The Very Real Problem of Fake Parts

There is a booming business in making and selling counterfeit parts to the U.S. government. Most of it is of foreign origin, but some is not. These parts can affect consumer electronics, telecommunications, medical devices, automotive parts, critical infrastructure, aircraft, spacecraft and various military applications. Counterfeits can be complete false fabrications, re-marked or re-worked used chips and other electronic parts, etc. Whether they will work is often the wrong question – working, but not properly, can be worse than a complete failure, e.g., altimeters, blood sugar analysis, etc.

The problem can lead to tainted supply chains which in turn lead to threats such as:

To Data:  Unauthorized Access, Alteration, Theft

To Communications: Interruption, Interference, Interception, Insertion

To Systems:  Poor performance, Failure, Remote system disablement

To Public Perception:  Safety of military systems and troops

While this problem will inevitably affect all agencies, the Department of Defense has taken the lead in doing something about it. As a result of the passage of Section 818 of the 2012 National Defense Authorization Act, which addresses the problem and mandates timely action, the Under Secretary of Defense for Acquisition, Technology & Logistics on March 16, 2012, issued a Memorandum to all Secretaries of the Military Departments and Directors of the Defense Agencies entitled: Overarching DoD Counterfeit Prevention Guidance.

Initial guidelines were issued on June 28, 2012, and on September 26, 2012, more definitive guidelines will be issued. We will keep you posted on this very important issue as these guidelines are formulated. For the moment, be aware that the law requires affirmative action on the part of both the government and contractors, details of which we will provide in future posts.

Also, the American Bar Association’s Public Contract Law Section is devoting fully a third of the Agenda at its Fall Meeting in Denver Nov. 1-2, 2012, to this important topic.

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