payback

A reader alerted us to the Berry Amendment and activity by ANHAM/Nour USA to subcontract to companies that are outside of the United States. So let's take a look and see what the deal is.

Berry Amendment

The Berry Amendment was originally enacted in 1941, and it was effectively reiterated as a part of each subsequent defense appropriations act until it was codified as 10 U.S.C. 2533a in 2002 by section 832 of Public Law 107-107.

Regarding purchases of textile and apparel items, the Berry Amendment requires that funds made available to DoD may not be used to purchase clothing; tents, tarpaulins, or covers; cotton and other natural fiber products, woven silk or woven silk blends, spun silk yarn for cartridge cloth, synthetic fabric or coated synthetic fabric (including all textile fibers and yarns that are for use in such fabrics), canvas products, or wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles); or items of individual equipment manufactured from or containing such fibers, yarns, fabrics, or materials unless it is grown, reprocessed, reused, or produced in the United States. That is, covered end items, components, and materials purchased with funds made available to DoD must be produced wholly in the United States. The Berry Amendment is implemented through the Defense Federal Acquisition Regulation Supplement (DFARS) at Subpart 225.7002.

The Berry Amendment contains several exceptions, including acquisitions that are at or below the simplified acquisition threshold and those items purchased outside the United States in support of combat operations.

Here is the actual announcement of the contract award from the DoD.

United States Department of Defense Contracts for May 27, 2004

ANHAM (Joint Venture), Vienna, Va., was awarded on May 25, 2004, a delivery order amount of $120,125,150 as part of a $120,125,150 firm-fixed-price contract for Iraqi Armed Forces and Associated Security Forces*, 15 Battalion Sets, and six Brigade Headquarters Sets.  Work will be performed in the Ukraine (65 percent), Romania (8 percent), United Kingdom (8 percent), Vienna, Va. (7 percent), Canada (5 percent), China (4 percent), and Schaumburg, Ill. (3 percent), and is expected to be completed by Sept. 30, 2006.  Contract funds will not expire at the end of the current fiscal year.  There were ten bids solicited on March 29, 2004, and ten bids were received.  The U.S. Army Tank-Automotive and Armaments Command, Warren, Mich., is the contracting activity (W56HZV-04-D-0181).

According to the percentages provided above, only 10% of the contract work will be completed within the United States. Now let's look at the short announcement of the subcontract to Ukrainian state-owned companies.

Ukraine to supply Iraqi military

Ukrainian state-owned factories will act as subcontractors for Anham, a consortium managed by Nour USA, which has subordinate firms linked to Iraqi politician Ahmad Chalabi and his allies.

The Ukrainians will provide individual kits such as backpacks and personal webbing among other items, with the contract ending in September 2006, the report said.

Sounds alot like goods covered under the Berry Amendment. So what gives? if the subcontracting went predominately to Iraqi companies, great idea. The Iraqi economy needs the help.

But this appears to be more about peddling contracts to Coalition of the Willing partners and influencing those who the US/CPA would like to bring on board.

Bpost Note: We have a non-working link to the original solicitation which apparently specified this was a contract subject to the Berry Amendment. If anyone finds the text of the original solicitation, please forward it to us at blogistonpost@yahoo.com or feel free to post it in the comments section below.
http://contracting.tacom.army.mil/iraqrequire/04r0692/R0692.htm

* What the heck are Associated Security Forces?