United States Government Accountability Office

GAO

September 2005 DEFENSE 

PROCUREMENT 

Air Force Did Not 

Fully Evaluate 

Options in Waiving 

Berry Amendment for 

Selected Aircraft 

GAO-05-957 

Report to the Committee on Armed 

Services, House of Representatives 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-957.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Ann 

Calvaresi-Barr at (202) 512-4841 or 

calvaresibarra@gao.gov. 

Highlights of GAO-05-957, a report to the 

Committee on Armed Services, House of 

Representatives 

September 2005

DEFENSE PROCUREMENT 

Air Force Did Not Fully Evaluate Options 

in Waiving Berry Amendment for Selected 

Aircraft 

The Air Force did not follow established policy when evaluating the need for 

a waiver of the Berry Amendment for 23 commercial derivative aircraft 

systems. Specifically, the Air Force did not thoroughly analyze the 

opportunities for compliance with the Berry Amendment on a system-bysystem basis, thereby diminishing the persuasiveness of the waiver’s 

support. 

The Air Force’s review of its compliance with the Berry Amendment 

regarding these systems began in early 2003 when it became aware that 

some aircraft manufacturers could not meet the Berry Amendment 

requirements. Faced with this problem, a senior Air Force acquisition official 

visited an aircraft manufacturer, two of its subcontractors (including a 

titanium producer), and an engine manufacturer. The Air Force’s conclusion, 

based on these visits and knowledge of the aerospace industry, was that 

other contractors involved in the Air Force’s acquisition and support of 

commercial derivative aircraft systems would also have difficulty complying 

with the Berry Amendment. In September 2003, the Secretary of the Air 

Force signed a temporary waiver that was initiated at the headquarters level 

and covered 19 systems. That was followed in April 2004 with a permanent 

waiver of the Berry Amendment for these 19 systems plus another 4. 

Air Force policy calls for certain actions before issuing a waiver, including 

conducting market research and conducting an analysis of what alternatives 

are available and why they are not acceptable. In this instance, the Air Force 

did not conduct market research for each system, as it believed no company 

could produce compliant parts—a position not explained in the waiver’s 

supporting documents. The Air Force documented an analysis of alternatives 

for only 1 aircraft system in the waiver. Memos representing 18 other aircraft 

systems state that alternatives to the waiver had been considered and 

rejected as not feasible but did not identify what the alternatives were, while 

memos for 3 additional aircraft systems make no reference to whether 

alternatives had been considered. The Air Force provided no documentation 

about its analysis of alternatives for the 1 remaining aircraft system in the 

waiver. After discussions with representatives for all 23 aircraft systems, 

GAO concluded that the Air Force did not document alternatives or 

thoroughly review possible options to achieve compliance with the Berry 

Amendment for many of the aircraft systems. 

GAO has identified several instances that highlight the Air Force’s lack of 

thoroughness in its waiver process for the 23 aircraft systems. For example, 

the Air Force did not question contractors’ inability to provide compliant 

spare parts when they were military unique and therefore not the same as 

the parts used in commercial aircraft. Also, the Air Force included some 

aircraft systems in the waiver that were already covered under other 

regulatory exceptions to the Berry Amendment. 

In April 2004, the Secretary of the 

Air Force approved a permanent 

waiver of the requirements of the 

Berry Amendment for 23 

commercial derivative aircraft 

systems, representing more than 

1,200 aircraft in the Air Force’s 

inventory. The Berry Amendment 

generally requires the Department 

of Defense (DOD) to purchase 

certain domestically grown or 

produced items, including specialty 

metals used in defense systems 

such as aircraft. Waivers to the 

Berry Amendment can be granted 

under certain circumstances. GAO 

was asked to evaluate the 

supporting evidence and analysis 

that the Air Force relied on to 

waive the Berry Amendment. GAO 

did not conduct a legal analysis of 

the waiver. 

What GAO Recommends

GAO recommends that the 

Department of Defense direct the 

Air Force to (1) conduct an 

analysis of each commercial 

derivative aircraft system in the 

waiver to consider opportunities to 

achieve compliance with the Berry 

Amendment requirements or 

document why such compliance is 

not possible and (2) assess, on a 

periodic basis, whether changes 

have occurred in the supplier base 

for each aircraft system in the 

waiver that would provide 

opportunities to procure 

domestically produced items as 

required by the Berry Amendment. 

