Government Contracts Monitor

Short Take: Counterfeit Electronic Parts – the Saga Continues

September 21, 2015

By: Lindsay Simmons

DoD is proposing to revise the DFARS rule entitled “Detection and Avoidance of Counterfeit Electronic Parts”. See Proposal here.

The rule proposes amendments to DFARS 246.870 and a new clause at DFARS 252.246-70XX, Sources of Electronic Parts, to require that DoD and its contractors and subcontractors, except in limited circumstances, acquire electronic parts from trusted suppliers in order to avoid counterfeit electronic parts.

The proposed rule addresses requirements for DoD contractors and subcontractors at all tiers. 

DoD proposes to include the new clause whenever it procures (1) Electronic parts; (2) End items, components, parts, or assemblies containing electronic parts; or (3) Services, if the contractor will supply electronic parts or components, parts, or assemblies containing electronic parts as part of the service.

This new clause is not limited to contractors subject to CAS and will apply to small business set-asides.  The clause includes flowdown to subcontracts, including subcontracts for commercial items.

In addition to the requirements to acquire electronic components from trusted suppliers, contractors and subcontractors that are not the original manufacturer are required to have a risk-based system to trace electronic parts from the original manufacturer to product acceptance by the Government.

The rule also proposes to delete the sentence “The term ‘electronic part’ includes any embedded software or firmware” from the definition of “electronic part.” Although electronic parts may include embedded software or firmware, the requirements of this rule are more applicable to hardware.

Lindsay Simmons is responsible for the contents of this Short Take.
© Jackson Kelly PLLC 2015