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1 1 (August 10, 2021)

handle is hein.crs/goveehg0001 and id is 1 raw text is: hd ir~in~ th jislatw de&~e su~ e I 14 9 August 10,2021 Security of Supply Arrangements (SOSAs): Background and Issues The U.S. defense industrial base (DIB) sources goods, services, and raw materials fromthe global marketplace to support nationals ecurity and defenserequirements. To facilitate the unhindered access to some key supplies, the Department of Defense (DOD) has entered into bilateral Security of Supply Arrangements (SOSAs) with selected foreign governments to secure themutual timely provision of defense-related goods and services during peacetime, emergency, and armed conflict. SOSAs allow DOD to request prioritized performance of contracts from companies in SOSA-signatory nations, and for SOSA signatories to requestthe same fromU.S. firms. This In Focus considers the background of SOSAs in the context of a globally integrated defense industrialbase, as well as potentialpolicy considerations for Congress to advance national security and homeland defense. Background SOSAs are nonbinding international agreements that provide a framework for the U.S. to receive and provide priority support for defense-related goods and services with signatory nations. SOSAs are conducted under bilateral Declarations of Principles for Enhanced Cooperation in Matters of Defense Equipment and Industry, thatestablish a framework for the signatories to follow in order to assure supply. SOSAs are the practical extension of these principles and are negotiatedby DOD (in coordination with other executive branch agencies, particularly the State and Commerce Departments) with a counterpart foreign government agency-usually the defense ministry (MoD). Currently, the U.S. has active SOSAs with: Australia (signed in 2011); Finland (2007); Italy (2003); the Netherlands (1978); Norway (2018); Spain (2015); Sweden (1987); and the United Kingdom(UK, 2017). Although Canada does not have a SOSA, the Department of Commerce has a Memorandumof Understanding (MOLT) with Public Services and Procurement Canada to mutually prioritize defense purchases (signed in 1998). This MOU operates like a SOSA. SOSAs represent one of many potential mechanisms for multinationalDIB cooperation. In additionto SOSAs, these mechanisms can include broad defense cooperation agreements (which provide the framework for SOSAs), as well as more targeted agreements known as Reciprocal Defense Procurement and Acquis ition Policy (RDP) MOUs, which allow DOD to exempt designated countries from procurement constraints under the Buy American statute (see 41 U.S.C. §§83, et seq.). Canada may be the United States' closest international defens epartner, due in part to interdependencies that grew from the Second World War and the Cold War. International treaties and integration policies provide Canada with various benefits and export control exemptions, notably including some exemptions to the International Traffic in Arms Regulations (ITAR). The U.S., meanwhile, has special access to supply chains and productive capacity based in Canada. In some respects, SOSAs may be seen as intermediate DIB cooperation arrangements more specific and intensive than RDP MOUs or broader defense cooperation agreements, but less exclusive compared to the U.S.-Canada relationship primarily, or the National Technology and Industrial Base (NTIB)-a statutorily established designation that includes the U.S., Australia, Canada, and the UK. DPA Regulations and SOSAs Under Title I of the Defense Production Act (DPA), the President has the authority to prioritize the performance of a contract for the promotion of the national defense, broadly defined. Title I authorities are governed under Executive Order (E.O.) 13603, which delegates DPA authorities to certain Cabinet secretaries across multiple sectors of the civilian economy. Those delegations are 1. the Secretary of Agriculture with respect to food resources, foodresource facilities, livestockresources, veterinary resources, plant health resources, and the domestic distribution offarmequipment and commercial fertilizer; 2. the Secretary of Energy with respectto all forms of energy; 3. the Secretary of Health and Human Services (HHS) with respect to health resources; 4. the Secretary of Transportation with respect to all forms of civil transportation; 5. the Secretary of Defense with respectto water resources; and 6. the Secretary of Commerce with all other materials, services, and facilities, including construction materials. Under the s ame E.O., each Secretary is required to develop regulations to prioritize and allocate resources and establish standards and procedures to promote the national defense. Although E.O.13603 governs thesestanding designations, they may be amended or superseded at the President's discretion. Six such regulations exist, which in totality are known as the Federal Priorities and Allocations System (FPAS) and encompass: (1) the Agriculture Priorities and Allocation System, by the Department of Agriculture (7

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