The Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources

Publication Date: August 2008

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Military and defense

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Abstract:

The Berry Amendment requires the Department of Defense (DOD) to give preference in procurement to domestically produced, manufactured, or home grown products, notably food, clothing, fabrics, and specialty metals. 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 DOD Appropriations Act; these provisions later became the Berry Amendment. Since then numerous other items have been proposed and/or added.

In the spring of 2001, Congress revisited the Berry Amendment largely in response to a controversy involving the Army's procurement of black berets. DOD had granted the Defense Logistics Agency authority to waive the Berry Amendment in order to purchase berets from foreign sources. However, it was reported that DOD had known for 25 years that no U.S. firm produced a solely domestic beret; this suggested that other violations of the Berry Amendment may have been overlooked or underreported. Largely as a result of the controversy over the black berets, the Berry Amendment was enacted into law in the FY2002 DOD Authorization Act (P.L. 107107) and is now codified at Title 10, United States Code (U.S.C.) § 2533a.

The 109th Congress enacted new legislative initiatives affecting the Berry Amendment. Section 842 of the FY2007 Defense Authorization Act (P.L. 109-364) has moved the specialty metal clause out of the Berry Amendment and into a new statutory provision, Title 10, U.S.C., Section 2533b; created a new exception for certain commercially available electronic component; granted DOD authority to waive specialty metal requirements for products manufactured before the date the new statute was enacted, and established a Strategic Materials Board to recommend items critical for national security. It remains to be seen what the impact of the new changes will be. Much of it is subject to DOD's interpretation.

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 specialty metal clause raises several questions regarding the viability of the Berry Amendment, among them: (1) If the U.S. does not produce a solely domestic item, or if the U.S. manufacturers of specialty metals 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 specialty metal restriction?

This report examines the original intent and purpose of the Berry Amendment, legislative proposals to amend the application of domestic source restrictions, as well as options for Congress. The report will be updated as events warrant.