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DoD’s Final Rule on Counterfeit Electronic Parts Safe Harbor

On August 2, 2016, the Department of Defense (“DoD”) issued its final rule on Detection and Avoidance of Counterfeit Electronic Parts—Further Implementation. The rule amends the Defense Federal Acquisition Regulation Supplement by laying a safe harbor related to counterfeit and suspect counterfeit electronic parts.

The safe harbor has three parts:

  1. The contractor must establish and maintain a system to detect and avoid counterfeit and suspect counterfeit electronic parts. The contractor must obtain review and approval of its system from DoD.
  2. The counterfeit or counterfeit suspect electronic parts must have been provided to the contractor as government property, or the contractor must have obtained the parts in accordance with regulations that require “trusted suppliers” for the parts.
  3. The contractor must timely notify the Government-Industry Data Exchange Program and contracting officer after becoming aware that parts are counterfeit or suspected of being counterfeit.

Government contractors are advised to read the final rule and ensure they have established appropriate policies and procedures to comply with the requirements. For those who read the proposed rule, it is important to also review the final rule. Of the 16 pages in the Federal Register related to this final rule, 13 of those pages summarize comments received on the proposed rule and changes made in the final rule as a result of the comments, particularly the definition of “trusted supplier.”

For questions or concerns related to government contract matters, do not hesitate to contact one of our experienced GovCon professionals for assistance.

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