DOD and the Air Force agreed with 

both of GAO’s recommendations. 
Page i GAO-05-957 Berry Amendment 

Letter 1

Results in Brief 2 

Background 3 

Air Force Waiver Lacked Thorough Analysis 5 

Conclusions 11 

Recommendation for Executive Action 12 

Agency Comments and Our Evaluation 12 

Appendix I Commercial Derivative Aircraft Included in the 

Air Force Waiver 15 

Appendix II Comments from the Department of Defense and the 

Air Force 17 

Appendix III GAO Contact and Staff Acknowledgments 21 

Table 

Table 1: Commercial Derivative Aircraft Included in the Air Force’s 

Permanent Waiver 15 

Abbreviations

AWACS Airborne Warning and Control System 

DFARS Defense Federal Acquisition Regulation Supplement 

DOD Department of Defense 

FAR Federal Acquisition Regulation 

Contents 
Page ii GAO-05-957 Berry Amendment 

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reproduce this material separately. 
Page 1 GAO-05-957 Berry Amendment 

September 23, 2005 

The Honorable Duncan L. Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

Congress enacted the Berry Amendment in 1941 to maintain a healthy 

industrial base and encourage domestic production of items deemed 

essential to meet defense needs. It generally requires the Department of 

Defense (DOD) to purchase certain domestically grown or produced 

items, including food, clothing, fabrics, and specialty metals such as 

titanium and titanium alloys, but allows a waiver of these requirements 

when goods cannot be found in satisfactory quality or sufficient quantity at 

U.S. market prices.1

 Citing this provision, in April 2004 the Secretary of the 

Air Force permanently waived the Berry Amendment for the purchase and 

support of 23 commercial derivative aircraft systems—representing over 

1,200 aircraft in the Air Force inventory.2

 These are commercial aircraft, 

modified for military use, that provide support for critical mission areas 

such as cargo and passenger airlift, medical evacuations, aerial refueling, 

VIP transport, embassy support, surveillance, counterdrug enforcement, 

and pilot training.3

 Appendix I provides information on the 23 aircraft 

systems included in the April 2004 waiver. 

Because of the broad and permanent nature of the waiver, you asked us to 

evaluate the supporting evidence and analysis that the Air Force relied on 

to waive the Berry Amendment for certain commercial derivative aircraft 

systems in its inventory. In response, this report evaluates the process the 

Air Force followed as well as its rationale for waiving the Berry 

 1

A waiver refers to a domestic nonavailability determination made under the Berry 

Amendment. 

2

Specifically, the waiver applies to (1) future aircraft deliveries under contract as of the 

April 2004 waiver and (2) current and future support contracts for replenishment spare 

parts and aircraft modifications. 

3

For example, the VC-25, or Air Force One, is a commercial Boeing 747 that has been 

modified for use by the U.S. government. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-957 Berry Amendment 

Amendment for these aircraft. Our review focused on the Air Force’s 

adherence to DOD and Air Force policy. We did not conduct a legal 

analysis of the waiver. 

In evaluating the Air Force’s process and rationale for waiving the Berry 

Amendment, we reviewed the statute, regulations, and DOD and Air Force 

policies that implement the Berry Amendment and provide guidance for 

the waiver process. In addition, we analyzed documentation and 

conducted interviews with senior Air Force acquisition officials as well as 

Air Force officials in the field for each aircraft system on the waiver. We 

also interviewed officials from the Office of the Secretary of Defense, the 

Defense Logistics Agency, the Defense Contract Management Agency, and 

the Department of Commerce to identify any additional guidance for 

issuing a Berry Amendment waiver and to understand each organization’s 

role in the Air Force’s waiver, if any. Finally, we conducted interviews and 

site visits with representatives from three companies, accounting for 17 

out of the 23 aircraft systems in the waiver, to better understand the 

information provided to the Air Force about the companies’ difficulty in 

complying with the Berry Amendment. We did not address whether the 

waiver was legally valid, that is, whether the waiver was a proper exercise 

of discretion by the Secretary of the Air Force under the Berry 

Amendment. 

We performed our review from October 2004 to September 2005 in 

accordance with generally accepted government auditing standards. 

The Air Force did not follow established policy when it evaluated the need 

for a broad, permanent waiver of the Berry Amendment for 23 commercial 

derivative aircraft systems, in that it did not thoroughly analyze the 

opportunities for compliance on a system-by-system basis. The Air Force 

initiated the waiver at the headquarters level after it became aware in mid2003 that many of its contracts lacked the required contract clause to 

implement the Berry Amendment specialty metals provision and that 

contractors were citing difficulty in complying with this requirement. In 

evaluating the need for the waiver, the Air Force did not conduct market 

research as called for in its policy, thoroughly review alternatives, or 

include an explanation as to why it believed that alternatives did not exist 

for each of the systems in the waiver. Instead, Air Force officials stated 

that they did not consider it necessary to conduct market research for 

each system or believe that compliant alternatives existed based on their 

knowledge of the aerospace industry. We identified several instances that 

highlight the Air Force’s lack of thoroughness, such as not assessing 

Results in Brief 
Page 3 GAO-05-957 Berry Amendment 

possible compliant options. In addition, the Air Force did not recognize 

that some systems were already covered under regulatory exceptions to 

the Berry Amendment, further illustrating the Air Force’s lack of thorough 

analysis. 

On the basis of these findings, we recommend that DOD direct the Air 

Force to thoroughly analyze opportunities to achieve compliance for each 

system in the waiver and periodically assess changes in the supplier base 

to see whether new opportunities for compliance with the Berry 

Amendment have become available. In comments on the draft report, DOD 

concurred with our recommendations and the Air Force agreed to 

implement them. 

The Berry Amendment generally prohibits DOD from using appropriated 

or other available funds for the procurement of certain items that have not 

been grown, reprocessed, reused, or produced in the United States. 

