New Information/Guidance/Tools:

• DoD issued a Defense Federal Acquisition Regulation Supplement (DFARS) final rule implementing the January 2008 amendments to the specialty metals law, 10 US Code Section 2533b, effective July 29, 2009.  The final rule and the new DoD Program Guidance and Instruction (PGI) coverage are currently available on the Defense Procurement and Acquisition Policy (DPAP) website Change Notices.  The final rule is substantially the same as Class Deviation 2008-O0002 that was issued January 29, 2008.
• Where time is critical, existing noncompliant contract items cannot be accepted, and applying the 2009 final rule would permit acceptance, Procuring Contracting Officers (PCOs) may apply the 2009 final rule to existing contracts on a case-by-case basis under FAR 1.108(d)(3).  After determining application to be in the Government’s interest, PCOs may delegate determination of appropriate consideration to DCMA.
• The following exceptions in the 2009 final rule might be used to resolve compliance issues on existing contracts:
  • Electronic Components:  This exception does not include structural or mechanical parts of an electronic assembly and does not include high performance magnets in an electronic component.
  • Commercially Available Off-the-Shelf (COTS) Items:  This exception has exclusions and limits when considering mill products, forgings, castings, high performance magnets, and fasteners.
  • Commercial Fasteners Market Basket:  This exception requires fastener manufacturers purchase 50% of all specialty metals from domestic sources.
  • Minimal Noncompliant Content:  This exception allows up to 2% noncompliant specialty metals where all remaining metals are compliant or fall within another authorized exception.
  • Melted or Produced in the United States:  “Produce” means the quenching or tempering of steel plate, gas atomization or sputtering of titanium, and final consolidation of non-melt derived titanium powder or titanium alloy powder.
• A contract awarded prior to the July 26, 2008 expiration of an earlier class Domestic Non-Availability Determinations (DNADs), such as the class DNADs issued for circuit card assemblies (CCA) and fasteners, can continue to rely upon the DNAD until the contract is complete.
• Contracts awarded under the 2009 final rule will contain a Contractor reporting requirement regarding use of the COTS Item exception at DFARS 252.225-7009(c)(2).  Reporting is implemented by DFARS 252.225-7029 (JUL 2009).
• DCMA is considering executing a block change to incorporate the 2009 final rule clauses across all contracts with specialty metals restrictions.  We will be discussing this with OSD within the next few weeks.
• This information is applicable to the Specialty Metals Clause Compliance Instruction.