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Specialty Metals

ACON 083

DAU GLOSSARY DEFINITION

Alternate Definition

Specialty metals are defined for Department of Defense (DoD) acquisitions in DFARS clauses 252.225-7008 and 252.225-7009. These clauses further define steel, alloys and various other terms applicable to specialty metals restrictions.

"Specialty metal" means -

  • Steel -
    • With a maximum alloy content exceeding one or more of the following limits:
      • 1.65% manganese
      • .60% silicon
      • .60% copper; or
    • Containing more than 0.25% of any of the following elements:
      • aluminum
      • chromium
      • cobalt
      • molybdenum
      • nickel
      • niobium (columbium)
      • titanium
      • tungsten
      • vanadium
  • Metal alloys consisting of -
      • Nickel or iron-nickel alloys that contain a total of alloying metals other than nickel and iron in excess of 10%
      • Cobalt alloys that contain a total of alloying metals other than cobalt and iron in excess of 10%
  • Titanium and titanium alloys
  • Zirconium and zirconium alloys

"Steel" means an iron alloy that includes between .02-2% carbon and may include other elements.

"Alloy" means a metal consisting of a mixture of a basic metallic element and one or more metallic, or non-metallic, alloying elements.

  • For alloys named by a single metallic element (e.g., titanium alloy), it means that the alloy contains 50% or more of the named metal (by mass)
  • If two metals are specified in the name (e.g., nickel-iron alloy), those metals are the two predominant elements in the alloy, and together they constitute 50% or more of the alloy (by mass)
General Information

Beginning with the 1973 Defense Appropriation Act, specialty metals were added to the list of items covered under the Berry Amendment. The original objective of Congress was to protect the special metal industry, while providing sufficient administrative flexibility for DoD. The very nature of the specialty metal provision itself created unanticipated consequences for DoD and the defense industry; including impact on competition, the administrative burden, costs to adhere strictly to the provisions, etc.

 

Section 842 of the John Warner National Defense Authorization Act (NDAA) for FY 2007 (Pub. Law 109-364), entitled “Protection of Strategic Materials Critical to National Security” established a separate stipulation to the Berry Amendment for provisions specific to specialty metals, codified as 10 U.S.C. § 2533b.

 

Unless an exception applies, the following restriction implements 10 U.S.C. § 2533b:

 

  1. Do not acquire the following items, or any components of the following items, unless any specialty metals contained in the items or components are melted or produced in the United States:
    1. Aircraft.
    2. Missile or space systems.
    3. Ships.
    4. Tank or automotive items.
    5. Weapon systems.
    6. Ammunition.
  2. Do not acquire a specialty metal (e.g., raw stock, including bar, billet, slab, wire, plate, and sheet; castings; and forgings) as an end item, unless the specialty metal is melted or produced in the United States. This restriction applies to specialty metal acquired by a contractor for delivery to DoD as an end item, in addition to specialty metal acquired by DoD directly from the entity that melted or produced the specialty metal.

 

Specialty Metals restrictions apply to funds appropriated or otherwise made available to DoD. Therefore, buying activities spending funds on behalf of Foreign Military Sales (FMS) counties or other Federal agencies must apply the restrictions. In addition Specialty Metals restrictions apply when DoD provides funding to another agency to buy items, (i.e. the other Federal agency must comply with the law).

 

Exceptions: There are a number of exceptions provided by the law. When using any of the exceptions, the contracting officer must ensure that the appropriate determination or documentation is in the contract file and the normally required DFARS clauses are omitted from the solicitation and contract. The exceptions to the specialty metals restrictions are similar but not identical to the exceptions to the Berry Amendment related to textiles, food, fabrics and hand or measuring tools (10 U.S.C. § 2533a). The exceptions to specialty metal restrictions are established in DFARS 225.7003-2, are summarized below. The exceptions to the specialty metals restrictions are similar but not identical to the exceptions to the Berry Amendment related to textiles, food, fabrics and hand or measuring tools (10 U.S.C. § 2533a).

