DOD Issues Final Rule to Avoid Counterfeit Electronics

The Defense Department amended its acquisition rulebook to clarify contractors’ roles in keeping counterfeit electronics out of critical defense systems.

And fake electronics have been a problem. A 2012 Senate Armed Services Committee investigation found 1,800 cases of counterfeit electronic parts in military equipment and named China as the dominant supplier. Though DOD has since improved its ability to trace parts to the original manufacturer, a 2016 Government Accountability Office report states, “the DOD supply chain is vulnerable to the risk of counterfeit parts — which can have serious consequences.”

The Defense Acquisition Regulation Supplement final rule, posted and effective Aug. 2, focuses on the careful selection of suppliers and verifying the authenticity of electronic parts.  

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The DOD rule requires contractors and subcontractors to buy electronic parts from trusted suppliers. When contractors and subcontractors are not the original manufacturers of a part, they are required to notify DOD contracting officers when they can’t get parts from trusted suppliers.

In those cases, the rule puts the responsibility for inspecting, testing and authenticating parts with industry standards on the contractor.

The rule also clarifies that contractors must conduct the same testing on purchases from Federal Supply Schedule and Defense Microelectronics Activity. However, the government retains the responsibility for parts requisitioned from its own inventory.

Defense officials also proposed another amendment that would make contractors and subcontractors subject to the approval of DOD officials when they identify a contractor-approved supplier. They already subject to reviews and audits.

Comments on the proposal are due Oct. 3.