Contract Management

The Army's decision to issue black berets to all of its forces in just eight months placed enormous demands on the military's procurement system. To meet this challenge, the Department of Defense (DOD) increased the domestic supplier's production, awarded contracts to known foreign sources, and procured berets from additional sources. This testimony discusses DOD's contracting strategy, including (1) the contracting procedures DOD used to buy the berets and (2) the circumstances surrounding waivers to the Berry Amendment, a statutory requirement to buy clothing from domestic suppliers. The Defense Logistics Agency (DLA) took several steps to expedite award of the contracts. However, DLA failed to (1) provide for full and open competition as required by the Competition in Contracting Act of 1984 or (2) obtain a review of these contract actions from the Small and Disadvantaged Business Utilization Office for possible small business participation. GAO also found that authority to waive the Berry Amendment was delegated to DLA's Director and Senior Procurement Executive by the Principal Deputy Under Secretary of Defense (Acquisition, Technology, and Logistics), but later canceled to ensure that any request for a waiver to the Berry Amendment received attention at an appropriate level within DOD. GAO concluded that the eight-month deadline placed DOD in a high-risk contracting situation. In their eagerness to serve the customer, DOD procurement officials chose to shortcut normal contracting procedures. The deadline allowed very little time to plan for the purchase of the berets and little room to respond to production problems.