Enacted in a 1941 defense appropriations act, the restriction initially 

ensured that American troops wore uniforms and ate food grown or 

produced in the United States. For more than 50 years, the Berry 

Amendment consistently appeared in annual appropriations acts. The 

scope of the restriction has changed over time to include additional items 

and exceptions. The current version, codified in 2001, restricts DOD 

purchases of food, clothing, certain fabrics, specialty metals, and certain 

tools.4

The specialty metals requirement was added to the Berry Amendment in 

1972. DOD implemented the specialty metals requirement by applying it to 

all contracts where the specialty metal is purchased directly by the 

government or the prime contractor and to all subcontract tiers for six 

major classes of programs—aircraft, missiles, ships, tank-automotive, 

weapons, and ammunition.5

 For these programs, the prime contractor 

 4

The complete list of items appears at 10 U.S.C. § 2533a(b)(1)-(3) and includes: (1) An 

article or item of (A) food; (B) clothing; (C) tents, tarpaulins, or covers; (D) cotton and 

other natural fiber products, woven silk or woven silk blends, spun silk yarn for cartridge 

cloth, synthetic fabric or coated synthetic fabric (including all textile fibers and yarns that 

are for use in such fabrics), canvas products, or wool (whether in the form of fiber or yarn 

or contained in fabrics, materials, or manufactured articles); or (E) any item of individual 

equipment manufactured from or containing such fibers, yarns, fabrics, or materials. (2) 

Specialty metals, including stainless steel flatware. (3) Hand or measuring tools. 

5

DOD chose these six classes of programs because they accounted for the most specialty 

metals procured by or for DOD based on 1972 materials estimates. 

Background 
Page 4 GAO-05-957 Berry Amendment 

must include a clause that requires all subcontractors to comply with the 

Berry Amendment’s specialty metals requirement. In addition, the Defense 

Federal Acquisition Regulation Supplement (DFARS) identifies those 

metals considered to be specialty metals, to include titanium, certain types 

of steel, and other assorted metals and alloys.6

 In 1996, Congress made 

clear that the Berry Amendment does apply to all commercial item 

purchases.7

The Berry Amendment includes a number of exceptions to the 

requirement to buy certain domestically produced articles. For example, 

the requirement does not apply to the extent that the Secretary of Defense 

or the Secretary of the military department concerned determines that 

satisfactory quality and sufficient quantity of an item cannot be procured 

as and when needed at U.S. market prices. Since May 2001, DOD policy 

specifies that the authority to approve a Berry Amendment waiver is not 

delegable below the Secretarial level, and the waiver is to include an 

analysis of alternatives and a certification as to why such alternatives are 

unacceptable.8

 Additional exceptions to the Berry Amendment are allowed 

for items already determined to be unavailable in the United States9

 and 

specialty metals purchased from a qualifying country, i.e., one that has 

signed a memorandum of understanding with the United States.10

The Berry Amendment does not include explicit criteria to be used or 

requirements to be met to support and document a waiver.11 The Air 

 6

DFARS 252.225-7014. 

7

See 10 U.S.C. § 2533a(i). 

8

The DFARS has recently been amended to reflect this requirement. See 70 Fed. 

Reg. 43073–43074 (July 26, 2005). The revision also requires that the congressional defense 

committees be notified at least 10 days before the award of a contract for titanium or 

titanium products involving a waiver. This reflects the requirements of an October 22, 2004, 

memorandum from the Under Secretary of Defense for Acquisition, Technology, and 

Logistics that was issued after the April 2004 Air Force waiver. 

9

DFARS 225.7002-2(c). 

10Specifically, the Berry Amendment includes an exception for the procurement of 

specialty metals outside the United States if such a procurement is necessary in 

furtherance of agreements with foreign governments in which both such governments 

agree to remove barriers to purchases of supplies produced in the other country or services 

performed by sources of the other country. See 10 U.S.C. § 2533a(e)(1)(B), which is 

implemented in DFARS 225.7002-2(n). 

11The implementing regulation, DFARS 225.7002, was revised in July 2005 to provide 

direction on delegation, analysis of alternatives, and congressional notification. 
Page 5 GAO-05-957 Berry Amendment 

Force’s internal policy, the Air Force Federal Acquisition Regulation 

Supplement, provides instruction as to what information the Air Force 

decision makers would generally expect to be provided if asked to 

approve a Berry Amendment waiver.12 The Air Force policy calls for the 

contracting officer to conduct market research to determine if an article or 

suitable substitute is available from a domestic source. If the article or 

substitute is not available, the contracting officer contacts Air Force 

headquarters, which in turn confers with the Department of Commerce 

(Commerce) to request a list of possible domestic sources. If Air Force 

headquarters notifies the contracting officer that domestic sources have 

not been identified by Commerce, Air Force policy then specifies that the 

contracting officer shall submit a determination and finding in a specified 

format for the Secretary of the Air Force’s approval. This format is to 

describe 

• the market research performed, 

• any alternatives/substitutes considered and why these 

alternatives/substitutes are not satisfactory, 

• the total estimated cost of the item(s) being acquired, 

• the circumstances precluding the buying of a domestic end item, and 

• the impact if the waiver is not approved. 

