This year, the House Armed Services Committee advanced a major reform to our defense program acquisition rules that will grow our American manufacturing base right when we need it most. The “Buy American” provision in this year’s National Defense Authorization Act is a commonsense plan to source more parts from American-made manufacturers and build more with U.S. labor. But recently some commentators have been misrepresenting the idea of Buy American to maintain the status quo; therefore it’s important to lay out the facts.
The critics of this provision have expressed concern that the bipartisan provision drafted to improve our Buy American laws will hurt our closest allies and force them to end their defense relationships with the U.S. In fact, they have gone as far as to say this would undermine NATO and our defense cooperation with Australia and Israel.
Such hyperbole is the real danger here. Our nation’s commitments to our allies and partners, including NATO, need to be strengthened, especially at a time when this administration is ending treaties and pulling out of international organizations. What these commentators fail to mention is that nearly all our NATO allies are considered “qualifying countries” by the Department of Defense for purposes of the Buy American Act. This means the language included in the NDAA will not hurt and may even strengthen our ties with these countries.
Under the Buy American Act (Chapter 83 of Title 41 U.S.C.) the government must purchase manufactured end items that have been made of “substantially all” United States component parts, which is interpreted by regulation as being 50 percent or more. Thus, for something to be considered American-made, it only needs to be made of 50 percent U.S. content.
Additionally, the law provides for a “public interest” exemption, which grants operational latitude to our federal department heads. The Department of Defense — under the Defense Federal Acquisition Regulation Supplement 225.101 and 225.872 — has applied that exemption to 27 qualifying countries as well as those with reciprocal trade agreements. The list includes all but three of our NATO allies, plus Australia, Israel, Egypt, Finland, Austria and Japan. This covers every nation that is a partner to the F-35 program, meaning that supply chain won’t be impacted at all.
The Buy American provision does not change the DoD’s interpretation of this “public interest” exemption. It only requires that the interpretation of “substantially all” be raised from 50 percent to 75 percent by Oct. 1, 2021, and increased by 5 percent per year thereafter, giving the department and industry time to adjust and adapt. This will ensure that we do not continue to utilize component parts from China and other non-allied or adversarial nations, while providing predictability for industry to grow American jobs.
By building more defense system component parts in the U.S., we will be utilizing taxpayer dollars here at home rather than sending that money abroad, and we’ll foster a new generation of well-trained, well-paid, American workers. Offshoring our nation’s manufacturing base didn’t happen overnight. Industries have made conscious decisions to move materials and industries overseas in order to increase profits. This enhancement to the Buy American Act takes a broader view: The U.S. must maintain our alliances while also strengthening our workforce and growing domestic manufacturing, which in turn will yield long-term benefits for American employers.
Moreover, if a high-end conflict should breakout with China or another adversary who has the ability to cut off shipping lanes and down our aircraft, America may face the possibility that we can no longer source a component part from abroad. Our war fighters will have to wait months for the department to identify, qualify and stand up a new manufacturer before we can start making a replacement. That’s time we can’t afford to lose. If the coronavirus pandemic has taught us anything, it is just how critical supply chains can be in a time of crisis.
As we shift our focus to implement our current National Defense Strategy, which has us looking at new conflicts with peer competitors like China, we must rethink not only the platforms we procure and how we fight — as each of the services are doing — but our supply chain logistics as well.
Our defense industrial base must be viewed as an inherent component of our national defense. We know we cannot go it alone, and we will keep our key allies and friends by our side. But we must also enhance our own manufacturing capabilities. The Buy American reforms under consideration in Congress strike the right balance between economic cooperation and comingled supply chains with the needs of the American worker and ensuring our national security in an uncertain world.
Rep. Donald Norcross, D-N.J., is chairman of the Tactical Air and Land Forces Subcommittee. Rep. John Garamendi, D-Calif., is chairman of the Readiness Subcommittee. Rep. Jackie Speier, D-Calif., is chairwoman of the Military Personnel Subcommittee. Bob Martinez is the president of the International Association of Machinists and Aerospace Workers. George Williams is the CEO of the American Shipbuilding Suppliers Association.