Monthly Archives: January 2012

Questions re ‘Trusted Suppliers’

According to Section 818 of the FY2012 NDAA, DOD is expected to revise regulations to “require that, whenever possible, the Department and Department contractors and subcontractors at all tiers–

(i) obtain electronic parts that are in production or currently available in stock from the original manufacturers of the parts or their authorized dealers, or from trusted suppliers who obtain such parts exclusively from the original manufacturers of the parts or their authorized dealers; and

(ii) obtain electronic parts that are not in production or currently available in stock from trusted suppliers …”

In response to another essay within this blog, I received questions concerning the definition of trusted suppliers and started this blog post for discussing this topic.

FY2012 NDAA – Obsolescence Management and Its Relationship to Counterfeit Electronic Part Avoidance

Section 818 of the FY2012 NDAA requires DOD to establish requirements for a contractor or subcontractor to notify its DOD customer when electronic parts are obtained from any source other than the original manufacturer or its authorized dealer. The continued demand for parts known to be obsolete is one scenario where DOD and its contractors can anticipate when it will be necessary to make such purchases unless obsolete parts are eliminated from electronic equipment designs.

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MILAERO007 The Rise of Counterfeit Components

MILAERO007 The Rise of Counterfeit Components

(This article originally appeared in the December 2011 issue of SMT Magazine)

FY2012 NDAA – Disposition of Counterfeit Electronic Parts

The disposition of counterfeit parts discovered within the supply chain continues to be a significant topic of debate among users and suppliers of electronic components. Some organizations do not return suspect counterfeit parts (a) for fear that one of the suppliers in the chain may subsequently attempt to resell them, and (b) because they may be required for evidence if the Government later expresses an investigatory interest. Others, however, return suspect counterfeit parts for a refund or credit.

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FY2012 NDAA – Customer / Supplier Engagement in Decision Making and Costs to Remedy Use of Counterfeit Electronic Parts

According to Section 818 of the FY2012 NDAA, DOD is expected to issue or revise guidance applicable to Department components to implement a risk-based approach to minimize the impact of counterfeit or suspect counterfeit electronic parts. DOD guidance and policies are to be established within 180 days after the date of the enactment of the NDAA. Regulations applicable to contractors are expected within 270 days. The revised regulations are to provide that the cost of counterfeit electronic parts and suspect counterfeit electronic parts and the cost of rework or corrective action that may be required to remedy the use or inclusion of such parts are not allowable costs under Department contracts.

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NCMA Webinar on NDAA Section 818: Detection and Avoidance of Counterfeit Electronic Parts

I will be conducting a webinar on 29 February for the National Contract Management Association (NCMA) on the counterfeit parts requirements introduced in the FY2012 NDAA.

Pass on the word to defense contract management professionals and project managers.

Henry Livingston

Quality Management System Standards

The Section 818 of the FY 2012 NDAA for will require DOD to implement a program to enhance contractor detection and avoidance of counterfeit electronic parts and to establish processes for the review and approval of contractor systems for the detection and avoidance of counterfeit and suspect counterfeit electronic parts. NDAA Section 818 further states that the review and approval processes are to be comparable to those established for contractor business systems under section 893 of the Ike Skelton National Defense Authorization Act for FY 2011.

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FY2012 NDAA – Reporting Counterfeit Electronic Parts

Prior to the FY2012 NDAA, the sharing of information on component counterfeiting incidents depended on willingness to share it. Though companies acknowledged the benefits they received from counterfeit case reports published by others, several defense and aerospace companies claim that legal or liability issues has been the chief reason for not sharing information on the incidents they discover. Though business systems adopted by defense and aerospace companies address disposition, containment and corrective action associated with non-conforming material issues in general, many companies lack business processes to support the sharing of information for the benefit of others who may also be affected.

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FY2012 NDAA – Authenticity Inspections and Tests

The National Defense Authorization Act (NDAA) for Fiscal Year 2012 will prompt contractors to carefully consider product authenticity inspections and tests applied to parts purchased from Independent Distributors and ‘brokers’.

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Why Black Market Entrepreneurs Matter to the World Economy – Wired

“Not many people think of shantytowns, illegal street vendors, and unlicensed roadside hawkers as major economic players. But according to journalist Robert Neuwirth, that’s exactly what they’ve become. …”