BERRY AMENDMENT
TRAINING
SECTION 832,
FY 2006 NDAA
The Defense Federal Acquisition Regulations Supplement (DFARS) is the key document governing the Berry Amendment's implementation for the Department of Defense. While DFARS citations relevant to the Berry Amendment are included throughout this training, this course material is not a substitute for consulting the DFARS or legal counsel regarding individual compliance questions.
HISTORY of the
Berry Amendment
Purpose
To protect the Defense Industrial Base of
the United States
Ellis Yarnal Berry (R) served as South Dakota's western district congressman from 1951 - 1971.
What
is it?
What
items are restricted?
DFARS 225.7002-1(a)
Anti-Deficiency Act (ADA)
Violation
- Fines up to $5000.00
- Imprisonment up to 2 years (31 U.S.C. 1350)
- Adverse personnel actions
Where
is it in the Acquisition Regulations?
General Rule
Applies to both End products and Components
Requires items to be grown, reprocessed, reused, produced in the United States.
FY 2006 Legislative changes
FLOW DOWN REQUIREMENTS
TO SUB-TIER SUPPLIERS
What00 the difference
between Buy American Act and Berry Amendment?
Qualifying Countries
DFARS 225.7002-2(n)
Pre-Award
Post award
Non-compliance?
Notify legal counsel! Verify the item is subject to Berry restriction 00ask contractor to confirm place of origin Suspend Government acceptance of non-conforming items IAW FAR 46.407 Ensure DFAS suspends payment on non-conforming supplies pending resolution Conduct market research for domestic source of item in question Determine substitute item availability if no domestic source found Present customer with substitute item(s) options for acceptability If a Domestic Non-Availability Determination is justified, prepare for Secretarial signature prior to acceptance
SPECIFIC RULES for TEXTILES and RELATED MATERIALS
Clothing Components
*this exception for electronics only applies to clothing with electronics
Applies to An Article
or Item of--
New Clothing Components
Applicability
- Delivery Orders
- Exercise of Options
New contractsEXCEPTIONS FOR TEXTILES
AND RELATED MATERIALS
APPLIES ONLY TO COTTON, OTHER NATURAL FIBERS, OR WOOL: (NOT TO SYNTHETIC FABRIC OR FOOD, etc.)
Acquisitions of end products incidentally incorporating cotton, other natural fibers, or wool, for which the estimated value of the cotton, other natural fibers, or wool--
(1) Is not more than 10 percent of the total price of the end product; and
(2) Does not
exceed the simplified acquisition threshold.
Exceptions for Textiles
and Related Materials
Acquisitions of fibers and yarns for use in synthetic fabric or coated synthetic fabric if the fabric is to be used in a component or end item that IS NOT A TEXTILE PRODUCT. But this exception does not apply to the synthetic or coated synthetic fabric itself DFARS 225.7002-2(o)
Para-aramid fibers and yarns manufactured in the Netherlands. DoD has determined that procuring only domestic articles would result in sole source contracts or subcontracts for the supply of the para-aramid fibers and yarns, and the sole source contracts or subcontracts are not in the best interest of the Government, and the Netherlands permits US companies selling para-aramid firms compete with foreign firms in that country. DFARS 225.7002-2(o)(2)
ADDITIONAL EXCEPTIONS TO BERRY
1. SAT Exception
DFARS 225.7002-2 (a)
2. Non-Availability
Exception
DFARS 225.7002-2(b)
Non-Availability Exception
Non-Available Articles
List
DFARS 225.7002-2(c)
Process for DNADS
1. Item or class of items, quantity, length of time DNAD is needed
2. Current and detailed market research justifying the non-availability of item(s) in satisfactory quality and sufficient quantity at U.S. market prices
3. Analysis of alternatives that would not require a domestic nonavailability determination
4. Written certification by the requiring activity, with specificity, why such alternatives are unacceptable.
5. Report and recommendation of the Contracting Activity Commander discussing supply and procurement situation (mission impacts), commercial practices, and other relevant facts in greater detail
6. Potential political ramifications, Congressional involvement, small business concerns, etc.
7. Expected outcome if a DNAD is not approved
Process for DNADS, cont00
Notification clothing/textile and related items: Clothing/textiles and related items - Section 833 of the FY2006 NDAA requires notification in FEDBIZOPPS within 7 days of award.
