Defense Production Act Amendments of 1991

Summary

Defense Production Act Amendments of 1991 - Title I: Amendments to the Defense Production Act of 1950 - Part A: Declaration of Policy - Revises the declaration of policy under the Defense Production Act of 1950 to state that such Act affords the President an array of authorities to shape defense preparedness programs and to take appropriate steps to maintain and enhance the defense industrial and technological base (the defense base). Requires executive agencies and departments responsible for defense acquisition to continuously assess the capability of the defense base to satisfy peacetime requirements as well as increased mobilization production requirements. States that plans and programs to carry out the policy stated above shall duly consider the promotion of efficiency and competition. Expresses certain congressional findings disapproving the growing U.S. dependence on foreign sources for critical components and materials used to manufacture major weapons systems for our national defense. States that it is imperative for the United States to preserve and strengthen its industrial and technological capabilities. States that executive agencies and departments responsible for the acquisition of defense mission critical professional and technical services should: (1) utilize a streamlined "best value" methodology in such procurement; and (2) place emphasis on the procurement of such services from the private sector and reduce reliance on the public and quasi-public sectors for such procurement. Part B: Amendments to Title I of the Defense Production Act - Directs the President to: (1) identify critical components essential for the execution of the national security strategy of the United States in peacetime and during graduated mobilization; and (2) take appropriate actions to protect against unreliable sources for critical components. Requires critical components to be identified for all items on the CINC Critical Items List. Requires the Department of Defense to take into account all components identified as critical by national security assessment or presidential determination under the Trade Expansion Act of 1962. Directs the President, in providing assistance to authorized defense contractors and subcontractors, to provide a strong preference for small businesses as defined by the Administrator of the Small Business Administration (SBA). Directs the President, in considering applicants for the purchase or lease of advance manufacturing equipment, to provide a strong preference for smaller subcontractors that have obtained the recommendation of: (1) an agency of the Department of Defense (DOD); or (2) the Secretary of Commerce or the Administrator of the SBA and have arranged to obtain management assistance services in connection with the installation of the equipment. States that nothing in this Act shall be interpreted to: (1) provide for the imposition of wage or price controls without prior authorization by a joint resolution of Congress; or (2) require action or compliance by any private person to assist in the production of, or other involvement in, chemical or biological warfare capabilities unless authorized by the President. Part C: Amendments to Title III of the Defense Production Act - Expands the existing loan guarantee authority of the President to include providing such authority for the procurement of industrial resources or a critical technology item for the national defense. Increases from $25,000,000 to $50,000,000 the maximum loan guarantee amount that may be made before a specific authorization by law is needed. Makes the same changes for loans made to private business enterprises under such Act. Authorizes the President to provide for purchases or purchase commitments for an industrial resource or a critical technology item for Government use or resale. (Currently, such purchases or purchase commitments are permitted for the purchase of metals, minerals, and other material.) Prohibits the President from executing a contract for purchases or purchase commitments unless: (1) the industrial resource or critical technology is essential to the national defense; (2) U.S. industry cannot reasonably provide such resource or technology in a timely manner; or (3) U.S. national defense demand for the resource or technology is equal to or greater than the output of domestic industrial capability determined to be available for national defense. Increases from $25,000,000 to $50,000,000 the maximum industrial resource shortfall authorized to be reached by the President before a specific authorization by law is required. Waives such requirements: (1) during periods of war or national emergency; or (2) upon a determination by the President that a specific guarantee is necessary to avert an industrial resource or critical technology shortfall that would severely impair national defense capability. Waives such requirements with respect to loan guarantees and loans to private business enterprises during periods of national emergency declared by the Congress or the President. Extends the term for purchases or purchase commitments from September 30, 1995, to a date not more than ten years from the date such purchase, commitment, or sale was initially made. Authorizes the President to make provision for the development of substitutes for the production readiness of critical technology products and processes when he determines that it will aid the national defense. Establishes in the Treasury the Defense Production Act Fund to carry out the purposes of title III of such Act. Establishes a maximum Fund balance. Directs the Secretary of the Treasury to designate a Fund manager to manage such Fund and report to the Congress annually on Fund activities. Provides for the determination of liabilities against the Fund. Transfers a specified amount to such Fund from the National Defense Stockpile Transaction Fund. States that it shall be the policy of the U.S. Government that: (1) no agency of the United States shall encourage or commit U.S. firms to any offset arrangement in connection with the sale of defense goods or services to foreign governments; (2) Government funds shall not be used to finance offsets in security assistance transactions except under specified procedures; (3) nothing in this Act shall prevent U.S. agencies from fulfilling obligations incurred through international agreements entered into prior to enactment of this Act; (4) the decision whether to engage in offsets and in negotiating and implementing offset arrangements lies with the companies involved; and (5) any exceptions to such policy shall be approved by the