Outsourcing Defense Hurts the U.S.

Posted May 16, 2008 at 11:02am

Rosie the Riveter. The indelible poster harkens a feeling of the American can-do attitude. More than 60 years ago, our nation’s industrial base answered the call to produce the airplanes, tanks and jeeps that our armed forces needed to win World War II. Their efforts helped to secure our country’s freedom and put the United States on the path to world leadership and economic success.

Since then, the U.S. military has fought in three major wars, and in every conflict the primary suppliers of military equipment were based right here in the United States. But today is different. The rise of globalization, questionable U.S. trade policies and the transformation of the American economy from manufacturing-based to service-based have increasingly led the United States to outsource our national defense.

On Feb. 29, the Air Force selected a European- based aerospace conglomerate, EADS, to build a next-generation air refueling tanker. I was and am still extremely troubled by this decision for several reasons. The negative effect on the economy of Kansas is enormous. As has been reported, the final step in manufacturing these aircraft would have been completed at the Boeing facility in Wichita. With the contract now set to be awarded to a foreign manufacturer, Boeing and other Kansas suppliers face the loss of billions of dollars and thousands of jobs.

In addition to the negative economic effect is the loss of skilled labor. Every contract sent overseas takes with it critical national defense skills — skills that will be very hard to replace once those employees walk out the door. Especially in a time of war.

The ability for America’s industrial base to quickly manufacture military goods is severely depleted. The conflict in Iraq is a perfect example of our difficulty to quickly mass-produce needed equipment. The Humvees that we sent to Iraq in 2003 were not up-armored. When the insurgency began to deploy deadly improvised explosive devices, the U.S. military needed several years to produce mine-resistant ambush-protected vehicles in mass quantities. The delay cost too many soldiers their lives and undermined America’s counterinsurgency efforts. The United States simply did not have the manufacturing capability or the skilled work force needed to provide for our own defense.

Jobs here at home are important, but there’s another side of sending military contracts overseas that doesn’t get nearly the attention it should: illegal transfer of technology. With more and more components of military equipment made overseas, our national security could be in jeopardy if foreign-built technology is sold to the highest bidder.

In 1999, the Defense Science Board determined that the threat is very real. “From a long-term strategic standpoint, globalization’s most significant manifestation is the irresistible leveling effect it is having on the international military technological environment in which DOD must compete. … The technology DOD [anticipates being able to leverage most] to maintain military dominance is that which the United States is least capable of denying its potential competitors. Access to commercial technology is virtually universal, and its exploitation for both civil and military ends is largely unconstrained. … Indeed, owing to the proliferation of military technology, the commercialization of former military-specific technology, and the increasing reliance of militaries worldwide on commercially developed technology, and the general diffusion of technology and know-how, the majority of militarily useful technology is or eventually will be available commercially and/or from non-U.S. defense companies.”

The trends noted by the DSB haven’t slowed down. The Department of Defense relies on multiple international defense companies every day to buy equipment for the military. Is anyone looking out for our country’s best interest when dealing with foreign competitors?

The answer should be yes. Earlier this year, the House Armed Services Committee held a hearing on the National Industrial Security Program. NISP was created in 1993 by executive order to ensure that cleared U.S. defense contractors safeguard the classified information in their possession while performing work on contracts, programs, bids, or research and development efforts. NISP manages contractors under foreign ownership, control or influence in order “to facilitate foreign investment by ensuring that foreign firms cannot undermine U.S. security and export controls to gain unauthorized access to critical technology, classified information, and special classes of classified information.”

Back in 1993, there may have been a legitimate reason to want to “facilitate” foreign investment in the industry. But as the recent tanker deal has shown, we may have facilitated too much. NISP is administered by the Defense Security Service, but incredibly, this agency played only a minor role, if any role at all, in determining the appropriateness of the EADS contract.

To be very clear, I don’t intend to suggest that EADS has any ulterior motives behind bidding for the contract. But the contract raises significant questions about the influence of foreign companies and governments on our defense procurement needs.

At a recent House Armed Services Committee hearing, a Government Accountability Office analyst called America’s procedures for overseeing foreign military contracts “Swiss cheese.”

Somewhere, Rosie the Riveter is rolling over in her grave.

Rep. Nancy Boyda (D-Kan.) is a member of the Armed Services Committee.