U.S. Sends Mixed Messages on Military Procurement

Last Updated Apr 29, 2010 10:56 AM EDT

The U.S. is already the world's largest arms exporter -- and it wants more.

The Department of Defense is seeking to reform the laws governing the export of technology and weapons, including the International Trafficking in Arms Regulations (ITAR). The goal is to ease U.S. exports, while still protecting critical technology. The end result would be one unified agency tasked with regulating a single list of technologies; this would allow faster analysis and approval of licenses. Right now, multiple departments are involved, with predictable delays and confusion. Secretary of Defense Robert Gates cited the extreme example of the inability to repair a C-17 transport in Australia quickly because permissions were required to allow foreign workers to touch it. Some of the proposals could be implemented through executive order but some would require legislative changes.

Of course, all countries would like to increase their exports, and many are tempted to protect their own industries. Italy was punished last year, for example, for limiting several defense contracts to domestic companies, chiefly Finmeccanica. And Canada argued successfully that U.S. attempts to direct stimulus spending to U.S. companies -- through "Buy America" provisions for steel and other materials -- violated NAFTA. Protectionism, even for weapons programs, is not easy to get away with, given the watchdogs at the World Trade Organization, NAFTA and the European Union.

There is nothing inherently protectionist about Gates's proposals, which seek to streamline the ITAR and export control rules to make it easier for companies like Boeing (BA) and Lockheed Martin (LMT) to sell overseas. At the same time, though, some unions and members of Congress, such as the two Washington Senators, Cantwell and Murray, are resisting EADS's (EADS:P) effort to bid on the $25 billion KC-X aerial tanker program. If Great Britain or Australia tried to prevent U.S. companies -- Lockheed Martin, in particular -- from bidding on their new fighter contracts, the outcry in the U.S. by many of the same people would be harsh.

So on the one hand, the U.S. is trying to make it easier for American companies to export, while on the other trying to shut the door on foreign ones. Hypocrisy, thy name is Congress.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.