DFARS specialty metals: melt source, 2% rule and COTS

DFARS specialty metals rules decide whether a part made of specialty steel, titanium, nickel or cobalt alloy, or zirconium can go into an aircraft, missile, ship, vehicle, weapon or ammunition you deliver to DoD. Compliance turns on where the metal was melted or produced, not where the part was machined, plated or assembled, so a supplier's chemistry certificate alone doesn't prove it. Build the melt-source question into your purchase orders and receiving checks now, so a part doesn't reach final inspection without proof of where its metal was melted.

What are the DFARS specialty metals rules?

DFARS specialty metals rules are two clauses implementing 10 U.S.C. 4863. 252.225-7008 requires specialty metal DoD buys as an end item to be melted or produced in the United States or its outlying areas. 252.225-7009 applies that restriction to aircraft, missile or space systems, ships, tank or automotive items, weapons and ammunition, but accepts a qualifying-country melt and lists exceptions.

The two clauses cover different deliveries. 252.225-7008 covers specialty metal delivered as an end item on its own, such as bar, billet, plate, sheet stock, castings or forgings. 252.225-7009 covers aircraft, missile or space systems, ships, tank or automotive items, weapon systems and ammunition, or any component of those, that contain specialty metal, and it carries the exceptions, flowdown and certification detail buyers deal with. A contracting officer uses 7008 above the simplified acquisition threshold when the item ordered is the metal itself, and 7009 when specialty metal sits inside a covered end item. DFARS 225.7003-5(a). DFARS 252.225-7008(b). DFARS 252.225-7009(b).

Both clauses trace back to 10 U.S.C. 4863, a separate statute from the Berry Amendment, which covers different goods such as clothing and hand tools. 10 U.S.C. 4863(a).

What counts as a specialty metal?

DFARS 252.225-7009(a) defines specialty metal as steel over set limits for manganese, silicon or copper, or containing more than 0.25 percent of nine named elements; nickel, iron-nickel or cobalt alloys with more than 10 percent other alloying metals; titanium and its alloys; and zirconium and its alloys. DFARS 252.225-7009(a). 10 U.S.C. 4863(m).

What counts as a specialty metal

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Table listing the metal families that count as DFARS specialty metal: steel over set alloy limits, nickel or iron-nickel alloys and cobalt alloys with more than 10 percent other alloying metals, titanium and titanium alloys, and zirconium and zirconium alloys, plus a sixth row for the high performance magnet definition, which gets its own, narrower COTS carve-out at (c)(2)(i)(C), is never covered by the 2 percent minimal content exception and is excluded from the electronic-component exemption, all for samarium-cobalt magnets specifically, while neodymium-iron-boron magnets fall outside the specialty metal definition entirely.

Metal family	Threshold or definition	Source
Steel	Alloy content over 1.65% manganese, 0.60% silicon or 0.60% copper, or more than 0.25% of aluminum, chromium, cobalt, molybdenum, nickel, niobium, titanium, tungsten or vanadium	DFARS 252.225-7009(a); 10 U.S.C. 4863(m)(1)
Nickel or iron-nickel alloy	Alloying metals other than nickel and iron exceed 10 percent	DFARS 252.225-7009(a); 10 U.S.C. 4863(m)(2)
Cobalt alloy	Alloying metals other than cobalt and iron exceed 10 percent; this is the family that covers samarium-cobalt magnets	DFARS 252.225-7009(a); 10 U.S.C. 4863(m)(2)
Titanium and titanium alloys	Any composition	DFARS 252.225-7009(a); 10 U.S.C. 4863(m)(3)
Zirconium and zirconium alloys	Any composition	DFARS 252.225-7009(a); 10 U.S.C. 4863(m)(4)
High performance magnet (a defined term, not its own metal family)	A permanent magnet that gets most of its magnetic properties from rare earth metals such as samarium. Excepted as COTS only inside a COTS end item or subsystem. Never counts toward the 2 percent minimal content exception. Not covered by the electronic-component exemption	DFARS 252.225-7009(a), (c)(2)(i)(C), (c)(6)

Samarium-cobalt magnets contain specialty metal under this clause, and neodymium-iron-boron magnets do not. PGI 225.7003-3(b)(6)(A). Both magnet types are still restricted separately under DFARS 252.225-7052 when melted or produced in China, Russia, Iran or North Korea, and from January 1, 2027, also when mined, refined or separated there. DFARS 252.225-7052(b), definitions of "specialty metal" and "high performance magnet."

Does this item comply with the specialty metals clause?

For 252.225-7009, compliance takes three checks in order. First, confirm the item contains specialty metal. Next, check whether an exception applies, such as COTS, a qualifying-country manufacture or the 2 percent rule. If none does, confirm the metal was melted or produced in the United States or a qualifying country.

