Export Administration Measure Extended.

The House of Representatives in late July passed stopgap legislation that would reauthorize the Export Administration Act through November 20. The act, Public Law 96-72, expired on August 20.

The measure now moves to the Senate, where Sen. Michael B. Enzi, R-Wyo., opposes a short-term reauthorization. Enzi--cosponsor of S.149, which would extend the Export Administration through 2004--argues that the expired act needs a significant overhaul before it is renewed. S.149 would do just that, he said. The Senate is expected to take up his bill in September.

On August 1, the House International Relations Committee approved a revision of the act that would strengthen restrictions on so-called dual-use technologies, which have both military and commercial use. Critics of the bill contend that commercial interests are undermined by the emphasis placed on national security. The administration supports the long-term renewal of the Export Administration Act and has urged Congress to do so. Several members of Congress, however, have expressed concern that the bill would allow the export of technology that could be used by other nations to develop weapons.

TRAC Update

During floor debate in late July on the Treasury-Postal Appropriations Act (H.R. 2590), Rep. Albert Wynn, D-Md., offered an amendment to prohibit funds for any outsourcing activities unless there is a full public-private competition under Office of Management and Budget circular A-76. The amendment was defeated by voice vote.

Wynn--sponsor of H.R. 721, the Truthfulness, Responsibility and Accountability in Contracting (TRAC) Act of 2001--has suggested that the federal government is not saving money or receiving the best possible value by contracting our. His legislation would require all service contracts to undergo public-private competitions, as well as the implementation of a centralized reporting and cost-accounting system. The TRAC Act has nearly 200 cosponsors.

Sen. Richard Durbin, D-I11., who has introduced similar legislation in the Senate (S.1152), is expected to offer his bill as an amendment to the fiscal year 2002 defense authorization measure when it comes to the floor later this month. Durbin's bill also would require federal agencies to review all current service contracts signed since 1980, in which federal employees had performed a service, and to determine if further public-private competition is necessary. S.1152 has 18 cosponsors.

Before the August congressional recess, the House Armed Services Committee passed a TRAC-type amendment to its version of the fiscal year 2002 defense authorization bill. The amendment offered by Rep. Neil Abercrombie, D-HI, would prohibit Defense Department outsourcing unless at least 10 percent cost savings are achieved through A-76 cost comparisons.

Opponents of the legislation, including NDIA, said that the TRAC Act poses a threat to national security and would result in significant delays in the acquisition process, thus driving up program and services cost. If passed, the amendment would prevent the federal government from capitalizing on the private sector's capabilities and its advanced technologies, as well as harm small business, according to opponents.

BRAC Debated

Defense Secretary Donald Rumsfeld told the House Armed Services Committee that additional rounds of base realignments and closures (BRAC) would allow his department to improve its facilities dramatically. The hearing, in late June, was one of several held by the armed services committees to consider amending the 2002 defense budget. The 2001 budget allows the Defense Department to replace its facilities at the rate of once every 192 years, Rumsfeld testified. The department would like to cut that time rate to 67 years, he said, noting that the industry standard is 57 years.

To achieve that target rate would require an additional $7 billion for the next nine years, Rumsfeld said. The administration's proposed budget amendment for 2002 and a new round of BRAC to reduce under-used facilities by approximately 25 percent would lower the replacement rate to 76 years, he said.

Chairman of the Joint Chiefs of Staff Gen. Henry R. Shelton also testifying before the House Armed Services Committee, said that an additional round of BRAC could save up to $3 billion per year.

Some members of Congress have criticized the BRAC process, arguing that the Pentagon cannot point to significant savings from previous closures. The process, they say, also requires significant up-front investments that produce minimal long-term returns.

Organizations such as NDIA and Business Executives for National Security (BENS) have formed a coalition in support of additional base closures. The coalition insists that savings from base closures and adjustments are needed to help fund modernization and transformation. Maintaining unnecessary infrastructure comes at the expense of every other defense account, including research and development, readiness and procurement, according to the coalition.

Reining In Federal Prisons

In last month's issue, we reported on the status of an NDIA member company forced to lay off employees due to Federal Prison Industry (FPI) expansion in the electronic component recycling industry. On behalf of the member company, NDIA has begun a dialogue with members of the House of Representatives, the Senate and the contracting agency in an effort to mediate a solution.

NDIA, a strong supporter of H.R. 1577, legislation that would dramatically overhaul the mandate of FPI, is committed to preventing FPI from hurting the operations of defense contractors. Small businesses are particularly vulnerable to FPI, NDIA said. Unlike large corporations, small businesses often operate on a handful of government contracts. The loss of one or two of those jobs could force a small business into bankruptcy. FPI's mandatory-source status allows it to obtain federal contracts without entering into a competitive-bid process.

Typical of many small businesses currently under contract with the federal government, NDIA's member company was launched with loans from the Small

Business Administration. NDIA has also learned that a significant percentage of the company's employees are minorities. NDIA will continue to monitor the situation and work for an amicable solution for all parties.