The Air Force did not conduct a thorough analysis of opportunities for 

compliance with the Berry Amendment on a system-by-system basis in 

approving a broad, permanent waiver covering 23 commercial derivative 

aircraft systems. The Air Force initiated the waiver at the headquarters 

level after it became aware of problems with implementing the Berry 

Amendment. In supporting the waiver, the Air Force did not conduct 

market research as called for in its policy, thoroughly review alternatives, 

or include an explanation as to why it believed that alternatives did not 

exist for each of the systems in the waiver. We identified several instances 

that highlight the Air Force’s lack of thoroughness in its analysis to 

support the waiver. 

 12Air Force Federal Acquisition Regulation Supplement 5325.7002-2 and its related 

Mandatory Procedure 5325.7002-2. 

Air Force Waiver 

Lacked Thorough 

Analysis 
Page 6 GAO-05-957 Berry Amendment 

According to a senior Air Force official, the Deputy Assistant Secretary 

(Contracting) and several Air Force officials met with titanium industry 

representatives in November 2002 to discuss their concerns that some 

aircraft manufacturers were not meeting the Berry Amendment 

requirement for domestic specialty metals. Subsequently, the Air Force 

formed an Integrated Product Team in March 2003 to study the history and 

requirements of the Berry Amendment’s specialty metals provision and to 

review the Air Force’s compliance. This team conducted a review of Air 

Force Materiel Command contracts and uncovered a number of contracts 

that lacked the clause that implements the Berry Amendment. The Air 

Force buying commands attempted to negotiate with contractors to add 

the required contract clause to those contracts. However, many 

commercial derivative aircraft contractors refused to accept the specialty 

metals provision that would require all contracts and subcontracts related 

to aircraft programs to be compliant with the Berry Amendment. In the 

summer of 2003, the Air Force official who led the waiver effort told us he 

visited an aircraft manufacturer, two of its subcontractors (including a 

titanium producer), and an engine manufacturer to evaluate the difficulty 

of complying with the Berry Amendment specialty metals requirement. 

Following these visits, the Air Force official concluded that other 

contractors involved in the Air Force’s acquisition and support of 

commercial derivative aircraft systems would also have difficulty 

complying with the Berry Amendment. 

According to Air Force officials, they initiated the waiver process at the 

headquarters level instead of following the established procedure of 

receiving individual requests from field contracting officers involved in 

acquiring or supporting these systems. Officials stated that this method 

was intended to ensure a consistent and comprehensive approach to 

supporting the waiver. Air Force headquarters collected supporting 

documentation that included letters from contractors and memos from the 

military users of commercial derivative aircraft systems. These companies 

indicated it would be “commercially impracticable” or otherwise not 

possible to comply with the Berry Amendment. In addition, memos from 

representatives of the military users of the aircraft indicated that the 

alternatives presented to them were not feasible. 

In September 2003, the Secretary of the Air Force signed a temporary 

Berry Amendment waiver, effective through April 1, 2004, which covered 

future aircraft deliveries under current acquisition contracts, as well as 

current and future support contracts, for 19 commercial derivative aircraft 

systems. In doing so, the Secretary of the Air Force made several findings, 

including the following: 

Air Force initiated waiver 

after identifying problems 

with Berry Amendment 

implementation 
Page 7 GAO-05-957 Berry Amendment 

• Contractors stated they could not comply with the Berry Amendment’s 

specialty metals restriction “without substantial changes to their 

manufacturing and supplier management processes,” which would 

“cause substantial, largely unquantifiable, cost and schedule impacts.” 

• Pursuing Berry Amendment compliance could make contractors’ 

commercial products less competitive in the worldwide market. 

• The systems at issue are produced on the same production lines used 

to support the commercial marketplace and generally comprise a 

minute portion of the contractors’ overall commercial business. 

• Several contractors informed the Air Force they would no longer 

accept contracts if the provisions implementing the Berry Amendment 

were included. 

On the basis of these findings, the Secretary of the Air Force determined 

compliant commodities for certain commercial derivative aircraft systems 

could not be acquired as and when needed in satisfactory quality and 

sufficient quantity at U.S. market prices, the waiver was needed to sustain 

ongoing operations of these systems and avoid major mission impacts, and 

the waiver would be of limited duration while Congress considered 

changes to the Berry Amendment in the fiscal year 2004 legislative cycle. 

However, these legislative changes did not occur, and in April 2004 the 

Secretary signed a permanent waiver that covered 23 commercial 

derivative aircraft systems—which included 4 additional systems—

exempting all of them from the Berry Amendment requirements. The 

permanent waiver relied on the same findings as the temporary waiver. 

The Air Force policy identifies the need to conduct market research prior 

to proceeding with a Berry Amendment waiver. According to the policy, 

the Air Force is to request a list of possible domestic sources from the 

Department of Commerce and draft a market research report indicating 

what companies were contacted. The Air Force acquisition official who 

drafted the policy told us that market research also includes advertising in 

official government sources for contracting opportunities. Officials from 

Commerce’s Bureau of Industry and Security and International Trade 

Administration informed us that there was no record of the Air Force 

requesting Commerce’s assistance in identifying domestic sources for the 

support of commercial derivative aircraft on the waiver. 

