[Congressional Record Volume 149, Number 114 (Tuesday, July 29, 2003)]
[Senate]
[Pages S10142-S10144]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 1480. A bill to amend the Buy American Act to increase the 
requirement for American-made content, to tighten the waiver 
provisions, and for other purposes; to the Committee on Governmental 
Affairs.
  Mr. FEINGOLD. Mr. President, today I am introducing legislation to 
strengthen the Buy American Act of 1933, the statute that governs 
procurement by the federal government. The name of the act accurately 
and succinctly describes its purpose: to ensure that the federal 
government supports domestic companies and domestic workers by buying 
American-made goods.
  While I a strong supporter of the act, I am concerned that, through 
abuse of its 5 broad waivers, the spirit--if not the letter--of the act 
is being weakened time and again.
  It only makes sense, Mr. President, for the federal government to 
make every effort to purchase goods that are made in America. A law 
requiring this common-sense approach should not be necessary. 
Unfortunately, this law is necessary, and the way in which its many 
loopholes are being used also makes strengthening it necessary.
  I have often heard my colleagues say on this floor that American-made 
goods are the best in the world. I could not agree more. This Congress 
should do more to ensure that the federal government adheres to this 
sentiment by enforcing and strengthening the provisions of the Buy 
American Act.
  As we all know the United States manufacturing industry is 
hemorrhaging, as jobs and companies move overseas or are lost all 
together. According to the AFL-CIO, the United States has lost more 
than 2.4 million manufacturing jobs since April 1998. This disturbing 
trend is of particular concern in my home state of Wisconsin.
  A March 2003 report by the Wisconsin State Department of Workforce 
Development notes that ``a combination of weak domestic and global 
demand, mergers and consolidations, automation, globalization of 
operations, and uncertainty surrounding war have caused employment in 
Wisconsin's manufacturing sector to shrink in recent years.'' The 
Department found that there were 594,100 manufacturing jobs in 
Wisconsin in 2000, and the Department estimates that this figure had 
dropped to 517,100 jobs by June of this year. More than 77,000 jobs 
lost in just 2\1/2\ years, Mr. President. And the people of my state 
can expect more of the same during the rest of this decade if we don't 
take action soon.
  While the Department expects some sectors to experience an upturn by 
2010, it estimates that the people of my state can still expect to lose 
thousands more manufacturing jobs by 2010.
  Much of this can be blamed on flawed trade agreements that the United 
States has entered into in recent years. The trade policy of this 
country over the past several years has been appalling. The trade 
agreements into which we have entered have contributed to the loss of 
key employers, ravaging entire communities. But despite that clear 
evidence, we continue to see trade agreements being reached that will 
only aggravate this problem
  This has to stop. We cannot afford to pursue trade policies that gut 
our manufacturing sector and send good jobs overseas. We cannot afford 
to undermine the protections we have established for workers, the 
environment, and for our public health and safety. And we cannot afford 
to squander our democratic heritage by entering into trade agreements 
that supercede our right to govern ourselves through open, democratic 
institutions.
  I will be introducing legislation in the near future to address that 
problem directly by establishing minimum standards for the trade 
agreements into which our nation enters. That measure is a companion to 
a resolution that will be introduced in the other body by my colleague 
from Ohio [Mr. Brown].
  Regrettably, some of the blame for the dire situation in which 
American manufacturing finds itself also lies in our own federal tax 
and procurement policies, some of which actually encourage American 
companies to move or incorporate abroad. The Buy American law was 
enacted 70 years ago to ensure that Federal procurement policies 
support American jobs.
  Some argue that the Buy American Act has outlived its usefulness in 
today's global economy. I argue that it is as relevant today as it was 
when it was enacted in 1933. The passage of 70 years has not diminished 
the importance of this Act for American manufacturing companies or for 
those who are employed in this crucial sector of our economy. In fact, 
a strong argument can be made that this Act is even more necessary 
today than it was 70 years ago. With American jobs heading overseas at 
an alarming rate, the Government should be doing all it can to make 
sure that U.S. taxpayer dollars are spent to support American jobs.
  Some argue that the Buy American Act is protectionist and anti-free 
trade. I disagree. Supporting American industry is not protectionist--
it is common sense. The erosion of our manufacturing base needs to be 
stopped, and Congress should support procurement and trade policies 
that help to ensure that we do not continue to lose portions of this 
vital segment of our economy.
  The legislation that I introduce today, the Buy American Improvement 
Act, would strengthen the existing Act by tightening existing waivers 
and would require that information be provided to Congress and to the 
American people about how often the provisions of this Act are waived 
by Federal departments and agencies.
  As I noted earlier, there are currently five primary waivers in the 
Buy American Act. The first allows an agency head to waive the Act's 
provisions if a determination is made that complying with the Act would 
be ``inconsistent with the public interest.'' I am concerned that this 
waiver, which includes no definition for what is ``inconsistent with 
the public interest'' is actually a gaping loophole that gives broad 
discretion to department  secretaries and agency heads. My bill would 
clarify this so-called ``public interest'' waiver provision to prohibit 
it from being invoked by an agency or department head after a request 
for procurement (RFP) has been published in the Federal Register. Once 
the bidding process has begun, the Federal Government should not be 
able to pull an RFP by saying that it is in the ``public interest'' to 
do so. This determination, sometimes referred to as the Buy

