Report | Aug. 12, 2015

Naval Personnel Can Improve Compliance With the Berry Amendment and the Buy American Act

DODIG-2015-161

Objective

Our audit objective was to determine whether Naval personnel complied with the Berry Amendment and the Buy American Act when they purchased covered items such as food, clothing, tents, textiles, and hand or measuring tools. We performed this audit in response to Section 1601 of the National Defense Authorization Act for FY 2014. We reviewed a nonstatistical sample of 55 contracts valued at about $74 million that were awarded during FY 2013 and FY 2014.

Findings

Naval contracting personnel did not consistently comply with the Berry Amendment for 11 of the 23 contracts reviewed. Contracting personnel did not assess whether suppliers could provide U.S.-produced items and omitted the Berry Amendment contract clause because they were not familiar with the Berry Amendment. Navy personnel allowed a contractor operating a logistics support program to sell non-U.S. made items because the contracting officer did not ensure the contractor was stocking items compliant with the Berry Amendment. Naval Sea Systems Command and Marine Corps Systems Command personnel complied with the Berry Amendment. As a result, Naval contracting personnel committed four potential Antideficiency Act violations.

Navy and Marine Corps contracting personnel did not ensure compliance with the Buy American Act for 12 of 32 contracts reviewed. Contracting personnel omitted required contract clauses or did not ensure items met domestic-content requirements, or both, because personnel were unfamiliar with the Buy American Act, relied on an inaccurate electronic clause matrix tool, made an administrative error, or treated a noncommercial item as a commercial-off-the-shelf item. As a result, suppliers may have provided non-U.S. made items. Naval Sea Systems Command–Headquarters, Naval Supply Systems Command Fleet Logistics Center–Norfolk and Marine Corps Systems Command contracting personnel generally complied with the Buy American Act.

Naval personnel corrected some of the deficiencies identified during the audit. Specifically, Naval personnel amended 7 contracts, removed any items that were not produced in the U.S, for those 7 contracts, required Berry Amendment and Buy American training, and updated standard operating procedures.

Recommendations

We recommend that Navy and Marine Corps officials modify noncompliant contracts to include the appropriate clauses and review potential Antideficiency violations.

Management Comments and Our Response

Naval Air Systems Command and Naval Supply Systems Command addressed all specifics of the recommendations. Comments from the Assistant Secretary of the Navy (Financial Management and Comptroller) partially addressed the specifics of the recommendation.