The National Defense Authorization Act for Fiscal Year 2012 Conference Report to Accompany H.R. 1540 states Contractor Responsibilities shall provide that –
(A) covered contractors who supply electronic parts or products that include electronic parts are responsible for detecting and avoiding the use or inclusion of counterfeit electronic parts or suspect counterfeit electronic parts in such products and for any rework or corrective action that may be required to remedy the use or inclusion of such parts; and
(B) the cost of counterfeit electronic parts and suspect counterfeit electronic parts and the cost of rework or corrective action that may be required to remedy the use or inclusion of such parts are not allowable costs under Department contracts.
So how does this affect you as a contractor or supplier? The fact is that costs relating to the purchase, replacement, or corrective actions are unallowable, meaning your company is going to be assuming this financial expense and risk. So the big question is, how do you avoid this investment risk?
Companies purchasing electronic parts will have to be more diligent verifying that the electronic parts are currently still in production, available from inventory of franchised distributors and authorized dealers, or available from other suppliers traceable to one of the paths above.
You can also obtain electronic parts that are not in production or currently available in stock from trusted suppliers – but what do you do when the authentic parts are no longer available from trusted suppliers?
The ultimate solution will be to utilize a trusted supplier, who can manufacture a replacement part that meets all qualification requirements. GCI’s proprietary technologies have successfully assembled customized replacement parts for obsolescence issues that eliminate all possibilities of counterfeit. For more information on how this solution works email firstname.lastname@example.org .