3. Combat Operations
DFARS 225.7002-2 (d)
4. Contingency Operations
In conjunction with J&A approval of other than competitive procedures on the basis of unusual and compelling urgency in accordance with FAR 6.302-2.
Limited to Food and Hand or Measuring Tools
This exception cannot be used for clothing/textiles or related items
DFARS 225.7002-2 (f)
5. Emergency
Acquisitions or Urgent and Compelling exception
If 00rgent and compelling00 exception in FAR 6.302-2 was used (DFARS 225.7002-2(f) Only for food or hand or measuring tools, not clothing, textiles, or related items
6. Vessels in Foreign
Waters
DFARS 225.7002-2 (h)
7. Commissary Resale
DFARS 225.7002-2 (i)
8. Qualifying Country
Notification Requirements
SUMMARY - EXCEPTIONS
*Nuclear, Biological, Chemical
EXCEPTIONS FOR FOOD
1. Perishable Food
DFARS 225.7002-2 (e)
2. Processed Foods
DFARS 225.7002-2 (l)
3. Seafood Exception
DFARS 252.225-7002 (l) and Section 8136 of P.L. 107-248
Section 832 of the National Defense Authorization Act for Fiscal Year 2006 requires the 00ecretary of Defense to ensure that each member of the defense acquisition workforce, who participates personally and substantially in the acquisition of textiles on a regular basis, receives training during fiscal year 2006 on the requirements of section 2533a of title 10, United States Code (commonly referred to as the 00erry Amendment00, and the regulations implementing that section.00/font>
The Berry Amendment was first passed in 1941 and its purpose was to protect the defense industrial base of the United States. It has been named after Congressman Ellis Berry, South Dakota00 western district congressman.
What is the Berry Amendment? It00 a statutory requirement directed at the Department of Defense that restricts the Department from using appropriated funds or funds otherwise made available to the Department for the procurement of certain items that are not grown, reprocessed, reused, or produced in the U.S. It does not apply to procurements using non-appropriated funds. Items covered under Berry include food, clothing, tents/tarpaulins/covers, natural and synthetic fibers and fabrics, items of individual equipment, and hand or measuring tools.
Here is a more extensive list. This list is available at DFARS 225.7002-1.
It may be an Anti-Deficiency Act violation
to buy items that are not compliant. Failure to comply with this
law can result in adverse personnel actions, fines, or imprisonment.
The Berry Amendment applies to Foreign Military Sales as well as to purchases made with DoD funds sent for procurement to other agencies outside DoD.
The Berry Amendment applies to the Department of Defense, and, again, applies even if the DoD funded purchase is being purchased by a civilian agency. The restrictions of the Berry Amendment can be found at DFARS 225.7002. The implementing contract clauses are at 252.225-7012 00reference for Certain Domestic Commodities00 and 252.225--7015.00estrictions on Acquisitions of Hand or Measuring Tools00/font>
The Berry Amendment applies to both the
end product as well as all of the components of the item. This
will be discussed later in slide 23.
The restrictions are based on where the fiber, fabric, or yarns are grown, reprocessed, reused or produced.
The National Defense Authorization Act for Fiscal Year 2006 contained two other changes to the Berry Amendment besides the Section 832 training requirement. Both apply only to clothing, fibers, fabrics, and yarns. One requires additional notification in the FEDBIZOPPs whenever a non-availability exception is used for an item of clothing, fibers, fabrics, or yarns. The second expanded the coverage of the Berry Amendment to all materials and components of clothing, such as zippers or steel toes in boots, that are normally associated with clothing. It does not apply to sensors or electronics or any like item not normally associated with clothing.
Generally, the law applies to both end items AND components. Sometimes, it is not obvious to us that we are buying something that contains items restricted by the Berry Amendment. For example, synthetic fabric is part of fuel filters. Cotton is part of medical supplies like gauze and bandages. Remember that failure to comply can lead to ADA violations, audits and oversight, and Congressional interest
A question often asked is 00what is
the difference between the 00uy American Act00and the 00erry Amendment00
Another often asked question is does one have precedence over the other?
