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Defense Procurement: Air Force Did Not Fully Evaluate Options in Waiving Berry Amendment for Selected Aircraft

GAO-05-957 Published: Sep 23, 2005. Publicly Released: Sep 23, 2005.
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Highlights

In April 2004, the Secretary of the Air Force approved a permanent waiver of the requirements of the Berry Amendment for 23 commercial derivative aircraft systems, representing more than 1,200 aircraft in the Air Force's inventory. The Berry Amendment generally requires the Department of Defense (DOD) to purchase certain domestically grown or produced items, including specialty metals used in defense systems such as aircraft. Waivers to the Berry Amendment can be granted under certain circumstances. GAO was asked to evaluate the supporting evidence and analysis that the Air Force relied on to waive the Berry Amendment. GAO did not conduct a legal analysis of the waiver.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense Because the Air Force did not thoroughly analyze each system on the waiver or fully document its position on the lack of alternatives, the Secretary of Defense should direct the Secretary of the Air Force to conduct an analysis of each commercial derivative aircraft system included in the waiver to consider opportunities to achieve compliance with the Berry Amendment requirements or to document why such compliance is not possible. This should include conducting market research, including consultation with the Department of Commerce, and assessing alternatives such as obtaining technical data rights to manufacture compliant parts, identifying compliant suppliers for military unique parts, determining the cost or effort for bringing contractors into compliance, and considering if systems are already exempted under other regulatory exceptions.
Closed – Implemented
The Department of Defense (DOD) and the Air Force concurred with GAO's recommendation. In response to this recommendation, the Air Force Materiel Command directed the Air Force Research Laboratory (AFRL) to undertake an analysis of each commercial derivative aircraft system included in the waiver to consider opportunities to achieve compliance with the Berry Amendment requirements or to document why such compliance was not possible. This analysis would provide support for retaining the current waiver or rescinding or modifying it as appropriate. The Air Force provided GAO the results of its analysis, which documented the Air Force's position that the waiver was necessary. The Air Force will continue to utilize the waiver for sustainment contracts awarded prior to November 16, 2006 (the effective date of 10 U.S.C. 2533b which amended the Berry amendment specialty metals requirement), but will not use it for contracts awarded after that date.
Department of Defense Because the Air Force did not thoroughly analyze each system on the waiver or fully document its position on the lack of alternatives, the Secretary of Defense should direct the Secretary of the Air Force to assess, on a periodic basis, whether changes have occurred in the supplier base for each aircraft system included in the waiver that would provide opportunities to procure domestically produced items as required by the Berry Amendment.
Closed – Not Implemented
The Department of Defense (DOD) concurred with GAO's recommendation in providing comments on this report. Furthermore, the Air Force indicated it would set up a periodic review process for those contracts covered by the waiver to identify opportunities to minimize or eliminate the use of the waiver. To date, however, the Air Force has been unable to provide documentation that these periodic reviews have taken place.

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Topics

Air Force procurementBuy national policyMilitary aircraftPolicy evaluationProcurement policyWaiversU.S. Air ForceAircraft acquisition programMilitary forcesAircraft acquisition programs