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U.S. Department of Defense Metals Sourcing Rule Affects Manufacturers
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Bidding for DOD business is challenging, especially when specialty metals are part of the deal.

While the U.S. Department of Defense (DOD) has tried to streamline the bidding process for steel and specialty metals in recent years, manufacturers still face challenges. One of the most prevalent is the DOD's regulation limiting the amount of foreign specialty metals in its purchases. It requires sellers to document that all parts in the supply chain are produced in the U.S., and limits non-domestic metal content to a minimal amount.

One Manufacturer's Challenge

In an interview with the Dayton (Ohio) Business Journal, government contracts attorney Barbara Duncombe described how one of her clients was caught up in the specialty metals regulation. The client had a DOD contract that specified the use of specialty metal parts from a certain subcontractor. When the project was completed, the DOD delayed payment until Duncombe's client certified that all of the specialty metal in the equipment was domestic. However, the DOD-specified subcontractor refused to certify its metals.

In the end, one of the final products was disassembled, and all of the parts produced by the subcontractor were weighed. The weight of those parts was compared to the overall weight of the final product, showing that the amount of metal in the parts would still be included in the minimal content exception - even if all of it came from outside the U.S. After that, the DOD released payment to Duncombe's client.

What You Can Learn

In the example above, working with suppliers that obtain certification for their products as a matter of course could have averted trouble entirely. While the purchase of commercially available off-the-shelf (COTS) items containing specialty metals is meant to be free from restrictions, the sourcing of products like bar, billet, wire, forgings, castings, fasteners and electronics connectors can't be taken for granted.

When bidding for DOD contracts, thoroughly review the request for quote and statement of work, which spells out the military specifications and standards. If you don't understand any part of the specs, or need to determine what effect the specialty metals regulation might have on your bid, government procurement technical assistance centers (PTACs) are available to help you. Find a PTAC in your state online at www.dla.mil/db/procurem.htm.

 


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