Understanding the Department of Homeland Security - opportunities for textiles

With the recent inclusion of Berry Amendment requirements for purchases by TSA and the U. S. Coast Guard (parts of DHS), it is important for U.S. technical textiles companies to better understand the very complex Department of Homeland Security.  On March 25, 2009, Mr. Mui Erkun, Industry Ombudsman from the Office of Procurement, DHS, shared this brief program with USIFI.  Download the power point presentation here.  Mr. Erkun is very willing to answer questions about the DHS and its procurement process. 

Check the DHS extensive website often for updates and for business opportunities:  www.dhs.gov/openforbusiness.

More explanation about Berry Amendment and Buy American Act:

Berry Amendment

The Berry Amendment (10 U.S.C. §2533a)  applies to the Department of Defense procurement of: 

[a] any of the following items, either as end products or components, unless the items have been grown, reprocessed, reused, or produced in the United States – (1) Food; (2) Clothing; (3) Tents, tarpaulins, or covers; (4) Cotton and other natural fiber products;  (5) Woven silk or woven silk blends; (6) Spun silk yarn for cartridge cloth;  (7) Synthetic fabric or coated synthetic fabric, including all textile fibers and yarns that are for use in such fabrics; (8) Canvas products; (9) Wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles; (10) Any item of individual equipment (Federal Supply Class 8465) manufactured from or containing any of the fibers, yarns, fabrics, or materials listed in this paragraph (a).

[b] Specialty metals, including stainless steel flatware, unless the metals were melted in steel manufacturing facilities located within the United States.

[c] Hand or measuring tools, unless the tools were produced in the United States.

The Berry Amendment requires 100% U.S. content, but this rule is waivable.  

There is a long list of exceptions to the requirement of the Berry Amendment beginning with - (a) Procurement contract worth less than $100,000; (b) products not available in satisfactory quality and sufficient quality at U.S. market prices; (c) acquisitions outside the U.S. in support of combat operations; (d) emergency acquisitions by activities outside the United States for personnel of those activities; etc, etc, etc.

Buy American Act

See this report for information about Buy American Act and how it differs from the Berry Amendment:  http://digital.library.unt.edu/govdocs/crs/permalink/meta-crs-10532:1

The Buy American Act (41 U.S.C. §§ 10a through 10d) is the major domestic preference statute governing procurement by the entire federal government   For the Defense Department it covers items not covered by the Berry Amendment.  It was enacted in 1933 and has only been substantively amended twice in the succeeding 60 years.   In determining what are American goods, the place of mining, growing, producing or manufacturing is controlling.  The nationality of the company owner or contractor is not considered when determining if a product is of domestic origin.

The Buy American Act differentiates between manufactured and unmanufactured goods.  Manufactured articles are considered domestic if they have been manufactured in the United States from components, “substantially all” of which have been mined, produced, or manufactured in the United States.   “Substantially all” means that the cost of foreign components does not exceed 50% of the cost of all components.   But a component is of domestic origin if it was manufactured in the United States, regardless of where its sub-components were manufactured.

There are 5 major exceptions to the Buy American Act.   The Act does not apply to procurements for which:

1. The application would be inconsistent with the public interest.
2. Or unreasonable in cost, meaning - 6% for most federal contracts; 12% for procurements involving small business or high unemployment areas; 50% for Department of Defense procurements. 
3. Products for use outside of the U.S.
4. Products not produced or manufactured in the United States in sufficient and reasonably available commercial quantities, and of satisfactory quality.
5. Procurements under $2500.   

While the Buy American Act appears to control most procurements of the federal government, it should be noted, when considering a particular procurement, that the application of the Act may be limited by other legislation or international agreement.  For example, the Trade Agreements Act of 1979 authorizes the President to waive any otherwise applicable law, regulation or procedure regarding Government procurement like the Buy American Act that would give foreign products less favorable treatment than that given to domestic products.  For more reading on the Buy American Act, see http://www.seia.org/galleries/pdf/CRS_Report_-_The_Buy_American_Act_3.13.09.pdf