International Contracting - Restrictions on Specialty Metals (10 U.S.C. 2533b)

Reporting of Specialty Metals Non-compliances

Once DCMA becomes aware of a specialty metals non-compliance, its occurrence will be verified through DCMA internal processes by acquisition, legal and technical resources. Verified occurrences of specialty metals non-compliances will be communicated and reported to government departments and agencies and to government contractors through the utilization of Government Industry Data Exchange Program (GIDEP) Agency Action Notices (AANs). The Agency Action Notice-Unlimited distribution (AAN-Us) will contain sufficient information such that all recipients will be fully aware of the details of specialty metals non-compliances. AANs distribute problem information issued by a Government department or agency to GIDEP participants who include Government and Government contractor members. Such notices may be restricted to Government only members of GIDEP (Agency Action Notice Limited distribution (AAN-L)) or may be released to all GIDEP participants (AAN-U)).

DCMA will communicate information to Government contractors, describing occurrences of verified specialty metals non-compliances by generating GIDEP AAN-Us. Specialty metals non-compliance AAN-Us will contain non-sensitive information only. Issuing these notices will allow DCMA to inform all Government contractors who participate in the GIDEP.

DCMA workforce personnel will be informed of verified specialty metals non-compliances through the DCMA Forum, which is used to notify individuals of issues of significance that may require risk assessment and surveillance.

Contact the DCMA Headquarters GIDEP Program Manager, Quality Assurance Directorate, for specialty metals non-compliances at (804) 609-4289 or for more information.

Domestic Non-Availability Determinations (DNADs)

In accordance with DFARS 225.7002-2(b), the secretaries of the military departments, without power of redelegation have authority to approve DNAD Determination and Findings for specialty metals applicable to one contract for their respective requirements.

Required form” means in the form of mill product, such as bar, billet, wire, slab, plate, or sheet, and in the grade appropriate for the production of specialty metals. DoD notes that, based on the new definition of ‘‘required form’’ provided in Section 804(e), it is more difficult to justify nonavailability of an item such as a fastener, since the nonavailability of the specialty metal itself must be justified. Read more.

National Security Waivers

The Under Secretary of Defense (AT&L) has approved six waivers since the DFARS final rule was published in 2009. With one exception, the waivers were for noncompliant high performance Samarium-Cobalt magnets.

DoD weapons programs affected: F-35, F-16, B-1B Reliability and Maintainability Improvement Program (RMIP), C-130J, AIM-9X, and the SM3-Block IIA missile.

Application of specialty metals restrictions to magnets. See DFARS PGI.

HPM = High performance magnet

COTS = Commercially available off-the-shelf. See DFARS PGI 225.7003-3.

Magnet made of specialty metal is: Commercially available, HPM NOT Commercially available, HPM COTS, NOT HPM NOT COTS, NOT HPM
Incorporated into COTS assembly or COTS end item NOT restricted *** NOT restricted ***
NOT incorporated into COTS assembly or COTS end item Restricted Restricted NOT restricted Restricted
Included in 2 percent minimum content? Cannot be included in 2 percent minimum content Cannot be included in 2 percent minimum content NOT restricted Can be included in 2 percent minimum content

***By definition, COTS assemblies and COTS end items will not include a HPM that is not commercially available or any other magnet that is not COTS.

  • Compliance for commercial derivative military articles. See DFARS PGI 225.7003-3.
    • A department or agency requesting a determination or approval from USD(A&S) in accordance with DFARS 225.7003-3(c) shall submit the request, including the proposed determination, to —
      • Principal Director, Defense Pricing and Contracting
        ATTN: OUSD(A&S) DPC/Contract Policy
        3060 Defense Pentagon
        Washington, DC 20301-3060.
    • The Director, DPC will forward the request to USD(A&S) as appropriate.
  • National security waiver. See DFARS PGI 225.7003-3.
    • A department or agency shall request a national security waiver from USD(A&S) in accordance with DFARS 225.7003-3(d) in a timely manner after discovering or being informed of a specialty metals noncompliance in an item, or component thereof, listed at 225.7003-2(a). The department or agency shall submit the request, via the chain of command, including the draft determination and draft letters of notification to the congressional defense committees, as follows:
      • Principal Director, Defense Pricing and Contracting
        ATTN: OUSD(A&S) DPC/Contract Policy
        3060 Defense Pentagon
        Washington, DC 20301-3060
    • The request shall include—
      • The quantity of end items to which the waiver would apply;
      • The time period that the waiver will cover;
      • How and when the noncompliance was discovered—
        • By the subcontractor(s);
        • By the contractor; and
        • By the department or agency;
      • A complete description of all of the items or systems containing noncompliant specialty metals;
      • The contract number(s), date(s), duration, and subcontractor(s) associated with the noncompliance;
      • The manufacturer and country of origin of the noncompliant material, if known;
      • Whether the contractor flowed down the DFARS clause to the subcontractors and in what format (e.g., exact quote or substantially the same?);
      • A technical description of the affected parts, their role in the larger assembly, and their function in the end item;
      • Estimated cost and schedule to replace noncompliant parts if a national security waiver is not granted;
      • Operational and safety implications;
      • Other national security considerations (such as how the requested waiver will contribute to national security policy or operational security);
      • A description of the contractor’s efforts to develop and implement a corrective plan to ensure future compliance; and
      • Information helpful to a determination as to whether any noncompliance was knowing and willful.
    • The Principal Director, Defense Pricing and Contracting will forward the request to USD(A&S) as appropriate.