Statement of Administration Policy: H.R. 4131 - Foreign Contracting Audit Equity Act

(House)
(Conyers (D) Michigan and 15 others)

The Administration opposes enactment of H.R. 4131 because it would place significant burdens on the acquisition process, discriminate, against foreign firms, and invite foreign retaliation, which would adversely affect U.S. companies.

In particular, the Administration objects to provisions of H.R. 4131 that would:

—  Require Executive agencies to obtain greater inspection and audit rights from a foreign contractor than from a U. S. contractor. This discrimination would weaken U.S. negotiating positions with foreign contractors and hinder competition between foreign and domestic firms.

—  Require foreign auditors, when performing audits for the U.S. Government pursuant to international agreements, to use U.S. auditing standards. Foreign auditors currently apply U. S. cost principles to determine the allowability of costs on U. S. contracts. To require the use of U. S. auditing standards would be contrary to the primary rationale for reciprocal audit agreements.

—  Permit examination by the Comptroller General of any records of any foreign contractor. This provision discriminates against foreign firms because it would place a greater burden on foreign contractors than currently exists on U. S. contractors. This is inconsistent with current law, which provides access to records of both U. S. and foreign contractors that "directly pertains to, and involves transactions relating to the contract or subcontract."