First, the Berry Amendment applies only
to DoD funds and funds available to DoD. It does not apply to
other agency00 funds, unless DoD is awarding the contract or purchase
order on behalf of another agency. Second, there is no commercial exception
provided in the Berry Amendment. It applies at the prime contract
for all items, and must be flowed down to all sub-tier suppliers. Third,
the Berry Amendment applies in addition to the Buy American Act.
The Buy American Act is a different domestic
preference law. It requires that items be manufactured in the
United States and that greater than 50% of the component cost of any
item be of domestic origin. Under Berry, the restricted
items must be 100% domestic in origin. The BAA allows a qualifying
country exception for all items, meaning that we can treat items from
the countries listed on the next slide and in DFARS 225.872-1, as if
they were domestic, based on the reciprocal defense procurement memoranda
of understanding that DoD has negotiated with these countries.
Berry only provides an exception for qualifying countries for procurement
of chemical warfare protective clothing. Another exception has
been approved via a determination by USD(AT&L) for para-aramid fibers
and fabrics from the Netherlands only. But NOT to hand or measuring
tools or food.
Last, Berry does not require contractor certification as does the BAA. The Berry Amendment requires contractor self-reporting. Berry compliance should be verified by DCMA as part of their purchasing system reviews.
The Department has signed reciprocal defense procurement MOUs with these countries. We refer to these countries as 00ualifying countries00 This is important with regard to the Berry Amendment because one exception to the clothing restriction allows us to procure chemical warfare protective clothing from these countries.
The time to deal with the Berry Amendment is in the pre-award stage. If your contract contains or might contain any item restricted by Berry, it is imperative that you include the appropriate clauses at DFARS 252.225-7012 and 7015 in your solicitation. And it is also imperative that you ensure the contractor understands these clauses and can comply with them. If not, you need to find another contractor, or discuss alternative items he can use that are from a US source. If he can00 comply, your options are limited. Either find another contractor, find alternative domestic items that meet your needs, qualify another source, or 00f none of these is possible, process a domestic non-availability determination under DFARS 225.7002-2(b). This process will be addressed later.
What happens if you did all the right things in the pre-award phase and the contractor later informs you after award that one of his sub-tier suppliers is non-compliant? The same rules apply 00ou must press the contractor to comply. If he cannot replace the part, or it is not in the Government00 best interest for him to replace the part, and he cannot find a US supplier after conducting a thorough market research, discussing availability with cognizant Department of Commerce personnel and after issuing a sources sought synopsis in FEDBIZOPPS, you can either terminate the contract for default, order him to find alternate domestic items to substitute that are acceptable to you, or see if any exception to Berry in DFARS 225.7002-2 applies. After that decision process, you can process a domestic non-availability determination, if justified.
Failure on the part of the contractor to comply with Berry can show a defect in his purchasing system, and may be taken into account in past performance reports.
Let00 go over this one more time. What do I do if my contractor tells me a part may be non-compliant?
If the contractor offers an item for
inspection and acceptance and discloses that it is not compliant with
Berry, you have few options. First, you should notify your lawyer,
verify that the contract requires compliance and that the item falls
under the restricted items in Berry, and get a listing of the parts
and the value of the clothing component or the component containing
the fibers, fabric, or yarns, at the lowest level. You cannot
accept the item until the contractor complies.
.
Now let00 talk about specific rules that relate only to clothing, fibers, fabrics and yarns.
The FY2006 National Defense Authorization
Act provided a new requirement under the Berry Amendment. The
definition of clothing is now expanded to include not just the textile
components but also other components such as zippers and buttons normally
associated with clothing. The law clearly states that sensors,
electronics and other items not normally associated with clothing are
not covered, however.
This change applies to all procurements using DoD funds obligated after January 5, 2006. If you are buying items off of a contract signed prior to January 6, 2006, this restriction applies and you must review your existing contracts to determine which items are affected.
Here is the list of items covered under these restrictions.
All clothing and the material and components normally associated with clothing;
Tents, tarpaulins or covers
Cotton and other natural fibers products, woven silk blends, spun silk yarn for cartridge cloth
Synthetic fabric and coated synthetic fabric 00including all textile fibers and yarns that are used in such fabrics. Textile fibers and yarns are fibers and yarns used in textile products, such as draperies, floor coverings, furnishings, bedding, flags, parachutes, and upholstered seats.