 

  1. Simplified acquisition threshold (SAT). Specialty Metals restrictions do not apply if the Government prime contract is below the SAT.
  2. Combat operations. Specialty metal restrictions do not apply to acquisitions outside the U.S. in support of combat operations.
  3. Contingency operations. Specialty metal restrictions do not apply to acquisitions in support of contingency operations.
  4. Unusual and compelling. Specialty metal restrictions do not apply to acquisitions using other than competitive procedures approved on the basis of unusual and compelling urgency in accordance with FAR 6.302-2.
  5. Commissary Resale. Specialty metal restrictions do not apply to acquisitions of items specifically for commissary resale.
  6. Foreign Comparative Testing Program. Specialty metal restrictions do not apply to acquisitions of items for test and evaluation under the foreign comparative testing program (10 U.S.C. 2350a(g)). However, this exception does not apply to any acquisitions under follow-on production contracts.
  7. Electronic components. Specialty metal restrictions do not apply to acquisition of electronic components as end items or components, unless the Secretary of Defense, upon the recommendation of the Strategic Materials Protection Board pursuant to 10 U.S.C. 187, determines that the domestic availability of a particular electronic component is critical to national security.
  8. Commercially available off-the-shelf (COTS).1 Specialty metals restrictions do not apply to acquisitions of COTS items containing specialty metals, except the restrictions do apply to contracts or subcontracts for the acquisition of—
    1. Specialty metal mill products, such as bar, billet, slab, wire, plate, and sheet, which have not been incorporated into end items, subsystems, assemblies, or components. Specialty metal supply contracts issued by COTS producers are not subcontracts for the purposes of this exception;
    2. Forgings or castings of specialty metals, unless the forgings or castings are incorporated into COTS end items, subsystems, or assemblies;
    3. Commercially available high performance magnets that contain specialty metal, unless such high performance magnets (HPM) are incorporated into COTS end items or subsystems. (Not all HPMs are specialty metal HPMs. This usually applies to samarium-cobalt HPMs, but not to neodymium HPMs.)
    4. COTS fasteners, unless—
      1. The fasteners are incorporated into COTS end items, subsystems, or assemblies; or
      2. The fasteners qualify for the commercial item exception in paragraph (9) below.
  9. Fasteners. Specialty metal restrictions do not apply to fasteners that are commercial items and are acquired under a contract or subcontract with a manufacturer of such fasteners, if the manufacturer has certified that it will purchase, during the relevant calendar year, an amount of domestically melted or produced specialty metal, in the required form, for use in the production of fasteners for sale to DoD and other customers, that is not less than 50% of the total amount of the specialty metal that the manufacturer will purchase to carry out the production of such fasteners for all customers.
  10. Qualifying country . 2 Specialty metal restrictions do not apply to items listed in DFARS 225.7003-2(a), which are manufactured in a qualifying country or containing specialty metals melted or produced in a qualifying country. This exception does not apply to a specialty metal (e.g., raw stock, including bar, billet, slab, wire, plate, and sheet; castings; and forgings) as an end item.
  11. Domestic Non-Availability Determination (DNAD). A waive may be approved if the Secretary of the military department determines that specialty metal melted or produced in the United States cannot be acquired as and when needed at a fair and reasonable price in a satisfactory quality, a sufficient quantity, and the required form (i.e., a domestic nonavailability determination). DFARS 225.7003-3(b)(5) and PGI 225.7003-3(b)(5) includes information for processing a DNAD.
  12. 2% Weight exception. Specialty metal restrictions do not apply to end items containing a minimal amount of noncompliant specialty metals, if the total weight of all noncompliant specialty metal (that is not otherwise exempt) does not exceed 2% of the total weight of all specialty metals in the end item. This exception does not apply to high performance magnets containing specialty metals.
  13. Commercial derivative military articles (CDMA). Specialty metal restrictions at DFARS 225.7003-2(a) do not apply to items acquired under a prime contract if—
    1. The USD(AT&L), or the Secretary of the military department concerned, determines that the item is a commercial derivative military article; and
    2. The offeror has certified, and subsequently demonstrates, that the offeror and its subcontractor(s) will individually or collectively enter into a contractual agreement or agreements to purchase sufficient quantity of domestically melted or produced specialty metal that is not less than the Contractor’s good faith estimate of the greater of -
      1. An amount equivalent to 120% of specialty metal required to produce the CDMA; or
      2. An amount equivalent to 50% of the specialty metal required to produce both the CDMA and the related commercial article, during the period of contract performance at all contract and subcontract levels.
  14. National Security waiver. The Secretary of Defense may waive the specialty metal restrictions if the USD(AT&L) determines in writing that acceptance of the item is necessary to the national security interests of the U.S. and notifies the Congressional Defense committees of the contemplated waiver. This authority may not be delegated below USD(AT&L).

 

1Note: If this exception is used for an acquisition of COTS end items valued at $5 million or more per item, the acquiring department or agency shall submit an annual report to the Director, Defense Procurement and Acquisition Policy, in accordance with the procedures at PGI 225.7003-3(b)(2).
2Qualifying countries are defined in DFARS 225.003