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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle D—United States Defense Industrial Base Provisions

JWNDAA Section

House Conference Report 109-702

(a) Requirement to Buy From American Sources-

(1) IN GENERAL- Subchapter V of chapter 148 of title 10, United States Code, is amended by inserting after section 2533a the following new section:

`Sec. 2533b. Requirement to buy strategic materials critical to national security from American sources; exceptions

`(a) Requirement- Except as provided in subsections (b) through (j), funds appropriated or otherwise available to the Department of Defense may not be used for procurement of--

`(1) the following types of end items, or components thereof, containing a specialty metal not melted or produced in the United States: aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition; or

`(2) a specialty metal that is not melted or produced in the United States and that is to be purchased directly by the Department of Defense or a prime contractor of the Department.

`(b) Availability Exception-

(1) Subsection (a) does not apply to the extent that the Secretary of Defense or the Secretary of the military department concerned determines that compliant specialty metal of satisfactory quality and sufficient quantity, and in the required form, cannot be procured as and when needed. For purposes of the preceding sentence, the term `compliant specialty metal' means specialty metal melted or produced in the United States.

`(2) This subsection applies to prime contracts and subcontracts at any tier under such contracts.

`(c) Exception for Certain Procurements- Subsection (a) does not apply to the following:

`(1) Procurements outside the United States in support of combat operations or in support of contingency operations.

`(2) Procurements for which the use of procedures other than competitive procedures has been approved on the basis of section 2304(c)(2) of this title, relating to unusual and compelling urgency of need.

`(d) Exception Relating to Agreements With Foreign Governments- Subsection (a)(1) does not preclude the procurement of a specialty metal if--

`(1) the procurement is necessary--

`(A) to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources for the purposes of offsetting sales made by the United States Government or United States firms under approved programs serving defense requirements; or

`(B) in furtherance of agreements with foreign governments in which both such governments agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country; and

`(2) any such agreement with a foreign government complies, where applicable, with the requirements of section 36 of the Arms Export Control Act (22 U.S.C. 2776) and with section 2457 of this title.

`(e) Exception for Commissaries, Exchanges, and Other Nonappropriated Fund Instrumentalities- Subsection (a) does not apply to items purchased for resale purposes in commissaries, exchanges, and nonappropriated fund instrumentalities operated by the Department of Defense.

`(f) Exception for Small Purchases- Subsection (a) does not apply to procurements in amounts not greater than the simplified acquisition threshold referred to in section 2304(g) of this title.

`(g) Exception for Purchases of Electronic Components- Subsection (a) does not apply to procurements of commercially available electronic components whose specialty metal content is de minimis in value compared to the overall value of the lowest level electronic component produced that contains such specialty metal.

`(h) Applicability to Procurements of Commercial Items- This section applies to procurements of commercial items notwithstanding section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430).

`(i) Specialty Metal Defined- In this section, the term `specialty metal' means any of the following:

`(1) Steel--

`(A) with a maximum alloy content exceeding one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or

`(B) containing more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten, or vanadium.

`(2) Metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent.

`(3) Titanium and titanium alloys.

`(4) Zirconium and zirconium base alloys.

`(j) Additional Definitions- In this section:

`(1) The term `United States' includes possessions of the United States.

`(2) The term `component' has the meaning provided in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).'.

(2) CLERICAL AMENDMENT- The table of sections at the beginning of such subchapter is amended by adding at the end the following new item:

`2533b. Requirement to buy strategic materials critical to national security from American sources; exceptions.'.

(3) CONFORMING AMENDMENTS- Section 2533a of title 10, United States Code, is amended--

(A) by striking paragraph (2) of subsection (b) and redesignating paragraph (3) of such subsection as paragraph (2);

(B) in subsection (c), by striking `or specialty metals (including stainless steel flatware)'; and

(C) in subsection (e)--

(i) by striking `Specialty Metals and' in the heading; and

(ii) by striking `specialty metals or'.

(4) EFFECTIVE DATES-

(A) Section 2533b of title 10, United States Code, as added by paragraph (1), shall apply with respect to contracts entered into after the date occurring 30 days after the date of the enactment of this Act.

(B) The amendments made by paragraph (3) shall take effect on the date occurring 30 days after the date of the enactment of this Act.

