S. 149, the Export Administration Act of 2001 (EAA). This bill, which is similar in format to legislation introduced in 1999 but not passed by Congress, would create a permanent statutory framework for U.S. export policy.

The United States has lacked such a framework since 1990, when a 1979 version of the EAA expired. For the past decade, export policy has been administered through presidential orders under the International Economic Emergency Powers Act (IEEPA) and temporary extensions of the 1979 law.

During the previous Congress, an earlier version of this legislation received major criticism and failed to pass.

The new bill contains provisions designed to quell many of the concerns from its opponents. It includes a statutory basis for the resolution of interagency disputes over export licenses, and it increases civil and criminal penalties for violations.

President Bush has indicated that this issue is a priority for his administration. However, it is unclear what language the final bill will contain and subsequently what this will mean for the defense industry.

Industry

Charles B. Wands has been appointed vice president of business management and chief financial officer for Northrop Grumman Integrated Systems Sector. Wands joined Northrop Grumman in 1999.

Northrop Grumman has also promoted Paul Meyer to vice president of business and advanced system development. Prior to joining Northrop Grumman in May 2000, Meyer served as vice president of business development for Lockheed Martin Skunk Works.

Veridian announced that Robert (Bob) A. Pattishall has become senior vice president and president of its systems division. Pattishall joined Veridian in May 2000 following a 24-year career in the CIA's office of development and engineering.

Bregman and Company, Inc. has named Robert D. Edell Jr. president of the firm. Edell has been with Bregman and Company since 1995, most recently serving as vice president.

Stephen Henwood has been appointed group managing director of the BAR Systems Programmes group in Lancashire, England. Previously, Henwood was managing director of BAR Systems Royal Ordnance business at Chorley.

Metals USA has named Nancy C. Brakers as vice president of marketing. Brakers has 21 years of industry experience and has been with Metals USA since 1998.

Metals USA has also appointed Robert J. Royer as Flat Rolled Group vice president of marketing. Royer joined the group in February 2000.

Mark Ketteman has been named general manager of Tadpole-Cartesia. Ketteman previously was business manager for Conic Systems, which was acquired by Tadpole in 1999.

Newport News Shipbuilding has chosen Irwin F. Edenzon to be vice president of technology development and carrier fleet support. Edenzon has served at Newport News Shipbuilding in various positions since 1997.

Stephen C. Hassell has been appointed vice president and chief information officer. Hassell has been with Newport News Shipbuilding since 1995.

William Sargent has been promoted to vice president and manager of the training systems division at Delex Systems, Inc. Sargent has worked at Delex Systems for 16 years.

ITT Industries has promoted Steven F. Gaffney to be president and general manager of the Avionics Division, in Clifton, N.J. Previously, Gaffney was vice president and director of programs at ITT. He has also held senior-level positions at Litton Industries, Smith Industries and Allied Signal.

Larry Reagan has been appointed director of Federal Operations for Information Builders, located in Washington, D.C. Reagan previously managed the office's consulting group, and brings over 20 years of industry experience to his new position.