Defense Department report criticizes Navy contracting

By:  Julia Bergman
The Day

Describing "a trend towards the purchase of goods produced outside of the United States" that he says have been noted by Connecticut manufacturers in the shipbuilding and aerospace industries, Sen. Chris Murphy has complained to Defense Secretary Ashton Carter about military purchasing.

Friday was National Manufacturing Day, and the Connecticut Democrat took the occasion to write to Carter following an August 2015 report by the inspector general of the Department of Defense that looked at the Navy's compliance with Buy American laws.

Naval contracting personnel failed to assess whether suppliers could provide items produced in the U.S., and, in some cases, were unaware of the Buy American Act and the Berry Amendment, the report found.
Wrenches, tents and other items were purchased from suppliers in other countries.

Buy American requires the government to give preference to American suppliers for bulk purchases of more than $3,000, and the Berry Amendment, which applies to purchases of at least $150,000, prevents the DOD from buying certain products such as clothing and textiles outside of the country.

The Naval Submarine Base in Groton was not part of the audit.

Only four Navy and Marine Corps sites were part of the review: Marine Corps Systems Command, Quantico, Va.; Naval Air Warfare Center Aircraft Division, Lakehurst, N.J.; Naval Sea Systems Command, Washington, D.C.; and Naval Supply Systems Command Fleet Logistics Center, Norfolk, Va.

The report reviewed a very small number of contracts, 55 in total, valued around $74 million and awarded during the 2013 and 2014 fiscal years.

The report did not provide a cost analysis between American-made vs. non-American-made products purchased.

The 2014 National Defense Authorization Act requires periodic audits of contracting practices related to procurement. The DOD inspector general audited the Army's compliance last year.

When the Army was planning to build new barracks in Alaska, it issued a request for proposals that called for bronze door knobs, items that Torrington-based Colonial Bronze Co. makes, Murphy said.

"The contractor filed and got a Buy American waiver for nonavailability, even when a simple Google search would've turned up this company in Torrington," said Murphy, who in recent months has pushed for strengthening Buy American laws.

"Most of the problem seems to be around a failure to assess whether existing American suppliers could produce a contracted good," he said.

The report says Naval contracting personnel, both civilian and military, did not consistently comply with the Berry Amendment for 11 of 23 contracts reviewed.

"Contracting personnel did not assess whether suppliers could provide U.S.-produced items and omitted the Berry Amendment contract clause because they were not familiar with the Berry Amendment," the report says.

The report also found that Navy and Marine Corps contracting personnel did not ensure compliance with the Buy American Act for 12 of 32 contracts reviewed for compliance with that law.

The report recommends that Navy and Marine Corps officials modify "noncompliant contracts."

Naval personnel did correct some of the deficiencies identified, "specifically they amended 7 contracts, removed any items that were not produced in the U.S. for those 7 contracts, required Berry Amendment and Buy American training, and updated standard operating procedures," the report says.

While the sample size is small, Murphy said the results could indicate a larger problem and "suggests that potentially billions of dollars in contracts are going overseas in violation of the Buy American Act."

In his letter to Carter, Murphy wrote that the report is "especially alarming" given that "according to DOD's own data, since 2007, the Department has sidestepped the Buy American Act 307,123 times through waivers and exceptions, and spent over $176.8 billion on goods manufactured outside of the United States."

In August, following his remarks at a conference put on by the Southeastern New England Defense Industry Alliance, Murphy told The Day in an interview that, "One of these days, a foreign supplier is going to tell us that they won't provide us with a product because their government doesn't agree with the particular mission associated with the final product."

"We put ourselves in a really risky national security position if we continue to have this internationalized supply chain," he added.