Naval contracting personnel did not fully comply with Buy American rules on nearly half of the contracts reviewed by the Department of Defense inspector general, according to a report.
The DOD IG looked at a total of 55 contracts valued at roughly $74 million to see if Naval contractors were in compliance with the Berry Amendment and Buy American Act.
The Berry Amendment requires the DoD to buy items such as food, clothing, tools, and textiles that are made in the United States on bulk orders that total $150,000 or more unless certain exceptions are approved. The Buy American Act is intended to give preference to American-made goods on purchases above $3,000.
The IG reviewed contracts that were awarded between fiscal years 2013 and 2014 and found that a total of 23 of the 55 contracts did not sufficiently meet requirements to purchase goods that were made within the United States.
Inspectors visited four Naval and Marine Corps sites to perform their inspection for the report. The Berry Amendment portion of the audit consisted of reviewing 23 Naval contracts and found requirements were not met in 11 of the 23 circumstances.
It was discovered that personnel at these locations were not familiar with the Berry Amendment.
"Contracting personnel did not assess whether suppliers could provide U.S.-produced items and omitted the Berry Amendment contract clause because they were not familiar with the Berry Amendment," the report reads.
In one instance, a Lakehurst, N.J., contracting officer did not assess a proposal for its compliance with the Berry Amendment when she purchased $299,360 worth of hand and measuring tools. The officer thought the clause was not needed because the contractor was a U.S.-based manufacturer. However, 1,298 of non-U.S. produced tools valued at $19,431 were not identified by the officer despite the contractor’s proposal specifically stating the place of production was outside of the United States.
In another circumstance at the Lakehurst location, a contracting officer did not assess the contractor’s proposal for compliance with the Amendment when she purchased $6,857,380 in aircraft parts and hand and measuring tools. This officer ordered $109,012 worth of tools that were not produced in the United States and claimed she was unaware of the Berry Amendment.
As a result, Naval contracting personnel potentially committed four Antideficiency Act violations, according to the IG. The Antideficiency Act states that appropriated funds cannot be used for any other purpose than what is specified. Additionally, an employee cannot make or authorize an expenditure or obligation exceeding the amount in an appropriation or funds.
Two of the sites visited for the review—the Marine Corps Systems Command at Quantico and the Naval Sea Systems Command in Washington, D.C.—were found to meet requirements on all nine of the contracts the inspectors looked over in relation to the Berry Amendment.
Navy and Marine Corps contracting personnel also did not ensure compliance with the Buy American Act for 12 of the 32 contracts reviewed by the inspector general.
The IG found that Lakehurst contracting personnel omitted Buy American Act implementing clauses on seven contracts because they were unfamiliar with the Act or created an administrative error.
Personnel at the Norfolk location omitted the Act on two contracts because they relied on an "inaccurate electronic clause matrix tool" and did not complete a sufficient review before approving the contracts.
An administrative error also led to personnel omitting the Act on one contract at the Quantico location.