Army Procurement:

Restriction on the Purchase of Alloy Steel to U.S. and Canadian Sources

NSIAD-89-126FS: Published: May 5, 1989. Publicly Released: May 5, 1989.

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Pursuant to a congressional request, GAO reviewed the Army's rationale for restricting grenade procurements to manufacturers who purchased steel from U.S. or Canadian sources.

GAO found that the Army: (1) had previously allowed contractors, upon request, to obtain steel for the manufacture of grenade bodies from various domestic and foreign sources; (2) in its fiscal year 1988 solicitation, required contractors to purchase the steel from U.S. or Canadian sources, since it had determined that the domestic industrial base for the steel, critical to the U.S. mobilization base, was limited and needed protection; (3) reviewed and retained the restriction after receiving new information about the industrial base and a former manufacturer's contention that the steel industrial base was not threatened and that the industry could easily meet defense mobilization needs; and (4) planned to recommend that future contracts not include any source restriction for steel, based on its continued study of the domestic industrial base, showing that the industry could now supply enough steel to meet peacetime and mobilization needs.

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