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Summary

Congress took action in the FY2007 National Defense Authorization Act (P.L. 109-364) to move the specialty metal provision from the Berry Amendment (Title 10, United States Code [U.S.C.] 2533a) into a separate section of Title 10 (10 U.S.C. 2533b). Section 843 of P.L. 109-364 directed the Secretary of Defense to establish a Strategic Materials Protection Board to determine, analyze, and recommend strategies to ensure the domestic availability of materials designated as critical to national security. The Board met in July 2007 and issued a report in September 2007. In July 2008, the Department of Defense (DOD) proposed to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 842 of the FY2007 National Defense Authorization Act and Sections 804 and 884 of the FY2008 National Defense Authorization Act, P.L. 110-181. The FY2008 National Defense Authorization Act (P.L. 110-181) contains several provisions which may impact the procurement of specialty metal. Section 803 requires the Strategic Materials Protection Board to perform an assessment of the viability of domestic producers of strategic materials; Section 804 changes the requirement that DOD procure all specialty metal from domestic sources. This provision does not apply to contracts or subcontracts for the acquisition of commercially available "off-the-shelf" items (with certain exceptions), as defined in the Office of Federal Procurement Policy Act, Section 35(c); and Section 884 requires DOD to publish a notice on the Federal Business Opportunities website before making any "nonavailability" determinations that would apply to multiple contracts. The specialty metal provision raises several questions, among them: (1) to what extent do United States (U.S.) national security interests and industrial base concerns justify waiver of the specialty metal provision; and (2) if the United States does not produce a 100% domestic specialty metal, should DOD restrict procurement from foreign sources? Debate over the specialty metal provision invites renewed debate over the efficacy of domestic source restrictions and whether the rationale for every restriction represents a balanced and reasonable approach. Some policymakers believe that the specialty metal provision conflicts with 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 domestic specialty metal suppliers need the protections afforded by domestic source provisions, and that keeping a robust, domestic specialty metal industry is a hedge against any future enemy threat. This report examines the specialty metal provision, potential oversight issues for Congress, and options that Congress may choose to consider. This report will be updated as events warrant.

Related Legislation:
• S.804

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