The Berry Amendment: Requiring Defense
Procurement to Come from Domestic Sources
Valerie Bailey Grasso
Specialist in Defense Acquisition
August 14, 2009
Congressional Research Service
7-5700
www.crs.gov
RL31236
CRS Report for Congress
P
repared for Members and Committees of Congress
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Summary
In order to protect the U.S. industrial base during periods of adversity and war, Congress passed
domestic source restrictions as part of the 1941 Fifth Supplemental Department of Defense
(DOD) Appropriations Act; these provisions later became the Berry Amendment. The Berry
Amendment required DOD to give preference in procurement to domestically produced,
manufactured, or home grown products, notably food, clothing, and fabrics, and specialty metals.
The current Berry Amendment (Title 10 United States Code (U.S.C.) Section 2533a, Requirement
to Buy Certain Articles from American Sources; Exceptions) contains a number of domestic
source restrictions that prohibit DOD from acquiring food, clothing, fabrics (including ballistic
fibers), stainless steel, and hand or measuring tools that are not grown or produced in the United
States. The Berry Amendment now excludes specialty metals; Section 842 of the FY2007
Defense Authorization Act (P.L. 109-364) enacted a new legislative provision which effectively
moved the specialty metal provision out of the Berry Amendment and into a separate section of
Title 10. On July 29, 2009, DOD issued a final rule which addresses statutory restrictions on the
acquisition of specialty metals not melted or produced in the United States.
The Berry Amendment applies to DOD purchases only. However, the American Reinvestment
and Recovery Act of 2009 (H.R. 1) contains a provision (Section 604) that appears to impose the
requirements of the Berry Amendment to all funds appropriated or otherwise made available to
the Department of Homeland Security (DHS). Also, the Berry Amendment Extension Act (H.R.
3116) was introduced in the House on July 7, 2009, and would prohibit DHS from the purchase of
clothing, tents, tarpaulins, and certain other textiles unless the items are grown, reprocessed,
reused, or produced in the United States.
Some policymakers believe that policies like the Berry Amendment contradict free trade policies,
and that the presence and degree of such competition is the most effective tool for promoting
efficiencies and improving quality. On the other hand, others believe that key U.S. sectors need
the protections afforded by the Berry Amendment. The debate over the Berry Amendment raises
several questions, among them: (1) If the U.S. does not produce a solely domestic item, or if U.S.
manufacturers are at maximum production capability, should DOD restrict procurement from
foreign sources, and (2) to what extent do U.S. national security interests and industrial base
concerns justify waiver of the Berry Amendment?
This report examines the original intent and purpose of the Berry Amendment and legislative
proposals to amend the application of domestic source restrictions, as well as options for
Congress.
Congressional Research Service
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Contents
Major New Developments........................................................................................................... 1
Berry Amendment Resources ................................................................................................ 3
Background ................................................................................................................................ 3
Controversy over the Berry Amendment...................................................................................... 4
History of the Berry Amendment................................................................................................. 5
When Was It Enacted and Why?............................................................................................ 5
How Does the Buy American Act Differ from the Berry Amendment?................................... 6
What Is the Relevance of the Berry Amendment Today?........................................................ 7
Current Application of the Berry Amendment.............................................................................. 9
Department of Defense Views of the Berry Amendment ........................................................ 9
Legislative Actions in the 109th, 108th, 107th, and 106th Congresses ........................................ 9
Other Views ........................................................................................................................ 14
Options for Congress ................................................................................................................ 14
Option 1: Take No Action, Retain the Berry Amendment as Enacted ................................... 15
Option 2: Eliminate Some Selected Restrictions .................................................................. 15
Option 3: Adopt a “Componency Standard” ........................................................................ 15
Option 4: Study the Lessening or Elimination of Provisions ................................................ 16
Option 5: Study What Percentage of Domestic Clothing, Textiles, Food, and Specialty
Metals Is Sold to the Military ........................................................................................... 16
Option 6: Appoint a “Berry Amendment Commission”........................................................ 16
Option 7: Audit and Investigate Berry Amendment Contracts .............................................. 17
Contacts
Author Contact Information ...................................................................................................... 18
Congressional Research Service
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Major New Developments
The Berry Amendment now excludes specialty metals. Sections 842 and 843 of the John Warner
National Defense Authorization Act for Fiscal Year 2007 (P.L. 109-364) enacted new legislative
provisions which effectively moved the specialty metal provision out of the Berry Amendment
and into a separate section of Title 10, and directed the Secretary of Defense to establish a
Strategic Materials Protection Board to study DOD’s strategic materials needs and make
recommendations to ensure that strategic materials critical to national security remain available.1
On July 29, 2009, DOD issued a final rule which addresses statutory restrictions on the
acquisition of specialty metals not melted or produced in the United States.2
The specialty metals provision provides protection for strategic materials critical to national
security. On July 23, 2009, the House Armed Services Committee’s Subcommittee on Readiness
held a hearing on the reconfiguration of the National Defense Stockpile and DOD’s development
of a plan for managing strategic materials. At the hearing, the Subcommittee received a written
statement from Mr. Richard A. Lowden, a Senior Materials Analyst from the Office of the Deputy
Under Secretary of Defense for Industrial Policy, who discussed the work of the Strategic
Materials Protection Board. Mr. Lowden sought to distinguish the difference between “strategic
materials critical to national security” and other “strategic materials.” Here is an excerpt from his
written statement which describes how the Board distinguished the two terms.
The statute that established the Board does not define “materials critical to national security,”
therefore, in order to distinguish between terms, the Board developed definitions to be used
for its purposes. The Board determined that for a material to be designated as strategic that
material should meet certain technical criteria. First, the material should be essential for
important defense systems and secondly, it must be unique in the function it performs - in
other words, there are no viable alternatives. This definition is consistent with respect to
earlier definitions in that it includes the aspect of criticality of application, but unlike earlier
variants, it does not include a vulnerability of supply factor. The Board’s definition of
strategic material is thus less restrictive and expands the list of materials that would be
considered strategic. It must be noted that additional criteria such as vulnerability of supply
would have to be considered in order to elevate a strategic material to a higher level of
concern.3
The FY2008 National Defense Authorization Act (P.L. 110-181) contained a provision (Section
803) which required the Strategic Materials Protection Board to perform an assessment of the
viability of domestic producers of strategic materials, the purpose of which is to assess which
domestic producers are investing, or plan to invest on a sustained basis, in the development of a
continued domestic production capability of strategic materials to meet national defense
requirements.
1 Section 2533b. Requirement to buy strategic materials critical to national security from American sources; exceptions.
2 DFARS Case 2008-D003. Restriction on Acquisition of Specialty Metals.
3 Statement of Mr. Richard A. Lowden, Senior Materials Analyst, Office of the Deputy Under Secretary of Defense for
Industrial Policy. Hearing on the Reconfiguration of the National Defense Stockpile, before the House Armed Services
Committee, Subcommittee on Readiness. July 23, 2009.
