# AFFARS MP5325.7002-2

#### Mandatory Procedure

MP5325.7002-2
Domestic Non-Availability Determinations (DNAD) Under DFARS 225.7002

#### March 2008

#### TABLE OF CONTENTS

#### 1. Introduction

#### 2. Pre-Award Procedures – Specialty Metals

#### 3. Applicability of Commercial Derivative Military Articles (CDMA) to Specialty Metals Restrictions

4. Domestic Non-Availability Determination (DNAD) Exception

#### 5. DNAD Package Contents

#### ADDENDA

#### 1: Sample DNAD Format -- Food, Clothing, Fabrics, and Hand or Measuring Tools

#### 2: Sample DNAD Format -- Specialty Metals

3. Sample Determination and Finding – Commercial Derivative Military Article

1. Introduction

Follow these Mandatory Procedures when requesting approval to purchase restricted food, clothing, fabrics, specialty metals, and hand or measuring tools under DFARS 225.7002. The requirement to comply with these statutory and regulatory restrictions applies to procurements in excess of the simplified acquisition threshold. This MP provides pre-award procedures and assistance in determining the applicability of specialty restrictions when drafting a Domestic Non-Availability Determination (DNAD) or a Commercial Derivative Military Article (CDMA) Determination and Finding (D&F). A DNAD or CDMA D&F must be tailored to your acquisition scenario. In some cases it may not be possible to obtain all of the data contained in the attached samples; however, Contracting Officers should make every effort to do so.

2. Pre-award Procedures

a. Include DFARS 252.225-7014 (Deviation 2008-O0002) in solicitations and contracts exceeding the simplified acquisition threshold (SAT) that requires delivery of specialty metals as end products. Include Alternate I (Deviation 2008-O0002) in solicitations and contracts exceeding the SAT that require delivery of an end item or component of an aircraft, missile or space system, ship, tank or automotive item, weapon system, or ammunition containing specialty metals. In addition, Deviation 2008-O0002 also applies to service contracts, including Contractor Logistics Support (CLS) contracts. However; there is no requirement to include the specialty metal provisions for service contracts when both of the following conditions exist:

(1) The contract is for services (i.e., contractor receives an aircraft, services the aircraft, and returns the aircraft to the Air Force); and

(2) There are no CLINS requiring the delivery of end items or components covered by the specialty metals restrictions.

b. For contracts covered by the specialty metals restrictions, contracting officers must have either an approved DNAD or an exception to the specialty metal restrictions; otherwise the contractor must deliver compliant end items or components. Contracting Officers can no longer use conditional acceptance or withholds to resolve non-compliance on contracts entered into after October 16, 2006.

3. Applicability of Commercial Derivative Military Articles (CDMA) to Specialty Metals

When the contractor certifies that a commercial derivative military article exception is applicable, the Contracting Officer shall follow the procedures in Deviation 2008-O0002 and use Addendum 3 as a D&F format coordinating the effort through SAF/AQCK for approval by the SECAF. This approval authority is not delegable.

4. Domestic Non-Availability Determination (DNAD) Exception

a. Individual DNADs

1. Food, Clothing, Fabrics, and Hand or Measuring Tools. When a contractor asserts that a domestic food, clothing, fabric, and hand or measuring tool Domestic Non-Availability Determination (DNAD) is required; the DNAD (Addendum 1) must be coordinated through SAF/AQCK and submitted to the Secretary of the Air Force for approval. The Secretary of the Air Force can grant a DNAD if compliant food, clothing, fabrics, and hand or measuring tools of satisfactory quality and sufficient quantity, and in the required form, cannot be procured as and when needed. This approval authority is not delegable. This exception should not be read to require that the compliant material/item must be totally unavailable, i.e., cannot be obtained at any cost. There is some cost limit that should be recognizable by a Contracting Officer, and that a reasonable person would agree, makes the material/item effectively “unavailable.”