While this waiver encompasses 23 different aircraft systems and certain 

related acquisition and support contracts, the Air Force did not conduct 

market research on each system included in the waiver. A senior Air Force 

acquisition official told us that it was unnecessary to conduct market 

Air Force Analysis Lacked 

Market Research and a 

Thorough Review of 

Alternatives 
Page 8 GAO-05-957 Berry Amendment 

research for each system because Air Force officials were knowledgeable 

about the aerospace industry and did not need to contact the Department 

of Commerce for assistance. Another senior official who led the waiver 

effort indicated that the original aircraft manufacturer owned the technical 

data rights and, in some cases, was the primary supplier of these spare 

parts. Therefore, this official believed that in some instances it would be 

difficult and costly to purchase technical data rights so suppliers other 

than the original aircraft manufacturer and its subcontractors could 

produce the parts. Moreover, this same Air Force official became 

convinced that no company could provide compliant spare parts after site 

visits to an aircraft manufacturer, which accounted for 11 systems in the 

waiver, and two of its suppliers (including a titanium producer) as well as 

an engine manufacturer. However, these findings were not documented in 

the waiver. 

DOD and Air Force policies also specify the need to identify alternatives 

and explain why such alternatives are unacceptable. In May 2001, the 

Deputy Secretary of Defense directed that each military department’s 

Secretary ensure that alternatives that do not require a waiver under the 

Berry Amendment are presented to the relevant military users before 

requesting a waiver. The military users must certify in writing why such 

alternatives are unacceptable before the Secretary may approve a waiver. 

The Air Force policy calls for similar information. 

To address DOD and Air Force policy requirements, the Air Force 

included 13 memos from military user representatives in the waiver’s 

supporting documentation, representing 22 of the 23 aircraft systems on 

the waiver. As specified in Air Force policy, most of these memos address 

the impact on the system if the waiver is not approved and state that the 

compliant alternatives had been considered. Specifically, memos 

representing 18 aircraft systems state that they had considered compliant 

alternatives and rejected them as not feasible, without stating what those 

alternatives were. Memos for 3 aircraft systems make no reference to 

whether alternatives had been considered. Only 1 memo representing a 

single aircraft system contains an assessment of a potential alternative and 

the delay it would cause to the aircraft’s mission if selected, although 

other Air Force documentation indicated that the alternative would not 

satisfy the Berry Amendment requirement. Though most of the memos 

state that alternatives had been considered, we found that in several 

instances military users and their representatives who prepared the 

memos were not presented with alternatives. A senior Air Force official 

who led the waiver effort acknowledged that the military users’ memos 
Page 9 GAO-05-957 Berry Amendment 

contain boilerplate language about the consideration and rejection of 

alternatives that would be compliant with the Berry Amendment. 

Air Force program management officials, contracting officers, military 

users, and a senior acquisition official told us that the Air Force did not 

identify and pursue compliant alternatives because they did not believe 

there were any available. For example, in many instances, contracting 

officers and program managers stated that the only realistic option was to 

pursue a Berry Amendment waiver. However, the waiver documentation 

lacked an explanation as to why the Air Force did not believe any 

alternatives were available. 

The Air Force missed opportunities to assess possible compliant options. 

For instance, the Air Force and Boeing have entered into a contract, 

referred to as the Rights Guard agreement, that could allow the Air Force 

to order technical data for military derivatives of the Boeing 707, 727, 737, 

and 747 commercial aircraft and to use that data to facilitate the 

competitive procurement of replenishment spare parts.13 This contract was 

in effect at the time the waiver was being considered and covered 8 of the 

23 systems on the waiver, representing 636 (or 51 percent) of the 

commercial derivative aircraft in the waiver. The senior Air Force official 

who led the waiver effort, and a field contracting official who oversaw 

support contracts for almost 90 percent of the aircraft on the Rights Guard 

agreement, told us they did not consider this contract as a means to 

acquire parts that would be compliant with the Berry Amendment. 

Further, this senior acquisition official was unaware that the contract 

applied to several Boeing models included in the waiver. While this 

contract would not have resolved the compliance issues for all of the 

aircraft systems listed on the waiver, this official acknowledged it might 

have allowed the Air Force to achieve compliance for a limited number of 

spare parts procurements for certain systems. 

The Air Force also did not question the contractors’ inability to be 

compliant on military unique spare parts. For example, we previously 

reported on the Air Force award of a $7.9 million contract to Boeing in 

September 2003 for 24 engine cowlings used on the E-3 Airborne Warning 

 13There have been versions of this contract in place since the early 1970s. The Air Force 

and Boeing are negotiating a new version of this contract, as the current contract will 

expire on September 30, 2005. 

