May 24, 1976
Page 15204
Mr. HATHAWAY. I thank the chairman for yielding to me.
We were prepared to bring this up today, as I mentioned to the Senator last Thursday, but I understand Senator CULVER, who was very much interested in this amendment, could not be present this afternoon, and so we have agreed to defer it until later in the week. In the meantime we are hopeful that we can work out some agreement among Senator TOWER, Senator NUNN, the chairman, and those of us pressing for this amendment, and others, modifying sections 802 and 803 so there may not be, although I cannot promise, any prolonged debate on this matter when it is finally brought up.
Mr. STENNIS. I thank the Senator, and I ask him now: As I understand, even though there are a number of amendments on the same subject, differently expressed, they all amount to similar subject matter and are almost the same; is that about right?
Mr. HATHAWAY. Yes, the Senator is correct. They all pertain to sections 802 and 803.
Mr. STENNIS. And the Senator thinks perhaps it could be worked down to one or two amendments; is that a fair question?
Mr. HATHAWAY. I think that they could not be narrowed down to one or two, but it would be very few.
Mr. S TENNIS. All right.
Mr. HATHAWAY. Will the chairman yield to me for another minute?
Mr. STENNIS. Yes, I yield the Senator 2 minutes.
Mr. HATHAWAY. I ask unanimous consent that there be printed. in the RECORD a copy of the letter to Members of the Senate pertaining to the amendments that we have been talking about.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
U.S. SENATE,
Washington, D.C.,
May 24, 1976.
DEAR COLLEAGUE: We intend to offer amendments modifying Sections 802 and 803 of H.R. 12438, the so-called Military Procurement Authorization bill now pending on the Senate floor.
These sections and the accompanying report language relate to the issue of weapons standardization among the member nations of NATO and express a strong Congressional policy that the Secretary of Defense accelerate his efforts in this direction.
We support this policy in its general terms, but are concerned about its potential for abuse in "package deals" where the Secretary could enter into agreements with officials of member nations which bind him to purchase weapons systems or equipment from the member nations in exchange for these officials' commitments to purchase other weapons systems and equipment from United States manufacturers.
Under existing law these sorts of deals appear to be prohibited by the Buy American Act which ordinarily requires goods to be used by the Armed Forces to be acquired domestically unless there are overriding cost or quality considerations, or other overriding public interest considerations. Other procurement laws and regulations require competitive procurements. Section 802 would, however, amend existing law to grant to the Secretary a per se "public interest" waiver of the Buy American Act to acquire foreign goods if he could assert that such a purchase somehow fostered NATO "standardization".
Further, Section 803 encourages him to enter into "cooperative arrangements" with members of NATO and establishes as national policy the conclusion that NATO standardization is more important than "potential economic hardship to parties to such agreements" and that this policy is a "two way street". This proposed statutory language, coupled with the report language, would seem to mandate that the Secretary actively pursue such package deals, and ignore the policy expressed in the Buy American Act, and similarly ignore the adverse impact these sharing agreements inevitably will have on U.S. manufacturers who might otherwise have won the right to supply the goods via objective competition. The domestic manufacturers may be effectively frozen out for the greater good of NATO cooperation.
Unstated in the bill or the report is that the "potential economic hardship to parties to such agreements"would likely be most acutely felt by the United States, or that it may be fundamentally unfair to freeze out many of our manufacturers in the interest of giving other of our manufacturers a wider, worldwide market.
In making these observations we do have a particular situation in mind. The Committee report on page 167 alludes to the decision by a number of NATO nations to purchase the U.S. made F-16 fighter aircraft and the Army's decision to purchase a Belgian made armored tank machine gun. No direct connection between the two decisions is mentioned in the report, but these actions are cited approvingly as instances where "standardization" has been fostered.
We believe there was a direct connection between the two decisions, that they were part of a "quid pro quo" agreement entered into about June of 1975 between then Secretary Schlesinger and Belgian officials in which the Secretary's representation that the Belgian gun would ultimately be chosen by the Army, rather than a competing American made gun, served as an inducement for Belgium's converse promise to buy the F-16 aircraft manufactured in the United States.