2. Specialty Metals. When a contractor asserts that a domestic specialty metal end item or component, DNAD is required (Addendum 2), the DNAD must be coordinated through SAF/AQCK and submitted to the Secretary of the Air Force for approval. The Secretary of the Air Force can grant a DNAD if compliant specialty metal of satisfactory quality and sufficient quantity, and in the required form, cannot be procured as and when needed. This approval authority is not delegable. Pursuant to the September 21, 2006, Defense Procurement and Acquisition Policy (DPAP) memo on Implementation Guidance for Pre-Award Berry Amendment Compliance, if award is made while a DNAD is in process and, after award of the contract, and the DNAD ultimately is not approved, the contractor must deliver compliant specialty metal end items. When the specialty metal DNAD covers titanium, the Congressional Defense Committees shall be notified at least ten days prior to contract award. A copy of this notification and the DNAD must also be provided to the Director, Defense Procurement and Acquisition Policy, as specified in DFARS PGI 225.7002-2(b)(4).

b. Class DNADs

1. Food, Clothing, Fabric, and Hand or Measuring Tools. Contracting Officers may continue to use OUSD (AT&L) approved class DNADs that cover food, clothing, fabrics, and hand or measuring tools for new contracts if the DNAD was signed by the Undersecretary of Defense (OUSD (AT&L)) or by a Service Secretary. The OUSD (AT&L) DNADs that are currently available for reciprocal use are posted on the DCMA Website. If a class DNAD is used, the Contracting Officer must prepare a Determination and Finding (D&F) approved by the Senior Contracting Official (SCO) or for AFMC and AFSPC the Senior Center Contracting Official (SCCO). This approval may be not further delegated. The Contracting Officer shall obtain legal review to support the determination.

2. Specialty Metal. As of 26 July 2008, the Contracting Officer may not use a class specialty metal DNAD for new contracts unless the DNAD has been signed and approved for use by the Undersecretary of Defense (Acquisition, Technology, and Logistics (OUSD (AT&L)). The OUSD (AT&L) DNADs that are currently available for reciprocal use are posted on the DCMA Website. When the Contracting Officer determines that use of a class OUSD (AT&L) approved specialty metal DNAD would be appropriate, the Contracting Officer must prepare a D&F for coordination through SAF/AQCK and approval for use by OUSD (AT&L). This approval authority is not delegable. The Contracting Officer shall obtain legal review and engineering analysis to support the determination.

c. One-Time Waiver Requests. For one-time waiver requests, DCMA is responsible for evaluating and approving contractors’ corrective action plans that cover an entire contract, sector, or corporation. DCMA is also authorized to negotiate disposition withholds associated with contracts with prior conditional acceptances due to noncompliance with specialty metal restrictions on Air Force contracts awarded on or before October 16, 2006 with final acceptance before September 30, 2010. PCOs should refer one-time waivers requests through their designated DCMA Administrative Contracting Officer.
5. DNAD Package Contents. When the Contracting Officer determines, through market research, that a specialty metal melted or produced in the United States or its possessions cannot be procured in satisfactory quantity and sufficient quantity, and in the required form, as and when needed, the format in the Mandatory Procedure MP5325.7002-2, Addendum 3 shall be used when submitting a request for a DNAD. At a minimum, the following information should be included in the DNAD package.

a. Determination and Finding

1) Identify noncompliant parts, assemblies or components.
2) Specify when compliant parts/components will be available.
3) Specify the duration and scope (e.g., month/year, covered lot numbers, contract numbers).
4) Discussion of circumstances that preclude acquisition of compliant items and alternative acquisition strategies.
5) Discussion of contractor’s detailed market analysis and corrective action plan.
6) Impact on the program’s delivery schedule, program costs, and mission.
7) Alternatives/substitutes considered.
8) Based on above, determination that waiver is required.
9) Certification by the requiring activity and approval by the SECAF.

b. Independent government verification/validation of contractor’s market analysis (This may not always be necessary if the contractor’s market analysis includes Government validation.)

c. In-Depth market analysis by the prime contractor/subcontractor.