(b) One-Time Waiver of Specialty Metals Domestic Source Requirement-

(1) AUTHORITY- The Secretary of Defense or the Secretary of a military department may accept specialty metals if such metals were incorporated into items produced, manufactured, or assembled in the United States before the date of the enactment of this Act with respect to which the contracting officer for the contract determines that the contractor is not in compliance with section 2533b of title 10, United States Code (as added by subsection (a)(1)), if--

(A) the contracting officer for the contract determines in writing that--

(i) it would not be practical or economical to remove or replace the specialty metals incorporated in such items or to substitute items containing compliant materials;

(ii) the prime contractor and subcontractor responsible for providing items containing non-compliant materials have in place an effective plan to ensure compliance with section 2533b of title 10, United States Code (as so added), with regard to items containing specialty metals if such metals were incorporated into items produced, manufactured, or assembled in the United States after the date of the enactment of this Act; and

(iii) the non-compliance is not knowing or willful; and

(B) the Under Secretary of Defense for Acquisition, Technology, and Logistics or the service acquisition executive of the military department concerned approves the determination.

(2) NOTICE- Not later than 15 days after a contracting officer makes a determination under paragraph (1)(A) with respect to a contract, the contracting officer shall post a notice on FedBizOpps.gov that a waiver has been granted for the contract under this subsection.

(3) DEFINITION- In this subsection, the term `FedBizOpps.gov' means the website maintained by the General Services Administration known as FedBizOpps.gov (or any successor site).

(4) TERMINATION OF AUTHORITY- A contracting officer may exercise the authority under this subsection only with respect to the delivery of items the final acceptance of which takes place after the date of the enactment of this Act and before September 30, 2010.

The House bill contained a provision (sec. 831) that would move statutory requirements for the procurement of specialty metals from domestic sources from the so-called ‘‘Berry amendment,’’ currently codified in section 2533a of title 10, United States Code, to a separate section of title 10 and make certain changes to those requirements.

The Senate amendment contained a provision (sec. 822) that would revise the provisions of the Berry amendment regarding the procurement of specialty metals from domestic sources.

The Senate recedes with an amendment that would codify the specialty metals requirements in a new section 2533b of title 10, United States Code, and modify those requirements. The amendment would also authorize a one-time waiver of the domestic source requirement for specialty metals that were incorporated into items produced, manufactured, or assembled in the United States before the date of the enactment of this Act, under certain conditions.

House Armed Services Committee Report 109-452

SECTION 831--PROTECTION OF STRATEGIC MATERIALS CRITICAL TO NATIONAL SECURITY

This section would amend title 10, United States Code, by inserting section 2533b, `Requirement to buy strategic materials critical to national security from American sources; exceptions.' This section would prohibit the use of appropriated funds for the procurement of a specialty metal or an item critical to national security, as determined by the Strategic Materials Protection Board, unless the item is reprocessed, reused, or produced in the United States.

The committee believes this section will build on the strong tradition of section 2533a of title 10, United States Code, known as the `Berry Amendment,' while simultaneously addressing certain issues related to the procurement of specialty metals. In particular, the committee is concerned by claims that confusion exists over the applicability of the Berry Amendment to all tiers of the supply chain. This section would clarify the original intent of the Berry Amendment by noting that the section applies to subcontracts at any tier under a prime contract, as well as the prime contract. This section would maintain all current exceptions and waivers to the current Berry Amendment. The committee notes that application of this section would allow foreign governments to purchase only specialty metals or items critical to national security from the United States or from their own domestic suppliers. The committee believes that allowing foreign governments to purchase specialty metals from any source not only defeats the intent of the Berry Amendment but also creates a grave risk to national security. This section would prohibit the practice of delivering non-compliant components to the federal government without charge in order to be considered compliant with the Berry Amendment.

The committee is aware that certain suppliers currently claim that they are inadvertently non-compliant with the Berry Amendment as it relates to specialty metals. This section would allow a 12-month `get well' period for suppliers at all levels of the supply chain to become compliant with section 2533b of title 10, United States Code. This section would require public notice of non-compliant suppliers on Fedbizoops.gov, a website that allows the commercial venders to seek federal markets for their products, written notification of non-compliance to the supplier and prime contractor, and receipt of a compliance plan from the non-compliant supplier and prime contractor. This section would allow a waiver for inadvertent non-compliance to be granted only after public posting of non-compliance and the opportunity for a challenger to offer the federal government the opportunity to substitute the non-compliant components with compliant components. This inadvertent non-compliance waiver would require approval from the secretary of the military department concerned.

Senate Armed Services Committee Report 109-254

The committee recommends a provision that would specify that domestic source requirements for specialty metals be applied specifically to titanium and nickel. The committee understands the concerns about the domestic industrial base for specialty metals are specific to titanium and nickel.