Incentive program to purchase capital assets manufactured in the United States.

Section 822 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136), requires the secretary of defense to establish an incentive program for contractors to purchase capital assets manufactured in the United States. This provision applies only to major defense acquisition programs and contracts entered into after May 2005. The secretary may use the Industrial Base Capabilities Fund established under Section 814 of the National Defense Authorization Act for Fiscal Year 2004 for this purpose. The provision also directs the secretary to provide consideration in source selection for contractors with eligible assets for major defense systems. At this time, no dollars have been appropriated for this fund.

DoD is in the process of crafting such a program but believes industry input is essential to constructing an effective incentive program. To that end, the Department will be publishing a Federal Register notice during the month of April 2004 that will seek industry input on identifying appropriate incentives for industry to use machine tools and other capital assets produced in the United States. Comments in response to this notice will also be accepted. If there appears to be sufficient interest in this incentive program, the Department may schedule a public hearing.

Once suitable incentives are identified, DoD will structure the incentive program and publish an interim rule implementing the incentive program.

Questions on this matter should be directed to Susan Hildner at [phone] or e-mail [e-mail].