1) Analysis of the current market and efforts required to obtain compliant parts.
2) Analysis of alternate acquisition strategies.
3) Submittal of a Corrective Action Plan (CAP) outlining the steps the contractor will take to attain compliance.

ADDENDUM 1—Sample D&F – Food, Clothing, Fabrics, and Hand or Measuring Tools

DETERMINATION AND FINDING

DNAD FOR {SPECIFY} FOOD, CLOTHING, FABRICS, AND HAND OR MEASURING TOOLS

Pursuant to the authority contained in Section 9005 of Public Law 102-396, as amended, 10 U.S.C. 2533a (the “Berry Amendment”) and Defense Federal Acquisition Regulation Supplement (DFARS) 225.7002-2, I hereby make the following determination and findings concerning [insert agency], [insert contracting activity].

Findings

1. The [insert contracting activity] proposes to purchase [insert description of the item(s)] under contract number [insert contract number]. The item(s) is/are produced or manufactured in [insert country of origin]. The total estimated cost of the item(s) is [insert amount].

2. Describe the mission of the organization:

3. Describe the circumstances that preclude the buying of a domestic end item (“The Berry Amendment (10 U.S.C. 2533a) requiring affected items to be domestic (i.e., of domestic origin and wholly of domestic content) unless a determination is made that such product cannot be acquired as and when needed in a satisfactory quality and sufficient quantity at U.S. market prices”).
4. Describe the market research performed, to include firms contacted.
5. Describe the impact if the waiver is not approved. [include the impact on the program’s delivery schedule, program costs, and mission.]
6. Describe any alternatives/substitutes considered and why these alternatives/substitutes are not satisfactory. [Discuss when compliant parts/components will be available and the Contractor’s Corrective Action Plan.]
7. Provide any other data that will support the request.

Determination

Based on the findings above, I herby determine that a satisfactory quality and sufficient quantity of the above [specify item(s)] that complies with the Berry Amendment cannot be acquired nor produced as and when needed at U. S. market prices. This determination is made in accordance with DFARS 225.7002-2(b) and 10 U.S.C. 2533a. Based on this determination, an exception applies to the requirements of the Berry Amendment to procurement of these items.

This determination will be effective until [specify time period, duration, scope (e.g. month/year, lot numbers, contract numbers, or program completion that specify item or program will comply with 10 U.S.C. §2533a are available.]

______________________________ ________
[NAME] DATE
SECRETARY OF THE AIR FORCE

ADDENDUM 2 – Sample D&F Format – Specialty Metals

DETERMINATION AND FINDING
DOMESTIC NON-AVAILABILITY DETERMINATION (DNAD) FOR [SPECIFY] SPECIALTY METALS

Pursuant to the authority contained in 10 U.S.C. §2533b and Defense Federal Acquisition Regulation Supplement (DFARS 225.7002-2), I hereby make the following determination and findings concerning [insert agency], [insert contracting activity] for acquisition of the domestic non-availability of specialty metals in [identify the program affected or, if the material/part concerned affects multiple programs, identify the specific material/end item/assemblies, components, parts, or materials].

Findings

1. The [insert name of contracting activity] proposed to purchase [insert specific description of item(s) at prime and subcontract level]. It was determined that this acquisition is subject to the 10 U.S.C. §2533b requirements to buy specialty metals critical to national security from U.S. sources and did not fall under any of the statutory exceptions under Deviation 2008-O0002. [insert prime contractor] has asserted that [inset non-compliant end item(s), assemblies, components, parts, materials, or milled products] cannot be obtained containing specialty metals melted or produced in the U.S. in a satisfactory quantity, sufficient quality, and in the required form, and has requested approval of a determination that specific end item(s), assemblies, components, parts, materials, and milled products are not available from domestic sources.

