ITAA backs relief from Berry Amendment for DOD

The Information Technology Association of America is supporting a Senate proposal that would allow the Defense Department to purchase technology hardware that includes specialty metals from foreign suppliers.

ITAA is urging Congress to adopt an amendment Sen. John Warner (R-Va.) proposed in the fiscal 2007 Defense Authorization bill. The amendment would exempt some commercial items from Berry Amendment restrictions.

Under the Berry Amendment, DOD is barred from purchasing foreign-supplied specialty metals, including nickel, titanium and specialty steels, which are common in electronic and IT products. It also requires the department to buy certain products considered essential to military preparedness that are made entirely with American materials and labor.

The amendment stemmed from a congressional attempt to protect the U.S. industrial base during times of adversity or war. Congress passed the restrictions, which became known as the Berry Amendment, as part of the 1941 Fifth Supplemental Defense Department Appropriations Act. Specialty metals provisions were added in the 1970s.

Every appropriations bill since 1942 has mentioned a preference for U.S. articles, supplies and materials, according to a Congressional Research Service report prepared in 2005.

IT component manufacturers have said that any item using integrated circuits or semiconductors – virtually all electronic components for weapons, communications, data exchange, and information systems – cannot be compliant with the Berry amendment, according to an ITAA statement released today.

“The Berry Amendment’s restriction on sourcing of specialty metals is no longer viable in the global market that controls the information technology arena and the electronic components we use,” Olga Grkavac, executive vice president at ITAA, said in a statement supporting Warner’s amendment.

Noting that failure to pass the proposal would be potentially catastrophic, Grkavac said, “most hardware used in IT goods and services are not and will not be compliant with these outdated regulations.”

Trey Hodgkins, director of defense programs at ITAA, said industries such as aerospace, electronics and computer chip manufacturers also support the Warner proposal. “What we’re hoping is to reach some kind of agreement,” he said.

The Senate provision would allow co-mingling of items on production lines so that the sourcing of individual components is not necessary throughout the assembly line, according to ITAA’s statement.

The exemption would allow aircraft manufacturers, for example, to purchase tons of titanium abroad and not have to operate two assembly lines, one for commercial aircraft, exempt from the Berry Amendment, and the other for military aircraft, Hodgkins said. “They would not have to keep all these parts separate,” he added.