NDAA2014 and Proposed Amendments to NDAA2012§818

Earlier this year, the House Armed Services Committee’s proposal for NDAA2014 included amendments to NDAA2012§818 to expand the conditions under which covered contractors can qualify for exemption from strict liability associated with rework and corrective action related to counterfeit electronic parts.
The proposed NDAA2014 would amend NDAA2012 §818 regarding contractor liability in two areas…

  1. electronic parts procured from an original manufacturer or its authorized dealer or from a trusted supplier (NDAA2014 §811), and
  2. obsolete electronic parts (NDAA2014 §812)

The agreement between the House and Senate Armed Services Committees on the National Defense Authorization Act for FY 2014 announced earlier this week, however, does not include these amendments.

Though there is no stated connection with the counterfeit parts issue, the agreement does include a section concerning “obsolete electronic parts” …

(a) IN GENERAL.—Not later than 180 days after the
date of the enactment of this Act, the Secretary of Defense
shall implement a process for the expedited identification
and replacement of obsolete electronic parts included in
acquisition programs of the Department of Defense.
(b) ISSUES TO BE ADDRESSED.—At a minimum, the
expedited process established pursuant to subsection (a)
(1) include a mechanism pursuant to which
contractors, or other sources of supply, may provide
to appropriate Department of Defense officials information that identifies—
(A) obsolete electronic parts that are in-
cluded in the specifications for an acquisition
program of the Department of Defense; and
(B) suitable replacements for such electronic parts;
(2) specify timelines for the expedited review
and validation of information submitted by contractors,
or other sources of supply, pursuant to paragraph (1);
(3) specify procedures and timelines for the
rapid submission and approval of engineering change
proposals needed to accomplish the substitution of
replacement parts that have been validated pursuant
to paragraph (2);
(4) provide for any incentives for contractor
participation in the expedited process that the Secretary
may determine to be appropriate; and
(5) provide that, in addition to the responsibilities
under section 2337 of title 10, United States
Code, a product support manager for a major weapon
system shall work to identify obsolete electronic
parts that are included in the specifications for an
acquisition program of the Department of Defense
and approve suitable replacements for such elec-
tronic parts.
(c) ADDITIONAL MATTERS.—For the purposes of this
(1) an electronic part is obsolete if—
(A) the part is no longer in production;
(B) the original manufacturer of the part
and its authorized dealers do not have sufficient
parts in stock to meet the requirements of such
an acquisition program; and
(2) an electronic part is a suitable replacement
for an obsolete electronic part if—
(A) the part could be substituted for an
obsolete part without incurring unreasonable
expense and without degrading system performance; and
(B) the part is or will be available in sufficient quantity
to meet the requirements of such
an acquisition program.


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