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US military sourcing strategies changing ever so slowly

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The wheels of government turn slowly. And while momentum is gaining for a move away from the traditional stockpiling of raw materials, changing the way the U.S. Defense Department procures metal isn't something that will happen overnight.

Beryllium serves as a perfect example. By all accounts, beryllium producer Brush Wellman Inc.'s quest to commission its $90.4-million Pebbles beryllium plant in Elmore, Ohio, has proceeded smoothly. Nevertheless, the process has taken nearly a decade since its inception.

Beryllium—used in critical system components for weapons, missile defense systems and infrared radar for fighter aircraft and attack helicopters—typically has been purchased by the Defense Logistics Agency (DLA) and stored in government-owned warehouses.

In 2000, Brush Engineered Materials Inc., Cleveland, the only domestic producer of high-purity beryllium, stopped production at its Utah plant, largely due to equipment obsolescence. Since then, the Defense Department has relied on a dwindling supply of beryllium ingot from the national defense stockpile, which is on pace to be depleted by 2011. Currently, the DLA has only about 50 short tons of the material in stock.

However, just boxing up a technologically advanced material such as beryllium and storing it in government warehouses is an inefficient way of going about business, according to Mike Anderson, Brush Wellman's president. "What happens over time is that new forms of the material are developed and new applications come along, so before long those forms that were stockpiled are obsolete," he said. "That's certainly happened with beryllium—essentially, most of the materials that are held in government stockpiles are obsolete grades."

In the early 2000s, Brush Wellman began to explore options with Congress and the Defense Department for the construction of a new primary beryllium production operation as a public/private partnership. "The first piece was communicating the complexities of the issues to the (Defense Department) and government in general," Anderson said. "It's not like you can show up in the Pentagon and find a beryllium guy."

In 2005, after much lobbying, the company received its first contract via the Defense Production Act Title III program, which provides financial incentives to domestic companies to invest in production capabilities for national defense needs. Since then, the company has been building the $90.4-million Pebbles beryllium plant. The project, which received $67 million in government funding, wouldn't have been economically feasible without government support, Anderson said.

The plant is on pace to begin production in October and reach full capacity by the first quarter of 2011, producing 160,000 pounds per year of high-purity beryllium metal and AlBeMet, a company-trademarked aluminum-beryllium alloy. About two-thirds of the products will go to defense- and government-related end-uses, with the remainder earmarked for private-sector companies that produce items such as optical scan mirrors for high-performance laser scanners and X-ray windows used in medical and scientific products, Anderson said.

The metals industry fully supports the DLA's intention to move toward different stockpiling approaches, he said. "We worked pretty closely with the DLA and we fully understand that (the agency) is trying to be much more innovative in how it stockpiles material. It's much easier to buy hunks of metal in bags or boxes and pile them up in a warehouse. When you need to upgrade it every three to six months and keep it in intermediate forms things becomes complicated, but they are really focused on doing just that."

Government would be wise to move toward so-called virtual stockpiles, where intermediary materials can be held and refreshed over time as applications change and demands advance, Anderson said. "We want the opportunity to sell more materials and help (the DLA) refresh the stockpiles that already exist. None of these issues is unsolvable, but they are difficult in a government environment with so many regulations. It's something that's going to take some time, but it's also something that's worth doing." TOM JENNEMANN


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