The “Buy American” Military Provision Under Assault

Less than one hour after his inauguration, President Trump tweeted: “We will follow two simple rules: BUY AMERICAN & HIRE AMERICAN!”

lmost no one thinks that buying American-made textiles for the military is a bad idea.

Many Americans are disturbed that our military men and women are wearing caps and boots made in China or that the yarns and fabrics for uniforms are imported from other nations.

Not only do we want our troops to have American-made products and bolster U.S. manufacturing, we want the flailing American textile industry to benefit from the $1.5 to $2 billion in annual Department of Defense (DOD) spending.

It is also not surprising that Trump’s support for manufacturing military in the United States has set off a slew of congressional attacks on the Berry Amendment, the federal code that ensures the military gets a secure U.S. supply of highly advanced products.

The U.S. textile industry has suffered for decades under NAFTA and GATT, which I wrote about extensively in my Made in America: Let the Thread Wars Begin.

Casey Bradford, who runs HomeGrown Manufacturing in Bixby, Oklahoma, wants to change that.

Bixy runs a 100 percent American-made clothing company. “I’m not doing this to become a multibillionaire. I’m doing this to bring back manufacturing,” says Bradford.

“A tee-shirt made in China costs $1 or less wholesale,” he says. His company can do it for about $3.50. Shipping costs are lower from Oklahoma than China, but it’s still a hefty premium. But Bixy says the costs are close enough that he has received inquiries from big brands like L.L. Bean, who love the idea of American made.

Marty Moran, the Chairman of the National Council of Textile Organizations (NCTO) said during the group’s annual state of the U.S. textile industry in March 2019, that NTCO is concerned about the congressional attacks on the Berry Amendment in recent annual defense bills, and says he rejects any congressional meddling to weaken the Act.

Named after a 1950s congressman, the Berry Amendment restricts the use of government funds to acquire foreign-origin food products, clothing, fabrics, fibers, yarns, hand tools, measuring tools and specialty metals, including components of these commodities.

Barring some exceptions, funds appropriated or otherwise available to the Department of Defense (DOD) cannot be used for the procurement of an item if the item is not grown, reprocessed, reused or produced in the United States.

The Berry Amendment is part of a 1941 law enacted as part of the Fifth Supplemental National Defense Appropriations Act, which became a permanent part of the U.S. Code when it was codified by the fiscal year 2002 National Defense Authorization Act.

The Berry Amendment directs DOD personnel to ensure funds appropriated or otherwise available to the DOD are not used to procure covered items if the items were not grown, reprocessed, reused or produced in the United States.

The most notable exception to the Berry Amendment is the unavailability of U.S. goods in sufficient quantities at U.S. market prices. In order to meet this exception, a written, domestic non-availability determination from a DOD or military department official is required.

A 2017 audit of the Buy American Act with the Defense Logistic Agency (DLA) was discouraging, however. The audit uncovered widespread ignorance of the Berry Amendment among procurement personnel and uneven compliance.

DLA contracting personnel complied with the Berry Amendment for 13 of the 32 contracts reviewed. However, DLA personnel at 3 of the 4 contracting offices visited did not comply with the Berry Amendment for the remaining 19 contracts, valued at $453.2 million.

This old textile mill, Northwest Woolen Mills, survived the gutting of the U.S. textile industry following NAFTA and GATT and is alive and well today in Woonsocket, Rhode Island. It is the home to the largest wool blanket manufacturer in the United States.

President Trump has made bolstering the military a priority during his administration, including a new uniform for soldiers. In his address to Wounded Warriors, Trump said, “We’re rebuilding our military like never before. Brand new fighter jets. Brand new ships of all kinds. Every soldier has the best equipment. In the Army, we’re even getting new uniforms, and those beautiful new uniforms with the belt. It was a big deal―the belt.”

The new uniforms, which are much more expensive, are not scheduled to go Army-wide until next year, when they will be issued to new soldiers either at the end of advanced individual training or when they report to their first units. Previously, uniforms were issued earlier for new recruits.

