Berry Amendment: Requiring Defense Procurement to Come from Domestic Sources [Updated December 8, 2004]   [open pdf - 89KB]

"The Berry Amendment requires the Department of Defense (DOD) to give preference in procurement to domestically produced, manufactured, or home grown products, notably food, clothing, fabrics, and specialty metals. In order to protect the U.S. industrial base during periods of adversity and war, Congress passed domestic source restrictions as part of the 1941 Fifth Supplemental DOD Appropriations Act; these provisions later became the Berry Amendment. In the spring of 2001, Congress revisited the Berry Amendment largely in response to a controversy involving the Army's procurement of black berets. DOD had granted the Defense Logistics Agency authority to waive the Berry Amendment in order to purchase berets from foreign sources. However, it was reported that DOD had known for 25 years that no U.S. firm produced a solely domestic beret; this suggested that other violations of the Berry Amendment may have been overlooked or under-reported. This procurement event raised important questions: (1) If the U.S. does not produce a solely domestic item, should DOD procurement be restricted from access to foreign sources? (2) Do procurement policies under the Berry Amendment adequately provide the best value to DOD and the federal government? (3) To what extent do U.S. national security interests justify waivers of the Berry Amendment? Some policymakers believe that policies like the Berry Amendment contradict free trade policies, and that the presence and degree of such competition is the most effective tool for promoting efficiencies and improving quality. On the other hand, others believe that key U.S. sectors need the protections afforded by the Berry Amendment. These two views have been the subject of ongoing debate in Congress. In the 108th Congress, both the proposed FY2005 National Defense Authorization Act (H.R. 4200), and P.L. 108-287, the FY2005 Department of Defense Appropriations Act, (H.R. 4613), contain provisions that may affect domestic source provisions in the Berry Amendment and the Buy American Act. This report examines the original intent and purpose of the Berry Amendment, legislative proposals to amend both laws and regulations governing the application of domestic source restrictions, as well as options for Congress. The report will be updated as events warrant."

Report Number:
CRS Report for Congress, RL31236
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