Congressional Research Service
1
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Highlights of Sec. 842, P.L. 109-364
Protection of Strategic Materials Critical to National Security
Funds appropriated may not be used for the procurement of strategic materials “critical to national security” which
are not reprocessed, reused, or produced in the United States. Such items are (1) specialty metals, and (2) items
critical to national security, as determined by the Strategic Materials Protection Board.
The Secretary of Defense may invoke several exceptions: (1) “availability exception” if sufficient quantity and quality
are not available; (2) procurement outside of the United States in support of combat operations or contingency
operations; (3) procurement by vessels in foreign waters; (4) procurement by which the use of “other than
competitive procedures” has been approved based on an urgent and compelling need; (5) procurement necessary to
comply with existing agreements with foreign governments; (6) procurement by commissaries, exchanges, and other
non-appropriated fund instrumentalities; (7) procurement less than the simplified acquisition threshold referred to in
10 U.S.C. 2304(g).
The first provision granted a one-time waiver of the specialty metals domestic source
requirements if such materials were incorporated in the items produced in the United States
before the enactment of this bill, with certain conditions: (1) the contracting officer would have to
determine, in writing, that it would not be practical or economic to replace the specialty metals
incorporating into the item with materials that would meet the domestic source requirement, (2)
the prime contractor and subcontractor would have in plan a plan to ensure compliance with the
requirements of the Berry Amendment, and (3) that the lack of compliance is not knowing or
willful.
The second provision established the Strategic Materials Protection Board with the following
individuals: the Secretary of the Defense, Under Secretary of Defense for Acquisition,
Technology, and Logistics; Under Secretary of Defense for Intelligence; and Secretaries of the
Army, Navy, and Air Force.4 The Board is required to meet at least once every two years, and
prepare and submit reports to Congress. The first meeting of the Board was held on July 17,
2007.5 The Board issued its final report to Congress on December 12, 2008.6
Other new developments include media reports that report that the Undersecretary of Defense for
Acquisition, Technology, and Logistics had considered several legislative proposals to broaden
the exceptions provided under the Berry Amendment. Inside the Pentagon reports John Young,
DOD’s senior acquisition executive, had formally submitted proposals to be considered as part of
DOD’s submission for the FY2009 National Defense Authorization bill. One such proposal would
have granted DOD authority to waive the requirements of the Berry Amendment during so-called
emergency operations. Such emergency operations might include military action taken against
U.S. adversaries, military action in response to an attack with weapons of mass destruction, or
military action resulting from national emergencies declared by the President. Another proposal
would have authorized military procurement officials to give contracting preference to indigenous
groups for the purpose of expanding economic development in a contingency operation.7 DOD
4 The Board was charged with determining what items are designated as critical to national security; analyzing risks
and effect on national defense that the non-availability of such items would pose; recommending to the President
strategies for ensuring domestic availability of such items; recommending other strategies to strengthen the industrial
base; and publishing in the Federal Register the list of items critical to national security.
5 Strategic Materials Protection Board Studies Impact of New Bill. Inside the Pentagon. Volume 23, Number 51,
December 20, 2007.
6 http://www.acq.osd.mil/ip/docs/report_from_2nd_mtg_of_smpb_12-2008.pdf.
7 Young Seeks Legislative Changes to Streamline Contingency Buying. Inside the Pentagon, February 28, 2008, Vol.
24, No. 9.
Congressional Research Service
2
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
had also submitted a legislative proposal that would amend the Berry Amendment to permit the
purchase of fresh fruits and vegetables from all sources.8
Berry Amendment Resources
Two new public resources provide answers to many of the most often-asked questions on the
Berry Amendment. DOD’s Office of Defense Procurement and Acquisition Policy (DPAP) has
prepared a “Frequently Asked Questions” compendium of general information on the Berry
Amendment. The questions and answers ranged from origin and history, authority, policy, and
exceptions; comparisons with other domestic source restrictions like the Buy American Act; the
policy governing determinations of non-availability (DNAD); and many questions often raised by
suppliers and other industry personnel.9
Also, the U.S. Department of Commerce has launched a new website to provide textile and other
manufacturers a resource for the latest information on the Berry Amendment. According to the
website, this resource was compiled with the support of the Commerce’s International Trade
Administration’s Office of Textiles and Apparel, DOD, Office of the Under Secretary of Defense
for Acquisition, Technology, and Logistics, DPAP; Army, Air Force, and Navy acquisition offices,
and others.10
Background
The Berry Amendment contains a number of domestic source restrictions that prohibit DOD from
acquiring food, clothing, fabrics (including ballistic fibers), specialty metals, stainless steel, and
hand or measuring tools that are not grown or produced in the United States.11
Congress and DOD have long debated the need to protect the U.S. defense industrial base by
restricting certain federal procurement to U.S. markets through legislation known as “domestic
source restrictions.”12 Every defense appropriations bill from 1942-2004 has included some
mention of a preference for U.S. articles, supplies, and materials. One particular group of
domestic source restrictions was first enacted into law on April 5, 1941, as part of the FY1941
Fifth Supplemental National Defense Appropriations Act, P.L. 77-29. During the 2nd session of
the 82nd Congress, the Honorable Elias Y. Berry, Representative from South Dakota, introduced
two bills to amend the Buy America Act to include wool as a product or material, produced or
manufactured in the U.S. 13 This amendment would come to be known as the Berry Amendment.
8 U.S. Department of Defense. Seventh Package of Legislative Proposals Sent to Congress for Inclusion in the National
Defense Authorization Act for FY2009, sent to Congress on May 28, 2008. See
[http://www.dod.mil/dodgc/olc/legispro.html].
9 The Defense Contract Management Agency has provided a list of items for which waivers have been issued due to
lack of a domestic supplier, as well as the corrective action plans submitted by suppliers to meet compliance with the
Berry Amendment. For further information, see [http://www.acq.osd.mil/dpap/cpic/ic/berry_amendment_faq.html].
10 [http://www.otexa.ita.doc.gov/berry.htm].
11 10 U.S.C. § 2533a, Requirement to Buy Certain Articles from American Sources; Exceptions.
12 For a discussion of domestic source restrictions, see “Defense Acquisition: Rationale for Imposing Domestic Source
Restrictions.” GAO/NSIAD-98-191, July 17, 1998, 20 pages.
13 Congressional Record. Proceedings and Debates of the 82nd Congress, Second Session. Volume 98-Part 3. March 25,
1952 - April 22, 1952 (pages 3859-3861).
Congressional Research Service
3
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
On December 13, 2001, the passage of the FY2002 National Defense Authorization Act codified
and modified the Berry Amendment,14 making it a permanent part of the United States Code.
