U.S. industry bears brunt of past protectionism.As even casual observers of the defense industry can attest To solemnly declare verbally or in writing that a particular document or testimony about an event is a true and accurate representation of the facts; to bear witness to. To formally certify by a signature that the signer has been present at the execution of a particular writing so as , the business of producing and delivering weapons systems to the military has radically changed. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , we have seen our industry not only shrink substantially, but also embrace globalization globalization
Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation much like the commercial sectors have in recent decades.
Unfortunately, many of the rules that govern defense industry remain stuck in the Cold War. Protectionist pro·tec·tion·ism
The advocacy, system, or theory of protecting domestic producers by impeding or limiting, as by tariffs or quotas, the importation of foreign goods and services. laws such as the Berry Amendment The Berry Amendment (USC, Title 10, Section 2533a), requires the Department of Defense to give preference in procurement to domestically produced, manufactured, or home grown products, most notably food, clothing, fabrics, and specialty metals. are a case in point. Although initially enacted to protect the domestic textile industry during World War II, the revised legislation in place today is proving to have detrimental effects on American contractors and their ability to meet the needs of their military customers.
The 1941 legislation, named after Congressman E.Y. Berry, prohibits the Defense Department from spending any appropriated funds on items made with non-domestic materials. Of particular concern to industry is the requirement that specialty metals used in the components of a weapon system have to be certified as being of U.S. origin. A recent Defense Contract Management Agency directive would withhold with·hold
v. with·held , with·hold·ing, with·holds
1. To keep in check; restrain.
2. To refrain from giving, granting, or permitting. See Synonyms at keep.
3. payments to contractors who cannot comply with that certification.
Military hardware manufacturers contend that they cannot possibly certify where the metal in each bolt and screw came from. Prime contractors, as it turns out, are not bearing as much of the brunt brunt
1. The main impact or force, as of an attack.
2. The main burden: bore the brunt of the household chores. of this rule as the sub-tier suppliers who provide most of the components used in aircraft, ships and ground vehicles. These subcontractors often buy scrap metal in bulk quantities, so they have no reasonable way to identify where each type of metal came from.
Companies such as Texas Instruments See TI.
(company) Texas Instruments - (TI) A US electronics company.
A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. and National Semiconductor recently announced that the specialty metals used in the devices they provide to the Defense Department have foreign-metal content and therefore cannot comply with the Berry rule. "To the best of our knowledge, no other semiconductor manufacturer currently is capable of meeting that standard," wrote Gerry Fields, vice president of National Semiconductor.
The specialty metals clause has been in place since 1972--when lawmakers worried about protecting domestic sources of materials for the Vietnam War Vietnam War, conflict in Southeast Asia, primarily fought in South Vietnam between government forces aided by the United States and guerrilla forces aided by North Vietnam. . But it has only been recently that the Defense Department has been pressured by lawmakers to crack down on contractors who don't fully meet the certification requirements.
The pro-Berry movement also has been fueled by the titanium titanium (tītā`nēəm, tĭ–) [from Titan], metallic chemical element; symbol Ti; at. no. 22; at. wt. 47.88; m.p. 1,675°C;; b.p. 3,260°C;; sp. gr. 4.54 at 20°C;; valence +2, +3, or +4. industry, which has tenaciously te·na·cious
1. Holding or tending to hold persistently to something, such as a point of view.
2. Holding together firmly; cohesive: a tenacious material.
3. lobbied to keep aircraft manufactures from buying titanium from foreign suppliers.
Companies such as Boeing have contended that the realities of the marketplace have to be taken into account. A growing demand for commercial airliners, in addition to pressing military orders, makes it necessary for aircraft makers to resort to foreign sources. There are only two major U.S. producers of titanium and, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. industry estimates, they have a two- to three-year backlog in their U.S. orders.
The Berry Amendment is a valid example of an anachronism a·nach·ro·nism
1. The representation of someone as existing or something as happening in other than chronological, proper, or historical order.
2. that served a legitimate cause when it was enacted, but no longer applies to the realities of the global marketplace.
Under the "Buy America" banner, supporters of this amendment call it a patriotic duty to ensure our domestic industry is protected from foreign competition. Clearly, the nation's industrial policy must take that into account. But it also has to accommodate the needs of our weapons manufacturers that need raw materials and, at times, find that domestic sources are insufficient.
The Defense Department, to be sure, has the right to issue waivers to contractors so they can purchase materials in the international market, but increasingly those waivers are being denied to prevent political backlash.
At this point, much discussion is taking place on this issue in the Defense Department, on Capitol Hill and in corporate boardrooms.
Obviously, there is much at stake in this debate. On the one hand, a number of American firms face the possibility of not getting paid for their work. That, in itself, would not be acceptable.
On the other hand, the Defense Department has to worry about the prospect of not being able to obtain the hardware that the war-fighter needs because suppliers are not able to acquire the raw materials domestically in a timely fashion. That scenario also would be objectionable.
This month, the Defense Department introduced a proposed revision to the Berry Amendment, which would exempt dual-use products that are made both for the military and the civilian markets. If Congress agrees to this proposal, it would mark a step in the right direction, but still would not solve the problem.
We have not yet reached a crisis point, but it's appropriate to begin raising red flags now. If a reasonable solution is not achieved soon, American firms--those same firms that the Berry Amendment sought to protect--will likely bear huge financial burdens if they are not paid for their products. More importantly, the nation's military forces could see shortages of critical equipment that the industry cannot deliver because outdated regulations stand in the way.
NDIA NDIA National Defense Industrial Association
NDIA New Doha International Airport (Qatar) will be following this issue closely and will be working in support of effective policies and laws that protect both the industrial base and the war-fighter.
Please email your comments to LFARRELL@NDIA.ORG