cela * See SOG Defense MOU Attachés Group Chairman Jim Inhofe ‘Ranking Member Jack Reed ‘Senate Armed Services Committee Senate Armed Services Committee Senate Russell Office Building-228 Senate Russell Office Buildng-228 Ast and C Street NE Ast and C Street NE ‘Washington DC, 20510 ‘Washington DC, 20510 August 5, 2020 Dear Senator Inhofe and Senator Reed, |1am writing to you as Chalrman ofthe Defense MOU Attachés Group [OMAG) to share concerns related to several provisions being considered for inclusion inthe fiscal year 2021 (FY21) National Defense Authorization Act (NDAA) and Department of Defense appropriations bills (nctng that this s subject to the Appropriations Committee process). Specifically, would like to express strong concerns about two sections inthe House-passed NDAA (H.R, 6295) and. ‘one section inthe House defense appropriations bill (Division A of H.R. 7617). Within H.R. 6385, section 825 ~ Enhanced Domestic Content Requirement for Major Defense Acquistion Programs (MDAPs) would require that, beginning on October 1, 2022, 75 percent of all artices, materials, and supplies for MDAPs must be mined, produced, or manufactured in ‘the United States, That domestic content requirement would rse annually until it reaches 100, percent by October 1, 2026. In adeltion, we have concerns with section #23 - Manufacture of Certain Ship Components (speciticaly, engines, reduction gears, propellers, auxiliary ‘equipment, and cranes) for auxiliary ships, which would considerably limit international, ‘competition and narrow industrial supply choices for shipbuilding ‘Within 4., 7617, ection 8129 would impose a Buy American requirement on all "hl rmecharical, and electrical components" for virally all ofthe Navy manned ships curently in development: ASX) Submarine Tender; T-ARC{X) Cable Laying and Repair Ship; T-AGOS(X) ‘Oceanographic Surveilance Ship; Light Amphibious Warship; and Next Generation Medium Logistics ship. enacted, these three legislative requirements will greatly impair the reciprocal deferse procurement agreements, which promote defense equipment cooperation and defense trade, thatthe United States has with numerous allies and partners. As you may be aware, the OMAG ‘compris 25 alled and partner nations with whom the United States has such agreements (For mere detailed information about DMAG, please see dmagdcifo).‘The benelits of these agreements have stood the test of time. Many of them were negotiated following the passage of the Culver-Nunn Amendment tothe fiscal year 1977 Defense ‘Authorization Act with the intended purpose to promote rationalization, standardization, and interoperability within the North Atlantic Treaty Organization (NATO). The United States also ‘negotiated adeitional defense procurement agreements with select non-NATO members over time. All these agreements are foundational for defense trade, which has greatly benefited “American manufacturers and created jobs in the United States, as evidenced by the level of U.S trade surpluses in defense equipment. According to the U.S. Department of Commerce, the United states enjoyed an aerospace and defense trade surplus of $89.6 billion in 2038. n the same timeframe, US. Foreign Military Sales alone totaled $55.7 billion Furthermore, these provisions may inhibit industrial cooperation and innovation exchange in US defense programs and impair the global competitiveness of US defense companies. In this Fespect nay also refer to the Statement of Administration Policy (ssued on July 23, 2020 by the Office of Management and Budget) regarding H.R. 6395, section 825 which states that the proposal ‘would have a significant and detrimental effect in weakening the integrity of our ‘contracting process, driving increases to acquisition lead times, adding to project costs, and impacting delivery of critical MDAP capabilities to the warfighter” In addition to the benefits to American industry, these agreements are fundamental to defense collaboration relationships, allowing for greater interoperability and effectiveness during ‘operations where the United States has stood shoulder-to-shoulder with allies and partners to address stared security challenges around the worl. would be most grateful if you would oppose Sections 825 and 823 ofthe H.R. 6395, as well as, engage on Section 8129 of the House defense appropriations bil These provsions erode the letter and spirit of reciprocal defense procurement agreements that benefit the American defense industry and its workers. ‘Sincerely yours, [00 a. leter-Henk Schroor ‘Chak, Defense MOU Attachés Group