President Signs FY 2010 DoD Appropriations Bill into Law

On December 19, 2009, the President signed H.R. 3266, a bill making fiscal year (FY) 2010 appropriations for the Defense Department, and for other purposes, into law (Public Law 111-118).

(The House and Senate passed the measure on December 16 and December 19, 2009, respectively.)

Highlights of the trade-related aspects of P.L. 111-118 include:

Extension of Surface Transportation Program Authorizations

P.L. 111-118 extends the authorization for certain highway, transit, highway safety and motor carrier safety programs of the Department of Transportation until February 28, 2010. (Since the expiration of SAFETEA-LU on September 30, 2009, surface transportation programs have been extended on short-term basis under a Continuing Resolution.)

Rescission of Buy American Waiver for Certain Defense MOU Violations, Etc.

The Secretary of Defense is required to rescind its blanket waiver of the "Buy American Act"¹ with respect to certain products produced in a foreign country which has been determined (after consultation with the U.S. Trade Representative) to have violated its reciprocal defense procurement memorandum of understanding (MOU)² with the U.S. by discriminating against such products produced in the U.S.

The Secretary is also required to submit a report to Congress on the amount of DoD purchases from foreign entities in fiscal year 2010. This report would have to separately indicate the dollar value of items for which the Buy American Act¹ was waived pursuant to any MOU described above or any international agreement to which the U.S. is a party.

Funding Prohibitions for F-22A Fighter Sales, Certain Procurements, Transfers

P.L. 111-118 prohibits certain funding from being used to:

approve or license the sale of the F-22A advanced tactical fighter to any foreign government. (However, DoD may conduct or participate in studies, research, design and other activities to define and develop a future export version of the F-22A that protects classified and sensitive information, technologies and U.S. warfighting capabilities.)

procure carbon, alloy or armor steel plate for use in any Government-owned facility or property under the control of the DoD which were not melted and rolled in the U.S. or Canada. (These procurement restrictions apply to any and all Federal Supply Class 9515, American Society of Testing and Materials (ASTM) or American Iron and Steel Institute (AISI) specifications of carbon, alloy or armor steel plate.) This restriction may be waived on a case-by-case basis if certain conditions are met. The restriction does not apply to contracts which are in being as of the date of the enactment.

expended by an entity of the DoD unless the entity, in expending the funds, complies with the Buy American Act.¹ If the Secretary of Defense determines that a person has been convicted of intentionally affixing a label bearing a Made in America' inscription to any product sold in or shipped to the U.S. that is not made in America, the Secretary shall determine whether the person should be debarred from contracting with the DoD. In the case of any equipment or products purchased with appropriations provided under this Act, it is the sense of the Congress that any entity of the DoD, in expending the appropriation, purchase only American-made equipment and products, provided that American-made equipment and products are cost-competitive, quality-competitive, and available in a timely fashion.

transfer to another nation or an international organization any defense articles or services (other than intelligence services) used for certain peacekeeping/peace-enforcement activities unless specified congressional committees are notified 15 days in advance of such transfer.

transfer to any nongovernmental entity certain specified armor piercing ammunition held by DoD (except under certain contracts).

Waiver of Certain Foreign Country Procurement Limitations

P.L. 111-118 allows the Secretary to waive with respect to a foreign country, on a case-by-case basis, each limitation provided in the law on the procurement of defense items from foreign sources if the Secretary determines that the application of the limitation with respect to that country would invalidate cooperative programs entered into between the DoD and the foreign country, or would invalidate reciprocal trade agreements for the procurement of defense items entered into under 10 USC Section 2531, and the country does not discriminate against the same or similar defense items produced in the U.S. for that country.

This provision applies with respect to: (1) contracts and subcontracts entered into on or after the date of the enactment of this Act; and (2) options for the procurement of items that are exercised after such date under contracts that are entered into before such date if the option prices are adjusted for any reason other than the application of a waiver granted under the above provision.

The provision would not apply to a limitation regarding construction of public vessels, ball and roller bearings, food, and clothing or textile materials as defined by section 11 (chapters 50-65) of the Harmonized Tariff Schedule and products classified under headings 4010, 4202, 4203, 6401 through 6406, 6505, 7019, 7218 through 7229, 7304.41 through 7304.49, 7306.40, 7502 through 7508, 8105, 8108, 8109, 8211, 8215, and 9404.

¹For purposes of this section, the term "Buy American Act'' means title III of the Act entitled 'An Act making appropriations for the Treasury and Post Office Departments for the fiscal year ending June 30, 1934, and for other purposes', approved March 3, 1933 (41 U.S.C. 10a et seq.).

²This provision applies to any reciprocal defense procurement MOU, between the U.S. and a foreign country pursuant to which the Secretary has prospectively waived the Buy American Act for certain products in that country.

H.R. 3326 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3326enr.txt.pdf.

House Appropriations Committee summary of H.R. 3326 available at http://appropriations.house.gov/pdf/FY2010_Defense_Appropriations_Bill_Summary.pdf