[[Page S10143]]

American Act's national security waiver, should be made well in advance 
of placing a procurement up for bid.

  The Buy American Act may also be waived if the head of the agency 
determines that the cost of the lowest-priced domestic product is 
``unreasonable,'' and a system of price differentials is used to assist 
in making this determination. My bill would amend this waiver to 
require that preference be given to the American company if that 
company's bid is substantially similar to the lowest foreign bid or if 
the American company is the only domestic source for the item to be 
procured.
  I have a long record of supporting efforts to help taxpayers get the 
most bang for their buck and of opposing wasteful Federal spending. I 
don't think anyone can argue that supporting American jobs is 
``wasteful.'' We owe it to American manufacturers and their employees 
to make sure they get a fair shake. I would not support awarding a 
contract to an American company that is price gouging, but we should 
make every effort to ensure that domestic sources for goods needed by 
the Federal Government do not dry up because American companies have 
been slightly underbid by foreign competitors.
  The Buy American Act also includes a waiver for goods bought by the 
Federal Government that will be used outside of the United States. 
There is no question that there will be occasions when the Federal 
Government will need to procure items quickly that will be used outside 
the United States, such as in a time of war. However, items that are 
bought on a regular basis and are used at foreign military bases or 
United States embassies, for example, could reasonably be procured from 
domestic sources and shipped to the location where they will be used. 
My bill would require an analysis of the difference in cost for 
obtaining articles, materials, or supplies that are used on a regular 
basis outside the United States, or that are not needed on an immediate 
basis, from an American company, including the cost of shipping, and a 
foreign company before issuing a waiver and awarding the contract to a 
foreign company.
  The fourth waiver allowed under the Buy American Act states that the 
domestic source requirements of the Act may be waived if the articles 
to be procured are not available from domestic sources ``in sufficient 
and reasonably available commercial quantities and of a satisfactory 
quality.'' My bill would require that an agency or department head, 
prior to issuing such as waiver, conduct a study that determines that 
domestic production cannot be initiated to meet the procurement needs 
and that a comparable article, material, or supply is not available 
from an American company.
  The newest Buy American Act waiver, which was enacted in 1994, 
exempts purchases of less than $2,500 from the domestic source 
requirements of the Act. While this waiver is not addressed in my bill, 
I have requested that the General Accounting Office conduct a study of 
this so-called ``micro purchase'' exemption, including how often it is 
used and its impact on American businesses.
  My bill also strengthens the Buy American Act in four other ways.
  First, it expands annual reporting requirements regarding the use of 
waivers that currently apply only to the Department of Defense to 
include all Federal departments and agencies. My bill specifies that 
these reports should include an itemized list of waivers, including the 
items procured, their dollar value, and their source. In addition, 
these reports would have to be made available on the Internet.
  The bill also increases the minimum American-made content standard 
for qualification under the Act from the current 50 percent to 75 
percent. The definition of what qualifies as an American-made product 
has been a source of much debate. To me, it seems clear that American-
made means manufactured in this country. This classification is a 
source of pride for manufacturing workers around our country. The 
current 50 percent standard should be raised to a 75 percent minimum.
  My bill also addresses the crucial issue of dual-use technologies and 
efforts to prevent them from falling into the hands of terrorists or 
countries of concern. My bill would prohibit the awarding of a contract 
or sub-contract to a foreign company to manufacture goods containing 
any item that is classified as a dual-use item on the Commerce Control 
List unless approval for such a contract has been obtained through the 
Export Administration Act process.
  Finally, my bill would require the General Accounting Office to 
report to Congress with recommendations for defining the terms 
``inconsistent with the public interest'' and ``unreasonable cost'' for 
purposes of invoking the corresponding waivers in the Act. I am 
concerned that both of these terms lack definitions, and that they can 
be very broadly interpreted by agency or department heads. GAO would be 
required to make recommendations for statutory definitions of both of 
these terms, as well as on establishing a consistent waiver process 
that can be used by all Federal agencies.
  I am pleased that this legislation is supported by a broad array of 
business and labor groups including: Save American Manufacturing, the 
U.S. Business and Industry Council, the International Association of 
Machinists and Aerospace Workers, the Milwaukee Valve Company, and the 
National and Wisconsin AFL-CIO.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1480

