May 24, 2019
Defense Primer: Acquiring Specialty Metals, Rare Earth
Magnets, and Tungsten
Some metals (such as titanium and tungsten) and metal
were included in annual DOD appropriations legislation
alloys, as well as strong permanent magnets known as rare
from 1941 until 2002, when they were permanently
earth magnets, are critical to U.S. Department of Defense
codified as 10 U.S.C. §2533a by the FY2002 National
(DOD) operations. These materials are frequently
Defense Authorization Act (NDAA, P.L. 107-107). In
integrated into components (such as integrated circuits,
2006, the FY2007 NDAA (P.L. 109-364) moved the
electrical wiring, or optoelectronic devices) or structures
specialty metal-related provisions from 10 U.S.C. §2533a to
(such as aircraft fuselages or ship hulls) of the military
10 U.S.C. §2533b.
platforms and weapon systems that enable warfighting
The domestic sourcing mandate for specialty metals applies
capabilities.
specifically to the Department of Defense.
A rare earth element is one of 17 chemical elements, including
Applicability of Restrictions
the 15 metallic chemical elements with atomic numbers 57
The specialty metals domestic sourcing restrictions apply to
through 71, as well as the chemically similar elements
all DOD prime contracts and subcontracts. For the purposes
scandium and yttrium. These materials are considered rare in
of the restriction, 10 U.S.C. §2533b defines a specialty
spite of their relative abundance throughout the Earth’s crust,
metal as any of the following metals or metal alloys:
as the extraction and production of such materials can be
Steel with a maximum alloy content exceeding one or
difficult and costly. Rare earth magnets produced using rare
more of the following limits: manganese, 1.65%;
earth elements are the strongest known permanent magnets.
silicon, 0.60%; copper, 0.60%; or containing more than
0.25% of any of the following elements: aluminum,
There are few, and in some cases, no known alternatives for
chromium, cobalt, niobium (columbium), molybdenum,
many of these materials, which often have unique physical
nickel, titanium, tungsten, or vanadium.
properties, such as high material strength coupled with low
Metal alloys consisting of nickel, iron-nickel, and cobalt
density, or resistance to various forms of corrosion. Many
base alloys containing a total of other alloying metals
of these materials are subject to sourcing restrictions or
(except iron) in excess of 10%.
prohibitions established by Congress, in part to protect the
Titanium and titanium alloys.
U.S. domestic materials industry and ensure the United
Zirconium and zirconium base alloys.
States maintains critical production capabilities and
capacity associated with the U.S. defense industrial base.
DOD uses the foundry location where the final melting or
similar production of a specialty metal takes place to
Certain sourcing restrictions establish that some items—or
determine its origin. For example, titanium sponge—
components of such items—incorporating certain metals
unwrought titanium that has not been melted—that has been
and metal alloys known as specialty metals generally must
manufactured in Kazakhstan, shipped to the United States,
be produced or manufactured in the United States. Other
and melted into ingots at a foundry in Ohio would be
sourcing prohibitions establish that some items—or
considered compliant with the specialty metals domestic
components of such items—incorporating certain types of
sourcing mandate. Under the specialty metals restrictions,
rare earth magnets and tungsten may not be acquired from
DOD generally may not acquire certain military platforms
specified foreign sources.
or weapon systems—or components of these platforms and
systems—that contain any amount of a specialty metal that
Sourcing Restrictions in Acquisitions
was not melted or produced in the United States.
For more information, see CRS Report R43354, Domestic
The restriction applies to aircraft; missile and space
Content Restrictions: The Buy American Act and Complementary
systems; ships; tank and automotive items; weapon
Provisions of Federal Law, by David H. Carpenter and Erika K.
systems; and ammunition. DOD and its prime contractors
Lunder.
are also prohibited from directly acquiring any specialty
metal (e.g., metal sheets, rods, plates) if it was not melted or
Acquiring Specialty Metals
produced in the United States.
Domestic sourcing restrictions for DOD acquisition of
Exceptions
specialty metals first appeared in the FY1973 DOD
Law and policy provide a number of exceptions to the
appropriations bill (P.L. 92-570) as an expansion of
specialty metals sourcing mandate, including the following
domestic content restrictions on DOD purchases of food,
selected examples:
clothing, and other goods, commonly known as the Berry
Amendment. The Berry Amendment sourcing restrictions
https://crsreports.congress.gov
Defense Primer: Acquiring Specialty Metals, Rare Earth Magnets, and Tungsten
circumstances where the Secretary of Defense or a
Under these sourcing prohibitions, DOD generally may not
secretary of a military department determines that
directly acquire rare earth magnets or tungsten that was
compliant specialty metal of satisfactory quality and
melted or produced in the four specified countries, or
sufficient quantity, and in the required form, cannot be
military platforms or weapon systems containing rare earth
procured as and when needed;
magnets or tungsten that was melted or produced in the four
acquisitions outside the United States in support of
specified countries. The prohibitions apply to aircraft;
combat operations or contingency operations;
missile and space systems; ships; tank and automotive
acquisitions for which the use of other-than-competitive
items; weapon systems; and ammunition.
