Specialty Metal Clause: Oversight Issues and Options for Congress [July 30, 2012]   [open pdf - 307KB]

"This report examines the specialty metal clause, potential oversight issues, and options for Congress. The specialty metal clause in the Defense Federal Acquisition Regulation Supplement (DFARS) prohibits the Department of Defense (DOD) from acquiring end units or components for aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition unless these items have been manufactured with specialty metals that have been melted or produced in the United States. Thousands of products used for defense, aerospace, automotive, and renewable energy technologies rely on specialty metals for which there are often few, if any, substitutes. Specialty metals covered by this provision include certain types of cobalt, nickel, steel, titanium and titanium alloys, zirconium, and zirconium base alloys. […] These changes reflected a view in Congress that there are differing rationales for offering domestic source provisions, and that these refinements would promote efficiencies throughout the defense supply chain. There are at least seven possible options for policymakers to consider: (1) eliminate the specialty metal clause; (2) require an assessment of compliance with new exceptions to the specialty metals clause; (3) require a review of waivers issued under the revised specialty metals clause, including requiring DOD to publicly disclose when waivers are granted; (4) require congressional approval before non-compliant specialty metal can be used in certain defense contracts; (5) require a congressional report for each platform/component where non-compliant specialty metals are used in defense contracts; (6) encourage the use of domestic specialty metal; and (7) appoint a special metals protection board."

Report Number:
CRS Report for Congress, RL33751
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