BOEING nat a QG2eer Bee a BoM ET Soot, ean January 11, 2014 ‘The Honorable Darrell E. Issa Chairman House Committee on Oversight and Govamment Reform United States House of Representatives, Washington, OC 20515 Dear Chairman Issa: Fer your request for information regarding existing and proposed major regulations that have recave yimPacted job growth for our Industry, Ihave attached our eotien Fesponse and ‘relevant materials for your review, Zhe Boeing Company and is subsidares dlrecty employ over 150,000 people, and support seroximately 1.2 milion more supplir-rlated jobs In al ty statee: rhe Boeing Company is Tim Keating Ce: The Honorable Elijah Cummings, Ranking Member{earivements on government contractors withthe laudable goal of improveg ates or caeronmental standards, or human tacking, for example, by In eect having criploraes yax® on the responsiblity to implement those social policies on contracts and see bYees working on government contacts, For each of these requremonis rons on “iso oversight organizations o ensue the implementation and effectiveness ct her rules. {he cost and benef of these statutory and reguiatory requirements hes often been Studied fo ensure thatthe acquisition process works as inlended, without unnecessary Somplexly while eneuring waneparency, accountablty and puble rust In December 1904 Deputy Secretary of Defense Willam Perry commissioned a study of the compiox Teaulatory environment intended to maintaln public accountability in doronen acquisition {ne prevent contractor abuses. The goal of the study was to assess the industry cost [Pact of spoctic reguations unique to Government contractors, te ‘measure the overall Impact ofthe regulatory environment on contractors’ sis and tp Identity the key ‘eavlatory cost drivers and how they impact contractors business proctoocg The study inducraee DP'Y Chain fs clear, ts Impact on global competitiveness, on fobs and ihe anttel base, We know there ls no easy solution, and over a hurdiad ateclog have been done on this subject, *Betermine wether any of these minerals used In ts products originated in the Congo or adjoining countries* Bisolese ints annual report whether the minerals dd or dd not originate Inthe Congo or adjoining countries * Disclose In its annual report what measures It took to determine the country or countries of origin ‘* Maintain auditable records to verity the determintion IF the filer determines that its products contain minerals from the Congo o adjoining counties (orf the filer le unable to determine whether or not they do), the fer must also; * Add @ Contflct Minerals Report ints annual report, describing due diligence on the source and chain of custody of the minerals, an Independent Private sector audi of such report, a description of al products containing the minerals, and a description ofthe efforts to determine the county and mine of ‘origin hese requirements will be extremely burdensome and cosly, I not Impossible, for a sed nant, ike Boeing to comply with, 9s they requlr visibly many les down g complex and Intemational supply chain, srs 88 good example of tha ripple effect throughout the supply chain of requirements {hat may bo well Intentioned bul have a huge cast and negative impact on global competitiveness, making it harder fo win business that enables us fo retaln sor orkforee and keep our plants and supplies operating, Including all the smh businesses that are a critical part of Boeing's success, tory Reform Derivatives-Mandatory Clearing ‘rhe Boeing Company ponsion trust uses over-the-counter derivatives to manage and hedge pension plan assets. Unike public pension funds, private pension ‘trusts are Subject fo ERISA and Department of Labor fduciery responsibilty requirements, and the £59.of swaps must be mado solaly inthe intrest ofthe plan's participants and beneficiaries, tfnder the Dodd-Frank Act, ERISA-covered private pension plans are treated as ‘Nrancial entities". Therefore, any swap used by the trust must be cleared ana margin reaurements wil be Imposed. i the trust is required to lear all swaps, those {Saulrements would be very costly o both pension fund operations and wouta reduce the mount of pension assets avaliable to pay out to thelr beneficaries,Derivatives-Determination of Foreign Exchange Swaps and Forwards ‘The Booing Company uses over-the-counter derivatives primarily to stabllze production and operating costs. We procure parts globally for the manufacture of our products, some of the procurement contracts are priced in forelgn currencies. We use OTC denominated procurement contracts, ‘The Dodt-Frank Act requires the Department of Treasury to issue regulations regarding \whethat foreign exchange ("FX") swaps and forwards should be exempt from the clear ts swaps, transactions with our counterparties ara not exemp! from margin requirements. If FX swaps aro subject to the requirements under the act, trove margin ‘eattrements could be signficant and would therefore impact cur business operations Such cash Is no longer available for our day to day business needs, Whistleblower Rulas ‘The SEC wil shorty issue regulations Implementing the Docd-Frank law’s whlslleblower bounty provision, which guarantees whistleblowers 10-30% of any fine over $1 millon atiibutabl to original information they provide the Commission. Unless carefully “Implemented, this provision has the potential to eviscerate internal compliance President's Working Group on Money Market Funds-Floating Rate NAV {Under the proposals discussed in he Raport ofthe President's Working Group on Financial Markets on Money Market Fund Reform Options, the recommendation would ‘move from the current stable NAV to a floating NAV, Changing the nature of money (market funds wil disrupt funding and cash management, and companios lke Boeing ‘would be lass Ikely to Invest. A floating rate NAV issue could potentially be a drain on cash flow. Commercial Intellectual Property Boeing supports engagement globally on developing rigorous IP legal norms, standards of practice and underiying laglslative requirements to enforca those IP protections domestically and abroad, both to enable a valld IP iicsnsing business model and to prevent counterfelting of aerospace and defense components and piece parts. In the federal market space, Including the Department of Defense, those same global 3énforcement mechanisms are cca for sirlar reasons, Additional focus is needed however, to prevent the “taking” of privata sector IP by the United States Government in {he form of statutory changes tothe "daveloped at private expense” doctrine currently embedded in the federal acquisition regulations (Including Impacts to “independent Research and Development” contract cost alowebilly). Its alee Important to prevent paaulatory implementation of changes contractually favoring the USG whos acquiring licenses and rights In technical data from commarclal item Providers, Including contract Clauses disproportionately and unfairly shifting the burden of Proving rights ownership from the USG to federal contractors, both commercial and USG Unique suppliers, QsHA The OSHA reinterpretation of its ‘Noise Standard” would reinterpret the term “feasible” to jeauute manufacturers to Instalnsttute costly engineering or administrate controls to Kwvor the nolse In manufacturing and other operations. Curent, employars are the feclty, nolse drapes, et.) or administrative controls (rotating employees in and out Serge Producing environments), where engineering controls are not fesse. Is difficult (0 see how any type of engineering control would work on an airport runway, Aviation ‘Lack of prortzation of NextGen for national alrspace system infrastructure 2 trafic contol system, they have to be assured that the promises of NewtGen will be Actual rather than theoretical. An excellent example of this isthe need of arin to Invest in arcraft avioni technology to access NexlGen lechnology. altinee are Foluctant to invest the estimated $4 bilion dollars in new technology unlose they know tney system wil actually enhance safety, reduce fuel burn and ereate now effwonos allowing more direct routes end reduced flying time, Excessive burden of drect and indlrect securty costs on U.S. airlines Gatrlers are concerned about a proposed increase in the 9/11 secu fee, The Presidents budget proposes a $1 Increase in 2012, 2013 and 2014, Alrinae aro also concemed about an Increase in the Passenger Faclty Charge that airports are ellowed 4to charge on a per-passenger basis, Alrlines are expected to pass these fees along to consumers. However, when alriine pricing power declines, carriers are often forced to avold fare increases and government mandated fees are actually not passed on to the Passenger in the form of a higher ticket fee,