President after receiving the recommendation of the National Security Council. Directs the Secretary of Defense to lead an interagency team to consult with foreign nations on limiting the adverse effects of offsets in defense procurement and to report to specified congressional committees. Requires the Secretary of Commerce (currently, the President) to prepare a report on the impact of offsets on the defense preparedness, industrial competitiveness, employment, and trade of the United States, as required under the Defense Production Act of 1950. Provides that if a U.S. firm enters into a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm and such contract is subject to an offset agreement exceeding $5,000,000, such firm shall furnish an offset agreement to a designated defense official and information concerning such sale. Provides for the protection of confidential information provided to such defense official. Outlines information to be included in the reports prepared by the Department of Commerce. Requires findings and recommendations contained in such reports to be considered by representatives of the United States during bilateral and multilateral negotiations aimed at minimizing the adverse effects of offsets. Part D: Amendments to Title VII of the Defense Production Act - Requires small business concerns to be given the maximum practicable opportunity to participate as contractors and subcontractors in all programs to maintain and strengthen the nation's defense base under the Defense Production Act of 1950. Requires representatives of small business concerns to participate in such advisory committees as may be established under such Act, and requires small business concerns to be given access to appropriate information to the maximum extent practicable. Requires the President to allocate a fair share of material authorized under the Act to small business concerns, especially to new concerns or individual firms facing undue hardship. Permits executives being trained and organized in the National Defense Executive Reserve and participating in voluntary agreements or plans of actions under direction of the President and pursuant to treaty obligations to be given antitrust and breach of contract immunity when undertaking any emergency actions. Exempts such activities from provisions of the Advisory Committee Act. Requires the President to provide for the establishment of an information system on the domestic defense industrial base which includes a systematic and continuously-updated procedure to collect and analyze information necessary to evaluate: (1) the adequacy of domestic industrial capacity and capability in critical components, technologies, and technology items essential to national security; (2) dependence on foreign sources for industrial parts, components, and technologies essential to defense production; and (3) the reliability of foreign source supply of critical components and technologies. Requires the current defense information network to be incorporated into such information system. Provides sources of, and uses for, such information as collected and analyzed, including review and production-base analysis purposes. Directs the President to require the Secretary of each military department to incorporate in such system a complete analysis of the production base of two major weapons systems of such department. Directs the President to provide for the establishment of, and report to the Congress on, a strategic plan for developing a cost-effective, comprehensive information system capable of identifying vulnerability in critical components, technologies, and technology items. Directs the President to require the Secretaries of Defense and of Commerce, as well as the heads of other appropriate Federal agencies, to consult with one another, provide information assistance and access, and coordinate standards, definitions, and specifications for information on defense production between Federal departments and agencies. Requires the President, upon establishment of the information system, to convene a task force to establish guidelines and procedures to ensure that all Federal departments and agencies which acquire information with respect to the domestic defense industrial base are fully participating in the system. Requires the President to report on the domestic adequacy or inadequacy of critical components, technologies, and technology items needed for the defense industrial base. Authorizes appropriations. Exempts any regulation or order issued under the Defense Production Act of 1950 from the Administrative Procedure Act. Part E: Technical Amendments - Limits the use of presidential authority to prioritize contracts having a bearing on national defense over other Government contracts or orders. Increases from $1,000 to $10,000 the possible fine for the willful violation of certain information disclosure rules. Revises provisions concerning certain employment appointment procedures in connection with appointments made by the President in order to carry out the provisions of the Defense Production Act. Part F: Repealers and Conforming Amendments - Repeals specified provisions of such Act which: (1) provide for the effective date of a synthetic fuel action sent to the Congress by the President; (2) provide for voluntary agreements and plans of action for international agreements for the international allocation of petroleum products and related information systems; (3) provide for the accrual of interest on remaining funds authorized and appropriated to carry out such Act; (4) establish the Joint Committee on Defense Production; (5) disqualify certain persons for employment under such Act; (6) require a feasibility study of the application of uniform cost accounting standards under defense procurement contracts; and (7) establish the National Commission on Supplies and Shortages. Part G: Reauthorization of Selected Provisions - Authorizes appropriations for FY 1991 through 1994 to carry out the Defense Production Act of 1950. Terminates all authority under the Act as of the end of FY 1994. Title II: Effective Dates - Sets forth effective dates for provisions of this Act.

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4 official files

• Reported in House (text)

  Reported in House · EN

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• Introduced in House (text)

  Introduced in House · EN

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• Passed House amended

  summary · EN · 2 October 1991

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• Introduced in House

  summary · EN · 25 July 1991

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