Under the Berry Amendment, the Secretary of Defense has the authority to waive the requirement
to buy domestically, under certain conditions.15
The 2001 controversy over the procurement of black berets, the waiver authority of the Secretary
of Defense, as well as the presence of other domestic source provisions have created considerable
interest in the Berry Amendment. Some policymakers believe that the Berry Amendment’s
restrictions (like the specialty metal clause) contradict free trade policies, and that the presence
and degree of such competition is the most effective tool for promoting efficiencies and
improving quality. Others believe that U.S.-based companies need the protections afforded by the
Berry Amendment. These two views have been the subject of ongoing debate in Congress.
Controversy over the Berry Amendment
On October 17, 2000, the Army Chief of Staff, General Eric Shinseki, announced that the black
beret would become the standard headgear for the U.S. Army. The Army planned to issue a one-
piece beret to each of the 1.3 million active duty and reserve soldiers during the spring of 2001,
while a second beret would be issued to each soldier in the fall of 2001. The Army was to pay
approximately $23.8 million for about 4.7 million berets. DOD awarded the first contract to
Bancroft, an Arkansas-based company that had manufactured military headgear since World War
I. Other contracts were awarded to several foreign manufacturing firms; five of the foreign firms
had production facilities in the People’s Republic of China, Romania, Sri Lanka, and other low-
wage countries.
To purchase the black berets, the Defense Logistics Agency (DLA)16 granted two waivers of
specific restrictions in the Berry Amendment. The first waiver was granted to DOD so that the
Department could purchase military uniforms from foreign sources. DLA granted this waiver
when it determined that no U.S. firm could produce a sufficient quantity of one-piece, black
berets by the Army’s deadline. As a result, there were protests from some segments of domestic
manufacturing, military and veterans groups, Members of Congress, and the public. The House
Small Business Committee held a hearing on May 2, 2001, to discuss the statutory authority to
waive Berry Amendment restrictions, as well as the concerns of the small business community
regarding the contract award process.
14 Within DOD regulations, the Berry Amendment can be found in the Defense Federal Acquisition Regulation
Supplement (DFARS), Restrictions on Food, Clothing, Fabrics, Specialty Metals, and Hand or Measuring Tools. See
DFARS, Part 225.7002.
15 10 U.S.C. § 2533(c)(d)(e)(f)(g)(h) Exceptions to the Berry Amendment are: when the Secretary of Defense or the
Secretary of the military department determine that satisfactory quality and sufficient quantity of any such article or
item or specialty metal cannot be procured as and when needed at United States market prices; procurement outside the
United States in support of combat operations; procurement by vessels in foreign waters; emergency procurement of
perishable foods by an establishment located outside the United States, for the personnel attached to such an
establishment; procurement of specialty metals or chemical warfare protective clothing produced outside the United
States, under certain circumstances; procurement which complies with reciprocal agreements with foreign
governments; procurement of certain foods; procurement for resale at commissaries, exchanges, and other non-
appropriated fund instrumentalities; procurement values that are under the simplified acquisition threshold.
16 The Defense Logistics Agency is a logistics combat support agency whose primary role is to provide supplies and
services to American military forces worldwide. See [http://www.dla.mil].
Congressional Research Service
4
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
DLA granted the second waiver to allow Bancroft to retain its contract and continue to produce
the black berets for the Army, even though Bancroft used materials from foreign sources.
Bancroft, the sole U.S. manufacturer of the one-piece beret, had procured materials from two
overseas suppliers, who, in turn, had procured material from other foreign sources. Bancroft’s
president reported that, as early as 1976, DOD had been notified that some beret materials were
procured from foreign sources.
On October 4, 2002, DOD announced that the Bancroft Cap Company of Cabot, Arkansas was
awarded a $14.8 million dollar firm-fixed-price contract to manufacture up to 3.6 million black,
wool berets for the United States Army and the United States Air Force. The contract was a two-
year contract with three one-year options. There were 154 proposals solicited, and thirteen
vendors responded. The contract is administered through the Defense Supply Center,
Philadelphia, PA.17
By some, where DOD purchases its berets is viewed as a relatively minor matter, when compared
to where it purchases its electronics, specialty metals, and other hardware used for logistics
support, communications and weapons modernization. However, to certain small businesses, the
loss of such a contract to foreign sources can be unacceptable.
History of the Berry Amendment
When Was It Enacted and Why?
The Berry Amendment, which dates from the eve of World War II, was established for a narrowly
defined purpose: to ensure that U.S. troops wore military uniforms wholly produced within the
United States and to ensure that U.S. troops were fed with food products solely produced in the
United States.18 Other industries, such as tools and specialty metals, were added later. Originally
enacted on the eve of World War II, it overrode exceptions added to the Buy American Act of
193319 for products procured by the Department of Defense.
In 1941, House and Senate Members held spirited discussions20 over the passage of what has
come to be known as the Berry Amendment, although the precise identity of the author of the
amendment remains unknown.21 Several issues were raised during the debate. Even though the
17 Defense Link. U.S. Department of Defense. Contracts for October 4, 2002.
18 On April 5, 1941, the Berry Amendment was first enacted as part of the Fiscal Year (FY) 1941 Fifth Supplemental
National Defense Appropriations Act, P.L. 77-29, 10 U.S.C. § 2241 note. The Berry Amendment was made permanent
when P.L. 102-396, Section 9005, was amended by P.L. 103-139, Section 8005. Since then, Congress has regularly
added or subtracted Berry Amendment provisions. On December 13, 2001, the FY2002 National Defense
Authorization Act codified and modified the Berry Amendment, repealing Sections 9005 and 8109 of the above-
mentioned bills. The Berry Amendment is now codified at 10 U.S.C. 2533a.
19 See discussion on the Buy American Act, in this report.
20 An example of a discussion of the issues surrounding the passage of the Berry Amendment can be found in the
Congressional Record, vol. 87, part 15. 77th Congress, 1st Session, pp. 2460-2984 and pp. 2711-2720.
21 Legislative reference specialists suggest (but are not certain) that the amendment may have been named after George
Leonard Berry (D-TN), who was appointed to serve the remainder of an unexpired U.S. Senate term (1937-38) due to
the death of Nathan Buchman, and was defeated for election in the Democratic presidential primary of 1938. At age 24,
Senator Berry had been elected president of the International Printing Pressmen and Assistants’ Union in 1907, a
position he held until his death in 1948.
Congressional Research Service
5
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
U.S. was not at war, Congress was concerned that the nation be prepared for adversity and thus
provided the impetus for such legislation. Some policymakers were also concerned that despite
the enactment of the Buy American Act in 1933, one department of the federal government had
reportedly purchased meat from Argentina. Likewise, another department had reportedly
contracted to purchase a large quantity of wool, about 50% of which came from foreign sources.
Questions were raised over the disposal of some 500,000,000 bushels of surplus wheat, with one
policymaker noting that “wheat products and wheat should be purchased from the production
here in the United States when we have such a surplus on hand and that our own farmers should
be given preference.”22 In an expression of that concern, the original version of the House bill
added a provision which required the purchase of American agricultural products in fulfilling
national defense needs. (The Senate version initially deleted the provision, but later reinstated it,
broadening the bill to include all agriculture.) The bill was enacted into law on April 5, 1941.
