Flender/Flender Gear Units/Helical gearboxes H2
and has continued to rise in spite of improvements in the safety record and reliability of the product. 4 According

to general aviation industry officials, product liability has been significant factor in the drastic drop in shipments of these aircraft

in the last decade, from over 1,0 year in 1 to 1,5 in 1. 4 Department of Defense Procurement Department

of Defense (Defense) procurement contracts are of vital concern to many domestic producers of gearing, since many medium- and small-sized

producers of gearing rely on defense weapons contracts for substantial portion of their revenues. Major concerns of .. gear producers are Defense' emphasis on lowest cost sourcing, lack of "Buy America" procurement provisions, and the loss of business because of offsets and Memoranda of Understanding, and, therefore, the slow erosion of part of the Nation' defense industrial base. Because of lowest cost sourcing and offsets, .. gear producers contend that increasing quantities of gearing used in ..-produced weapon systems, for both .. and foreign consumption, are being produced by foreign competitors. 4 In recent years, Defense has shifted the emphasis of its procurement policies from systems life cost or the cost of the system over the duration of its use to lowest cost purchasing from qualified bidders 8 Domestic gear manufacturers maintain that this has resulted in decrease in the number of contracts awarded to domestic suppliers. Past policies emphasized maintaining viable production base capable of meeting .. security needs. Such considerations prevented contracts from being awarded solely on price basis, and permitted domestic manufacturers to win more contracts. .. gear producers also believe that Defense' current emphasis on initial low bid prices ignores systems life costs and increases Defense' reliance on foreign sources for gearing. Defense requirements for free and open price competition for subcontractors and supplie