Government Contracts NASA Issues Rule on Counterfeit Parts Detection and Avoidance
Friday, February 7, 2020

NASA Issues Rule on Counterfeit Parts Detection and Avoidance

By Government Contracts Editorial Staff

The National Aeronautics and Space Administration has issued a proposed rule addressing the detection and avoidance of counterfeit parts. It would apply to contractors that supply an electronic part, or a product containing an electronic part, to NASA. The rule would require covered contractors, and subcontractors at all tiers, to use electronic parts that are currently in production and purchased from the original manufacturers of the parts, their authorized dealers, or suppliers who obtain the parts exclusively from the original manufacturers of the parts or their authorized dealers. If a contractor does not purchase electronic parts in this manner, it must purchase the parts from a NASA-identified supplier or contractor-approved supplier. The contractor would then assume responsibility and be required to inspect, test, and validate authentication of the parts. The rule also would require the contractor to obtain traceability information and provide this information to the contracting officer when requested, and the rule makes the selection of contractor-approved suppliers subject to review and audit by the CO.

Contract Clause. The requirements would be added at new NFS Subpart 1846.70. These requirements would also be added in a new contract clause, NFS 1852.246-74, which would be used in solicitations and contracts that procure electronic parts; end items, components, parts, or assemblies containing electronic parts; and services, if the covered contractor will supply electronic parts. The clause would be included in commercial items contracts pursuant to amended NFS 1812.301. Finally, under proposed NFS 1831.205-70, the costs of counterfeit electronic parts, suspect counterfeit electronic parts, and any corrective action that may be required to remedy the use or inclusion of such parts, are unallowable unless the contractor has an approved detection system and gives proper notice, or the parts were provided to the contractor as government property under FAR Part 45. This proposed rule implements section 823(c)(2)(B) of the National Aeronautics and Space Administration Transition Authorization Act of 2017 (PL 115-10), which noted an investigation found 1,800 cases and over 1 million counterfeit parts in the Department of Defense supply chain from 2009 through 2010. Comments on the rule referencing NFS Case 2017-N010 are due March 9, 2020. For the text of the rule, see ¶70,048.77.

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