MURPHY REQUESTS MEETING WITH PENTAGON TO IMPROVE COMPLIANCE IN WAKE OF CONTINUED “BUY AMERICAN” VIOLATIONS

IG reports reveal that 36% of U.S. Air Force contracts reviewed & 40% of U.S. Navy contracts reviewed violated Buy American laws; Such violations could have cost American businesses more than $200 billion over 5 years & may have threatened our national security

WASHINGTON – Today, just days after denouncing the findings of a February 2016 U.S. Department of Defense (DoD) Inspector General (IG) report which revealed that DoD contracting personnel continue to violate Berry Amendment and Buy American Act laws, U.S. Senator Chris Murphy (D-Conn.) requested to meet with DoD and demand a plan to end the violations and ensure proper compliance training of contracting personnel going forward. In a letter to DoD Under Secretary of Defense for Acquisition, Technology and Logistics Frank Kendall, Murphy reiterated his concerns from an October 2015 letter regarding similar DoD violations, and explained that these violations may have cost American manufacturers more than $200 billion in business over the last five years. Murphy also emphasized that such egregious abuses of the Buy American and Berry Amendment laws are especially damaging to Connecticut’s defense manufacturing base and to our national security. 

According to the February 2016 IG report, one-third of the U.S. Air Force contracts reviewed violated either the Buy American Act or the Berry Amendment. The report revealed that Air Force personnel did not comply with the Buy American Act for 12 out of 33 contracts reviewed, and Air Force personnel did not comply with the Berry Amendment for six out of 21 contracts reviewed.  A similar report from August 2015 revealed that 40% of U.S. Navy contracts reviewed violated the Buy American procurement laws. 

“I am deeply troubled that DoD IG’s very small audit revealed such a large proportion of violations of domestic procurement laws. Since DoD is already exempted from the Buy American Act on many purchases through statutorily acceptable means, the number of violations within the U.S. Air Force further proves that lack of compliance within DoD is seriously damaging American businesses,” wrote Murphy. “If what the IG found in the Navy and the Air Force were true of the DoD in general, this would mean that over $200 billion in additional goods were manufactured overseas instead of in the United States. Without thorough consideration for procurement from DoD, the over 4,000 manufacturers currently operating in my state will surely suffer. That is why I again strongly urge you to do more to ensure all DoD contracting personnel are comprehensively trained in domestic procurement rules and regulations. I am also requesting we meet to discuss how DoD plans to achieve the training that we both agree is important, and what resources Congress can provide to assist in this effort.”

The manufacturing industry plays a crucial role throughout Connecticut communities, creating new jobs and accelerating our state’s economic recovery. Today, Connecticut’s 4,602 manufacturers account for 10.2% of the state’s jobs.

The full text of the letter is available online and below:

The Honorable Frank Kendall
Under Secretary of Defense for
Acquisition, Technology and Logistics
Department of Defense
1000 Defense Pentagon
Washington, DC 20301

Dear Secretary Kendall:

Thank you for your response to my October 2015 letter regarding my concerns over violations of domestic procurement law, specifically the Buy American Act, within the Department of Defense (DoD). I remain concerned, however, given new reports of continued violations within DoD, and urge you to further reevaluate the methods by which DoD ensures contracts comply with federal domestic-content requirements.

My previous letter addressed an August 2015 report from the DoD Inspector General (IG) regarding improving compliance with the Berry Amendment and Buy American Act within the U.S. Navy. These laws prohibit DoD from purchasing items such as fabrics, food, and hand tools that are grown, reprocessed, reused, or produced outside the United States, and require all Federal government contracts to procure articles, materials, and supplies from companies that mine, produce, or manufacture within the United States. Unfortunately, a February 2016 report from DoD IG regarding compliance issues within the U.S. Air Force outlined similar concerns as was within the U.S. Navy earlier in the year. In particular, the IG found that one-third of U.S. Air Force contracts reviewed violated either the Buy American Act or the Berry Amendment. Air Force personnel did not comply with the Buy American Act for 12 out of 33 contracts reviewed, and did not comply with the Berry Amendment for six out of 21 contracts reviewed. Procurement for the six contracts that did not comply with the Berry Amendment alone had an obligated value of $7.1 million.

I am deeply troubled that DoD IG’s very small audit revealed such a large proportion of violations of domestic procurement laws. Since DoD is already exempted from the Buy American act on many purchases through statutorily acceptable means, the number of violations within the U.S. Air Force further proves that lack of compliance within DoD is seriously damaging American businesses.

In the last five years, according to data from the Federal Procurement Data System, DoD spent a staggering $690 billion on manufactured goods. $48 billion worth of manufactured goods were purchased overseas, legally, during that time. If what the IG found in the Navy and the Air Force were true of the DoD in general, this would mean that over $200 billion in additional goods manufactured overseas instead of in the United States, which is not only a violation of the law, but a serious threat to our national and economic security.

A fair opportunity to compete for defense contracts is critical to American economic success. In Connecticut, our manufacturing base is helping create new jobs and accelerating the state’s economic recovery, accounting for 10.2% of the state’s jobs. Without thorough consideration for procurement from DoD, the over 4,000 manufacturers currently operating in my state will surely suffer. That is why I again strongly urge you to do more to ensure all DoD contracting personnel are comprehensively trained in domestic procurement rules and regulations. I am also requesting we meet to discuss how DoD plans to achieve the training that we both agree is important, and what resources Congress can provide to assist in this effort. Thank you and I look forward to meeting with you soon.

Sincerely,

Christopher S. Murphy
United States Senator