BY PATRICK McLAUGHLIN
A collaboration of electronics and engineering trade associations that have significant dealings with the federal government is urging the United States Congress to incorporate changes into the FY2007 National Defense Authorization Act (NDAA) that would allow previously forbidden foreign-smelted metals in products procured by the Department of Defense (DoD).
At press time, Congress had not yet voted on the Defense Authorization bill, but interested parties anticipated a vote could have taken place by the time this publication reached distribution.
At issue are certain provisions within the Berry Amendment, enacted in 1972 but by and large not enforced beyond the initial one or two levels in the supply chain. The more-than-30-year-old legislation states that DoD contractors and suppliers at every tier cannot incorporate specialty metals into military parts and components unless those metals have been smelted in the United States. Recently, the government began insisting that all levels of the supply chain certify that all specialty metals used in military hardware were smelted in the U.S.
The result of this recent enforcement, say proponents of proposed changes to the legislation, is that many distributors and component manufacturers have had orders cancelled or returned.
The National Electronic Distributors Association (NEDA; www.nedassoc.org) issued a release and a position paper on the topic, stating that it “is working with several trade associations and companies selling to the DoD to clarify through new legislation the domestic preference of the law while enabling the DoD and its suppliers to better implement, comply with, and enforce the regulation.”
Also in its release, NEDA included a laundry list of other trade organizations that make up the Berry Amendment Task Force, including the Aerospace Industries Association, American Electronics Association, CompTIA, Contract Services Association, Industrial Fasteners Institute, International Technology Association of America, Manufacturer’s Alliance for Productivity and Innovation, Electronic Industries Alliance, National Defense Industries Association, Professional Services Council, Semiconductor Industry Association, and the U.S. Chamber of Commerce.
A number of those same organizations also make up a group known as the Acquisition Reform Working Group (ARWG), which was formed in 1993 and regards itself as a developer of legislative proposals aimed at sustaining the United States’ technology and industrial base, and improving government access to commercial technologies.
Both the Berry Amendment Legislative Task Force and the ARWG support three key parameters of Section 822 of U.S. Senate Bill 2766-a bill that proposes changes to the Berry Amendment to be incorporated into the FY 2007 NDAA. In summary, the three key reforms the groups seek are:
- An exemption for commercial items;
- An exemption that would allow manufacturers of dual-use items to commingle foreign and domestic specialty metals in production, provided they acquired the appropriate quantity of domestically melted specialty metals;
- A de minimis exemption allowing for delivery of an item containing non-compliant specialty metals that are less than 2% of the total amount of specialty metals in an item.
The proposed de minimis exception might be the one that most affects interconnect, passive, and electromechanical (IP&E) producers. In its position paper, the NEDA states, “The ‘Berry Amendment’ Preference for Domestic Specialty Metals, intended to protect the domestic capacity for large scale metallic production, such as nosecones, vehicle chassis and airframes, is interrupting the military supply chain for critical semiconductors and other electronic components-even though they may contain as little as trace amounts of such metals.
“Active electronic components, like microprocessors and memory chips and controllers, contain tiny quantities of these metals, often in layers measuring only several angstroms thick and weighing less than one-hundredth of a percent of the total of the chip,” the position paper continues.
Says NEDA executive vice president Robin Gray, “We’re optimistic we will get the three main exemptions as a compromise, but not everything we want in the bill will necessarily survive.”
One reason for optimism, he explains, is that those from the specialty-metals lobby object less to issues concerning electronics than to those concerning other defense equipment that uses significantly greater amounts of such metals. In other words, they have proverbial bigger fish to fry.
As an example, he pointed out that Russia is a significant producer of titanium-a metal that is in huge demand and (perhaps not coincidentally) is a primary component of weapons and military aircraft. Boeing, one of the world’s largest defense contractors, maintains relationships with Russian titanium producers. By comparison, the metals smelted in foreign countries and used in small quantities within electronics pose little danger to the domestic specialty-metals industry.
As this issue of Connector Specifier was going to press, Congress was in its August recess. Gray explained that during this break, staffers were working on a conference bill. The Senate version of the NDAA is likely to pass with the three above-referenced reforms included, Gray says, perhaps by mid to late September.