The American made gun, manufactured by Maremont Corporation, a Chicago based company with its principal factory in Saco, Maine, had prior to June of 1975 been recommended for purchase by the Army Armor Command. Subsequent to the alleged F-16 deal, an ostensible competition was held between the Belgian and American guns, after which the Army declared the Belgian gun to be the winner.
On May 19, 1976, we, along with other members of the Maine Congressional Delegation, Congressmen William S. Cohen and David F. Emery, joined Maremont in filing suit in U.S. District Court for the District of Columbia alleging that there was such a deal, that the subsequent competition was not conducted according to the relevant statutes and regulations, and was preordained to determine the Belgian gun the winner. The suit asks that Secretary Rumsfeld and Secretary Hoffman be enjoined from carrying out the agreement pending resolution of a contract protest filed with the Comptroller General by Maremont Corporation, and thereafter be permanently enjoined.
We believe that the courtroom is the appropriate forum to settle the factual dispute we have with the Army and the Department of Defense, and do not ask our colleagues to make any determinations regarding this particular situation.
But we do believe that as a matter of national policy Congress should be made aware of any proposed agreements between the Secretary of Defense and officials of NATO nations which involve any sort of "quid pro quo" before such an agreement is finally entered into. In this way, Congress can participate directly in the weighing of standardization goals and domestic economic impact, and will thereby be able to consider with full knowledge future legislation dealing with authorizations or appropriations for procurement of weapons.
We believe further that the goals of "standardization" and "interoperability" ought to be defined with much greater precision than is now present in Sections 802 and 803 of this proposed legislation, and the blanket waiver of the Buy American Act contained therein ought to be substantially tightened up.
Our own experience again sheds light on the dangers of potential for abuse without stricter definition. The version of the Belgian gun, MAG 58, proposed to be installed in the U.S. M-60A3 tank is substantially different from the versions of the MAG 58 utilized by Belgium, Holland, and Great Britain, and the two versions cannot be substituted for one another without major modification. Further, the Maremont tank gun possesses the characteristic of a high degree of parts interchangeability with the standard M-60 infantry machine gun and consequently would result in positive economies of scale in the area of parts supply.
We believe standardization ought to be defined in terms of ready substitution of one nation's equipment for another, or in terms of overall economies of scale, but should in no event be left open.
We shall be offering amendments directed at these objectives and solicit your support. Amendment No. 1665 is already available. If you have any questions or would like to cosponsor our effort, please contact us directly or have your staff call either John Doyle at extension 42523, or Jim Case at 45344.
Sincerely,
WILLIAM D. HATHAWAY,
U.S. Senator.
EDMUND S. MUSKIE,
U.S. Senator.
Mr. STENNIS. Mr. President, I had hoped the floor leader could be here, and I think he will be here in a few minutes. Will the Senator be ready on one of his amendments tomorrow should we get to this bill?
Mr. HATHAWAY. I assume that Senator CULVER will be back tomorrow.
Mr. NUNN. My understanding is Senator CULVER will not be back until Wednesday morning.
Mr. HATHAWAY. Then I would hope we could wait until Wednesday morning.
Mr. STENNIS. It is nice to accommodate everyone we can and we wish to go as far as we can in that field, but really we have this bill set and we have already started moving on amendments. Could the Senator call him? I am not thinking about taking it up now.
Mr. HATHAWAY. I want to protect whatever interest Senator CULVER might have. I say to the chairman that we are already in the negotiating stage this afternoon and maybe we can reach Senator CULVER by telephone.
Mr. NUNN. Let me ask the chairman. The reason for deferring until Senator CULVER arrives is that Senator CULVER, according to my understanding, would be against the Hathaway amendment. The Hathaway amendment would undo a good many of the things Senator CULVER has been working on in our committee, particularly in standardization. A couple Culver amendments are in the bill. So these amendments are going in the opposite direction, and that is the reason I think Senator HATHAWAY is really deferring to Senator CULVER and being courteous to him in waiting until he comes back, because I know he would be interested in probably opposing this amendment.
Mr. STENNIS. Responding, I think that we ought to try mighty hard to work out something here regardless of who it is or which side that they are on. That is the only way we can debate the amendments and dispose of them.