Largely as a result of the controversy surrounding the procurement of the black berets,
Representative Walter B. Jones introduced a bill to amend Title 10 of the United States Code, thus
making the Berry Amendment a permanent provision of law. On April 3, 2001, Representative
Jones introduced H.R. 1352, the purpose of which was to codify and modify the provisions of the
Berry Amendment. At the introduction of the bill, Representative Jones stated that the black beret
controversy and the decision of the Defense Logistics Agency to waive the Berry Amendment
provisions and allow the procurement of berets from foreign sources highlighted the need to
review the current law and look for ways to improve the effectiveness of the law. H.R. 1352would
also add a requirement that the Secretary of Defense notify the House and Senate committees on
Appropriations, Armed Services, and Small Business before a waiver is made. The provisions of
H.R. 1352 were enacted into law as part of the FY2002 National Defense Authorization Act, P.L.
107-107.
How Does the Buy American Act Differ from the Berry
Amendment?
The Buy American Act (BAA) and the Berry Amendment are often confused, and the terms are
sometimes used interchangeably. The BAA, enacted in 1933, is the principal domestic preference
statute governing most procurement by the federal government, while the Berry Amendment,
enacted on the eve of World War II, governs DOD procurement only.23 The BAA seeks to protect
domestic labor by giving preference to domestically produced, manufactured, or home-grown
products in government purchases, with certain exceptions. The Berry Amendment overrides
many of these exceptions, primarily for food, clothing, and specialty metals.
The two major differences between the BAA and the Berry Amendment are: (1) The BAA applies
only to federal government contracts to be carried out within the U.S., while the Berry
Amendment, which is for defense contracts only, is not limited to contracts within the U.S.; and
22 Statement of James Francis O’Connor, Representative from Montana, March 21, 1941, during congressional debate
over the 1941 Fifth Supplemental National Defense Act (see Congressional Record, vol. 87, part 15. 77th Congress, 1st
Session, p. 2564.)
23 The Buy American Act (41 U.S.C. §§10a through 10d, as amended), enacted in 1933, is the major domestic source
restriction governing procurement by all of the federal government. It restricts U.S. government procurement by giving
preference to domestically produced, manufactured, or home-grown products. For further discussion of the Buy
American Act, refer to CRS Report 97-765, The Buy American Act: Requiring Government Procurements to Come
from Domestic Sources, by John R. Luckey.
Congressional Research Service
6
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
(2) The BAA requires that “substantially all” of the costs of foreign components not exceed 50%
of the cost of all components (thus, an item can be of 51% domestic content and still be in
compliance with the BAA) while the Berry Amendment requires that items be 100% domestic in
origin.
It should be noted that there are a number of other domestic source provisions which generally
govern specific types of procurement; these provisions are not covered by the BAA or the Berry
Amendment. These provisions will not be covered in this report but must be considered when
determining whether or not a specific domestic source provision affects a particular type of
procurement.24
What Is the Relevance of the Berry Amendment Today?
Some observers argue that the Berry Amendment restrictions may not always represent the best
value to DOD or the federal government, nor is there always a justifiable national security interest
to preserve certain items currently under the Berry Amendment. Nevertheless, others have
asserted that U.S. workers and businesses have an expectation that Congress will consider their
interests in determining procurement policies.
A number of Berry Amendment- restricted items may be in line with the original purpose and
intent, based on the end use products that are produced. For example, certain items like chemical
warfare protective clothing (composed of ballistic fibers, made from textiles) may warrant further
study. Specialty metals may be critical and vital to the war-fighting effort if they are used for
“high-tech” electronics and communications. Food restrictions, on the other hand, are not critical
and may make it more difficult for DOD to take advantage of commercial business practices. In
an increasingly globalized economy, many food suppliers find it difficult to adhere to this
restriction as it deviates from standard commercial business practices, so some may decline to sell
to DOD. Many food suppliers who sell to DOD claim they are often forced to adopt unique,
costly, and inefficient business practices to do business with the defense sector.25
Economic, social, and political factors come into play when examining the purpose and intent of
the Berry Amendment. If the U.S. becomes dependent on purchasing equipment and supplies
from foreign sources, what prevents an adversary from cutting off U.S. access to such items or
refusing to build militarily critical items in times of crisis or conflict? Another argument for
maintaining the Berry Amendment restrictions is that they often benefit small, minority-owned,
and disadvantaged businesses which may depend on DOD for their viability. According to
24 See 41 U.S.C. § 10a through 10d, and 10 U.S.C. § 2533, Determinations of Public Interest under the Buy American
Act. For further discussion of the Buy American Act, see CRS Report 97-765, The Buy American Act: Requiring
Government Procurements to Come from Domestic Sources, by John R. Luckey. For further discussion of defense
domestic source provisions not covered by the Buy American Act or the Berry Amendment, refer to Title 10 of the
United States Code.
25 According to Leslie G. Sarasin of the American Frozen Food Institute (AFFI), “The Berry Amendment required
DOD to procure foods, entirely of U.S. origin ingredients. Often, DOD was forced to reject multi-ingredient,
commercially available food items processed in the U.S. because the domestic origin of all ingredients and components
of the product could not be demonstrated. This policy put DOD at odds with common commercial practice in the food
industry, which typically follows U.S. tariff law in determining questions of foreign origin, and limited its access to the
widest possible selection of products.” Memorandum to the Defense Acquisition Regulations Council on AFFI
comments on DOD’s proposed interim rule regarding modification of the Berry Amendment, June 21, 2002. See
DFARS Case 2002-D002, at [http://www.affi.com/policy.asp].
Congressional Research Service
7
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
congressional testimony, U.S. textile and apparel industries combined have lost approximately
540,000 jobs during the 1990s.26
Some would argue that the Berry Amendment is still relevant today because of the tragic events
of September 11, 2001. There are also concerns over the possibility of future acts of terrorism and
the safety and security of the nation’s food supply. Some specialty metals and steel products,
items covered under the Berry Amendment, are produced by distressed U.S. industries. One such
company, Bethlehem Steel, one of the largest U.S. steel manufacturers, filed for Chapter 11
bankruptcy protection, in part because of the competition from cheaper, foreign-made and
possibly subsidized steel.27 Additionally, the procurement of certain items like ballistic fibers
(found in body armor, which is critical to the protection of U.S. military troops) is restricted to
domestic producers under the Berry Amendment. Generally, proponents of the Berry Amendment
have argued that these types of restrictions are necessary to maintain a viable industrial base, and
that the Berry Amendment serves as some protection for critical industries by keeping them
healthy and viable in times of peace and war.
However, critics argue that the Berry Amendment can undercut free market competition and may
produce other negative effects, such as reducing business incentives to modernize, causing
inefficiency in some industries due to a lack of competition, and causing higher costs to DOD
(because the military services may pay more for “protected” products than the market requires).
