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2006 FIN – Berry Amendment Fastener Changes Pass Congress

October 30
00:00 2012

October 3, 2006 FIN – The U.S. Congress compromised on revisions to the Specialty Metals Provision of the Berry Amendment, including what a lobbyist termed “some progress” in answering fastener industry concerns.

The updated language in Section 842: Protection of Strategic Materials Critical to National Security was passed as part of the FY2007 Defense Authorization Bill.
The legislation is awaiting presidential signature.
The language contains several specific changes to the law that are directly aimed at addressing concerns raised by the fastener industry regarding availability of specialty metals, according to lobbyist Jennifer Baker, who represents the Industrial Fasteners Institute.
“For example, there is now language dealing with an ‘availability exception’ that states that the Berry Amendment does not apply if the defense secretary or secretary of a military department determines that compliant specialty metal of ‘satisfactory quality and sufficient quantity, and in the required form cannot be procured as and when needed,'” Baker, of the Washington, DC-based Laurin Baker Group, explained.
The exception is aimed at the IFI’s contention that fastener manufacturers were not able to get certain types of specialty metals in the form needed, i.e. wire rod, Baker told
The new language also makes clear that the availability exception applies to “prime contracts and subcontracts at any tier under such contracts”.
“In other words, subcontractors such as fastener manufacturers could apply directly to DoD for these exceptions with regard to their specific product needs,” Baker emphasized.
Current inventory was also addressed in the revisions. Baker said the updated bill addresses the issue of current inventories by providing for a “one-time waiver,” which allows the secretary of defense to accept specialty metals that were incorporated into items produced, manufactured, or assembled in the U. S. before the date of the new law. Conditions for waiver qualification include:
• The contractor has a plan in place to ensure compliance in the future.
• Non-compliance is not knowing or willful.
This provision is only applicable to products made before the new law is enacted, and for end items delivered to the DoD by September 30, 2010.
“So, while fasteners manufacturers and distributors certainly would have preferred the Senate approach of granting a commercial product exemption for dual-use fasteners, we recognize that this represents some progress,” Baker concluded.
The revised amendment defined ‘specialty metal’ as steel with a maximum alloy content exceeding one or more of the following limits: manganese, 1.65%; silicon, .6%; or copper, .6%; or steel containing more than .25% of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten or vanadium. The term ‘specialty metal’ also refers to metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10%; titanium and titanium alloys; and zirconium and zirconium base alloys.
In addition, the revised amendment calls for the defense secretary to establish a Strategic Materials Protection Board. ©2006/2012 Fastener Industry News
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2006 FIN � IFI Coalition Supports Berry Amendment Change

July 25, 2006 FIN – The Industrial Fasteners Institute and a coalition of industry organizations are seeking changes in the specialty metals provisions of the Berry Amendment for fastener manufacturers and distributors.
The Defense Federal Acquisition Regulation Supplement (DFARS) invokes the Berry Amendment as a purchase order condition under certain circumstances.
The Berry Amendment dates back to 1941 and establishes a preference for domestic products in DoD purchases. The provision requires specialty metals be melted in the U.S. or a qualifying country. The IFI is working with a coalition of organizations – including aerospace, government procurement, electronics and information technology organizations.
The House and Senate have passed versions of the 2007 National Defense Authorization Act and now must work out the differences in a conference committee.
“The Senate version of the bill contains the type of reasonable approach that IFI hopes will prevail in the final bill,” according to IFI lobbyist Jennifer Baker. The Senate version “would exempt fasteners that are used in both commercial and military applications.”
The specialty metals clause prohibits DoD funds from being used in the procurement of specialty metals, including stainless steel flatware, if the item is not “reprocessed, reused or produced” in the U.S. Suppliers such as fastener manufacturers and distributors say that often times they are unable to obtain the sufficient quantity and quality of the specialty metals necessary to make aerospace fasteners, and current law does not help them address this issue.
Congressional offices don’t like being deluged with form letters, so Baker encourages industry supporters to use the following information to support the Senate language in their own words: The multi-association Berry Amendment Reform Coalition supports Section 822 of S2786 of the 2007 Defense Authorization Act to enact a “reasonable balanced framework for statutory preference for domestic specialty metals in the Berry Amendment.”
“In general, the current specialty metals provision in the Berry Amendment requires the DoD to procure domestically produced specialty metals (e.g. titanium, stainless steel and other alloys). In many cases this imposes burdensome and unworkable requirements on large and small suppliers, which must determine and track the country of origin for specialty metals contained in items they sell to the DoD.” It is often not possible or cost-effective for companies to determine or monitor the country of origin for specialty metal content on a part-by-part basis, especially where only minute quantities are involved. Suppliers could be forced to have separate production runs or lines for military and commercial items, dramatically increasing costs to DoD.
This issue involves the DoD’s access commercial products and the latest commercial technologies. Compliance has become cumbersome with price and availability challenges resulting from global demand for specialty metals and the increasingly commercial nature of elements of the supply chain that includes many small and mid-sized businesses. The impact is also significant and costly for companies supplying both commercial and military markets, including off-the-shelf fasteners.
Legislative action is needed to reform the specialty metals provision of the Berry Amendment with an approach that will: sustain a healthy and broad U.S. defense supplier base; ensure that DoD can continue to procure needed items in a timely, cost-effective manner; and preserve the domestic specialty metals industry.
The coalition is seeking three key reforms needed: (1) An exemption for commercial items; (2) An exemption that would allow manufacturers of dual-use items to commingle foreign and domestic specialty metals in production, provided they acquired the appropriate quantity of domestically melted specialty metals; and (3) A de minimis exemption allowing for delivery of an item containing non-compliant specialty metals that are less than 2% of the total amount of specialty metals in an item. ©2006/2012 Fastener Industry News
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