The Berry Amendment Example
Hopeful government contractors must be aware of all the requirements of a solicitation to avoid being deemed non-responsive. This is rarely a simple task; however, when multiple clauses govern the same subject, the risk of error in following such requirements increases. This article demonstrates such an issue by explaining the interworking of the Buy American Act (BAA), 41 U.S.C. §§ 8301-8305, with the Berry Amendment, 10 U.S.C. §§ 2533a-2533b, which are both implemented in the Department of Defense (DOD) contracts through the Defense Federal Acquisition Regulation Supplement (DFARS).
Most government contracts incorporate the BAA into their requirements through 48 CFR § 52.225-1 et seq. See also 48 CFR §§ 252.225-7000-02 (DFARS BAA clauses). The BAA provisions require that “domestic end products” that are deliverable under the contract be manufactured in the United States and be comprised of at least 50% domestic components by cost. It should be noted that some exceptions apply, including the allowance of goods from countries with whom the US has entered an agreement under the Trade Agreement Act and the allowance of other goods that meet specific criteria. The Berry Amendment, on the other hand, restricts the DOD’s purchases of certain non-domestic end products or components, including food, clothing, fabrics, tents, hand tools, and specialty metals. See 48 CFR §§ 252.225-7008-09, 7012.
The Government Accountability Office (GAO) had heard two separate bid protests where the dissatisfied bidders were deemed non-responsive to a solicitation when they met the BAA requirements, but not the more stringent Berry Amendment requirements. One of these protests dealt with a proposal to sell fish that would have been processed in the US but was deemed non-responsive since the fish would have been caught by foreign vessels. In re F.J. O’Hara & Sons, Inc., 1990 U.S. Comp. Gen. LEXIS 271. The other bid was deemed non-responsive since 12% of the labor for producing the solicited clothes would have taken place in Haiti. Matter of Penthouse Mfg. Co., 1985 U.S. Comp. Gen. LEXIS 1241, aff’d 1985 U.S. Comp. Gen. LEXIS 811. Both bidders asserted that the bids were responsive since the goods met the BAA’s requirements for “domestic end product.”
GAO construed the bidders’ protests to assert that the BAA’s definition of “domestic end product” superseded the Berry Amendment’s “Preference for Certain Domestic Commodities” which requires that covered goods “may not be used for procurement of an item if the item [or its components] is not grown, reprocessed, reused, or produced” domestically. 10 U.S. Code § 2533a(a). The GAO rejected this argument in both protests finding that the BAA’s “domestic end product” definition was not relevant to a determination of whether a bid complied with the Berry Amendment clauses, as both are measured independently of one another.
The lesson here is that bidders must consider all the requirements of a solicitation and that if a bidder fails to do so, its bid may be deemed non-responsive. While this article demonstrates one example of this issue, contractors should seek the advice of counsel to determine whether similar issues lie in solicitations for which they intend to compete and to assure that they remain compliant during contract performance.