What the heck is Mil-spec DFARS? 2019

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MS24693C

Welcome to our ongoing “What the heck is that” series, where we discuss some of the unique fasteners and electronic hardware that precision manufacturers use in the design and assembly of their products.  If you sell to the military either directly or indirectly, then you are probably aware of today’s topic: “DFARS” and “Mil-spec fasteners”.

What does Mil-spec mean anyway?

Before we get into the nitty gritty of DFARS, let’s discuss what makes a “Mil-spec” fastener.   Mil-spec is the informal name for the military standard the U.S. Department of Defense uses in the production of military equipment. Mil-spec fasteners are usually designated by an AN, MS, NAS or NASM prefix followed by a part number.  Each of these prefixes is an abbreviation: NAS stands for National Aerospace Standard and MS stands for Military Standard. For example, the MS24693C pictured above is a fastener produced according to military standards.

Mil-spec fasteners look a lot like their civilian cousins, but, these little guys are made to a specific standard that defines in detail, the screw’s attributes, including: dimensions, tensile strength, hardness, threads, drive type, material qualities and plating, just to name a few.  Mil-spec fasteners are even traceable by lot to designated manufacturers.  The government maintains a list of factories and suppliers who are qualified to manufacture and distribute Mil-spec fasteners.  These suppliers have met all the government’s requirements and pass the highest quality control standards. This designation is called the Qualified Suppliers List for Manufacturer’s [QSLM].

Who uses Mil-spec Fasteners?

Mil-spec fasteners are used by anyone manufacturing or servicing military equipment.  Often, the bill of materials calls for specific Mil-spec grade fasteners in accordance with a part number, drawing or procurement requirement.  Some of the most common uses of Mil-spec fasteners include aerospace and naval vessels.

Now, tell me about DFARS…

Almost a decade ago, the term “DFARS Compliant Material” came to the forefront for companies supplying parts and services to the government. The original Federal Acquisition Regulation (FAR) clause 252.225-7014 specified “A Preference for Domestic Specialty Metals.”  What that means in our world is that for fasteners to be DFARS compliant, the metal used to fabricate them must be melted or manufactured in the United States or a qualifying country.

The Defense Federal Acquisition Regulation Supplement declares the following:

  • Provides specific acquisition regulations that must be followed in the procurement process for goods and services for the Department of Defense and its contactors.
  • FAR 252.225-7014 specifies “A Preference for Domestic Specialty Metals” in the manufacturing of fasteners.  Berry Act, Buy American.
  • The Specialty metals must be melted and manufactured in the United States or a “Qualifying country.”

What is a Qualifying Country?

Qualifying country” means a country with a reciprocal defense procurement memorandum of understanding or international agreement with the United States in which both countries agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country, and the memorandum or agreement complies, where applicable, with the requirements of section 36 of the Arms Export Control Act (22 U.S.C. 2776) and with 10 U.S.C. 2457.

Qualifying countries include the following 27: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Israel, Italy, Japan, Latvia, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom of Great Britain and Northern Ireland.

To keep up to date with DFARs requirements, visit

www.acq.osd.mil/dpap/dars/dfars/html/current/225_0.htm

What is a Specialty Metal?

Title 48 – Federal Acquisition Regulations System, 252.225-7014 Preference for domestic specialty metals.

SPECIALTY METAL DEFINITION

(1) STEEL

(I) WHERE THE MAXIMUM ALLOY CONTENT EXCEEDS ONE OR MORE OF THE FOLLOWING LIMITS:  MANGANESE, 1.65 PERCENT; SILICON, 0.60 PERCENT; OR COPPER, 0.60 PERCENT; OR

(II) WHICH CONTAINS MORE THAN 0.25 PERCENT OF ANY OF THE FOLLOWING ELEMENTS: ALUMINUM, CHROMIUM, COBALT, COLUMBIUM, MOLYBDENUM, NICKEL, TITANIUM, TUNGSTEN, OR VANADIUM;

(2) METAL ALLOYS CONSISTING OF NICKEL, IRON-NICKEL, AND COBALT BASE ALLOYS CONTAINING A TOTAL OF OTHER ALLOYING METALS (EXCEPT IRON) IN EXCESS OF TEN PERCENT;

(3) TITANIUM AND TITANIUM ALLOYS; OR

(4) ZIRCONIUM AND ZIRCONIUM BASE ALLOYS.

www.gpo.gov/fdsys/pkg/CFR-1996-title48-vol3/xml/CFR-1996-title48-vol3-sec252-225-7014.xml

Specialty Metals Include:

  • Stainless steel
  • High alloy steel like Grade-BD
  • Cobalt Chrome Alloys or Grade 5 Chromium steel with high chromium content
  • Nickel Alloys
  • Titanium

Aluminum, Carbon Steel & Copper Alloys are not specialty metals and cannot be DFARS.

What is the difference between Domestic & DFARS?

This is a great question!  There are 3 main factors used to determine the country where a fastener is made and how they are classified.  1) The origin of the metal 2) the country of melt and 3) the country of manufacture.