procedures has been approved when the need for
DOD is also generally prohibited from selling covered
materials or end items is of an unusual and compelling
materials from the National Defense Stockpile to the
urgency;
specified nations, or to any third party reasonably believed
acquisitions where the prime contract is at or below the
to be acting as a broker or agent for a covered nation or an
simplified acquisition threshold (generally $250,000);
entity in a covered nation. The National Defense Stockpile
situations where an acquisition furthers an international
was established by Congress in 1939 (50 U.S.C. §98 et
agreement (e.g., trade or offset agreements) with a
seq.) to acquire and retain strategic and critical materials to
qualifying country;
decrease or prevent the potential dependence of the United
purchases of electronic components, such as diodes or
States on foreign sources for supplies of these materials in
integrated circuits, unless the Secretary of Defense,
times of national emergency.
pursuant to a recommendation of the Strategic Materials
Protection Board, determines that the domestic
Exceptions
availability of a particular electronic component is
Law and policy provide limited exceptions to these
critical to national security;
prohibitions, applicable to
covered items incorporating specialty metals that were
not melted in the United States if the total amount of
circumstances where the Secretary of Defense
noncompliant specialty metals in such an item does not
determines that compliant materials of satisfactory
exceed 2% of the total weight of specialty metals in the
quality and quantity, in the required form, cannot be
item;
procured as and when needed at a reasonable price;
commercially available off-the-shelf (COTS) items
procurement or sale of covered materials, or end items
containing specialty metals, except in certain
containing such materials, outside of the United States
circumstances;
for use outside of the United States;
acquisitions of some commercially available items (e.g.,
acquisitions at or below the simplified acquisition
fasteners, high-performance magnets);
threshold;
acquisition of commercial derivative military articles in
purchase of a COTS end item containing covered
certain circumstances; and
materials, barring COTS end items that are 50% or more
items containing noncompliant materials if the
tungsten by weight, or mill products (e.g., metal sheets,
acceptance of such items is necessary to the national
rods, plates) that have not been incorporated into an end
security interests of the United States.
item or component;
purchase of electronic devices containing covered
Acquiring Rare Earth Magnets
materials, unless the Secretary of Defense, pursuant to a
and Tungsten
recommendation of the Strategic Materials Protection
DOD sourcing restrictions for the acquisition of rare earth
Board, determines that the domestic availability of a
magnets and tungsten first appeared in the FY2019 NDAA
particular electronic device is critical to national
(P.L. 115-232). These restrictions were permanently
security; or
codified as 10 U.S.C. §2533c. In contrast to the specialty
purchase of an end item containing a neodymium-iron-
metals restrictions, 10 U.S.C §2533c establishes that these
boron magnet manufactured from recycled material if
materials, or finished products containing these materials,
the milling of the recycled material and sintering of the
may not generally be sourced from four specific countries:
final magnet takes place in the United States.
the Democratic People’s Republic of Korea, the People’s
Republic of China, the Russian Federation, or the Islamic
Relevant Statutes and Regulations
Republic of Iran.
Title 10, U.S. Code, §2533b and §2533c
These sourcing prohibitions apply specifically to the
Defense Federal Acquisition Regulation Supplement (DFARS)
Department of Defense.
Subparts 225.7003 and 225.7018
Applicability of Prohibitions
The sourcing prohibitions for rare earth magnets and
tungsten apply to all DOD prime contracts and subcontracts
at any tier. Covered materials include
samarium-cobalt magnets;
neodymium-iron-boron magnets;
tungsten metal powder; and
tungsten heavy alloy or any finished or semi-finished
component containing tungsten heavy alloy.
https://crsreports.congress.gov
Defense Primer: Acquiring Specialty Metals, Rare Earth Magnets, and Tungsten
CRS Products
CRS In Focus IF10548, Defense Primer: U.S. Defense Industrial
Heidi M. Peters, Analyst in U.S. Defense Acquisition
Base, by Moshe Schwartz and Heidi M. Peters
Policy
CRS In Focus IF10609, Defense Primer: The Berry and Kissell
IF11226
Amendments, by Michaela D. Platzer
CRS Report R43864, China’s Mineral Industry and U.S. Access to
Strategic and Critical Minerals: Issues for Congress, by Marc
Humphries
Disclaimer
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Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
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https://crsreports.congress.gov | IF11226 · VERSION 1 · NEW