In 1941, Congress enacted the Berry Amendment, which required that certain items procured for defense purposes be grown or produced in the United States. Specialty metals were added to the Berry Amendment in the early 1970s. The term “specialty metals” is defined to mean any of the following: Steel with a maximum alloy content exceeding one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or containing more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten, or vanadium. Metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent. Titanium and titanium alloys. Zirconium and zirconium base alloys. Specialty metals and their potential applications in DOD weapon systems include: steel alloys such as those used for ship hulls; metal alloys consisting of nickel and iron-nickel; certain cobalt base alloys such as samarium-cobalt alloy magnets used in radars; titanium and titanium alloy used in aircraft engine parts; and zirconium and zirconium base alloys used in gas turbine engines. In 2006, Congress passed the Fiscal Year 2007 NDAA which established specialty metals restrictions separate from the Berry Amendment. The provision generally requires DOD and its contractors to procure specialty metals produced or melted in the United States unless an exception applies which then permits the specialty metals to be obtained from foreign countries. Table 1 shows the federal regulations and DOD guidance that govern the elements of planning, compliance, and domestic source restrictions when procuring specialty metals for major weapon systems. DOD also has other exceptions available under the specialty metals restrictions, but they were beyond the scope of our review. As mandated, our review focused on national security waivers. Appendix II provides a list of the allowable exceptions to the specialty metals restrictions. Some of these exceptions include: National Security Waivers: When the use of noncompliant specialty metals in a weapon system is identified after it has been fabricated, the Secretary of Defense may determine in writing that acceptance of such an end item is necessary to the national security interests of the United States. The Secretary is allowed by statute to delegate this authority to the USD AT&L. DOD generally must notify Congress in advance of making these written determinations except in the case of an urgent national security requirement. Domestic Non-Availability: A domestic non-availability exception may apply if USD AT&L or the Secretary of the military service determines that compliant specialty metal of satisfactory quality, sufficient quantity, and in the required form, cannot be procured when needed at a fair and reasonable price. Qualifying Countries: This exception waives the requirement for procuring specialty metals produced in the United States if the acquisition relates to certain agreements with foreign governments, known as “qualifying countries.” Under the qualifying country exception, manufacturers in these countries have greater flexibility when procuring specialty metals for DOD procurements than U.S. manufacturers. Specifically, they can procure specialty metals from any source—including non-qualifying countries—while a component manufacturer in the United States must procure specialty metals from a source in the United States or a qualifying country. To implement the specialty metals restrictions, DOD established a clause in the DFARS. Generally DOD must include this clause in weapon system solicitations and contracts to require that contractors deliver items incorporating specialty metals in compliance with statute and regulation. Contractors are required to insert this clause, known as flow down, in their subcontracts that include items containing specialty metals, to the extent necessary to ensure compliance. In fiscal year 2009, changes were made to the specialty metals restrictions statute by the Fiscal Year 2008 NDAA, which eliminated an exception used to procure electronic components containing high performance magnets, with noncompliant metals from non-domestic sources. It also established a national security waiver exception—permitting the Secretary of Defense to accept delivery of an end item containing non-domestic specialty metals when the Secretary certifies that it is in the interests of national security. The Department of Defense (DOD) monitors the availability of specialty metals and conducts periodic quality assurance reviews; but played a limited role in planning for the procurement of specialty metals and ensuring compliance with specialty metals’ restrictions for the five programs we reviewed. Officials representing the weapon system programs that we reviewed typically rely on their prime contractors to plan for the procurement of specialty metals and to ensure compliance with these restrictions. We reviewed selected prime contracts for these programs and found they contained clauses requiring prime contractors to procure specialty metals in compliance with domestic source restrictions, ensure that delivered items meet contract technical requirements as part of quality assurance, and maintain processes for meeting future material needs. In turn, these prime contractors told us that they flow down the contract requirements—including those pertaining to specialty metals—to their suppliers, and require them to follow industry standards for quality management. Further, prime contractors for these programs told us they use a risk-based approach to oversee subcontractors, including those