Shipbuilding Suppliers: Buy American Language Is NOT Earmarks

Bill Greenwalt, a lifelong Republican and one of America’s leading experts on Pentagon procurement who drafted many of the laws governing the process, really hit a nerve when he stuck the label “earmark” on some Buy American provisions in the NDAA earmarks. This op-ed in reply to Greenwalt comes from an organization that is may not be well known to some of our readers, the American Shipbuilding Suppliers Association. The name is self-descriptive. What does its CEO, George Williams, say about Greenwalt’s assessment? Read on! The Editor.

The American Shipbuilding Suppliers Association (ASSA) strongly rebukes the misleading claims in the Breaking Defense article, Buy American Earmarks Slip In: Defense Committees Must Act. Contrary to claims by Bill Greenwalt, the legislation he refers to is not corrupt earmarks aimed at benefitting specific businesses or congressional districts. It identifies necessary measures to ensure that the U.S. can build and support the equipment needed for America’s national defense.

George Williams

The U.S. government’s position of nurturing our shipbuilding industry through buy-American policies is as old as our nation itself. There is nothing corrupt in U.S. policies aimed at preserving critical industries. By law (10 USC §7309), Navy ships must be built in U.S. shipyards. The national security justification for this legislation is clear. Without it, U.S. shipyards would go out of business, given their inability to compete with cheaper foreign shipbuilders. Similarly, if the U.S. wants to maintain the capability to build critical shipboard components for future warships, then legislation is necessary to keep maintain that manufacturing capability in the U.S.

ASSA’s position is that congressional direction is needed so components for all Navy surface ships and unmanned vessels to be designed, engineered, manufactured and assembled in the U.S. Over recent decades, as government support for the U.S. maritime industry has waned and foreign manufacturers have aggressively targeted the U.S. defense market, U.S. shipbuilding suppliers have gone out of business at record numbers.

For example, the May 2019 DoD Industrial Capabilities Report submitted to Congress says: “Industries involved in the manufacturing of shipbuilding components were among the hardest hit by the global shift in the industrial base over the past 20 years.  And, since 2000, these industries experienced a combined decline of over 25,000 establishments in the United States.  Expanding the number of companies involved in Navy shipbuilding is important to maintaining a healthy industrial base.” The challenges faced by the industry from international competition and the shrinking industrial base “erode the capabilities of the manufacturing and defense industrial base and threaten the Department of Defense’s (DoD) ability to be ready for the ‘fight tonight,’ and to retool for great power competition.”

The preservation of our nation’s ability to build warships, and the critical components included within them is a matter of national security. National security should not entirely be relegated to foreign allies. Single source suppliers can be problematic for the defense industrial base, but the solution is to encourage U.S. manufacturing through policy, not drive the few remaining U.S. suppliers out of business.

Greenwalt claims, without evidence, that Buy American requirements will “…needlessly drive up costs and limit the capability delivered to the Navy.” ASSA’s position is that preserving U.S. manufacturing capability is critical, and that any potential cost premium would be largely, or even completely offset by the direct benefit to the U.S. Treasury derived from buying from domestic manufacturers.

U.S. manufacturers pay U.S. corporate income tax and employ American workers, who pay American taxes. There are additional benefits down the supply chain as American manufacturers use American made components and sub-assemblies from American sub-suppliers, all paying U.S. income tax. This takes people off the unemployment rolls by providing well-paying jobs and permitting Americans to gain experience in critically needed trades and skills. Buying components from foreign sources provides no such benefit to U.S. citizens, the U.S. economy, or to the U.S. defense industrial base – all while bringing harm to U.S. businesses.

Additionally, there is no evidence to back up Mr. Greenwalt’s claim that relying on U.S. businesses would, “ … negatively impact the warfighter by restricting technology options to potentially inferior ones.” The manufacturing companies that make up the U.S. shipbuilding supplier base are very specialized in responding to the unique requirements of our warships; their facilities are capital-intensive; they require a highly skilled workforce; they are familiar with stringent Navy requirements for operations in demanding environments (e.g. cyber security, shock, vibration, EMI, acoustic, etc.); their highly engineered products generally do not lend themselves to commercial markets; and they provide critical business to third and fourth tier suppliers within the shipbuilding supplier base

Most importantly, maintaining a robust domestic manufacturing capability allows for a surge capability by ensuring rapidly scalable capacity to support major military operations—a theme frequently emphasized by DoD and Navy leaders. These are a critical national asset and once lost, it is unlikely or extremely costly to replicate them when needed, as was the case in the DDG-51 restart.

It’s time to put America first. We can’t afford to be in the position where we can’t design, build and equip U.S. warships without relying on other countries. It’s time to listen to the needs of American companies. It’s time to make “Buy American, Hire American” America’s priority.