To require a review and report regarding the effects of use of contractual offset arrangements and memoranda of understanding and related agreements on the effectiveness of buy-American requirements.

1. Adds Sec. 8124. (a) The Secretary of Defense-- on page 120, between lines 17 and 18

   Adds a sectionPrinted page

   Inserted: Sec. 8124. (a) The Secretary of Defense--

   Inserted: (1) shall review--

   Inserted: (A) all contractual offset arrangements to which the policy established under section 2532 of title 10, United States Code, applies that are in effect on the date of the enactment of this Act;

   Inserted: (B) any memoranda of understanding and related agreements to which the limitation in section 2531(c) of such title applies that have been entered into with a country with respect to which such contractual offset arrangements have been entered into and are in effect on such date; and

   Inserted: (C) any waivers granted with respect to a foreign country under section 2534(d)(3) of title 10, United States Code, that are in effect on such date; and

   Inserted: (2) shall determine the effects of the use of such arrangements, memoranda of understanding, and agreements on the effectiveness of buy American requirements provided in law.

   Inserted: (b) The Secretary shall submit a report on the results of the review under subsection (a) to Congress not later than March 1, 2005. The report shall include a discussion of each of the following:

   Inserted: (1) The effects of the contractual offset arrangements on specific subsectors of the industrial base of the United States and what actions have been taken to prevent or ameliorate any serious adverse effects on such subsectors.

   Inserted: (2) The extent, if any, to which the contractual offset arrangements and memoranda of understanding and related agreements have provided for technology transfer that would significantly and adversely affect the defense industrial base of the United States and would result in substantial financial loss to a United States firm.

   Inserted: (3) The extent to which the use of such contractual offset arrangements is consistent with--

   Inserted: (A) the limitation in section 2531(c) of title 10, United States Code, that prohibits implementation of a memorandum of understanding and related agreements if the President, taking into consideration the results of the interagency review, determines that such memorandum of understanding or related agreement has or is likely to have a significant adverse effect on United States industry that outweighs the benefits of entering into or implementing such memorandum or agreement; and

   Inserted: (B) the requirements under section 2534(d) of such title that--

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   Inserted: (i) a waiver granted under such section not impede cooperative programs entered into between the Department of Defense and a foreign country and not impede the reciprocal procurement of defense items that is entered into in accordance with section 2531 of such title; and

   Inserted: (ii) the country with respect to which the waiver is granted not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.

   Inserted: (c) The Secretary--

   Inserted: (1) shall submit to the President any recommendations regarding the use or administration of contractual offset arrangements and memoranda of understanding and related agreements referred to in subsection (a) that the Secretary considers appropriate to strengthen the administration buy American requirements in law; and

   Inserted: (2) may modify memoranda of understanding or related agreements entered into under section 2531 of title 10, United States Code, or take other action with regard to such memoranda or related agreements, as the Secretary considers appropriate to strengthen the administration buy American requirements in law in the case of procurements covered by such memoranda or related agreements.

   Original wording

   On page 120, between lines 17 and 18, insert the following:

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As printed