Air Force Did Not 

Consider Possible 

Compliant Options 
Page 10 GAO-05-957 Berry Amendment 

and Control System (AWACS), a Boeing 707 aircraft modified for military 

use.14 These engine cowlings were similar to those used on the commercial 

707, but were modified to meet military requirements. Boeing proposed to 

manufacture these engine cowlings rather than subcontracting the work as 

it did in the original E-3 AWACS production contracts. This required the 

company to include in its contract proposal the cost of acquiring 

production equipment to manufacture these parts. The temporary waiver 

of the Berry Amendment that included the E-3 AWACS was issued at the 

same time that the Air Force awarded the engine cowlings contract. 

However, it did not question Boeing’s inability to produce compliant 

cowlings in-house. The waiver documentation did not include any 

discussion or other indication that the Air Force questioned company 

assertions that it could not meet Berry requirements, specifically for 

military unique items. 

In addition, the Air Force did not fully evaluate the cost of bringing 

contractors into compliance. Although one company’s representatives said 

that compliance would be costly, the Air Force did not validate what the 

actual costs would be and did not assess whether the cost of complying 

would be similar for the other manufacturers of commercial derivative 

aircraft. For example, Gulfstream officials said that they performed a highlevel review—which was provided to Air Force contracting officers—that 

showed that about 0.2 percent of the total value of aircraft parts on the 

C-37A originates in countries not exempt from the Berry Amendment. 

However, the Air Force did not validate this estimate or determine the cost 

or effort necessary for Gulfstream or any other similarly situated 

contractor to achieve compliance. 

Finally, the Air Force did not consider its leverage as the primary 

customer of the T-6 aircraft, given that the U.S. government accounts for 

364 out of 435 aircraft ordered as of August 2005, with planned purchases 

of an additional 782 aircraft through 2015.15 The Air Force will also need to 

purchase spare parts for the life of the aircraft system. According to 

Raytheon, the company selects and establishes a supplier base during the 

design, development, and testing of its commercial aircraft, resulting in 

 14GAO, Contract Management: The Air Force Should Improve How It Purchases AWACS 

Spare Parts, GAO-05-169, (Washington, D.C.: Feb. 15, 2005). 

15The T-6 Joint Primary Aircraft Training System is a joint program of the Air Force and the 

Navy. The Air Force is responsible for administering the production contracts for this 

aircraft. 
Page 11 GAO-05-957 Berry Amendment 

suppliers being certified by the Federal Aviation Administration. However, 

the Air Force did not ask Raytheon what steps it would need to take and 

what costs would be involved in complying with the Berry Amendment 

requirement. 

By not conducting a system-by-system review, the Air Force was unaware 

that some systems were already covered under other regulatory 

exceptions to the Berry Amendment. For example, one of the exceptions 

allows specialty metals to be procured from a qualifying country. The 

TG-15 support contract was already exempt from the Berry Amendment 

specialty metal restriction because this training glider was manufactured 

in Germany, a qualifying country. In another example, the senior Air Force 

officials were not aware that the TG-10 and TG-14 support contracts were 

already covered under the regulatory exception for certain foreign 

manufactured equipment. This exception allows DOD to purchase spare 

and replacement parts for foreign manufactured equipment when 

domestic parts are deemed unavailable.16 Air Force contracting officials in 

the field previously determined that spare parts for these two training 

gliders were unavailable domestically, as these aircraft are manufactured 

in the Czech Republic and Brazil. The support contract for these systems 

was modified to cite this exception 6 months before they were added to 

the permanent waiver. 

Air Force officials did not consider any of these other regulatory 

exceptions prior to including these training gliders in the waiver. Only 

after we identified that these training gliders were already exempted did 

the acquisition officials consult with contracting officials at Oklahoma City 

Air Logistics Center—those responsible for managing the support 

contract—to determine whether these exceptions had ever been 

considered. Had the Air Force done so before finalizing the permanent 

waiver, it may have discovered that these training gliders were already 

covered through other regulatory exceptions. This illustrates the Air 

Force’s lack of thoroughness by not coordinating the waiver with all of the 

appropriate contracting officials in the field. 

The Berry Amendment was enacted to strengthen the industrial base to 

ensure that it could produce essential items for defense purposes. 

 16FAR 25.104(a). 

Air Force Did Not 

Recognize Some Systems 

Were Already Covered 

under Other Regulatory 

Exceptions 

Conclusions 
Page 12 GAO-05-957 Berry Amendment 

Although the Department of Defense relies on commercial products to 

satisfy some of its military requirements, it remains responsible for 

assessing opportunities to satisfy the requirements of the Berry 

Amendment. The Air Force’s failure to follow established policies and its 

decision to combine 23 aircraft systems in one waiver diminished the 

persuasiveness of the waiver’s support. By not thoroughly analyzing each 

system on the waiver, the Air Force treated all systems as if they had the 

same compliance problems, when in fact several of the systems had 

unique circumstances that should have been considered and documented 

before approving a waiver. Additionally, the Air Force did not fully 

document its position on the lack of alternatives and has limited the 

possibility of future review concerning these systems through the 

execution of a permanent waiver. 