DFARs only related to specialty metals, and the country of melt & manufacture.  Check with your customer before making any assumptions about what “domestic” means to them.  100% Domestic (metal origin, melt & manufacture) is becoming harder and harder to find. Many products are not available off the shelf and are “made to order” if DFARS or domestic is needed. This will involve a lead time and may have a minimum lot charge.

Lessons Learned: Considerations when purchasing MS24693C or other Mil-spec DFARs fasteners

  • Always ask for “full certifications”.  This includes part name, part description, date of manufacture, lot number, chemical composition of material, and treatment of material including plating or passivation.
  • At point of purchase, make sure the screws are DFARS.  If you do not specifically ask for DFARS-compliant screws, you might receive screws that don’t meet the DFARS requirements, in which case, they won’t meet military standards.  We’ve learned this the hard way so hopefully you don’t have to!

5 Things You Should Know About Conflict Mineral Legislation

Newsletter

Volume 14

April 6, 2015

5 Things You Should Know  About Conflict Mineral Legislation per  Dodd-Frank Act Section 1502

Have you gotten the survey yet? The one asking you to report on your usage of Conflict Minerals from the Republic of Congo and the surrounding areas?   Welcome to the club!

It seems that I receive Conflict Mineral surveys from both public and private companies every week (you know who you are!).  It got me thinking about how cool it is that the products we supply to manufacturers are subject to SEC regulations! All kidding aside, this regulation is all about transparency in the supply chain in order to restrain trade practices that finance inhumane behaviors in areas of conflict in Africa.  Since this hot topic is top of mind, we decided to spend this issue discussing our Top 5 things You Need to Know about Conflict Mineral Legislation and how this regulation impacts manufacturers and the supply chain community.

  1. What are Conflict Minerals?

“Conflict Minerals” is the term used to describe the minerals tantalum, tin, tungsten and gold that are sourced from mines under the control of violent forces in the Democratic Republic of Congo (DRC) and the surrounding countries.  Commonly referred to by the acronym 3TG, these minerals are commonly used in aerospace, electronics, wiring and many other products.

  1. What is the Conflict Mineral Act and where did it originate?

In 2010, Congress enacted Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act amending the SEC Act of 1934.  Referred to as “Conflict Mineral Legislation”, the Act requires “Reporting Companies” to disclose their use of certain minerals needed to manufacture their products, and to conduct a reasonable country of origin inquiry (RCOI) into the source of those minerals. The Reporting Companies must use a new form (Form SD), where they are required to record if the minerals they use and source are DRC Conflict Free, Not DRC Conflict Free or DRC Conflict undeterminable.  These findings must be filed with the SEC annually by May 31 for the prior year, and must be made publically available.

The final rules were enacted in 2012 and took effect in 2013, with the first reporting deadline of May 31, 2014.  You can visit the following link to the SEC facts page for a concise(ish) summary of the legislation.

http://www.sec.gov/News/Article/Detail/Article/1365171562058#.VRtPh_nF_GA

  1. Does my company need to comply?

Great Question!  Section 1502 covers what the SEC refers to as Reporting Companies who use certain minerals in their products.  Reporting Companies are defined as all public companies and other private companies that file periodic SEC reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

Since the legislators didn’t want anyone to feel excluded, and in an effort to make the entire supply chain for Conflict Minerals transparent, they drafted the rules to include anyone in the supply chain of Reporting Companies. The supply chain includes companies supplying or manufacturing raw materials, components or finished products (including fasteners!).

  1. What is the OECDs role in Conflict Minerals?

Due diligence is an important part of Section 1502.  The Organization for Economic Cooperation and Development (OECD), an international organization endorsed by the US State Department and the United Nations, has programs to help companies’ source minerals responsibly throughout the entire supply chain.   The OECD’s “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas” is currently the only recognized due diligence framework available compliant with Section 1502.

You can visit the OECD’s website and download the report here: http://www.oecd.org/daf/inv/mne/GuidanceEdition2.pdf

  1. What can my company do to create conflict-free supply chains?

I recommend you visit the website http://www.conflictfreesourcing.org.  Make sure to download the free reporting template:  http://www.conflictfreesourcing.org/conflict-minerals-reporting-template.   I have filled out this template multiple times already and plan to have my downstream suppliers complete the form by 2016.

Another great source of information is the Big 4 accounting consultancies: Deloitte, PWC, EY and KPMG.  I really like PWCs website.  They have a very informative section with benchmarks based on industry. Here is the aerospace benchmark.    http://www.pwc.com/en_US/us/cfodirect/assets/pdf/aerospace-conflict-minerals-benchmarking.pdf.  Interestingly 2 of the 10 reporting companies reported the Conflict Minerals status was undeterminable. I’m curious to see what the benchmarking data shows in future years.

Finally, I recommend working with your trade group and legal counsel.  I recently attended a trade group seminar where our speaker suggested we develop a compliance report for use with our downstream suppliers and vendors that mirrors what we are required to report upstream.  This strategy makes a lot of sense to me, and will be part of my operations plans for 2016.

Please email me at robin@mfsupply.com with any questions, comments or feedback.  Thanks!

The Screw Lady