2. Describe the mission of the organization:

3. Describe the circumstances that preclude the acquisition of compliant end items pursuant to 10 U.S.C. 2533b requiring specialty metals to be domestically melted or produced. [Provide a detailed description to explain what portion of the specific item being procured at the prime contract level is not compliant. Specify whether the DNAD is for a program as a whole, a specific contract, certain deliveries, and/or specified end items, components, or parts.]

4. Describe market research performed, to include firms contacted. [Summarize the market research and analysis supporting the assertion of non-availability or include the contractor provided data as an attachment.] [Specify the activity (e.g., AFRL)] conducted an in-depth study of these items and determined that they are [provide brief summary of the analysis -- this should address the aspects of satisfactory quality, sufficient quantity in required form, and time requirements.]

5. Describe the impact if the waiver is not approved. [Include the impact on the program’s delivery schedule, program costs, and mission.]

6. Describe any alternatives/substitutes considered and why these alternatives/substitutes are not satisfactory. [Discuss when compliant parts/components/milled products will be available in the Contractor’s Corrective Action Plan.]

7. Provide any other data that will support the request.

Determination

Based on the findings above, I hereby determine that a satisfactory quality and sufficient quantity of the compliant specialty metals in the required form of the above [specify item(s)/material(s)] cannot be procured as and when needed. This determination is made in accordance with DFARS 225.7014 (Deviation 2008-O0002) and /or Alternate I (Deviation 2008-O0002) and 10 U.S.C. §2533b. Based on this determination, an exception applies to the delivery of end items, assemblies, and components thereof, containing [specify items] where the specialty metals contained in such items were melted or produced. [State whether or not this DNAD is available for other programs or Services to use.] This determination will be effective until [specify time period, duration, scope (e.g. month/year, lot numbers, contract numbers, or program completion.]

______________________________ ________
[NAME] DATE
SECRETARY OF THE AIR FORCE

ADDENDUM 3
Sample D&F – Commercial Derivative Military Article (CDMA)

DETERMINATION AND FINDING

FOR {SPECIFY} COMMERCIAL DERIVATIVE MILITARY ARTICLE (CDMA)

Pursuant to the authority contained in Section 804 of the FY 2008 National Defense Authorization Act and the Defense Federal Acquisition Regulation Supplement (DFARS) 225.7002-2, I hereby make the following determination and findings concerning [insert agency], [insert contracting activity].

Findings

The responsible program office has determined in accordance with 10 U.S.C. 2533b(j) that the aircraft offered by [insert Contractor] in response to Solicitation Number [insert solicitation number], including airframe, engines, as well as related spares and associated parts, is a commercial derivative military article as defined by 10 U.S.C. 2533b(e)(7). See Attachment A. Further, [insert Contractor] has certified (see Attachment B) in accordance with 10 U.S.C. 2533b (j) that it and its subcontractors have or will enter into a contractual agreement or agreements to purchase an amount of specialty metal in the required form for use during the period of contract performance in the production of the commercial derivative military article and the related commercial article, that its good faith estimate is at least the greater of --

(i) An amount equivalent to 120% of the amount of specialty metal that is required to carry out the production of the commercial derivative military article (including the work performed under each subcontract); or

(ii) An amount equivalent to 50% of the amount of specialty metal that is purchased by the contractor and its subcontractors for use during such period in the production of the commercial derivative military article and the related commercial article.

Determination

Based on the findings above, I hereby determine that the aircraft offered by [insert Contractor] in response to Solicitation Number [insert Solicitation Number], including airframe, engines, as well as related assemblies, spares and associated parts, is a commercial derivative article as defined by 10 U.S.C. 2533b(e)(7), and that [insert Contractor] has satisfied the certification requirements of 10 U.S.C. 2533b(j). Accordingly, 10 U.S.C. 2533(b) shall not apply to any contract with [insert Contractor] awarded pursuant to Solicitation Number [insert Solicitation Number].

_________________________________ ____________
{NAME} DATE
SECRETARY OF THE AIR FORCE

Attachments
A. Program Office Determination to support the commercial aspect of the item.
B. Contractor’s CDMA Certification