Because the Air Force did not thoroughly analyze each system on the 

waiver or fully document its position on the lack of alternatives, we are 

making two recommendations to DOD so that it can improve the waiver’s 

support or modify it as necessary. Specifically, we recommend that the 

Secretary of Defense direct the Secretary of the Air Force to take the 

following two actions: 

• Conduct an analysis of each commercial derivative aircraft system 

included in the waiver to consider opportunities to achieve compliance 

with the Berry Amendment requirements or to document why such 

compliance is not possible. This should include 

• conducting market research, including consultation with the 

Department of Commerce, and 

• assessing alternatives such as obtaining technical data rights to 

manufacture compliant parts, identifying compliant suppliers for 

military unique parts, determining the cost or effort for bringing 

contractors into compliance, and considering if systems are already 

exempted under other regulatory exceptions. 

• Assess, on a periodic basis, whether changes have occurred in the supplier 

base for each aircraft system included in the waiver that would provide 

opportunities to procure domestically produced items as required by the 

Berry Amendment. 

In written comments on a draft of this report, DOD concurred with both of 

our recommendations. In response, DOD will direct the Air Force to 

conduct an analysis of each commercial derivative aircraft system 

Recommendation for 

Executive Action 

Agency Comments 

and Our Evaluation 
Page 13 GAO-05-957 Berry Amendment 

included in the Berry Amendment waiver and to periodically assess 

whether changes have occurred in the supplier base that would provide 

opportunities to procure domestically produced items. In addition, DOD 

provided comments from the Air Force, which indicated the Air Force’s 

concurrence with our recommendations and its intent to develop a plan to 

review the current waiver and rescind or modify it as appropriate. DOD 

and Air Force responses are reprinted in appendix II. We incorporated the 

Air Force’s technical comments in the report as appropriate. 

In its general comments, the Air Force stated that the waiver is reasonable 

and necessary and that the draft report fails to acknowledge the 

circumstances and rationale that compelled it to execute the waiver. The 

Air Force also indicated that the report did not clearly articulate the scope 

of the current waiver, which covers future spare parts purchases, but does 

not include future aircraft purchases. 

While the Air Force stated that the waiver is reasonable and necessary, our 

report shows that the Air Force did not follow established policy when it 

did not thoroughly analyze the opportunities for compliance on a systemby-system basis. Had it conducted market research and thoroughly 

reviewed alternatives for each system on the waiver, the Air Force could 

have strengthened the persuasiveness of the waiver’s support. We are 

encouraged that the Air Force has concurred with our recommendation to 

reevaluate the support for each of the systems on the waiver. 

The Air Force also stated that our report did not acknowledge the 

circumstances and rationale for the waiver. We disagree with this 

assertion. Our first finding discusses at length the reasons the Air Force 

considered a waiver necessary and outlines the waiver’s rationale based 

on the Air Force’s supporting documentation. While we agree that it was 

necessary for the Air Force to promptly address Berry Amendment 

compliance issues, this should not have precluded the Air Force from 

conducting a thorough analysis on how to achieve compliance on a 

system-by-system basis, especially during the 6-month period that the 

temporary waiver was in force. 

In addition, the Air Force indicated that the report did not clearly 

articulate the scope of the current waiver. Although the draft report 

correctly described the scope of the waiver, we made changes throughout 

the report to specify and emphasize that the scope of the waiver covers 

future aircraft deliveries under current acquisition contracts and current 

and future support contracts. The waiver does not apply to commercial 
Page 14 GAO-05-957 Berry Amendment 

derivative aircraft systems not listed on the waiver or future contracts for 

systems on the waiver entered into after the waiver’s effective date. 

We are sending copies of this report to the Honorable Donald H. Rumsfeld, 

Secretary of Defense; the Honorable Preston M. Geren, Acting Secretary of 

the Air Force; and interested congressional committees. We will also 

provide copies to others on request. In addition, the report will be 

available at no charge on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me 

at (202) 512-4841 or calvaresibarra@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix III. 

Ann Calvaresi-Barr, Director 

Acquisition and Sourcing Management 
Appendix I: Commercial Derivative Aircraft 

Included in the Air Force Waiver 

Page 15 GAO-05-957 Berry Amendment 

Table 1: Commercial Derivative Aircraft Included in the Air Force’s Permanent Waiver 

Aircraft designation 

Original equipment 

manufacturer Derived from Mission 

Air Force 

inventory

C-9A/C Nightingale Boeing 

(McDonnell Douglas) 

DC-9 Transportation for Vice President, First 

Lady, and other senior officials 

7

C-12C/D/F/J Huron Raytheon Aircraft 

(Beech) 

Beechcraft Super King Air 

(C-12C/D/F) 

Beechcraft King Air (C-12J)

Military airlift, embassy support 28

C-20B/H Gulfstream Aerospace Gulfstream III and IV Transportation for President, Vice 

President, and other senior officials 

10

C-21A Bombardier Aerospace 

(Learjet) 

Learjet 35A business jet Short-range cargo and passenger 

airlift, including medical evacuations 

76

C-26B Metroliner M7 Aerospace 

(Fairchild Aircraft) 