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Buy American Improvement Act 
     of 2003''.

     SEC. 2. REQUIREMENTS FOR WAIVERS.

       (a) In General.--Section 2 of the Buy American Act (41 
     U.S.C. 10a) is amended--
       (1) by striking ``Notwithstanding'' and inserting the 
     following:
        ``(a) In General.--Notwithstanding''; and
       (2) by adding at the end the following:
       ``(b) Special Rules.--The following rules shall apply in 
     carrying out the provisions of subsection (a):
       ``(1) Public interest waiver.--A determination that it is 
     not in the public interest to enter into a contract in 
     accordance with this Act may not be made after a notice of 
     solicitation of offers for the contract is published in 
     accordance with section 18 of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 416) and section 8(e) of 
     the Small Business Act (15 U.S.C. 637(e)).
       ``(2) Domestic bidder.--A Federal agency entering into a 
     contract shall give preference to a company submitting an 
     offer on the contract that manufactures in the United States 
     the article, material, or supply for which the offer is 
     solicited, if--
       ``(A) that company's offer is substantially the same as an 
     offer made by a company that does not manufacture the 
     article, material, or supply in the United States; or
       ``(B) that company is the only company that manufactures in 
     the United States the article, material, or supply for which 
     the offer is solicited.
       ``(3) Use outside the United States.--
       ``(A) In general.--Subsection (a) shall apply without 
     regard to whether the articles, materials, or supplies to be 
     acquired are for use outside the United States if the 
     articles, materials, or supplies are not needed on an urgent 
     basis or if they are acquired on a regular basis.
       ``(B) Cost analysis.--In any case where the articles, 
     materials, or supplies are to be acquired for use outside the 
     United States and are not needed on an urgent basis, before 
     entering into a contract an analysis shall be made of the 
     difference in the cost for acquiring the articles, materials, 
     or supplies from a company manufacturing the articles, 
     materials, or supplies in the United States (including the 
     cost of shipping) and the cost for acquiring the articles, 
     materials, or supplies from a company manufacturing the 
     articles, materials, or supplies outside the United States 
     (including the cost of shipping).
       ``(4) Domestic availability.--The head of a Federal agency 
     may not make a determination under subsection (a) that an 
     article, material, or supply is not mined, produced, or 
     manufactured, as the case may be, in the United States in 
     sufficient and reasonably available commercial quantities and 
     of satisfactory quality, unless the head of the agency has 
     conducted a study and, on the basis of such study, determined 
     that--
       ``(A) domestic production cannot be initiated to meet the 
     procurement needs; and
       ``(B) a comparable article, material, or supply is not 
     available from a company in the United States.
       ``(c) Reports.--
       ``(1) In general.--Not later than 60 days after the end of 
     each fiscal year, the head of each Federal agency shall 
     submit to Congress a report on the amount of the acquisitions 
     made by the agency from entities that manufacture the 
     articles, materials, or supplies outside the United States in 
     that fiscal year.