Canvas products
Wool, whether in the form of fiber or yarn or contained in fabrics, materials or manufactured articles
Items of individual equipment manufactured
from or containing any of the above fibers, yarns, fabrics or materials.
Again, the new FY2006 change expanded
the definition of clothing to include components of clothing beyond
the fiber, fabrics, and yarns. Be aware of this when using delivery
orders or options from contracts awarded prior to January 6, 2006.
The Congressional conference report contained language that small arms protective inserts for body armor are not clothing, or materials or components thereof, under Berry, however the fabrics in SAPI are restricted under Berry.
An exception which applies only to cotton, other natural fibers, or wool is the incidental incorporation language implemented at DFARS 225,7002-2(j). It allows the Department to buy end items which include cotton, other natural fibers, or wool in very small quantities and percentage of the item from other than US sources. This means if the total value of the natural or cotton or wool fiber is under the simplified acquisition threshold AND comprises no more than 10% of the total price of the end item, it does NOT have to be from a US source.
There are several other exceptions besides the incidental incorporation one we just discussed.
One mentioned earlier allows us to purchase chemical warfare protective clothing from qualifying countries. Remember that qualifying countries means those listed in DFARS 225.872-1 with which we have negotiated a reciprocal defense procurement MOU.
Another allows us to buy from anywhere waste and byproducts of cotton or wool fiber for use in propellants and explosives.
Third, there is an exception for fibers and yarns for use in synthetic fabric or coated synthetic fabric if the fabric is to be used in a component or end item that is NOT a textile product. This exception does not apply to the synthetic or coated synthetic fabric itself.
Last, there is an exception for para-aramid fibers and yarns manufactured in the Netherlands only. The USD(AT&L) has determined that in the case of para-aramid fibers and yarns, requiring a domestic provider would require DoD to use sole source contracts or subcontracts that would not be in the best interests of the Government.
Let00 talk about some general exceptions to Berry that are not specifically restricted to textiles and related materials. Generally, these exceptions apply regardless of the type of item you are buying.
First 00there is an exception under the Berry Amendment when the DoD is buying something under the simplified acquisition threshold, currently at $100,000. It must be a single, one-time buy and we are not permitted to split requirements to get under this threshold. But this exception is not available to our prime contractors or sub-tier suppliers. The SAT exception applies only to the Government00 contract. It has no relevance for a prime contractor00 contract with a subcontractor.
The second major exception is our 00on-availability00
exception which applies to food, clothing, fibers, fabrics and yarns
but NOT to hand or measuring tools.
This exception may be approved by either the Secretary of the Military Department concerned, or the Under Secretary of Defense for Acquisition, Technology & Logistics if they determine that items grown, reprocessed, reused, or produced in the US cannot be acquired as and when needed in satisfactory quality and sufficient quantity at US market prices.
If you find yourself in a situation where
you cannot find an item grown, reprocessed, reused or produced in the
US, after performing market research, including sources sought announcements
in FedBizOpps and through discussions with the Department of Commerce
for help in locating possible domestic sources, you may have a justified
case for a domestic non-availability determination, or DNAD.
When developing your proposed DNAD
D&F, your exception should be narrowly drawn. It should contain
a requirement to review the status of the industry on an annual basis
and a report required to document that the review was performed.
We will discuss in a moment the conditions
under which you should consider taking action to maintain, create, or
expand domestic capacity. In those cases where such action is
warranted, the DNAD should be limited in duration to the time required
to achieve adequate domestic supply. In cases where DoD action
is not warranted, the DNAD may be unlimited in duration. As discussed,
you are required to conduct annual market research. Should the
market develop sufficient new capacity, you will be required to notify
the approving authority and the DNAD will no longer remain effective.
If you have reason to believe that the market, on its own, will make
sufficient supply available by a certain date in the future, you can
limit the DNAD to the date.
Before a DNAD can be approved, you are required to look at alternatives and include an analysis of alternatives, including the reasons why each alternative would not suffice, in your proposed DNAD. This requirement for an analysis of alternatives was directed by the Deputy Secretary of Defense on May 1, 2001.
Again, this requirement applies to all Berry Amendment restricted items, except hand or measuring tools.
