Report | Dec. 14, 2020

Audit of the Department of Defense’s Compliance With the Berry Amendment (DODIG-2021-033)

Audit

Publicly Released: December 16, 2020
 

Objective

The objective of this audit was to determine whether the Military Services and the Defense Logistics Agency (DLA) complied with the Berry Amendment for DoD procurements and acquisitions when purchasing materials and supplies.

 

Background

The Berry Amendment applies to purchases over the simplified acquisition threshold using funds appropriated or otherwise made available to the DoD. Unless an exception under the Berry Amendment applies, it requires all covered items to be grown, reprocessed, reused, or produced in the United States, regardless of whether they are purchased as end items, components, or materials.

 

Finding

The Military Services and the DLA generally complied with the Berry Amendment requirements for DoD procurements and acquisitions. Specifically, the Military Services and DLA contracting officials:

• included the required Berry Amendment Defense Federal Acquisition Regulation Supplement
   (DFARS) clauses in solicitations, for 65 of 74 contracts reviewed, valued at $4.4 billion; and

• complied with Berry Amendment requirements for the award of 118 of 135 contracts
   reviewed, valued at $5.4 billion.

However, the Military Services and DLA contracting officials:

• issued solicitations for 9 of 74 contracts, valued at $7 million, without the required Berry
  Amendment DFARS clauses;

• awarded 6 of 135 contracts, valued at $14 million, without the required Berry Amendment
  DFARS clauses; and

• modified an additional 11 of 135 contracts, valued at $14.3 million, to include the required
   Berry Amendment DFARS clauses, as a result of our audit.

Additionally, Defense Contract Management Agency officials did not document the Berry Amendment as an item for compliance when conducting initial reviews of contracts for 26 of 44 contracts reviewed, valued at $796.6 million.

The Military Services and DLA contracting officials and the Defense Contract Management Agency officials did not fully comply with the Berry Amendment requirements due to oversights, limited experience with the Berry Amendment, and a lack of consistent training on the Berry Amendment requirements. In addition, the Military Services and the DLA contracting officials did not fully apply the Berry Amendment recommended best practices meant to help ensure compliance. As a result, the DoD has limited assurance that items procured and delivered were in compliance with the Berry Amendment.

 

Recommendations

We made recommendations to address our finding, including recommendations reinforcing the requirement to include clauses implementing the Berry Act Amendment in solicitations; establishing mandatory training, implementing best practices; and reviewing and correcting deficiencies identified at specific sites during the audit.

 

Management Comments and Our Response

This report contains 13 recommendations addressed to Defense Pricing and Contracting, the Military Services, and the DLA. Of the 13 recommendations, 7 were resolved but will remain open until further actions are taken, and 6 were closed. Below is a description of management comments on the 13 recommendations.

The Defense Pricing and Contracting Acting Principal Director agreed to reinforce the requirement to include the Berry Amendment implementing clauses in contract solicitations for covered items; therefore, the recommendation is closed.

Comments and associated actions from the Military Services and the DLA addressed the specifics for eight recommendations to update and enhance training requirements and implement best practices. Of the eight recommendations, four were resolved but will remain open until further actions are taken, and four were closed.

The DLA Acquisition Director, responding for DLA Aviation–Richmond, reviewed active Berry Amendment contracts and determined no modifications were necessary; therefore, the recommendation is closed. The Procurement Insight/Oversight Director in the Office of the Deputy Assistant Secretary of the Army (Procurement), responding for the Army Contracting Command–Aberdeen Proving Ground, agreed to finalize a standard operating procedure related to Berry Amendment compliance. Therefore, the recommendation is resolved, but will remain open until the Director provides documentation to support that the proposed action is completed.

The Principal Deputy Assistant Secretary of the Air Force (Acquisition, Technology, and Logistics), responding for the Air Force 1st Special Operation Contracting Squadron, agree to develop a policy for awarding and administering Berry Amendment contracts, and reviewing Berry Amendment contracts. Therefore, the recommendations are resolved, but will remain open until the Principal Deputy Assistant Secretary provides documentation to support that the proposed actions are completed.

All of the recommendations, summaries of management’s comments to the recommendations, and our responses are located in the “Recommendations, Management Comments, and Our Response” section of the report.

 

This report is the result of Proj. No. D2019-D000AV-0193.000.