DoD Buying From Everywhere but America

Recent reports by the Department of Defense (DoD) Inspector General (IG) found that military branches continue to ignore domestic preference laws.

The DoD IG report on U.S. Navy contracts found that the Navy is not in compliance with the Buy American Act and the Berry Amendment. The Buy American Act requires the U.S. government to give preference to products made in the United States. Bulk purchases of more than $3,000 are subject to this act. The Berry Amendment specifically prevents the DoD from buying products such as clothing and textiles outside of the United States. The amendment is applied to purchases of at least $150,000.

The report concluded that nearly half of the Navy contracts originally reviewed violated the Berry Amendment. The DoD IG then picked another sample of 32 contracts and found that more than one-third violated the Buy American Act.

Violations of the Berry Amendment often led to violations of the Antideficiency Act; this was the case with four of the above-mentioned Berry Act violations. The Antideficiency Act states that appropriated funds cannot be used for any purpose other than that specified. The Berry Amendment requires that these appropriated funds be used to purchase American-made products unless certain exemptions are met, creating the double violation.

This is the second report released by the DoD IG on compliance with the Berry Amendment and Buy American Act, having previously reported on the Army’s compliance in 2014. The IG had found that only 4 of 33 contracts violated the Berry Amendment. However, the DoD IG then examined another 50 contracts, finding about half violated the Buy American Act. One also violated the Antideficiency Act.

Neither the Navy nor Army contract samples were statistically significant, which means the true proportion of contracts that violate these laws could be worse. According to DoD IG Public Affairs Chief Bridget Serchak, the IG plans to release a report on the Air Force’s compliance with domestic preference laws in March 2016. An audit of the Defense Logistics Agency will also be conducted in 2016.

The DoD IG initiated the investigations after the Project On Government Oversight raised concerns that DoD was circumventing the Buy American Act and the Berry Amendment. Congress then passed section 1601 in the FY 2014 National Defense Authorization Act mandating semiannual DoD audit reports on compliance with both the Buy American Act and the Berry Amendment.

POGO first covered this systemic problem with domestic preference laws in 2013 when Air Force Master Sergeant Steven Adachi discovered two pairs of his boots were made in China rather than America. The Air Force found that one of these purchases violated the Buy American Act. After he requested new American-made boots, he was promptly demoted. He then decided to retire.

A congressional letter to the DoD in 2012 referenced Adachi’s case and expressed concern that the military was attempting to circumvent the Berry Amendment by giving soldiers individual allowances to purchase their own athletic shoes, since the act only applies to bulk purchases.

The following year, POGO supported an amendment by Senator Susan Collins (R-ME) that placed tighter controls on this allowance program.

In 2013, Senator Collins, along with Senator Angus King (I-ME), sent a letter to DoD requesting that they use bulk purchases to buy American-made athletic shoes from New Balance. Despite the Senators’ letter, the Deputy Secretary of Defense sent out a 2014 memo pledging to begin buying American-made footwear as soon as it becomes available “in the near future.”

Congress also passed legislation in the 2014 omnibus spending package banning non-American made flags on military bases, further expanding the reach of domestic preference laws. A year later the Pentagon released rules implementing this ban.

Despite the progress made in Congress, the IG reports and Adachi’s experience indicate that DoD has a long way to go before it is compliant with domestic preference laws. These laws are vitally important to both helping American troops’ morale and strengthening America’s economy.