• Nothing is Certain but Death, Taxes and Congressional Attempts to Amend the Berry Amendment
  • July 19, 2006 | Authors: Michael A. Hordell; Sean P. Bamford
  • Law Firm: Pepper Hamilton LLP - Washington Office
  • Once again, changes to 10 U.S.C. § 2533a – the Berry Amendment – have been included in the 2007 Defense Authorization Act by the Senate and the House of Representatives. The House, through H.R. 5122, seeks to expand the coverage of the Berry Amendment; and the Senate, with S. 2766, wants to reign in the amendment’s application in the area of specialty metals.

    In the House version, a new section of the U.S. Code – 10 U.S.C. § 2533b – would limit Department of Defense (DOD) purchases of “strategic materials critical to national security” to U.S. sources unless certain exceptions are met. The new section would cover specialty metals and “item[s] critical to national security, as determined by the Strategic Materials Protection Board.” Section 2533b would create a Strategic Materials Protection Board, which would consist of the Secretary of Defense; the Under Secretary of Defense for Acquisition, Technology and Logistics; the Under Secretary of Defense for Intelligence; the Secretary of the Army; the Secretary of the Navy and the Secretary of the Air Force. House changes also would move specialty metals from coverage by the Berry Amendment to Section 2533b.

    Sen. John Warner’s amendment to the Senate changes would provide a dual use items exception and a de minimis exception. The amendment also creates exceptions for procurements of commercial items containing specialty metals and specialty metals that are incorporated into electronic equipment. Commercial items under the Warner amendment would not include commercial items where noncommercial modifications exceeded five percent of its cost, other than commercial off-the-shelf fasteners, and forgings and castings for military unique-end items.

    Whether the Warner amendment is a reaction to perceived “tightening” of the Berry Amendment’s specialty metal restrictions by DOD agencies is not known at this time. Also, it possible – like most proposed changes to the Berry Amendment – that neither the Senate nor the House changes will make it into the final version of the 2007 Defense Authorization Act. We will keep you posted on any future developments.