at lower tiers. DOD quality assurance staff also conduct periodic quality assurance reviews, primarily at the prime contractor level. DOD played a limited role in planning for specialty metals’ needs for the five programs we reviewed, and does so primarily through reports and assessments of availability of supply. Specifically, the Defense Logistics Agency conducts periodic assessments of strategic and critical materials for DOD, which help inform the department’s decisions to undertake risk mitigations such as stockpiling materials subject to potential shortfalls. In addition, the U.S. Geological Survey provides information to DOD on a variety of mineral commodities, which DOD uses in its analysis of materials availability; it also produces publicly available data on production and trends for some specialty metals and alloys used in specialty metals, including titanium. Specifically, the U.S. Geological Survey reported the price of titanium ingot increased by 250 percent between 2003 and 2006, before dropping to its average price range in the following 4 years. Due in part to the limits of worldwide production capacity, some specialty metals require a long lead time to produce, and specific grades of titanium procured for weapon system production may also require qualification and testing periods. Growing tensions in countries that the United States depends on for these metals, such as Russia, could potentially lead to additional availability risks. For example, a specialty metals industry official told us that samarium cobalt magnets are uniquely developed for DOD weapon systems and must undergo lengthy qualification and testing periods before their use in a weapon system. Further, in DOD’s most recent annual assessment of industrial capabilities, it stated that the industrial base upon which DOD relies has steadily become more global and diverse, and DOD does not control the supply chain that supports production. DOD MIL-STD-3018, Standard Practice for Parts Management (Oct. 27, 2011) and SD- 19, Parts Management Guide (December 2013). management guidance, and the prime contractor told us that this planning includes specialty metals. While neither the material management contract requirement for the programs in our review or the Family of Medium Tactical Vehicles program’s parts management contract requirement specifically discuss specialty metals, they both require contractors to do advance planning for the materials needed in future production, which would include specialty metals or parts containing them. The six prime contractors for the programs we reviewed reported that they conduct various activities to ensure future specialty metals parts for production will be available, including forecasts of specialty metals needed for future production and initiating advance purchasing agreements with specialty metals producers. Four of the prime contractors indicated they have had no difficulties in obtaining specialty metals needed for production from domestic sources or qualifying countries, but two reported encountering availability issues for some specialty metals, including titanium pipe, stainless steel, and some engine parts metals. Table 2 summarizes the six prime contractors’ planning activities for procuring specialty metals and the extent to which they have incurred availability issues. DOD officials for the five weapon systems programs we selected for review reported that they contractually require their prime contractors to comply with the specialty metals restrictions. Five of the six prime contractors, in turn, reported that they rely on their subcontractors for compliance by including the specialty metals restrictions in their subcontracts and purchase orders to the extent necessary to ensure compliance of the end products delivered to the government. The other prime contractor, responsible for the development of the KC-46 Tanker, said it directly procures specialty metals for this military aircraft, rather than relying on subcontractors, largely based on the existing design for its commercially available aircraft. In addition, we found that the prime contracts for four of the five DOD weapon system programs we selected for review require the prime contractor to adopt and use industry standards for quality management. For the remaining contract, although it is not specifically stated in the contract, the prime contractor indicated to us that they interpret their contract to require them to adopt and use industry standards for quality management. These prime contractors indicated they also require their subcontractors and suppliers to use these industry standards. These standards apply to the procurement of all parts, including specialty metals, and include: (1) evaluating potential subcontractors for inclusion on the contractor’s approved suppliers list; (2) reviewing required independent certifications or subcontractor certificates of conformance for items delivered under contract; (3) testing subcontractor parts and processes to determine if they meet contractual specifications; and (4) rating subcontractors on a routine basis using performance metrics such as product quality and on-time deliveries. Five of the six prime contractors that we spoke with reported that these industry standards for quality management were included in their contracts. For example, the prime contractor for the Family of Medium Tactical Vehicles reported that it performs systematic quality reviews of its subcontractors every 6 months to 2 years.