PART F-MISCELLANEOUS

SEC. 851. [19 U.S.C. 2242 note] AUTHORITY TO CONTRACT WITH UNIVERSITY PRESSES FOR PRINTING, PUBLISHING, AND SALE OF HISTORY OF THE OFFICE OF THE SECRETARY OF DEFENSE

The Government Printing Office, on behalf of the Secretary of Defense, shall contract for services for the printing, publishing, and sale of volumes III and IV of the publication entitled "History of the Office of the Secretary of Defense" using procurement procedures that exclude sources other than university presses.

SEC. 852. [103 Stat. 1517] PROCUREMENT FROM COUNTRIES THAT DENY ADEQUATE AND EFFECTIVE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS

(a) SENSE OF CONGRESS.-It is the sense of Congress that it should be a very important consideration in the procurement of property, services, or technology by the Department of Defense whether such procurement is from any person of any country which has been identified by the United States Trade Representative, on the advice of the Commissioner of Patents and Trademarks in the Department of Commerce and the Register of Copyrights, pursuant to section 182(a)(2) of the Trade Act of 1974 (19 U.S.C. 2242) as denying adequate and effective protection of intellectual property rights or fair and equitable market access to United States persons that rely upon intellectual property protection.

(b) REPORT. (1) If the Secretary of Defense takes any action, upon the direction of the United States Trade Representative (in consultation with the Commissioner of Patents and Trademarks and the Register of Copyrights), with respect to the procurement of property, services, or technology by the Department of Defense on the basis of the consideration set forth in subsection (a), the Secretary shall submit promptly to the committees described in paragraph (2) a report describing the nature of such action and the reasons for such action.

(2) The committees to which the report required by paragraph (1) shall be submitted are the Committees on Armed Services, on Finance, and on the Judiciary of the Senate and the Committees on Armed Services, on Ways and Means, and on the Judiciary of the House of Representatives.

NATIONAL DEFENSE AUTHORIZATION ACT, FISCAL YEAR 1989
(P.L. 100-456, approved Sept. 29, 1988)

TITLE VIII—ACQUISITION POLICY AND MANAGEMENT
PART A-ACQUISITION MANAGEMENT

SEC. 807. [10 U.S.C. 2304 note] REGULATIONS ON USE OF FIXED-PRICE DEVELOPMENT CONTRACTS

(a) IN GENERAL.—(1) Not later than 120 days after the date of the enactment of this Act [September 29, 1988], the Secretary of Defense shall revise the Department of Defense regulations that provide for the use of fixed-price type contracts in a development program. The regulations shall provide that a fixed-price contract may be awarded in such a program only if—

(A) the level of program risk permits realistic pricing; and (B) the use of a fixed-price contract permits an equitable and sensible allocation of program risk between the United States and the contractor.

(2) [Paragraph (2) ceased to be in effect on September 29,

1990.]

(b) DEFINITIONS.-[Defined "major system", a term used in paragraph (2) of subsection (a).]

(c) EXPIRATION.-[Provided for expiration of paragraph (2) of subsection (a).]

PART B-DEFENSE INDUSTRIAL BASE

SEC. 825. [10 U.S.C. 2501 note] DEPARTMENT OF DEFENSE OFFSET POLICY

(a) FINDINGS.-Congress makes the following findings:

(1) Many contracts entered into by United States firms for the supply of weapon systems or defense-related items to foreign countries and foreign firms are subject to contractual arrangements under which United States firms must agree

(A) to have a specified percentage of work under, or monetary amount of, the contract performed by one or more foreign firms;

(B) to purchase a specified amount or quantity of unrelated goods or services from domestic sources of such foreign countries; or

(C) to invest a specified amount in domestic businesses of such foreign countries.

Such contractual arrangements, known as "offsets", are a component of international trade and could have an impact on

United States defense industry opportunities in domestic and foreign markets.

(2) Some United States contractors and subcontractors may be adversely affected by such contractual arrangements. (3) Many contracts which provide for or are subject to offset arrangements require, in connection with such arrangements, the transfer of United States technology to foreign firms.

(4) The use of such transferred technology by foreign firms in conjunction with foreign trade practices permitted under the trade policies of the countries of such firms can give foreign firms a competitive advantage against United States firms in world markets for products using such technology.

(5) A purchase of defense equipment pursuant to an offset arrangement may increase the cost of the defense equipment to the purchasing country and may reduce the amount of defense equipment that a country may purchase.

(6) The exporting of defense equipment produced in the United States is important to maintain the defense industrial base of the United States, lower the unit cost of such equipment to the Department of Defense, and encourage the standardized utilization of United States equipment by the allies of the United States.

(b) AMENDMENT TO TITLE 10.-[Added section 2505 to title 10. [Such section 2505 was redesignated as section 2532 by section 4202(a) of Public Law 102-484.]]