Fairchild Metro 23 Counterdrug enforcement 11

C-32A Air Force Two Boeing Boeing 757-200 Transportation for Vice President and 

other senior officials 

4

C-37A Gulfstream Aerospace Gulfstream V Transportation for Vice President and 

other senior officials 

9

C-38A Gulfstream Aerospace 

(Israel Aircraft IndustriesGalaxy Aerospace) 

Astra SPX business jet Transportation for distinguished 

visitors, medical evacuations, 

counter-drug efforts, and combat and 

disaster assistance 

2

C-40B/C Boeing Boeing 737-700 Transportation for combatant 

commanders-in-chief and other senior 

officials 

7

C-135 all variants Boeing Boeing 367-80 

(707 prototype) 

KC-135 provides aerial refueling; other 

variants perform specialized missions 

567

CFM-56-2b (F108) 

Engine 

CFM International CFM-56-2a engine Commercial engine used on KC-135R, 

RC-135, E-6, and C-40 

1,853

E-3 Sentry (Airborne 

Warning and Control 

System, AWACS) 

Boeing Boeing 707-320C Airborne surveillance, command, 

control, and communications system 

33

E-4B (National 

Airborne Operations 

Center, NAOC) 

Boeing Boeing 747-200 Airborne command, control, and 

communications center for President, 

Secretary of Defense 

4

E-6 Mercury (Take 

Charge and Move Out, 

TACAMO) 

Boeing Boeing 707-320B Airborne command post for fleet 

ballistic missile submarines 

0a 

E-8C (Joint 

Surveillance Target 

Attack Radar System, 

JSTARS) 

Boeing (airframe) 

Northrop Grumman 

(electronics modifications) 

Boeing 707-300 Provides real-time surveillance and 

targeting information 

15

KC-10A Extender Boeing 

(McDonnell Douglas) 

Boeing DC-10 Aerial refueling, airlift support 59

Appendix I: Commercial Derivative Aircraft 

Included in the Air Force Waiver 
Appendix I: Commercial Derivative Aircraft 

Included in the Air Force Waiver 

Page 16 GAO-05-957 Berry Amendment 

Aircraft designation 

Original equipment 

manufacturer Derived from Mission 

Air Force 

inventory

T-1A Jayhawk Raytheon Aircraft 

(Beech) 

Beech 400A Advanced trainer for Air Force student 

pilots on airlift, bomber, or tanker 

aircraft 

179

T-6A Texan II (Joint 

Primary Aircraft 

Training System, 

JPATS) 

Raytheon Aircraft 

(Beech) 

Beech/Pilatus PC-9 Mk II Entry-level trainer for Air Force and 

Navy student pilots 

180b

T-43A Boeing Boeing 737-200 Trainer for navigators of strategic and 

tactical aircraft 

8

TG-10B/C/D 

Merlin (B), 

Kestrel (C), 

Peregrine (D) 

Letecke Zavody Aircraft 

Corporation 

(Czech Republic) 

Super Blanik L-23 (TG-10B)

Blanik L-13AC (TG-10C) 

Blanik L-33 Solo (TG-10D) 

Air Force Academy training gliders: 

Basic Soaring Trainer (TG-10B), 

Aerobatic & Spin Trainer (TG-10C), 

Cross-Country & Spin Trainer (TG10D) 

 21

TG-14A Ximango Grupo Aeromot Aircraft 

Corporation 

 (Brazil) 

AMT-200S Super Ximango Air Force Academy cross-country 

training glider 

14

TG-15A/B Schempp-Hirth 

(Germany) 

Duo Discus (TG-15A), 

Discus 2b (TG-15B) 

Air Force Academy advanced crosscountry training glider 5

VC-25A Air Force One Boeing Boeing 747-200B Transportation for President 2

Source: GAO analysis. 

a

The Air Force was responsible for administering the contracts for this aircraft through January 2005. 

Currently it has no E-6 aircraft in its inventory. However, the Navy has 16. 

b

The Air Force and Navy plan future purchases of 454 aircraft and 328 aircraft respectively for a total 

of 782 aircraft through 2015. 
Appendix II: Comments from the Department 

of Defense and the Air Force 

Page 17 GAO-05-957 Berry Amendment 

Appendix II: Comments from the Department 

of Defense and the Air Force 

Now on p. 12. 
Appendix II: Comments from the Department 

of Defense and the Air Force 

Page 18 GAO-05-957 Berry Amendment 

Now on p. 12. 
Appendix II: Comments from the Department 

of Defense and the Air Force 

Page 19 GAO-05-957 Berry Amendment 
Appendix II: Comments from the Department 

of Defense and the Air Force 

Page 20 GAO-05-957 Berry Amendment 
Appendix III: GAO Contact and Staff 

Acknowledgments 

Page 21 GAO-05-957 Berry Amendment 

Ann Calvaresi-Barr (202) 512-4841 or calvaresibarra@gao.gov 

In addition to the contact named above, John Neumann, Assistant 

Director; Noah Bleicher; Greg Campbell; Jeffrey Hartnett; Robert Lee; 

Lillian Slodkowski; and Adam Vodraska made key contributions to this 

report. 

Appendix III: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Acknowledgments 

(120390) 
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