Measure penalizes officials, targets dumped superCPUs

Federal procurement officials would lose their salaries if they purchased alleged "dumped" supercomputers, under an appropriations bill provision offered by Rep. David Obey (D-Wis.).

But the provision, included in the funding bill for NASA and the National Science Foundation, is being questioned by critics who say it wrongly targets contract officials' salaries rather than traditional trade-dispute procedures to address problems of dumping.

Rep. Jim Kolbe (R-Ariz.) unsuccessfully offered an amendment to strike the provision during the Appropriations Committee mark up of the bill last week.

"I offered the amendment because I think it's inappropriate for us to reach so far into a well-established body of trade law, agreements and procurement legislations," Kolbe said. The Appropriations Committee "has no business in the bill doing that kind of thing."

Specifically, a NASA or NSF official who approved, or was poised to approve, the purchase of a non-U.S. supercomputer would not receive a salary if the Commerce Department had already determined in a "preliminary determination" or "final determination" that the supercomputer had been offered "at other than fair value."

NSF's National Center for Atmospheric Research (NCAR) in Boulder, Colo., announced in May it was poised to buy a competitively bid NEC supercomputer. After that announcement, Commerce released a preliminary determination indicating the NEC supercomputer was priced below market value.

Cray Research Inc. had requested Commerce conduct the study. NCAR has not signed the contract to buy the supercomputer, but it said Commerce's analysis is based on incorrect assumptions.

It had "erroneously equated numbers of systems with numbers of processors" to analyze the value of the NEC supercomputer, according to Bill Buzbee, director of the Scientific Computing Division at NCAR. "When you do the analysis with the right number of processors, we find no evidence of dumping."

No later than this week, NCAR plans to issue its own analysis as to whether NEC offered its supercomputer below cost. Whether the bill would affect the NCAR purchase procedure is unclear.

Lawrence Rudolph, general counsel at NSF, said "the administration, as of this date, has taken no position" on the Obey language. "NCAR is concluding negotiations with" NEC, he said. "At the same time, NCAR is evaluating the issue of dumping as the NSF requested."

"As far as [Rep. Obey's] language is concerned, Congress has already put in place statutory, mandated procedures for dealing with dumping. The significance of the language is that Congress is in some sense prejudging NCAR's decision," Buzbee said.

A Commerce preliminary determination constitutes the first step in a process to determine if a company has been dumping. After such a preliminary determination, Commerce can choose to launch a full case to investigate the question of dumping.

John Deeken, a spokesman for Obey, said the language "is basically a way to restate congressional intent that U.S. industry should not be adversely impacted by foreign competition dumping products on the U.S. market."

The law would deny salary to a procurement official who chose to go ahead with a purchase even after Commerce concluded the offered price was below market value.

According to the Dow Jones news service, Japan's Ministry of International Trade and Industry said Obey's provision would "slightly conflict" with international government procurement rules.


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