Defense Production Act:

Offsets in Military Exports and Proposed Amendments to the Act

NSIAD-90-164: Published: Apr 19, 1990. Publicly Released: May 24, 1990.

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Pursuant to a congressional request, GAO reviewed: (1) the interagency process used to prepare the 1988 report on offsets in military exports; (2) the use of economic models to measure the impact of offsets; and (3) information on proposed amendments to the Defense Production Act.

GAO found that: (1) agencies used an informal process to prepare the 1988 offsets report because they had no guidelines or written procedures; (2) the report summarized new data on prime contractors, but did not include any analysis of that data; (3) the report basically restated the findings of three prior reports to Congress and reproduced previous analyses based on case studies related to industrial competitiveness, employment, and international trade; (4) the methodology used to prepare the report did not identify the effect of offsets on specific critical industries; (5) differing agency views may have significantly affected the 1988 and previous reports' conclusions; and (6) proposed legislative amendments would better provide for the inclusion of differing views in the annual offsets report.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The Defense Production Act (DPA) of 1950 was reauthorized in October 1992. The modifications to section 309 now state that: (1) data developed by any agency while conducting any interagency study or other independent study or analysis shall be made available to the Secretary of Commerce; and (2) the report shall include alternative findings or recommendations offered to the Secretary.

    Matter: Congress may wish to consider amending section 309(b) of the Defense Production Act to better provide for the disclosure of significant differing agency views. Specifically, Congress may wish to provide that agencies participating or consulting in developing the offsets report will have their significant differing views included in the report without performing additional studies or analyses.


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