What is the difference between the Berry Amendment, the Buy American Act, and the Trade Agreement Act?

February 12, 2017

by Shelley Hall

Berry Amendment:

The Berry Amendment is implemented in DFARS 225.7002. The contract clauses that apply DFARS 252.225-7012 and DFARS 252.225-7015.  There is additional guidance in the DFARS PGI 225-70.  NOTE:  Does not apply to agencies outside DOD.

The Berry Amendment restricts any funding appropriated or available to DoD from being used to buy the following end items, components, or materials unless they are wholly of US origin: An article or item of food; clothing; tents, tarpaulins, or covers; cotton and other natural fiber products; woven silk or woven silk blends; spun silk yarn for cartridge cloth; synthetic fabric or coated synthetic fabric; canvas products, or wool; or any item of individual equipment manufactured from or containing such fibers, yarns, fabrics, or materials; and hand or measuring tools.

Also review the Berry Amendment FAQs at http://www.acq.osd.mil/dpap/cpic/ic/berry_amendment_faq.html

Buy American Act (BAA):

The Buy American statute restricts the purchase of supplies that are not domestic end products. For manufactured end products, the Buy American statute uses a two-part test to define a domestic end product – (1) The article must be manufactured in the United States; and (2) The cost of domestic components must exceed 50 percent of the cost of all the components.  This component test of the Buy American statute has been waived for acquisitions of COTS items.

The Buy American statute applies to small business set-asides.

Exceptions include public interest, non-availability, unreasonable cost, resale, information technology that is a commercial item.

Trade Agreements (reference FAR 25.4):

The Trade Agreements statute provides the authority for the President to waive the Buy American statue for eligible products from countries that have signed an international trade agreement with the United States, or that meet certain other criteria, such as being a least developed country.

Exceptions to the Trade Agreements law include:

Acquisitions set aside for small businesses;

Acquisitions of arms, ammunition, or war materials, or purchases indispensable for national security or for national defense purposes;

Acquisitions of end products for resale;

Acquisitions from Federal Prison Industries, Inc. and from Nonprofit Agencies Employing People Who Are Blind or Severely Disabled; and

Other acquisitions not using full and open competition, if authorized by Subpart 6.2 or 6.3

In the World Trade Organization Government Procurement Agreement (WTO GPA) and each FTA, there is a U.S. schedule that lists services that are excluded from that agreement in acquisitions by the United States.

How does the Berry Amendment differ from the Buy-American Act?

They differ with regard to their scope, threshold, exceptions, and waiver authority.

The Berry Amendment is applicable to purchases over the simplified acquisition threshold using funds appropriated or otherwise made available to DoD, and applies even if another agency, such as the GSA, is purchasing the item for DoD. Unless an exception under the Berry Amendment is found to apply, it requires that all covered items must be grown, reprocessed, reused, or produced in the United States, regardless of whether they are purchased as end items, components, or materials.

The BAA applies to all supply purchases of supplies or construction materials over the micro-purchase threshold for use in the U.S. It also requires the use of domestic construction material. The BAA is applicable to the entire Federal Government. The Act requires an evaluation factor be placed on proposals offering foreign end items. For civilian agencies, this evaluation factor for supply contracts is 6% if the lowest domestic offeror is from a large business, or 12% if the lowest domestic offeror is from a small business. For the Department of Defense (DoD), the evaluation factor is 50%. The evaluation factor for construction material contracts is 6% for all agencies.

COTS Items

COTS items are a subset of commercial items. The following laws are not applicable to contracts for the acquisition of COTS items:

The portion of 41 U.S.C. 8302(a)(1) that reads “substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States,” Buy American–Supplies, component test.

The portion of 41 U.S.C. 8303(a)(2) that reads “substantially all from articles, materials, or supplies mined, produced, or manufactured in the Unites States,” Buy American—Construction Materials, component test (see 52.225-9 and 52.225-11).

“Commercially available off-the-shelf (COTS) item” means any item or supply (including construction material) that is any item, other than real property, that is of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, sold in substantial quantities in the commercial marketplace; and offered to the Government, without modification, in the same form in which it is sold in the commercial marketplace.

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