By waiting to issue expensive army “dress” uniforms, the military will save on the thousands of recruits who don’t make it out of their special training. Manufacturers are currently being sourced and must meet the Berry Act requirements.

The fact that it is so difficult to find a manufacturer using 100 percent U.S. fibers, or at least the prescribed percentage of fibers in the final product, highlights just how much NAFTA and GATT has gutted our domestic textile and footwear industries. The Rust Belt included not just the steel industry that left plants to idle or die, but the textile industry that was once the manufacturing engine of the South.

The DOD’s procurement of clothing, textiles and footwear makes up a large share of DOD’s contract obligations subject to the Berry Amendment—a whopping $1.9 billion in fiscal year 2018. But just as in other areas of DOD procurement, contract awards seem to be fixed.

One of the largest military-apparel contractors is the Federal Prison Industries (FPI), also known as UNICOR, which supplies prison-manufactured apparel. DOD’s awarding of clothing contracts to this government-owned supplier has proven controversial in both Congress and the apparel industry, and rightly so.

Critics say that prison industrial programs like UNICOR threatens private enterprise and the jobs of residents who are not incarcerated.

Among other issues, critics have challenged FPI/UNICOR’s mandatory source provision, which could require DOD to purchase from FPI/UNICOR factories if they can provide the desired product, within the required time frame, and at a competitive price.

How bad is it? In fiscal year 2018, the DOD accounted for about 90 percent of FPI/UNICOR’s textile and apparel sales, virtually shutting out almost all other U.S. textile manufacturers.

Congress also extended the Berry Amendment by requiring DOD to provide 100 percent U.S.-produced running shoes for recruits entering basic training, which took effect March 2017. This is a big deal.

While the United States is a major manufacturer of safety footwear, almost 100 percent of shoes sold domestically are imported. The U.S. shoe industry was completely decimated by NAFTA and GATT, which I wrote about in Walking a Mile in American Made Shoes.

Previously, DOD provided vouchers to an estimated 250,000 recruits each year to purchase athletic footwear, which did not have to be domestic in origin. The DOD’s direct purchases of footwear, such as combat boots and military dress shoes, totaled about $208 million in fiscal year 2018.

One of New Balance’s manufacturing facilities in Lawrence, Massachusetts. New Balance was promised a shot at a Pentagon contract under the Obama administration if it agreed to stop bashing the TPP. An agreement they say Obama reneged on. Photo credit: John Tlumacki/Boston Globe.

The House Armed Services Committee Chairman Smith (D-WA) and Ranking member Mac Thornberry (R-TX) announced the mark-up schedule for the fiscal year 2020 National Defense Authorization Act.

Senators Rob Portman, Lindsey Graham and Sherrod Brown are working together to get it done by sponsoring the Act of 2018 (S.2284) to “strengthen Buy American requirements.”

The proposed legislation may be the most significant “Buy American” development since President Donald J. Trump issued his “Buy American” Executive Order in 2017, setting forth a policy and action plan to “maximize . . . the use of goods, products and materials produced in the United States” through federal procurements and federal financial assistance awards to “support the American manufacturing and defense industrial bases.”

Currently, the bill has been referred to the Committee on Homeland Security and Governmental Affairs where it remains parked.

It’s time for textile companies to come home. U.S. shoemaker New Balance says that one of its greatest challenges in manufacturing in the United States is getting supplies. Brendan Melly, the director of U.S. operations for New Balance said, “When competitors in athletic footwear went overseas, their suppliers left as well.”

It will take vigilance to ensure the return of textile and shoe manufacturing to U.S. soil because global textile corporations want to stack the game in their favor by employing cheap labor in foreign countries and skirting strict U.S. manufacturing and labor laws and higher taxes.

In the military, the deck is stacked deeper with favored contractors exploiting prison labor that pushes out legitimate U.S. textile manufacturers unable to compete with indentured labor.

We must remain vigilant in pointing out policies that threaten a healthy, U.S. manufacturing industry and support legislation such as the Act of 2018 (S.2284).