(c) NEGOTIATIONS.-(1) The President shall enter into negotiations with foreign countries that have a policy of requiring an offset arrangement in connection with the purchase of defense equipment or supplies from the United States. The negotiations should be conducted with a view to achieving an agreement with the countries concerned that would limit the adverse effects that such arrangements have on the defense industrial base of each such country. Every effort shall be made to achieve such agreements within two years after September 29, 1988.

(2) In the negotiation or renegotiation of any memorandum of understanding between the United States and one or more foreign countries relating to the reciprocal procurement of defense equipment and supplies or research and development, the President shall make every effort to achieve an agreement with the country or countries concerned that would limit the adverse effects that offset arrangements have on the defense industrial base of the United States.

(d) REPORTS.-(1) Not later than November 15, 1988, the President shall submit to Congress a comprehensive report on contractual offset arrangements required of United States firms for the supply of weapon systems or defense-related items to foreign countries or foreign firms. Such report shall include, at a minimum, the following:

(A) An analysis of the amount and type of contractual offsets required of United States firms by the governments of foreign countries or by foreign firms.

(B) An assessment of the benefits for and costs to United States manufacturers of defense products at all tiers that re

sult from requirements of foreign governments for contractual offset arrangements in the case of products procured from United States firms.

(C) An assessment of the benefits for and the costs to United States manufacturers of defense products at all tiers that would result from restriction of the ability of foreign governments or foreign firms to require contractual offsets in the case of defense products procured from United States firms.

(D) An assessment of the benefits and costs of a United States policy that requires reciprocal offsets in the procurement of defense products from those countries whose governments have a policy of requiring contractual offsets in the case of defense products procured from United States firms.

(E) An assessment of the impact that elimination of contractual offset requirements in international sales of defense products would have on the national security of the United States.

(F) Recommendations for a national policy with respect to contractual offset arrangements.

(G) A preliminary discussion of the actions referred to in paragraph (2).

(2) Not later than March 15, 1990, the President shall transmit to Congress a report containing a discussion of appropriate actions to be taken by the United States with respect to purchases from United States firms by a foreign country (or a firm of that country) when that country or firm requires an offset arrangement in connection with the purchase of defense equipment or supplies in favor of such country. The report shall include a discussion of the following possible actions:

(A) A requirement for an offset in favor of the United States or United States firms in any case in which the Department of Defense or any other department or agency of the United States purchases goods from such foreign country or a firm of such country.

(B) A demand for offset credits from such foreign country to be used, to the extent practicable, to meet offset obligations of United States firms to such foreign country or to a firm of such country.

(C) A reduction in assistance furnished such foreign country by the United States.

(D) A requirement for alternative equivalent advantages in the case of any such foreign country or a firm of such country if the United States does not purchase a sufficient volume of goods from such country or firm for a requirement described in subparagraph (A) to be effective.

(3) The President shall report to Congress at least once each year, for a period of 4 years, on the progress of the negotiations referred to in subsection (c). The first such report shall be submitted not later than one year after the date of the enactment of this Act [September 29, 1988].

(4) In this subsection, the terms "United States firm" and "foreign firm" have the same meanings as are provided in section 2505(d) of title 10, United States Code, as added by subsection (b).

PART D-MISCELLANEOUS

SEC. 843. [44 U.S.C. 502 note] CONTRACT GOAL FOR DISADVANTAGED SMALL BUSINESSES IN PRINTING-RELATED SERVICES.

(a) TEST PROGRAM.-The Public Printer shall establish and carry out a test program for increasing its award of contracts to small and disadvantaged businesses for the printing, binding, and related services needed by the Department of Defense. The program shall have a goal of procuring in each such fiscal year from such businesses printing, binding, and relating services equivalent to not more than 5 percent of the value of the printing, binding, and related services which were procured in the preceding fiscal year by the Government Printing Office from non-Government sources for the Department of Defense. The Public Printer may use such procurement procedures as he considers necessary to facilitate achievement of such goal.

(b) COVERED ENTITIES.-In this section, the term "small and disadvantaged businesses" means the small business concerns, historically Black colleges and universities, and minority institutions described in section 2323(a)1 of title 10, United States Code.

(c) ENFORCEMENT.-Any person who, for the purpose of securing a contract under subsection (a), misrepresents the status of any concern or person as a small business concern referred to in subsection (b), is subject to the penalties set forth in section 2323(f) of title 10, United States Code.

(d) DEPARTMENT OF DEFENSE GOALS.-For the purpose of determining whether the Department of Defense has attained the goals set forth in section 2323 of title 10, United States Code, the Secretary of Defense may count any procurements by the Public Printer in the program established under subsection (a).

(e) DURATION OF TEST.-The test program established by subsection (a) shall not apply to solicitations issued on or after October 1, 2000.

1 Section 2323 of title 10, United States Code, was formerly section 1207 of Public Law 99– 661. Such section 1207 was codified into title 10 by section 801 of Public Law 102–484.