[[Page S10144]]

       ``(2) Content of report.--The report required by paragraph 
     (1) shall separately indicate the following information:
       ``(A) The dollar value of any articles, materials, or 
     supplies for which this Act was waived.
       ``(B) An itemized list of all waivers granted with respect 
     to such articles, materials, or supplies under this Act.
       ``(C) A list of all articles, materials, and supplies 
     acquired, their source, and the amount of the acquisitions.
       ``(3) Public availability.--The head of each Federal agency 
     submitting a report under paragraph (1) shall make the report 
     publicly available by posting on an Internet website.''.
       (b) Definitions.--Section 1 of the Buy American Act (41 
     U.S.C. 10c) is amended--
       (1) by striking subsection (c) and inserting the following:
       ``(c) Federal Agency.--The term `Federal agency' means any 
     executive agency (as defined in section 4(1) of the Federal 
     Procurement Policy Act (41 U.S.C. 403(1))) or any 
     establishment in the legislative or judicial branch of the 
     Government (except the Senate, the House of Representatives, 
     and the Architect of the Capitol and activities under the 
     Architect's direction).''; and
       (2) by adding at the end the following:
       ``(d) Substantially All.--Articles, materials, or supplies 
     shall be treated as made substantially all from articles, 
     materials, or supplies mined, produced, or manufactured, as 
     the case may be, in the United States, if the cost of the 
     domestic components of such articles, materials, or supplies 
     exceeds 75 percent.''.
       (c) Conforming Amendments.--
       (1) Section 2 of the Buy American Act (41 U.S.C. 10a) is 
     amended by striking ``department or independent 
     establishment'' and inserting ``Federal agency''.
       (2) Section 3 of such Act (41 U.S.C. 10b) is amended--
       (A) by striking ``department or independent establishment'' 
     in subsection (a), and inserting ``Federal agency''; and
       (B) by striking ``department, bureau, agency, or 
     independent establishment'' in subsection (b) and inserting 
     ``Federal agency''.
       (3) Section 633 of the National Military Establishment 
     Appropriations Act, 1950 (41 U.S.C. 10d) is amended by 
     striking ``department or independent establishment'' and 
     inserting ``Federal agency''.

     SEC. 3. GAO REPORT AND RECOMMENDATIONS.

       (a) Scope of Waivers.--Not later than 6 months after the 
     date of enactment of this Act, the Comptroller General of the 
     United States shall report to Congress recommendations for 
     determining, for purposes of applying the waiver provision of 
     section 2(a) of the Buy American Act--
       (1) unreasonable cost; and
       (2) inconsistent with the public interest.

     The report shall include recommendations for a statutory 
     definition of unreasonable cost and standards for determining 
     inconsistency with the public interest.
       (b) Waiver Procedures.--The report described in subsection 
     (a) shall also include recommendations for establishing 
     procedures for applying the waiver provisions of the Buy 
     American Act that can be consistently applied.

     SEC. 4. DUAL-USE TECHNOLOGIES.

       The head of a Federal agency (as defined in section 1(c) of 
     the Buy American Act (as amended by section 2) may not enter 
     into a contract, nor permit a subcontract under a contract of 
     the Federal agency, with a foreign entity that involves 
     giving the foreign entity plans, manuals, or other 
     information that would facilitate the manufacture of a dual-
     use item on the Commerce Control List unless approval for 
     providing such plans, manuals, or information has been 
     obtained in accordance with the provisions of the Export 
     Administration Act of 1979 (50 U.S.C. App. 2401 et seq.) and 
     the Export Administration Regulations (15 C.F.R. part 730 et 
     seq.).
                                 ______