Buying American

Today, Carter and Korb debate whether Congress should safeguard U.S. manufacturing by ensuring military contracts go to domestic firms, or leave it up to the military. Earlier this week, they the legality of evidence gleaned from torture, to what extent Congress should intervene in military affairs, and whether Adm. William J. Fallon was right to disagree publicly with his civilian commander. On Friday, they’ll conclude their Dust-Up by discussing how the military should prepare itself for future war and conflict.

Congress should keep contracts fair
By Lawrence J. Korb

The proper role of Congress in evaluating weapons decisions by the Pentagon is to ensure that the taxpayer gets the most bang for the buck and that the men and women in the armed services receive the equipment they need to carry out their mission at the lowest possible price.

However, in trying to fulfill this role, members of Congress often come under pressure from their constituents to put the interests of their districts ahead of those of the armed services and the American public.

These conflicting pressures will come into play when Congress reviews the decision by the Air Force to award a contract to build midair refueling tankers, potentially worth $100 billion, to a European-American consortium headed by a European firm (European Aeronautic Defense & Space Co., which partners with Northrop Grumman Corp.), rather than to an all-American company, Boeing. Had Boeing won the contract, it would have created as many as 40,000 jobs in the U.S. At the time the Air Force announced its selection, EADS-Northrop has said its victory would result in “only” 25,000 jobs here in the U.S.

According to the information revealed by the Air Force, the EADS-Northrop bid would give the Air Force a better plane at a lower cost. The Air Force used five criteria in making its decision: mission capability, risk, past performance, cost and integrated assessment. Boeing did not manage to beat EADS-Northrop in a single area. The Air Force concluded that by 2013, EADS-Northrop would be able to build 49 superior tankers compared with 19 less-capable planes built by Boeing.

For its part, Boeing has argued that the competition was unfair, and quite properly has filed a petition with the nonpartisan Government Accountability Office. If the GAO does not overturn the Air Force, Congress should allow the Air Force’s decision to stand.

Many members of Congress, who are more concerned with jobs at home than the national interest, will use some specious arguments. They will argue that allowing a foreign company to build military equipment for our troops will result in the loss of sensitive technology. But this is a tanker, not a secret advanced system. What we are talking about here are commercial aircraft modified to refuel fighters and bombers in midair. Ironically, Boeing’s line of jet aircraft, beginning with the 707, was a spinoff of the KC-135 tanker it built for the Air Force.

Others will argue the European planes are less expensive because Airbus receives government subsidies. That is a matter for the World Trade Organization to decide, not Congress or the Air Force. In fact, the WTO is considering that issue, along with the European Union’s claim that Boeing receives subsidies from the Pentagon. Moreover, the Air Force was directed by the administration not to consider the subsidy issue.

Ironically, this situation arose only because Congress did play its proper role. In 2003, the Air Force and Boeing agreed to deal with the tanker issue by having the Air Force lease modified 767s in a sole-source deal with Boeing. Both the service and the company claimed incorrectly that leasing was less expensive than buying. When members Congress found out that the Pentagon was cooking the books, they canceled the deal. That’s what they should do now: Make sure the competition was fair and that the data is solid. Doing anything else would be a disservice to the country and the military.

Lawrence J. Korb, assistant secretary of Defense in the Reagan administration, is a senior fellow at the Center for American Progress and a senior advisor to the Center for Defense Information.

Constituents matter
By Phillip Carter

Larry,

The politics of defense acquisition often remind me of the politics of crime. Sentencing policy, particularly on drug-related offenses, is perhaps the best illustrative example, but there are others, such as California’s long-running debate over its “three strikes” law. Rational policymaking gets squeezed out because legislators cannot afford to adopt any political position that might make them look soft on crime -- even when policies such as drug diversion programs or community policing might do more to stop crime than tougher sentencing laws.

In the national security arena, politicians often face the same dilemma. Question defense procurements or major national security legislation, and you run the risk that you will be hammered for being soft on defense. Notwithstanding his background as a seriously disabled Vietnam War combat veteran, then-Sen. Max Cleland (D-Ga.) fell victim to such criticisms after he opposed the Homeland Security Act of 2002 and subsequently lost the election.

For large defense acquisitions, the choice can even be more difficult. Not only do members of Congress have to worry about appearing soft on defense, they must worry about jobs and businesses in their districts, whose fortunes ride on these contracts. I think this goes beyond mere pork-barrel politics; these are legitimate concerns about constituents. To the extent that their districts’ economies are affected by these large, multibillion-dollar procurements, members of Congress should ensure those interests are considered by the Pentagon.

But Larry, I also think you’re missing the point with respect to Congress’ real role here. There is far more (properly or improperly) to the role of Congress in the defense procurement world than simply buying the best bang for the taxpayers’ buck. The reality is that Congress has, for decades, injected itself and its politics into the federal procurement process for what it perceives as worthy causes, such as preferential treatment for veteran-owned, minority-owned and small businesses. Similarly, Congress has long mandated protectionist procurement policies like the Buy American Act, Fly American regulations, and the Berry Amendment, requiring the government to buy everything from spare parts to airplane rides to uniform cloth from domestic producers. These programs clearly have negative cost consequences, but Congress has deemed them to be both strategically and politically important. I think it’s fair to debate the merits of these policies and weigh the cost effect for the taxpayer against the real or perceived need to do social good or protect domestic sources for production. Politics has played a role in this process for decades, and it’s not going away any time soon.

I agree with you, though, that Congress should not go so far as to reject this deal categorically because the winning team has a foreign firm as a member. That kind of response would provoke a protectionist backlash from overseas that would possibly cost more American jobs in the long run. And doing so would undermine our strategic alliances with European countries -- relationships that are absolutely essential to gathering intelligence and countering terrorism.

Further, the security risks raised by this deal can be addressed and mitigated. The State and Commerce departments oversee a complex export control system (sometimes too complex) to monitor and control the defense technologies and services that leave our country. And the Defense Department’s security agencies have in place a system for managing “foreign ownership, control and influence” in situations like this, or in which a foreign parent company owns a U.S. contractor doing classified work.

However, my main concern here has to do with the need for these tankers, and whether we have deliberated enough over our strategic needs in this area. I do think the Air Force needs these aircraft to replace the aging KC-135 and KC-10 tankers it now uses. Global “power projection” in places such as Iraq and Indonesia requires the ability to conduct mid-flight refueling, just as it requires an at-sea refueling capability for the Navy (which has existed in robust form since World War II). But it’s not clear how this tanker procurement fits together with other Air Force aircraft purchases -- and how the Air Force’s vision of warfare fits in with the national vision for how America will fight in the future. In the final analysis, we may need more tankers and cargo aircraft than we’re buying now to be the world’s leader in the post-Cold War, post-9/11 world. I’m not at all satisfied that we’ve thought through these questions or their answers.

Phillip Carter practices government contracts law with McKenna Long & Aldridge in New York. He previously served as an Army officer for nine years, deploying to Iraq in 2005-06 as an embedded advisor with the Iraqi police in Baqubah.