U.S. industry bears brunt of past protectionism.

• Author: Farrell, Lawrence P., Jr.
• Position: PRESIDENT'S PERSPECTIVE

As even casual observers of the defense industry can attest, the business of producing and delivering weapons systems to the military has radically changed. In the United States, we have seen our industry not only shrink substantially, but also embrace globalization much like the commercial sectors have in recent decades.

Unfortunately, many of the rules that govern defense industry remain stuck in the Cold War. Protectionist laws such as the Berry Amendment are a case in point. Although initially enacted to protect the domestic textile industry during World War II, the revised legislation in place today is proving to have detrimental effects on American contractors and their ability to meet the needs of their military customers.

The 1941 legislation, named after Congressman E.Y. Berry, prohibits the Defense Department from spending any appropriated funds on items made with non-domestic materials. Of particular concern to industry is the requirement that specialty metals used in the components of a weapon system have to be certified as being of U.S. origin. A recent Defense Contract Management Agency directive would withhold payments to contractors who cannot comply with that certification.

Military hardware manufacturers contend that they cannot possibly certify where the metal in each bolt and screw came from. Prime contractors, as it turns out, are not bearing as much of the brunt of this rule as the sub-tier suppliers who provide most of the components used in aircraft, ships and ground vehicles. These subcontractors often buy scrap metal in bulk quantities, so they have no reasonable way to identify where each type of metal came from.

Companies such as Texas Instruments and National Semiconductor recently announced that the specialty metals used in the devices they provide to the Defense Department have foreign-metal content and therefore cannot comply with the Berry rule. "To the best of our knowledge, no other semiconductor manufacturer currently is capable of meeting that standard," wrote Gerry Fields, vice president of National Semiconductor.

The specialty metals clause has been in place since 1972--when lawmakers worried about protecting domestic sources of materials for the Vietnam War. But it has only been recently that the Defense Department has been pressured by lawmakers to crack down on contractors who don't fully meet the certification requirements.

The pro-Berry movement also has been fueled by the titanium industry, which...