Global Fastener News

May 1, 2007 FIN – Compliant specialty metals of satisfactory quality and sufficient quantity for fasteners “cannot be procured as and when needed” and Department of Defense contracting officers may procure both end items and components not meeting domestic content requirements.

The April finding involves fasteners for manufacture and repair of military aircraft, missile and space systems, ships, tank and automotive systems, weapon systems and ammunition.
Ken Kreig, undersecretary of defense for acquisition, technology & logistics, issued the class determination of domestic non-availability (DNAD) for fasteners.
A Defense Contract Management Agency (DCMA) comparison of compliant and noncompliant fasteners from 19 manufacturers “identified significantly higher prices for compliant fasteners,” Kreig noted. The price differential was attributed to costs of additional shaving, tracing and finding compliant material at each level of the supply chain, extra fees for small production runs and segregation of stock and certification fees.
“The fastener industry is driven by the global commercial market,” Kreig found. “Most U.S. fasteners manufacturers state that they do not have a constant supply of domestic raw materials, and that it is difficult to find compliant material in sufficient quantity to meet the demands of the Department of Defense. As a relatively minor consumer of fasteners, the DoD does not have the market power to incentives industry to tailor its business processes to meet the department’s peculiar specialty metal restriction.”
Keri’s findings stated, “Many fasteners are made of specialty metals, predominantly stainless steel, steel alloys and titanium.” He noted the fastener industry estimates that 80 to 85% of all fasteners are dual use or interchangeable between commercial and military applications. “Worldwide demand for these specialty metals is increasing due to increasing commercial aerospace requirements (foreign and domestic) and, to an extent, increasing defense industry requirements,” Kreig wrote. “DCMA verified that lead times for compliant material is long, ranging in length from 50 weeks for stainless steel to over 100 weeks for titanium.”
A requirement to “produce DoD-compliant fasteners using separate, small production runs, and the refusal of some suppliers to agree to produce compliant fasteners” contribute to delays in finding and tracing metals for fasteners. “These delays are impacting the Department’s ability to meet requirements.”
Many fastener manufacturers “state that the quality of U.S. domestic metal is not adequate to produce defect-free fasteners,” Kreig found. “Domestic steel wire mills have not been able to provide consistently seam and defect-free materials. Defects and seams can cause thread laps, head cracks and cracking under stress, which reduce fastener life and can lead to safety risks. As a result, domestic material often requires additional shaving to eliminate seams and surface flaws. Costs for additional shaving are passed on to the Department.”
Klieg’s determination “will remain in effect until DCMA notifies me that circumstances have changed and compliant specialty metal of satisfactory quality and sufficient quantity, in the required form can be procured as and when needed.”
Rob Harris, managing director of the Industrial Fasteners Institute, credited the group’s aerospace division and its manager, Pat Meade, and a working group of both fastener manufacturers and distributors plus the Aerospace Industries Association, key aerospace contractors and the Lauren Baker Group – the IFI’s lobbyist – for contributing to the determination. Web: industrial-fasteners.org
The determination involves federal stock classes 5303, 5306, 5307, 5310, 5320 and 5325 or NAICS code 332722. It excludes cotter pins, dowel pins, hose clamps, spring pins and turnbuckles.
Filling Orders
Regarding current purchase orders, if compliant hardware is not available, suppliers can ship noncompliant hardware under existing and future contracts and cite the DNAD as the authority to ship, according to DCMA officials and contract specialists at major OEMs.
The fastener DNAD is independent of Proposed Rule Changes to the DFARS to implement the new statute passed in October 2006 and now found in Section 2533b of Title 10 of the U.S. Code (not yet released for public comment) because the Defense Department has always had the right to issue DNADs under the old statute. A class determination for “all fasteners” was possible (as opposed to DNADs on a contract-by-contract, part-by-part basis) because the new statute passed in October 2006 contained language, strongly supported by the fastener industry, that allowed for DNADs if the specialty metals were not available in the “required form” when needed by the government.
“The only potential change to the DNAD would be if the final Rule Changes contain an exemption to the specialty metals provisions for Commercial Off the Shelf (COTS) items,” IFI stated. “At that time, the DNAD would only need to continue to cover any military-unique fasteners not considered COTS items until such time as DCMA determined domestic sources were available.”
The fastener DNAD can be found at the DoD’s website for contract management: dcma.nil/dnad.
The IFI emphasized that its information should not be taken as legal advice. Individual companies should do an internal analysis of their contracts. Web” industrial-fasteners.org ©2007/2012 Fastener Industry News
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