Loophole in Buy American Act closed

No exceptions for equipment used overseas

By:  Alec Johnson
Republican American

WASHINGTON — Though too late for the shuttered Ansonia Specialty Metals in Waterbury, an amendment to close loopholes in the Buy American Act is headed to the White House for President Obama's signature.

Sen. Christopher S. Murphy who has argued in favor of strengthening Buy American legislation since his days representing the 5th Congressional District, said the amendment would force the Department of Defense to be more transparent on where it spends its money for goods procured for overseas use.

"It is stunning to me that it is 2015 and we have to pass this," said Lori Pellitier, the AFL-CIO's state president. "You would think this would be something that would just be done, but it's not."

Murphy said his first goal was to point out how the Department of Defense is circumventing the Buy American Law using loopholes approved by Congress. He said the most used exception to the legislation is for equipment that is going to be used overseas. "If something is to be used primarily overseas the item does not need to be bought in America," he said. "Unfortunately, we have been fighting two multitrillion dollar wars in Iraq and Afghanistan, so almost everything we buy for the Department of Defense is used overseas."

Murphy said he learned of defense contractors looking to cheaper overseas manufacturers for parts and equipment when talking with leadership of the former Ansonia Specialty Metals, which closed in 2014.

That company was the country's only fully domestic maker of large-diameter seamless copper-nickel tubing for the U.S. Navy. Its prices were undercut by companies in Germany and Mexico leading to its demise.

"Defense manufacturing is Connecticut's bread and butter," Murphy said. "There are hundreds of defense manufacturers up and down the Naugatuck Valley, most of which are supplying parts to prime contractors like Electric Boat or Pratt & Whitney."

It is not clear when the president may sign the legislation.

"The quiet scandal is that has been occurring over the last decade or so, is that lots of work that used to go to these smaller machine shops in the Naugatuck Valley and throughout Connecticut are going overseas now," Murphy said. "We have this requirement that a certain percentage of every military good be bought in America, but congress has written in exceptions and loopholes to render that law almost meaningless."

THE AMENDMENT requires that instead of just sharing the dollar amount for contracts over $5 million with Congress the defense department must share specifically who the contract is awarded to and what is to be procured.

Murphy said in Germany troops recently needed light-duty vans for goods and troop transport. "Ford and Chevy both make light-duty vans that can be sent overseas," he said. "DOD spent $30 million buying German vans. That is $30 million that could have gone to U.S. auto companies. It is pretty simple to ship these vans across the Atlantic."

Murphy said it is estimated that 600,000 American jobs have been lost because of the loopholes. "That is as stunning as it is sickening," he said. "By forcing the DOD to explain these loopholes we think they won't use them as much. When DOD sends less money overseas, they are still spending that money, but they spend it on American companies."

IN 2014, $5.4 BILLION OF taxpayer money was spent using the "outside the country" Buy American waivers. In the last 4 years, the total was $50 billion, according to the senator's office..

The AFL-CIO's Pellitier, who represents about 220,000 workers in all of the state's 169 towns, said protecting work for Americans will impact the workers.

"This is a great step for the American worker and I think it is good for the American taxpayer too," she said.

Pellitier said the amendment levels the playing field for not only large Connecticut corporations like United Technologies and General Dynamics Electric Boat, but also for the smaller machine shops and business that supply parts for larger products.

"When our tax dollars procure goods we have to look to buy American," she said.