DoD’s Fastener Exemption May Become Procurement Model

Jason Sandefur

A recent U.S. Defense Department exemption for fasteners might become a model for how the Pentagon deals with potential metal shortages, Dow Jones Newswires reports. Growing demand for metal supplies, particularly specialty metals, has prompted DoD to contemplate commandeering supplies if needed, according to Bill Greenwalt, deputy under secretary for industrial policy.
“At present the Defense Department does not yet see the need to commandeer U.S. production of titanium or armored steel,” writes Rebecca Christie of Dow Jones. But the government is prepared to step in if defense manufacturers can”t get the materials they need to build equipment for combat troops, Christie reports. “Since the Iraq war began, the Pentagon has not been shy about commandeering resources when pressed,” Christie continues.
But specialty metals are a trickier issue because many U.S. companies import supplies, limiting the Pentagon”s access to contractors or forcing the U.S. government to pay more for products without foreign content, according to Dow Jones.
Greenwalt said the Pentagon is talking with suppliers about waivers for some of these requirements, citing the recent decision by the Defense Contract Management Agency to issue a fastener exemption to the Defense Federal Acquisition Regulations Supplement after finding that compliant specialty metals of satisfactory quality and sufficient quantity for certain fasteners “cannot be procured as and when needed” (see FIN 5/01/07). The April 10, 2007, determination authorized DoD contracting officers to procure both end items and components not meeting domestic content requirements.
The Domestic Non-Availability Determination (DNAD) issued by Ken Kreig, undersecretary of defense for acquisition, technology & logistics, involves fasteners for manufacture and repair of military aircraft, missile and space systems, ships, tank and automotive systems, weapon systems and ammunition.
Greenwalt said such “overarching waivers” might ease the bureaucratic burden involved in procuring certain metals. “If we have to do them program by program for every commercial item, we”ll never be able to buy commercial items,” Greenwalt told Dow Jones.
Acknowledging the potential damage if DoD commandeers U.S.-made metals, Greenwalt said “There is a potential disruptive factor in the commercial marketplace. It”s not something you do lightly.”
Dow Jones reports that DoD has been reaching out to companies outside of its traditional contracting base to broaden its supply chain and seek cost reductions, though difficult transitions for potential Pentagon suppliers may impede progress.
“If we have barriers to contracting with those commercial providers, or we make it so hard that they don”t want to contract with us, we have precluded ourselves from getting access to technology, and needed technology,” Greenwalt said. \ �2007 FastenerNews.com