Critics also contend that the Berry Amendment promotes U.S. trade policies that might
undermine international trade agreements.28
For these reasons, some believe that this is not the time to change the provisions of the Berry
Amendment, arguing that the U.S. should maintain its current capacity, at a minimum, to feed and
clothe its military forces.
26 Statement of Evan Joffe, Marketing Manager of Springfield, LLC, before the House Committee on Small Business,
May 22, 2001.
27 Behr, Peter. Bethlehem Steel Files for Bankruptcy; Struggles With Competition From Imports, Labor Costs
Exacerbated by Aftermath of Attacks. Washington Post, October 16, 2001, p. E01. Bethlehem Steel, a 97-year-old
company based in Bethlehem, PA, was the 25th steel company to file for bankruptcy protection since 1998. The
company listed $4.3 billion dollars in assets, $6.75 billion dollars in liabilities, including an unfunded health care
obligation of $1.85 billion dollars.
28 The delays associated with the procurement of body armor for U.S. troops in Iraq have been a source of
congressional criticism during the 108th Congress. According to Vice Admiral Keith W. Lippert, United States Navy,
who is the Director of the Defense Logistics Agency, the Army has adequately equipped all of the U.S. troops with the
Interceptor Body Armor. In his testimony on March 30, 2004, before the House Armed Services Subcommittee on
Readiness, he reported that “As we prepared (for Operation Iraqi Freedom), we built on lessons learned from previous
conflicts. Our preparations were good in some areas, but needed to improve in others. I’ve discussed our joint planning
with the Services in advance of the operation. In some cases, actual demand for items exceeded projections. For
example, the Small Arms Protective Inserts—the SAPI plates you’ve all heard about—the estimated FY2003
requirements were seventeen million dollars. For a very good reason, the protection of our American war fighter—The
Army increased their requirement for Interceptor Body Armor. Today all troops in Iraq are equipped with Interceptor
Body Armor. To meet the increased requirement, funded requisitions began coming to us in January 2003. By
November 2003, we actually bought three hundred seventy million dollars of the SAPI plates - using exigency
contracts, awarded within thirty days, with an average delivery beginning within eighty-three days. The Army Audit
Agency conducted a special inspection of body armor and found that we were timely in making awards and that quality
products were delivered on time. However, SAPI production right now is constrained by the availability of raw
materials, mainly the ceramic tiles contained in the plates. At present, known worldwide production of qualified
ballistic packages is limited to twenty-five thousand SAPI sets (or fifty thousand plates) per month.”
Congressional Research Service
8
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Current Application of the Berry Amendment
Department of Defense Views of the Berry Amendment
DOD officials have expressed contrasting views about the necessity for the Berry Amendment.
Former Secretary of Defense Richard Cheney29 issued a 1989 report to Congress called “The
Impact of Buy American Restrictions Affecting Defense Procurement.” The report suggested that
an alternative to the Berry Amendment would be a specifically targeted approach to provide DOD
with the ability to establish assured sources of supply for mobilization purposes through existing
mobilization base planning under the Defense Production Act.30 The report concluded that
“statutory and regulatory policies and other federal and DOD acquisition regulations like the
Berry Amendment, which prohibit or impede foreign-source participation in U.S. defense
contracting, constitute a considerable departure from the concept of full and open competition.”
In 1997, the DOD Acquisition Reform Executive Focus Group’s final report called for the
elimination of some Berry Amendment restrictions on food, clothing, and textiles, while retaining
restrictions on specialty metals and measuring tools.
A former DLA Deputy Director, Major General (Ret.) Charles R. Henry, testified that the Berry
Amendment was critical to the maintenance of a “warm” U.S. industrial base during periods of
adversity and war. He summed up his opinion, as follows:
The point here is that, through the Berry Amendment, our defense procurement
establishment is able to maintain a stable of independent, competing producers who
understand the mil-specs of different items and who have the commitment to service the U.S.
military. They are there for our military when there is a surge in requirements—as there was
with Desert Storm—and they must be there during peacetime.31
Legislative Actions in the 109th, 108th, 107th, and 106th Congresses
A number of domestic source provisions governing the Berry Amendment were proposed and/or
enacted into law during the 109th, 108th, 107th, and 106th sessions of Congress. One common
theme among the bills was the broadening of the Secretary of Defense’s waiver authority
(authority to waive the Berry Amendment) when he believes that there is an unusual and
compelling reason to procure items from foreign sources.
Section 832 of P.L. 109-163, the FY2006 National Defense Authorization Act, requires the
Secretary of Defense to train certain members of the defense acquisition workforce (those who
“participate personally and substantially in the procurement of textiles”32) on the requirements of
the Berry Amendment. Section 833 requires the Secretary of Defense to post public notifications
29 Secretary of Defense, March 1989 - January 1993.
30 For further discussion on the Defense Production Act, see CRS Report RS20587, Defense Production Act: Purpose
and Scope, by Daniel H. Else, 6 p.
31 Testimony before the Oversight and Investigations Subcommittee, House Committee on Education and the
Workforce. Hearing on Federal Prison Industries’ Proposed Military Clothing Production Expansion - Assessing
Existing Protections for Workers, Business, and FPI’s Federal Agency Customers. October 5, 2000.
32 Section 832, P.L. 109-163.
Congressional Research Service
9
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
of any contracts for clothing materials and components covered under the Berry Amendment.
“Clothing materials and components” includes included materials and components not normally
associated with clothing. Notices shall be posted on the Internet site maintained by the General
Services Administration, [http://www.fedbizopps.gov/].
The Department of Defense (DOD) Federal Acquisition Regulation Supplement (DFARS)
225.7002 has been revised to include a more nuanced and detailed list of items, components, and
materials covered under the provisions of the Berry Amendment.33
DOD has adopted a final rule, without change, to implement Sections 826 and 827 of the FY2004
National Defense Authorization Act. The interim rule was published in the Federal Register on
May 13, 2004, followed by a 60-day comment period. The final rule adds new exceptions to the
acquisition of food, specialty metals, and hand or measuring tools when needed to support
contingency operations or when the use of other than competitive procedures is based on unusual
and compelling urgency.34
The House version of H.R. 4200, the proposed FY2005 DOD Authorization bill, contained a
provision that would have limited the ability of the Secretary of Defense to purchase defense
items from countries that impose offset regulations or policies on purchases of defense items from
the United States. The Senate version of H.R. 4200 did not contain this provision. The final
version contains a provision that requires the Secretary of Defense to develop a defense
acquisition trade policy designed to eliminate any adverse impact of offset agreements in defense
trade. Another provision in the House version of the bill would have required the Secretary of
Defense to delay phasing out of the restriction of acquisition of polyacrylonitrile (PAN) carbon
fiber from foreign sources for three years. The Senate version did not contain this provision. The
final version contains a provision that would delay the phase out of the domestic source
restriction for PAN carbon fibers for 30 days, after the Secretary of Defense provides to the
House and Senate Armed Services Committees a report on an assessment of the domestic and
international industrial structure that produces PAN carbon fibers and market trends for the
product.
