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Tuesday, November 1, 2011

The Arsenal Act: Context and Legislative History

Daniel H. Else
Specialist in National Defense

The Arsenal Act (10 U.S.C. §4532) requires the Secretary of the Army to have all supplies needed by the Army to be made in government-owned factories or arsenals if this can be accomplished “on an economical basis.” It also grants the Secretary the authority to “abolish any United States arsenal that he considers unnecessary.” This broad mandate, and even broader authority, has lead some observers to question whether the Department of the Army is abiding by either the spirit or the letter of the law in awarding development and procurement contracts. Others have expressed concern that the seeming unilateral authority to abolish arsenals could place them at a disadvantage should the Department of Defense (DOD) seek to close military installations.

Federal arsenals, those government-owned industrial sites that have produced the engines of war for the United States Army virtually since the birth of the nation, exist and operate under the jurisdiction of the Secretary of the Army. They, along with their naval counterparts in the form of federally owned shipyards, have sustained the military services for more than two centuries.

The two sections of the act were written approximately seven decades apart and are grounded in the events of their time. The authority to abolish dates to the era just prior to the Civil War, when the arsenals functioned not only as the nation’s principal source of military arms, but also helped to nurture and sustain the country’s early commercial industrialization. It was a period when the arsenals were beginning to experience competition in satisfying the Army’s needs.

The requirement to have Army supplies made in U.S.-owned factories or arsenals dates to the years immediately following the conclusion of World War I, when Congress, realizing that the United States faced increasing global responsibilities at a time of much-reduced defense appropriations, moved to ensure the continued existence of this “in-house” industrial base. Nevertheless, the statute does not define “supplies,” nor does it spell out what is meant by making supplies “on an economical basis.”

The Department of the Army has promulgated policy for the implementation of the authority to produce supplies, embodying it in Army Regulation (AR) 700-94, Army Industrial Base Policy, of December 2004. AR 700-94 assigns the responsibility for deciding whether a given article is to be manufactured at a government-owned facility or contracted to a commercial vendor to the Assistant Secretary of the Army for Acquisition, Technology, and Logistics (ASA(ATL)). It also requires the Commanding General of Army Materiel Command (AMC) and the individual Program Executive Officers (PEOs) and Program Managers (PMs) to provide the Assistant Secretary with the analyses needed to make that decision.

This report describes the roles of the federal manufacturing arsenals during the years surrounding the enactment of the two sections of the Arsenal Act, one as part of the Army Appropriations Act for 1854, and the other within the Defense Act of 1920, also known as the Army Reorganization Act of 1920, and provides historical context. The report also shows the change in language between the sections’ original enactment and today, and it provides details on the Army’s policy in implementing the manufacturing sourcing portion of the statute.

Date of Report: October 28, 2011
Number of Pages: 13
Order Number: R42062
Price: $29.95

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