U.S. Air Force personnel failed to comply with Depression Era congressional laws that require them to give preferential treatment to American-made products in one-third of contracts reviewed by the Defense Department’s top internal watchdog.
The Pentagon’s inspector general appraised 54 contracts valued at over $19 million, out of a sample pool size of 510 contracts worth more than $54 million, to determine if service contractors complied with the Berry Amendment and the Buy American Act.
The Berry Amendment – passed by Congress in 1941 – requires the Pentagon purchase products such as food, clothing, and equipment that are made in the U.S. on bulk orders that total $150,000 or more, unless certain exceptions are approved. The Buy American Act – passed in 1933 – is intended to give preference to American-made goods on purchases above $3,000.
The Pentagon IG reviewed contracts that were awarded between the start of fiscal year 2014 and May 15, 2015, and discovered that Air Force personnel didn’t comply with the Buy American Act for 12 out of 33 contracts reviewed, and likewise failed to follow the Berry Amendment for six out of 21 contracts reviewed.
The audit found that service members omitted the Buy American Act contract clauses for a host of reasons, such as “they were unfamiliar with the Buy American Act requirements; relied on previous contracts with similar purchases; did not complete sufficient review of the contract before award; or mistakenly omitted the clause or made an administrative error.”
As a result, suppliers may have been provided with items produced outside the U.S. and Air Force personnel potentially violated the Anti-deficiency Act, according to the IG. The legislation states that appropriated funds cannot be used for any other purpose than what is specified.
The new IG report is the third in a series required by the fiscal 2014 National Defense Authorization Act, which sets funding and policy guidelines for all of the Pentagon’s programs and efforts. The previous study, issued last August, revealed that 40 percent of U.S. Navy contracts reviewed also violated either the Buy American Act or the Berry Amendment.
The laws may not be as relevant as were when they were written back in an age when manufacturing was one of the main engines of the U.S. economy. In fact, the law’s requirements, long since antiquated, might be difficult to meet in some cases. Low-margin soft goods like men’s underwear are mostly made in Asia, unless you pay designer prices. And taxpayers wouldn’t want soldiers walking around in expensive Ralph Lauren skivvies. Of course, the counter-argument is that the legislation has been on the books so long everyone in Pentagon purchasing should learn about them the first day on the job.
The margins of error are troubling because if military personnel can’t comply with existing statutes for something as simple as buying American-made good, the same mistakes could be happening with the larger, pricier contracts issued by the Defense Department – though a higher price tag usually brings more scrutiny and cost controls. The mistakes in the sample size taken by the IG, when compared to the thousands of contracts issued annually by the department, also mean that the various problems outlined in the report could be more rampant than realized.
Equally as worrisome, the screw-ups could be costing the U.S. jobs, particularly in those states that rely on manufacturing contracts with the Pentagon.
The IG recommended the Air Force attempt to fix the problem by drilling down into the service contractor units to determine if any violations occurred and both Pentagon and Air Force officials agreed with the watchdog to take a harder look, according to the report.