Noted Criticisms of DOD's Proposed Regulations

To continue the discussion on DOD definitions related to electronic parts in Section 818(f) of the 2012 NDAA, the regulation states that an electronic part is an IC or integrated circuit, includes a discrete electronic component, which includes transistors, capacitors, resistors, diodes or a circuit assembly. But final regulations clearly include any embedded software or firmware in an electrical part. And the responsibility to detect and eliminate counterfeit parts applies to companies that supply products containing electronic parts as well as the companies that supply individual electronic units.

Major criticisms of DOD’s proposed regulations is that they haven’t identified what an effective detection system should be. Risk issues with parts required for mission critical obsolete parts remains high. DOD, in final regulations addresses the criticism by openly recognizing and even endorsing implementing a risk-based approach for contractors to detect counterfeits and avoid them utilizing risk-based policies an procedures as outlined in DFARS 246.870-2(b).

The final rule describes the risk-based analysis that individual contractors are expected to assume when determining the inspections and tests they will administer on electronic parts. Selection of tests and inspections will be left to the contractors discretion to minimize risk to the Government. Considerations by contractors should include evaluating probabilities of receiving counterfeit parts, decisions on tests or inspections that will identify incoming counterfeit parts, and consequences of risk should a counterfeit part be installed and the potential safety issues or impact on program success such installations could create.

As Contractors continue to wade through these bureaucratic regulations, the focus has to be on what is best for the individual supplier or contractor as well as the Government and the funded programs. How do we protect our businesses from the dishonesty surrounding the counterfeit world? Contact for information on GCI’s solutions to these problems.

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