Inspector General Robert P. Storch announced today that the Department of Defense Office of Inspector General (DoD OIG) released the “Audit of DoD Compliance with the Buy American Act for Light Emitting Diode Lighting Improvement Projects.”
The report identifies deficiencies in how contracting officials documented contractor‑installed light-emitting diode (LED) products that were not compliant with the Buy American Act (BAA). The DoD OIG conducted this audit in response to a congressional request following a complaint to the DoD Hotline and Congress that contractors were installing foreign-made LED lighting products that were not compliant with the BAA.
“Reducing dependency on foreign suppliers for critical goods enhances national security,” said IG Storch. DoD personnel must ensure that materials and products acquired for public use be manufactured in the United States.”
The audit examined four contracts for energy savings projects including $34.9 million for LED lighting improvements. The DoD OIG determined that contracting officials did not document that contractors installed LED products manufactured in the United States or that the cost of the parts manufactured in the United States exceeded the required percentage of all parts.
DoD contracting officials relied on prime contractor assurances that subcontractors installed BAA compliant items; viewed the contracts for energy savings projects as contracts for services rather than procurement of LED products; and viewed the LED products installed by the contractors as commercial-off-the-shelf items, for which the acquisition regulations waive the domestic content requirement. As a result, DoD contracting personnel had limited assurance that contractors installed BAA-compliant LED products. The audit also identified products with markings that could indicate noncompliance with the BAA.
The DoD OIG made 11 recommendations, including that Army, Air Force, and Defense Logistics Agency contracting officials document contractors’ BAA compliance reviews. The DoD OIG also recommended that the Principal Director, Defense Pricing and Contracting, issue guidance specifying that procuring activities issuing energy savings service contracts ensure Federal Acquisition Regulation construction materials clauses implementing BAA requirements are included and enforced.
The DoD OIG will continue to monitor the DoD’s progress toward fully implementing all recommendations.