The defense industry and some lawmakers are sounding alarms about recent changes to the law dictating how depot-level work on military equipment is shared between government and private facilities.
An Aerospace Industries Association (AIA) official said the rewrite of the depot provisions, in the recently passed fiscal year 2012 defense authorization act, potentially could deprive small business of work and lead to job losses. Yet he and concerned lawmakers said they are still examining the changes, which senators were surprised to find in the final version of the authorization legislation that House-Senate negotiators crafted last month.
“Most of the concerns (with the rewritten depot provisions) rest with the fact that nobody can tell you what the impact is,” said Cord Sterling, vice president for legislative affairs at AIA, a defense industry trade group. “Depot legislation is very complex. A couple of words here and a couple of words there and you can have very significant impact on the industrial base, both within the Department of Defense at the depots as well as in the private sector.”
The authorization act broadens the definition of what type of work on military equipment falls under the definition of depot maintenance, he said. Such maintenance is divided evenly between government and private-sector depots. Sterling said if more-complex work is factored in as depot maintenance, he fears smaller companies will lose out. That’s because if the government has to assume more work, it likely will take on less-skilled duties perhaps done now by smaller firms–such as basic maintenance–while leaving the more-complex matters–like the nuclear refueling of aircraft carriers–to the highly skilled private sector workers in larger firms.
“So it could have a very, very significant impact upon small business,” he said.
Still, Sterling maintained the defense industry, Congress, and the Pentagon don’t fully understand the impact of the depot-language changes.
Senate Armed Services Committee (SASC) staff met yesterday with industry representatives about the depot changes, and the House Armed Services Committee (HASC) is planning a similar meeting.
Congress could change the depot language in the authorization act, which also could be tweaked in the process of implementing regulations.
The depot changes were added to the authorization measure by the House during a House-Senate conference committee that crafted the final bill Dec. 12.
Multiple senators, including SASC Chairman Carl Levin (D-Mich.) and Ranking Member John McCain (R-Ariz.) voiced concerns about the depot-definition changes on the Senate floor Dec. 15, before the chamber passed the defense authorization bill. Sen. James Inhofe (R-Okla.) and six other senators had sent the SASC leaders a letter on Dec. 9 charging the depot changes were improperly made by the House during the conference committee negotiations.
Sen. Susan Collins (R-Maine) said the two disputed depot provisions in the final conference report, “constitute a major rewrite of depot policies and laws.”
“These sections have not been sufficiently vetted,” she said. “They could potentially hurt competition in acquisition programs, harm our public depots, and cause unintended consequences that could significantly affect not only depots, but also the private sector industrial base and the thousands of employees in both sectors.”
Levin said he agrees “there are a number of unanswered questions” about the depot-related changes “that could have significant effects.”
“I am aware that the depot maintenance issue has long been a sensitive one to our Nation and to many of our members, and that the precise words in these provisions matter,” he said. “The existing statutes, regulations, and practices have served to sustain both core logistics capabilities and the defense industrial base over the last decade, so any changes need to be fully understood.”