252.225-7008 has no exceptions paragraph and no qualifying-country option of its own; metal delivered as an end item on its own must be melted or produced in the United States or its outlying areas. DFARS 252.225-7008(b). The acquisition-level exceptions at DFARS 225.7003-3(a) and a domestic nonavailability determination still reach that metal, since they run against 225.7003-2(a)(2), the restriction 7008 implements, not against 7008's own clause text.

Does this item comply with 252.225-7009

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Decision flow for 252.225-7009 with four steps for checking specialty metals compliance. Step 1 asks whether the item contains specialty metal; a no means the clause does not apply, with a side note to check DFARS 252.225-7052 separately for magnets, tantalum or tungsten. Step 2 asks whether an exception applies, covering electronic components, commercially available off-the-shelf items and their carve-outs, a commercial-product fastener meeting the 50 percent domestic-melt test, manufacture in a qualifying country, the 2 percent minimal content rule that excludes high performance magnets, or an approved domestic nonavailability determination; a yes means the item complies. Step 3 asks whether the specialty metal was melted or produced in the United States or a qualifying country; a yes means the item complies. Step 4 is the end state when no exception applied and the metal was not melted or produced domestically: the item cannot be delivered unless DoD grants a national security waiver. A side note clarifies that 252.225-7008, which covers specialty metal delivered as an end item on its own, has no exceptions and no qualifying-country option; it requires a US or outlying-area melt directly.

1. 1

   Does the item contain specialty metal (steel over threshold, nickel/iron-nickel or cobalt alloy over 10 percent, titanium, or zirconium)?

   If met

   Continue to step 2

   If not met

   Clause does not apply; check DFARS 252.225-7052 separately if the item has a magnet, tantalum or tungsten

2. 2

   Does an exception apply: electronic component, COTS item (with its carve-outs), commercial-product fastener meeting the 50 percent domestic-melt test, item manufactured in a qualifying country, 2 percent minimal content (not available to high performance magnets), or an approved domestic nonavailability determination?

   If met

   Item complies

   If not met

   Continue to step 3

3. 3

   Was the specialty metal melted or produced in the United States or a qualifying country?

   If met

   Item complies

   If not met

   Continue to step 4

4. 4

   No exception applied and the metal was not melted or produced in the United States or a qualifying country

   If met

   Cannot deliver unless DoD grants a national security waiver under DFARS 225.7003-3(d)

What is the 2 percent minimal content exception, and why doesn't it cover magnets?

DoD may accept an item whose noncompliant specialty metal, by weight, doesn't exceed 2 percent of the total specialty metal weight in that end item, as the contractor estimates in good faith. The exception measures against the item's own specialty metal content, separately from its total weight, and it doesn't apply to high performance magnets. 10 U.S.C. 4863(i). DFARS 252.225-7009(c)(6).

A high performance magnet is a permanent magnet that gets most of its magnetic properties from rare earth metals such as samarium. The exclusion attaches to that defined term, regardless of the magnet's weight. A program can't fold a small noncompliant magnet into an otherwise-compliant assembly and count it as minimal content. DFARS 252.225-7009(a), (c)(6).

Which exceptions apply besides the 2 percent rule?

Besides the 2 percent rule, DFARS 252.225-7009(c) excepts electronic components, commercially available off-the-shelf (COTS) items, commercial-product fasteners that meet a domestic-melt purchase test, and items manufactured in a qualifying country regardless of the metal's own origin. Each exception carries its own limits.

Electronic components are exempt unless DoD names one critical to national security. The exemption doesn't cover the housing, brackets or any high performance magnet inside the component. DFARS 225.7003-3(b)(1). 10 U.S.C. 4863(g). DFARS 252.225-7009(a), definition of "electronic component."

A COTS item is exempt, with four carve-outs. Mill products are exempt only once they're built into a COTS end item, subsystem, assembly or component. Forgings and castings are exempt only inside a COTS end item, subsystem or assembly. High performance magnets containing specialty metal are exempt only inside a COTS end item or subsystem. Fasteners follow the mill-product rule or the 50 percent test below. DFARS 252.225-7009(c)(2)(i)(A)-(D).

The fastener test covers the manufacturer's purchases for the calendar year. The fastener manufacturer certifies it will buy domestically melted or produced specialty metal in the required form equal to at least 50 percent of what it purchases to make fasteners for DoD and every other customer. Buyers get the exemption only when they buy the fasteners under a contract or subcontract with that manufacturer. DFARS 252.225-7009(c)(3). DFARS 225.7003-3(b)(3).

DFARS 225.003 lists 28 qualifying countries, among them the UK, Germany, France, Japan, Israel and Australia. Check the current 225.003 list before you accept a foreign melt source, since a country can be added when the United States signs a new reciprocal defense procurement agreement. DFARS 225.003.

What is a domestic nonavailability determination?

A domestic nonavailability determination lets DoD accept noncompliant specialty metal when compliant metal isn't available in the needed quality, quantity, form and time, at a reasonable price. 10 U.S.C. 4863(b)(1). A military department secretary approves one for a single contract; multiple contracts need USD(A&S) (Under Secretary of Defense for Acquisition and Sustainment) approval. DFARS 225.7003-3(b)(5).

