Restrictions on Specialty Metals (10 U.S.C. 2533b)
Instructions on Reporting of Commercial Off-the-Shelf (COTS) Items Containing Specialty Metals Delivered in Covered Non-Commercial Items
Restrictions on Specialty Metals (10 U.S.C. 2533b)
The law and regulations relating to the specialty metals restriction has undergone many changes over the past few years. This web site provides the historical record to help you understand which policy applies to what contracts, and provides links to each change in policy.
Historical Policy from January 29, 2008 to Present:
The Director, Defense Procurement (DPAP) issued Class Deviation 2008-O0002, Implementation of New Specialty Metals Restriction on January 29, 2008. Class Deviation 2008-O0002 superseded Class Deviations 2006-O0004 and 2007-O0011 and implemented sections 804 and 884 of the FY 2008 National Defense Authorization Act (NDAA), (as well as section 842 of the FY 2007 NDAA not superseded by sections 804 and 884). This Class Deviation 2008-O0002 was effective as of January 29, 2008.
The broad Class Domestic Nonavailability Determinations (DNAD) for circuit card assemblies, fasteners, needle roller bearings, and Caterpillar diesel engine components, in effect on January 29, 2008, will expire on July 26, 2008. New procurement actions awarded on or after July 26, 2008, will not be able to rely on these broad DNADs. However, for contracts awarded prior to July 26, 2008, and where the award relied upon any of these Class DNADs, items can continue to be accepted after July 26, 2008.
Class Deviation 2008 further provides that, in line with the authority under FAR 1.108(d)(3), contracting officers may, at their discretion, modify a contract awarded prior to January 29, 2008 to include Class Deviation 2008-O0002 with appropriate consideration.
Section 804 also removed the prior implication that accepting noncompliant materials may create an Anti-deficiency Act violation.
Historical Policy from October 26, 2007 through January 28, 2008:
Contracts issued during this period fall under Class Deviation 2007-O0011, Waiver of Specialty Metals Restriction for Acquisition of COTS Items.
The Director, DPAP, provided Class Deviation 2007-O0011 on October 26, 2007. This Class Deviation made minor changes to the memo of Class Deviation 2007-O0004, by clarifying the correct date for the One-Time Waiver as October 17, 2006. The attachment to Class Deviation 2007-O0011 superseded the attachment to Class Deviation 2006-O0004 and listed 10 U.S.C. 2533b(a)(1) as a statute that is inapplicable to the acquisition of commercially available off-the-shelf (COTS) items, in accordance with 41 U.S.C. 431. It also revised Alternate I of the contract clause by adding a definition of "commercially available off-the-shelf item," and made Alternate I inapplicable to specialty metals contained in COTS items. This Class Deviation was followed by publication of a Federal Register notice on November 8, 2007 of DFARS Case 2007-D013, Waiver of Specialty Metals Restriction for Acquisition of Commercially Available Off-the-Shelf Items.
Contracts awarded between October 26, 2007, and January 28, 2008, can continue to rely on Class Deviation 2007-O0011, however, new procurement actions must follow the policy on specialty metals in place at the time of award. The question of whether a contract is "new" or "old" should be determined based on the definition of "contract" in the FAR (see FAR 2.101 and FAR 43.103). Thus, bilateral modifications of contracts would generally be considered "new" contracts. Exercise of priced options, in-scope change orders, and funding of later program years of multi-year contracts would generally not be considered "new" contracts.
Historical Policy from December 6, 2006, through October 25, 2007:
On December 6, 2006 Director, Director, DPAP provided Class Deviation 2006-O0004, Restriction on Procurement of Specialty metals. This Class Deviation addressed changes made to the domestic specialty metals restriction in Section 842 of the FY 2007 John Warner NDAA (Public Law 109-364), entitled "Protection of Strategic Materials Critical to National Security". The new law was effective on November 16, 2006. Subsequently, on January 17, 2007, the Director, DPAP issued a memorandum which provided factors to be considered when making domestic non-availability determinations under 10 U.S.C. 2533b (Specialty Metals Restriction). Contracts awarded between January 17, 2007, and January 28, 2008, can continue to rely on the policy in place during this period, however, new procurement actions must follow the policy on specialty metals in place at the time of award.
For any contract awarded after November 16, 2006, the Department can no longer continue the practice of withholding payment while conditionally accepting noncompliant end items or components of covered items.
Historical Policy effective prior to December 6, 2006:
Contracts awarded prior to December 6, 2006, fall under the specialty metal restrictions that existed in 10 U.S.C. 2533a (the "Berry Amendment").
On February 17, 2006, the Defense Contract Management Agency (DCMA) issued an interim instruction addressing the process for conditional acceptance of items containing noncompliant parts. A revision was issued on March 10, 2006.
In a memorandum dated June 1, 2006, the Director, DPAP, issued general guidance regarding compliance with the specialty metals restriction and aligned with DCMA's instruction. Conditional acceptance and withholding of payment for noncompliant parts is a method that can be used to accept needed equipment under these contracts. Compliance plans are required in such circumstances. However, new contracts or procurements added to contracts after December 6, 2006, would fall under one of the other historical policies above.
On August 18, 2006, the Director, DPAP issued a memorandum which stressed the importance of addressing contractor compliance with the specialty metals restriction of the Berry Amendment (10 U.S.C. 2533a) prior to award of contracts in order to ensure compliance with the Berry Amendment. Additionally, it states the contracting officer should inquire and verify that the contractor will deliver compliant items.
By memorandum dated September 21, 2006, Director, DPAP, provided additional pre-award guidance.
Domestic Non-Availability Determinations (DNADs)
In accordance with DFARS 225.7002-2(b), the secretaries of the military departments, without power of redelegation have authority to approve DNAD Determination and Findings for specialty metals applicable to one contract for their respective requirements. Read more.