The Senate version of H.R. 4200 contained a provision that would have provided the Secretary of
Defense the authority to waive the application of statutory domestic source requirements and
domestic content requirements for those countries who have signed a Declaration of Principles on
defense trade with the United States. The House version of the bill contained no such provision;
the Senate receded.
33 According to the DOD policy on Program Acquisition and International Contracting (PAIC), “Unless a specific
exception in law applies, the products, components, or materials listed below must be grown, reprocessed, reused, or
produced wholly in the United States if they are purchased with funds made available (not necessarily appropriated) to
DOD. These rules apply to both prime contractors and subcontractors. The items listed are food, clothing, tents,
tarpaulins, covers, natural fibers or yarns, natural fiber products, natural fabrics, synthetic fabrics, fabric blends,
individual equipment (covered in Federal Supply Class 8465) made from or containing fibers, yarns, fabrics, or
materials (including all fibers, yarns, fabrics, or materials therein), specialty metals (as defined in DFARS
252.225.7014), stainless steel flatware, hand tools, and measuring tools. Office of the Under Secretary of Defense for
Acquisition Technology and Logistics, Defense Procurement and Acquisition Policy, revised January 13, 2005.
[http://www.acq.osd.mil/dpap/paic/berryamendment.htm].
34 U.S. Department of Defense. DFARS; Berry Amendment Changes. DFARS Case 2003-D099. Published in the
Federal Register, vol. 69, no. 180, September 17, 2004.
Congressional Research Service
10
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
The House version of H.R. 4200 contained a provision that would have amended the Berry
Amendment to require the Secretary of Defense to notify Congress and the public when the
Secretary of Defense exercised certain waiver authority. The Senate version of the bill contained
no such provision; the House receded.
P.L. 108-287, the Fiscal Year (FY) 2005 Department of Defense (DOD) Appropriations Act, (H.R.
4613), prohibits the procurement of carbon alloy, or armor steel plate not melted and rolled in the
United States (U.S.) or Canada, unless this restriction is waived by the appropriate departmental
Secretary within the Department of Defense; requires the Secretary of Defense to submit to
Congress a report on the amount of DOD purchases from foreign entities in FY2005, for which
the provisions of the Buy American Act were waived; prohibits the spending of appropriated
funds unless the entity is in compliance with the Buy American Act; prohibits the procurement of
ball and roller bearings from foreign sources unless the restriction is waived by the Secretary of
Defense; prohibits the purchase of any supercomputer unless manufactured in the United States;
and grants authority to the Secretary of Defense to waive limitations on the procurement of
defense items from foreign sources, under certain conditions.
The FY2004 National Defense Authorization Act (P.L. 108-136) amends the Berry Amendment
by making exceptions for the procurement of covered items for the purpose of contingency
operations and for unusual and compelling urgency of need. In addition, the act makes the
procurement of waste and byproducts of cotton and wool fiber for use in the production of
propellants and explosives inapplicable to the requirements of the Berry Amendment, and grants
certain exceptions for the procurement of ball bearings and roller bearings, procured for use in
foreign products, that is produced by a company that does not satisfy the requirements set for
manufacturers in the national technology industrial base.
H.R. 2658, the FY2004 Department of Defense Appropriations Act (P.L. 108-87), includes the
following key provisions: (1) restrictions on the procurement of carbon, alloy, or armor steel
plating; (2) prohibitions on the application of Buy American requirements to the procurement of
any fish, shellfish, or seafood products during FY2004; (3) prohibitions on the purchase of
welded shipboard anchor and mooring chain 4 inches in diameter and under, unless the anchor
and mooring chain are manufactured in the United States from components that are substantially
manufactured in the United States; (4) prohibitions on the procurement of carbon, alloy, or armor
steel plate that were not melted and rolled in the United States or Canada, for use in any
government-owned facility under DOD’s control; (5) prohibitions against the use of certain funds
without compliance with the Buy American Act; and (6) waiver of the Buy American Act when
there are reciprocal defense procurement agreements with certain foreign countries. Also, P.L.
108-87 requires reports to Congress on the amount of foreign purchases made in FY2003, and on
contracts for Iraq reconstruction and recovery efforts that are funded in whole or part with DOD
funds.
The final version of the FY2004 National DOD Authorization Act (P.L. 108-136) includes a
variety of domestic source provisions. Section 813 requires the Secretary of Defense to establish
a “Military System Essential Breakout List” of critical technologies and components vital to our
national defense, including the origin of each item; Section 821 identifies and lists foreign
countries that restrict the sale of military goods or services to the U.S. because of counter-
terrorism or military operations, and contains a prohibition on the procurement of items from
certain identified countries; Section 822 provides an incentive program for major defense
acquisition programs to use machine tools and other capital assets produced within the U.S.;
Section 824 requires the Secretary of Defense to conduct a study of the adequacy of the beryllium
Congressional Research Service
11
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
industrial base; Section 826 amends the Berry Amendment by making exceptions for the
procurement of covered items for the purpose of contingency operations, when the procurement is
under circumstances described as of an unusual and compelling urgency. Section 827 grants an
exception to the Berry Amendment for procurement of waste and byproducts of cotton and wool
fiber for use in the production of propellants and explosives, and Section 828 grants an exception
to 10 U.S.C. 2534 for the procurement of ball bearings and roller bearings used in foreign
products.35
The Defense Transformation for the 21st Century Act of 2003 (S. 927) was introduced on April
28, 2003, and referred to the Senate Armed Services Committee. Some provisions of S. 927 were
passed in the FY2004 National DOD Authorization Act.
H.R. 4546, the FY2003 National DOD Authorization Act (P.L. 107-314), extended an Army pilot
program that permitted the sale of manufactured articles and the services of certain industrial
facilities without regard to domestic source restrictions (see Section 111).36 The act required the
DOD Inspector General to annually review the pilot program and submit a report to Congress; in
the DOD Inspector General’s review, the effectiveness of the Army pilot program was lauded, and
recommendations were made to improve the program.37
Several provisions affecting the Berry Amendment were enacted in the FY2003 Department of
Defense Appropriations Act (H.R. 5010, P.L. 107-248). Section 8016 prohibited the procurement
of welded shipboard anchor and mooring chain 4 inches in diameter and under, unless
manufactured from components that are substantially manufactured in the U.S.; Section 8030
prohibited the procurement of carbon, alloy or armor steel plates, for use in any DOD-controlled,
government-owned facility, unless the materials were melted and rolled in the U.S. or Canada.
Section 8033 requires DOD to submit a report to Congress on the amount of purchases from
foreign entities in FY2003. Section 8046 required that any expenditure of funds be in compliance
with the Buy American Act and authorized the Secretary of Defense to determine whether persons
convicted of intentionally affixing “Made in America” labels on products not made in America
should be debarred from DOD contracting. Section 8060 prohibited the procurement of ball and
roller bearings, unless produced by a domestic source and being of domestic origin.
