The US Department of Defense has published new rules to help prevent counterfeit electronic parts ending up in military systems.
The final version of the Defense Federal Acquisition Regulation Supplement (DFARS) – published this week – will “strengthen the integrity of the process for acquisition of electronic parts and benefits both the government and contractors,” according to the Federal Register notice.
In 2010/2011 the DoD said it had identified upwards of a million counterfeit components in the military supply chain, while a report from market research firm HIS published in 2013 indicated there had been more than 12m reports of counterfeit electronics parts in the prior five years.
Aside from the security and safety risks associated with including fake electronic components in military hardware, it has been estimated that a single incident of a counterfeit part can cause up to 64 weeks of production line downtime and cost up to $2.1m to resolve.
The new DFARS document is a set of mandatory detailed requirements on how to buy, manage, and dispose of electronic components, along with reporting mechanisms when counterfeits are found, and draws on
The final version has some significant changes from the proposed rule, first published last September, including a number of amendments that change the terminology used to tie in with terms used in the electronics industry.
For example, the finalised version replaces ‘authorized dealer’ – which is rarely used in practice – and replaces it with ‘authorized supplier.” Similar, ‘trusted supplier’ has gone to be replaced with ‘contractor-approved supplier’.
As expected, the DFARS requires contractors at all tiers – not just those subject to Cost Accounting Standards (CAS) as before – to acquire electronic components from trusted suppliers, rejecting comments that small businesses and acquisitions of commercially-available off the shelf (COTS) items should be exempt.
Electronic parts that are out of stock or no longer in production must also be obtained from trusted suppliers, in recognition of the fact that obsolete parts are known to be an entry point for counterfeits in the supply chain.
Among other changes, the final rule also amends the definition of ‘obsolete electronic part’ to utilise the newly defined term ‘authorized aftermarket manufacturer.’
The DoD is currently undertaking a study on the state of the microelectronics industry, with an emphasis on finding ways to boost access to trusted suppliers.
Last month, a federal jury convicted the president of defense contracting firm Boggs & Associates – Stephan Boggs – on 25 counts of supplying substandard and non-conforming components to the US military, mail fraud and false claims.
The parts were made from unauthorized substituted material, were dimensionally defective, used unauthorized inferior fittings, not heat treated properly, not plated properly and/or did not pass specified testing requirements.