Before a class determination, USD(A&S) posts a notice on SAM.gov at least 30 days ahead where practicable, and asks mill producers and other interested parties for information. The determination and its reasoning get published as far as national security and business confidentiality allow. DFARS 225.7003-3(b)(5)(ii).

Does the clause flow down to subcontractors?

Yes, for 252.225-7009. The prime contractor inserts paragraphs (a) through (c) and paragraph (e)(2) into subcontracts for items containing specialty metal, including commercial products, and may reword paragraph (c)(6) only to manage the 2 percent exception at the prime level. The high performance magnet exclusion still applies at every tier. DFARS 252.225-7009(e).

252.225-7008 has no flowdown paragraph. The prime that delivers the metal to DoD is responsible for its melt source, so primes usually write the US-melt requirement into the purchase order to their mill or distributor. Check your contract and counsel on the wording. DFARS 252.225-7008.

What should a mill test report show?

A mill test report should identify the producing mill, the heat number and the chemistry, and for specialty metals it should state the melt country. Put that requirement on the PO, because many mills leave it off unless asked. A chemistry test can't prove melt location. The same grade of steel or titanium gets melted in more than one country.

Tie every lot or heat to its mill certificate before it goes into inventory, and flag any certificate that names a mill without naming a melt country.

Put these lines on the purchase order, or send them as a request to the mill or distributor:

Mill test report covers what a compliant certificate looks like, and receiving inspection covers what to do when the paperwork doesn't arrive with the material. Your team can open each melt-source request as a task and hand it to Scout Agent, who follows up with the supplier by email and phone.

How does this relate to DFARS 252.225-7052?

252.225-7052 (new contracts carry the deviation version, 252.225-7961) bars certain rare earth magnets, tantalum and tungsten from China, Russia, Iran or North Korea, whether or not a qualifying country would otherwise clear the item. The specialty metals clauses require a US or qualifying-country melt. 252.225-7052 bars covered material from those four countries regardless. DFARS 252.225-7052(a), (b).

A samarium-cobalt magnet can trigger both clauses at once. It's a cobalt alloy under the specialty metals rules and a covered magnet under DFARS 252.225-7052, which adds upstream mining and refining stages from January 1, 2027.

Questions teams ask

Does the specialty metals clause apply to fasteners?

The clause applies to a fastener only when it isn't otherwise excepted. A fastener built into a COTS end item, subsystem, assembly or component is exempt as part of that item, and a standalone commercial-product fastener is exempt if its manufacturer certifies the 50 percent domestic-melt purchase test for the year. A fastener that fails both tests needs melt-source proof like any other specialty metal part.

Does a titanium part machined in the US comply if the bar was melted abroad?

It complies if the bar was melted in a qualifying country. DFARS 252.225-7009(b). If it was melted elsewhere, it doesn't comply unless an exception such as COTS or the 2 percent rule applies, because machining doesn't change the melt location.

What if a supplier can't say where the metal was melted?

Record the answer as unknown and treat the lot as noncompliant until proof arrives. If no compliant source exists, the requiring activity can seek a domestic nonavailability determination through the contracting officer.

Does the clause apply to small purchases?

Prime contracts at or below the simplified acquisition threshold don't carry the clauses, and neither do a few other DoD buys, such as contingency operations, urgent-need awards and commissary resale. Once a prime contract carries 252.225-7009, every subcontract for items containing specialty metal carries it too, whatever the purchase order's value. DFARS 225.7003-3(a). DFARS 252.225-7009(e)(2).

If your team is building melt-source evidence into purchase orders for steel, titanium, nickel-alloy or cobalt-alloy suppliers, talk to our team.

This article is general information, not legal or tax advice. Check how the rules apply to your business with your legal or tax advisor.

Sources (12)

1. DFARS 252.225-7008 Restriction on Acquisition of Specialty Metals (MAR 2013)
2. DFARS 252.225-7009 Restriction on Acquisition of Certain Articles Containing Specialty Metals (JAN 2023)
3. DFARS 225.7003 Restrictions on acquisition of specialty metals (and 225.7003-1 through -5)
4. DFARS 225.7003-2 Restrictions
5. DFARS 225.7003-3 Exceptions
6. DFARS 225.7003-5 Solicitation provision and contract clauses
7. DFARS 225.003 Definitions (qualifying country)
8. DFARS 225.872-1 General (qualifying countries for the Buy American statute and Balance of Payments Program)
9. 10 U.S.C. 4863, Requirement to buy strategic materials critical to national security from American sources; exceptions
10. ASD(A) DPC, Restrictions on Specialty Metals (10 U.S.C. 2533b)
11. Class Deviation 2026-O0041, Revision 1, DFARS Part 225 (Revolutionary FAR Overhaul)
12. DFARS 252.225-7052 Restriction on the Acquisition of Certain Magnets, Tantalum, and Tungsten