In the conference report that accompanied H.R. 5010 (H.Rept. 107-732), House and Senate
conferees discussed the application of the Berry Amendment to the Multi-Year Aircraft Lease
Pilot Program, which was authorized in H.R. 3338, the FY2002 DOD Appropriations Act (P.L.
107-117). Congress later approved Section 308 of H.R. 4775, the FY2002 DOD Supplemental
Appropriations Act (P.L. 107-206) to clarify Berry Amendment restrictions on the use of foreign-
sourced specialty metals in any commercial aircraft leased under the Boeing Lease Program. The
Lease Program permitted Boeing to use foreign-sourced specialty metals, such as Russian
titanium, on military aircraft.
Critics of the Boeing Lease Program argued that the decision to use Russian titanium bypassed
the Berry Amendment, which required DOD to give preference to domestically produced,
35 10 U.S.C. §2534, Miscellaneous Limitations on the Procurement of Goods Other than United States Goods.
36 This provision was initially enacted in Section 141 of the FY1998 Defense Authorization Act (P.L. 105-85; 10
U.S.C.§ 4543 note).
37 U.S. Department of Defense. Audit on the Status of Extended Pilot Program on Sales of Manufactured Articles and
Services at Army Industrial Facilities. Office of the Inspector General, Report No. D-2003-103.PDF, June 27, 2003, 23
p.
Congressional Research Service
12
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
manufactured, or home grown products, notably food, clothing, fabrics, and specialty metals. The
language of H.Rept. 107-732 acknowledged that Congress concurred with the views of the Air
Force, and that the decision to use foreign-sourced specialty metals was based on certain unique
financial and time-sensitive requirements.38
In the 107th Congress, the proposed FY2002 National Defense Authorization Act (H.R. 2586)
contained a provision that, if enacted, would have codified the Berry Amendment, modified it to
require advance congressional notification of all waivers, and included parachutes on the list of
items covered.39 The Senate later passed an amended version that would codify certain Berry
Amendment requirements. To resolve the waiver issue, House and Senate conferees stated their
expectation that DOD would comply with waiver notification requests from the House or Senate
and ensure that no U.S. manufacturer could provide the required item in sufficient quantity or
quality before granting a future waiver to the Berry Amendment. An amended waiver requirement
became law when the Berry Amendment was codified through the passage of the FY2002
National Defense Authorization Act (P.L. 107-107).
The 106th Congress acted to tighten certain Berry Amendment provisions. The FY1998 National
Defense Authorization Act40 directed the DOD Office of the Inspector General to conduct an audit
of the FY1998 procurement of military clothing by the Army, Navy, Air Force and Marine Corps
to determine whether contracting officers complied with the Berry Amendment and the Buy
American Act. The first audit found that 59 percent of those contracts reviewed did not include
the appropriate contract language (or clause) to implement the Berry Amendment, resulting in
some 43 violations valued at $1.4 million, and concluded that many of the violations occurred
because contracting officials were not fully knowledgeable of the requirements of the Berry
Amendment. The audit findings noted that DOD procurement officials had agreed to issue policy
guidance to contracting officers, emphasizing the importance of complying with the Berry
Amendment. A second audit was later conducted. The second audit found that approximately
60% of all contract actions reviewed did not include the appropriate contract clauses to
implement the Buy American Act nor the Berry Amendment.41
38 See H.Rept. 107-732 for a discussion on the “Application of the Berry Amendment to Multi-Year Aircraft Lease
Pilot Program.” For further discussion on the Boeing tanker lease proposal, see CRS Report RL32056, The Air Force
KC-767 Tanker Lease Proposal: Key Issues For Congress, by Christopher Bolkcom, and CRS Report RL34398, Air
Force KC-X Tanker Aircraft Program: Background and Issues for Congress, by Ronald O'Rourke.
39 Section 805, H.R. 2586.
40 P.L. 105-85, enacted November 18, 1997.
41 U.S. Department of Defense. Audit of the Procurement of Military Clothing and Related Items by Military
Organizations. Office of the Inspector General. Report No. 99-023, October 29, 1998, 53 p. The House Armed Services
Committee requested that a second audit be conducted because of the number of violations identified in the DOD
Inspector General’s Report No. 99-023. As a result of the second audit, The Inspector General recommended that the
Acquisition Executives for the Army, Navy, Air Force, and the U.S. Special Operations Command establish review
procedures or additional training for solicitations and contract awards made subject to the Buy American Act and the
Berry Amendment, and that the Assistant Secretaries for Financial Management and the Comptroller of the Army and
Air Force investigate these matters for potential violations under the Antideficiency Act. For further discussion about
the second audit, see U.S. Department of Defense. Audit of the Buy American Act Issues on Procurements of Military
Clothing. Office of the Inspector General. Report No. D-2002-066PDF. March 20, 2002, 76 p.
Congressional Research Service
13
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Other Views
Some proponents of the Berry Amendment believe that the U.S. military should not be dependent
on foreign sources for critical textile products and that dependency on foreign sources for military
items could lead to problems with supply, demand, delays, and a potentially adversarial
relationship with suppliers during times of war or military mobilization. Furthermore, some
believe that the Berry Amendment should be expanded to include other important industries and
that new federal agencies like the Department of Homeland Security should be covered by the
provisions of the Berry Amendment.
However, others (i.e., some domestic and foreign companies) have criticized the Berry
Amendment, stating that it undercuts free market competition, may promote discriminatory
practices, robs businesses of incentives to modernize, causes inefficiency in some industries due
to a lack of competition, and results in higher costs to DOD, because the military services pay
more for “protected” products than the market requires. Some critics of the Berry Amendment
also argue that the U.S. will lose its technological edge in the absence of competition and alienate
foreign trading partners, thereby provoking retaliations and loss of foreign sales. They assert that
the Berry Amendment will ultimately reduce the ability of the U.S. to negotiate and persuade its
allies to sell or not sell to developing countries. They contend that the Berry Amendment
promotes U.S. trade policies that undermine the international trade agreements. Furthermore,
restrictions on food mean that in most cases it is illegal for DOD to purchase an item or food if it
is a foreign item or if it has any foreign ingredient or processing. On the other hand, critics have
also expressed concern over the increased levels of imported, ready to wear goods, and the
prevalent “sweat shop conditions” of foreign markets.
A GAO report has questioned whether the Berry Amendment is sufficient protection for the
defense industrial base and whether alternatives and solutions exist to keep critical industries
healthy and viable in times of peace and war. The report was in response to a request from the
House Armed Services Committee, directing GAO to determine whether DLA is properly
implementing applicable statutory and regulatory guidance for best value purchases and to solicit
DLA views on the domestic clothing and textile supplier base. GAO officials acknowledged that
the Berry Amendment was a positive factor in helping DOD to maintain a domestic supplier for
some of DOD’s unique military needs; however, officials pointed out that the overall domestic
clothing and textile industry was in decline due to declining employment and production levels,
as well as the implementation of various free trade agreements that may affect different levels of
the domestic supply chain. As a result, DLA has initiated a study to examine both clothing and
textile industries.42
Options for Congress
The Army’s black beret controversy, which revealed that the berets are not 100% domestic in
origin, and the resulting waiver of Berry Amendment restrictions to allow DLA to procure the
berets from foreign sources raised questions which have not been settled, as to the original
purpose, intent, and value of the Berry Amendment. Congress may choose to examine the
42 Contract Management: DLA Properly Implemented Best Value Contracting for Clothing and Textiles and Views the
Supplier Base as Uncertain. Report to the Chairman and Ranking Minority Member, Committee on Armed Services,
House of Representatives. U.S. General Accounting Office, GAO-03-440, February 2003. 18 p.