FAR Part 25.104 contains a list of items that are generally considered to be not available in sufficient quantities to meet all of DoD00 needs. However, it doesn00 necessarily mean that the item is not available for the purpose of a Berry Amendment DNAD. You are still required to do the market research to determine if your Berry restricted item or article is eligible for a DNAD.
What is the process for getting a DNAD
approved? Each Military Department should have a process documented.
For USD(AT&L) approved DNADs, the process requires a documented
package, consisting of a written Determinations and Findings explaining
the item or class of items, the quantity and length of time that the
DNAD is needed; documentation of a current and detailed market
research conducted that justifies the non-availability of the item(s)
in satisfactory quality and sufficient quantity at US market prices;
an analysis of alternatives that explains the alternatives reviewed
and an explanation why each would not suffice; a written certification
by the requiring activity, with specifics, why these alternatives would
not suffice; a report and recommendation of the contracting activity
commander discussing the supply and procurement situation, including
mission impacts, commercial practices, and other relevant facts in greater
detail that support the waiver; the potential political ramifications,
Congressional involvement, and small business concerns or other issues
AT&L should be aware of with regard to the approval sought; and
a discussion of the expected outcome if a DNAD is not approved.
You should coordinate your DNAD well
in advance with your legal counsel. Approval can be granted by
the Secretary of the Military Department concerned or by USD AT&L.
After approval, market conditions could change or acceptable substitutions
could become available, so any proposed DNAD D&F should include
a requirement to check availabilities at least annually.
It is important to note that whenever
a DNAD for the procurement of clothing or textile and related items
is approved, there is a FEDBIZOPPS notification requirement within 7
days of award.
A third general exception permits DoD to waive the Berry Amendment if the purchase is made outside the United States in support of combat operations. Currently this exception is limited to procurements for the Middle East and Afghanistan.
Fourth, we have an exception for contingency
operations. This exception does not pertain to clothing/textiles
or related items, however 00nly to food and hand or measuring tools.
Also be aware that the simplified acquisition threshold for contingency operations differs from the usual threshold in FAR.
We have several exceptions in emergency or urgent and compelling situations. First, purchases by, or for, an establishment located outside the US in support of US personnel located there. Second, if we are buying something using other than competitive procedures approved on the basis of an unusual and compelling urgency exception under FAR 6.302-2, there is an exception from the requirements of the Berry Amendment for food or hand or measuring tools only.
This exception is only applicable to buyers on vessels operating in foreign waters.
This exception covers items specifically bought for our commissaries for resale or ship00 stores.
Earlier we discussed what we mean by
Qualifying Countries, and we said that the Department of Defense has
negotiated reciprocal defense procurement MOUs with these countries.
Under an exception, we can buy chemical warfare protective clothing
from these 21 countries.
If we meet certain requirements in DFARS 225.7002-2(o), we can buy para-aramid fibers and yarns only from the Netherlands.
Let me summarize once more the Notification
Requirements under the Berry Amendment.
If you are using the Non-Availability
exception at DFARS 225.7002-2(b) for clothing, textiles, or related
articles, you must publish a notice in FEDBIZOPPS within 7 days of award.
In summary, you should now be aware of the restrictions in the Berry Amendment and where they are in the DFARS. You should be able to explain what items or articles are covered and the component coverage for clothing, fibers, fabrics, and yarns. You should also be able to explain the different exceptions DoD is granted in the statute. Last, you should be able to explain the notification requirements, to Congress and to FedBizOpps for clothing, fibers, fabrics and yarns, and related articles.
There are a few unique food-related EXCEPTIONS you should be aware of under the Berry Amendment.
DoD is permitted to buy perishable foods for an activity located outside the US. In the past, we were talking about an OCONUS contract for personnel overseas. In the FY2006 NDAA, an expansion of this exception was granted to allow purchases of perishable foods for personnel overseas, even if the contract is being awarded in the US.
There is an exception to the restriction on food for foods manufactured or processed in the US, even if the food or any of the components of the food item were grown or produced outside the US. HOWEVER, this exception does not apply to fish, shellfish, or seafood contained in foods manufactured or processed in the US.
Seafood must be of US origin in order for DoD to buy it. The seafood in any seafood product, manufactured or processed in the US, must be wholly of US origin. This means that the seafood was fished within the US, taken from sea by a US flagged ship, or processed in the US by a US flag ship.
