News

Government Contractors: New Rule on Counterfeits

May 9, 2014
Categories: Counterfeit, Government Procurement, Intellectual Property

Contractors must now meet tough new requirements to prevent fake electronic parts from making their way into systems meant for the Pentagon under a provision of the National Defense Authorization Act for fiscal year 2012 that went into effect this week, nearly two years after passage of the Act.

According to a final rule published Tuesday by the Department of Defense, covered contractors and their subcontractors now need to implement and maintain counterfeit electronic part detection and avoidance systems, and certify that they have done so in all federal bid submissions. If a contractor fails to maintain an adequate system – one that meets, at a minimum, twelve enumerated industry best practices — the Pentagon can withhold payments or disapprove the purchase of the system in its entirely. Among the required, risk-based policies and procedures, are training, inspection and testing, and use of “trusted” suppliers.

For further information about this ruling, read Jill Aitoro’s article in the FedBiz section of the Washington Business Journal: ‘Finding fakes: Contractors are now on the hook for weeding out counterfeit parts.’

CREATe.org Resource:

For examples of the impact of counterfeits in government procurement and recommended practices, download the CREATe.org whitepaper: Government Procurement: Driving Responsible Business Practices.

 

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