Congressional Research Service
14
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
domestic source restrictions under the Berry Amendment and other procurement provisions and to
determine whether they help or hurt the defense industrial base, including relationships with
foreign trading partners.
Option 1: Take No Action, Retain the Berry Amendment as Enacted
Congress may choose to take no action, to retain the current provisions of the Berry Amendment
as enacted in law.
Option 2: Eliminate Some Selected Restrictions
Congress might eliminate some selected restrictions, such as the restrictions on food. Eliminating
the restrictions on purchasing food items (with less than 100% domestic content) would allow
U.S. food suppliers to use more commercial business practices that are more cost effective. This
move would arguably promote more competition and interest in selling food to DOD. For
example, some in DOD believe that elimination of the food restriction would allow food suppliers
a greater and more practical latitude to use foreign ingredients and processing, in line with current
commercial practice. Many food suppliers find this restriction to be the least practical, and even
trade associations of food suppliers have stated that this restriction makes it more difficult to do
business with DOD. The Pentagon believes that the food provisions of the Buy American Act
would continue to provide U.S. food suppliers a significant advantage over foreign suppliers.
Likewise, Congress could eliminate or modify the clothing restriction, allowing DOD to find the
best item for the most competitive price.43 DOD has reportedly known for 25 years that it does
not produce a solely domestic beret.44 One alternative would be for restricted items to be
classified according to a prioritized system, with “high-tech” and “low tech” classifications,
which each could have different waiver requirements. Some military uniform components, such
as the beret, could be classified as “low-tech,” and therefore could be procured without a waiver.
This option would be opposed by groups such as the American Manufacturing Trade Action
Coalition and the National Council of Textile Organizations.
Option 3: Adopt a “Componency Standard”
Congress might revise the Berry Amendment and amend the provisions to say that manufactured
articles are considered domestic if “substantially all” of their components have been mined,
produced, or manufactured domestically. This is similar to the requirements of the Buy American
Act and could eliminate future procurement issues like those encountered in the Army black beret
procurement.
43 However, the American Manufacturing Trade Action Coalition [http://www.amtacdc.org] advocates for the
preservation of the Berry Amendment and the Buy American Act, so that the U.S. military does not become dependant
on foreign sources for critical textile products.
44 At the May 2, 2001 hearing before the House Committee on Small Business, Ms. Michele Goodman from Atlas
Headwear, Inc. (a small business supplier based in Phoenix, Arizona) testified that American companies could have
fulfilled the Army’s black beret requirement had DLA’s Defense Supply Center of Philadelphia been given enough
time to proceed properly, and had the U.S. Army been more open minded about the type of beret it wanted. Her
company attempted to bid for the beret contract, without success. See the prepared statement of Michele Goodman,
“Black Beret Procurement: Business as Usual at the Pentagon?” House Committee on Small Business, May 2, 2001.
Congressional Research Service
15
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Such a provision was proposed in the House-passed version of H.R. 1588, the FY2004 National
Defense Authorization Act. Section 829, titled “Requirement Relating to Purchases by
Department of Defense Subject to Buy American Act,” would have broadened the definition of
what makes an item “domestic” in origin. In Section 829, an item was defined as domestic and
covered under the Buy American Act if it was at least 65% domestic in origin. Adoption of this
provision would have provided DOD the authority to procure items that may be a combination of
both domestic and foreign in origin. This provision alone would represent a significant departure
from the 100% domestic requirement of the Berry Amendment, and more closely parallel the
provisions of the BAA.45 However, this provision was dropped in the final version of the bill.
Option 4: Study the Lessening or Elimination of Provisions
Congress could solicit the opinions of trade associations, labor organizations, and industry experts
on the selected use of Berry Amendment restrictions and use of the waiver requirement. Many
industry experts say that this approach is preferable to an “all or nothing” stance taken by some
interest groups.
The American Apparel and Footwear Association (AAFA) supports the preservation of the Berry
Amendment. AAFA believes that the controversy surrounding the procurement of the berets has
helped shore up support for such a change in the law. The association has suggested that Congress
might want to consider whether one particular restriction adversely impacts a U.S. company or its
workers that might have become dependent upon the provisions of the Berry Amendment for their
economic well-being.46
Option 5: Study What Percentage of Domestic Clothing, Textiles,
Food, and Specialty Metals Is Sold to the Military
Congress might determine whether these markets are wholly dependent on the military or
whether they represent a statistically significant portion of the total market. For example, during
Desert Storm the apparel and textile industry proved that its surge capacity could rapidly respond
to a major contingency and a sudden call-up for servicemen and women. The industry started
with nine manufacturers producing two million camouflage fatigues in 1988; by 1991, the
number of manufacturers increased to sixteen, producing some five million camouflage fatigues.
Congress may also want to explore the impact of Berry Amendment restrictions on U.S.
relationships with foreign trading partners.
Option 6: Appoint a “Berry Amendment Commission”
Congress might appoint a commission to study the effects of the Berry Amendment restrictions
on the U.S. industrial base, national security, and the military’s war-fighting capability. The
commission could assess the economic, social, and political impact of current restrictions and
45 The Buy American Act requires the federal government to procure items that are “substantially” composed of
domestic materials, while the Berry Amendment requires that the Department of Defense procure items that are wholly
(100%) domestic.
46 AAFA Legislative Update, March/April/May 2001.
Congressional Research Service
16
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
make recommendations to the Congress. The commission could determine whether current
coverage of the Berry Amendment is appropriate or whether it should be expanded or contracted.
Option 7: Audit and Investigate Berry Amendment Contracts
Congress could investigate all military procurement contracts for compliance with the Berry
Amendment. Noting that congressional testimony suggested that DLA had known that the
Bancroft Cap Company has used foreign suppliers for the past twenty-five years implies that
there may be other similar instances that have been overlooked or underreported. Congress could
direct the Government Accountability Office47 or the DOD Inspector General to conduct an audit
of a representative sample of contracts awarded for each restricted item under the Berry
Amendment, including whether end products incorporated materials from foreign sources.
47 Effective July 7, 2004, the General Accounting Office’s legal name is the Government Accountability Office.
Congressional Research Service
17
The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources
Author Contact Information
Valerie Bailey Grasso
Specialist in Defense Acquisition
vgrasso@crs.loc.gov, 7-7617
Congressional Research Service
18