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On August 2, 2016, the Department of Defense (“DOD”) rolled out new requirements for defense contractors that provide electronic parts and assemblies containing electronic parts. The new rules impose significant risks on DOD contractors.  One clause mandates a specific purchasing hierarchy, with requirements to purchase from the original manufacturer or authorized suppliers thereof when available.  When an original source is not available, contractors are now required essentially to “vouch” for their suppliers, assuming all the risks if a vendor delivers a counterfeit or suspect counterfeit part. Simultaneously, DOD issued a second clause, which requires certain covered contractors in the DOD supply chain to establish and maintain an acceptable electronic part detection and avoidance system. Failure to implement an effective plan may disqualify a vendor from providing products to the DOD. These new rules come very close to imposing a near “strict liability” standard on DOD contractors, asking them to essentially guarantee the supply chain.  Cross your heart and hope to die.
Continue Reading Cross Your Heart and Hope to Die – New DFARS Clauses Target Counterfeit Electronic Parts

The Department of Defense (“DoD”) recently proposed to make specified costs allowable that are associated with discovering and correcting counterfeit or suspect counterfeit electronic parts.  DoD’s proposed rule would amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to implement the National Defense Authorization Act (“NDAA”) for Fiscal Year 2016.
Continue Reading DoD Proposes Cost Allowability Rule for Correcting Counterfeit Electronic Parts

If you are a contractor that interacts with both the Department of Defense and “electronic parts,” it is time to grab the caffeinated beverage of your choice, crack open 79 FR 26,092, and begin the bone-tingling read that is sure to keep many supply chain managers up at night. Implementing the requirements found in the National Defense Authorization Acts for FY2012 and FY2013, the DoD’s counterfeit parts rule was finalized and published in the Federal Register on May 6, 2012. Effective immediately, the new series of regulations apply to defense contractors using, relying on, or selling to the DoD an “electronic part,” as that term is now newly defined.  Although it may spoil the ending and break the cardinal rule of reading any thriller, we provide here the “Cliffs Notes” version of the regulations’ lengthy preamble and the key takeaways of the new Rule and its proposed application.
Continue Reading “They’re Here” – What You Need to Know Now About the Chilling New DoD Counterfeit Parts Rule … and its NASA “Spinoff”

Every now and then, the FAR Councils issue a Federal Acquisition Circular (FAC) – an update to the Federal Acquisition Regulation implementing a number of changes. Often these changes are rather pro forma. But occasionally, you get a Circular with many different (and interesting) issues. FAC 2005-67, issued in late-June 2013, with rules becoming effective in June and July 2013, is one such circular. We thought it would be helpful to highlight five of these rules that raise interesting and timely issues, especially where they may signal additional changes yet to come.
Continue Reading Lots of Little Things – FAR Updates from the Federal Acquisition Circular

By David Gallacher 

Earlier this month, we wrote about a new proposed rule from the Department of Energy imposing new and onerous requirements relating to compliance with the U.S. export control laws. DOE claimed that this proposed rule was modeled on a prior rule included in the Department of Defense Federal Acquisition Regulation Supplement (DFARS) at DFARS Subpart 204.73 and DFARS 252.204-7008, promulgated originally in 2008 (and discussed here). But be aware that those DFARS rules were recently removed. Kind of. In case you were not paying attention, the DFARS export restrictions were recently moved to DFARS Subpart 225.79 and DFARS 252.225-7048. See 78 Fed. Reg. 36108. So, even though the citations may have changed, the song remains the same.Continue Reading “The Song Remains the Same” – DFARS Removes and Replaces Restrictions on Export Controls

By Mark Jensen

Each month, we try to review the Federal Register and post an update summarizing some of the more interesting developments. This month, two of the topics – a proposed rule from the Department of Energy relating to onerous export requirements, and a final rule from the Small Business Administration relating to increased risks for contractors – are reported separately. But beyond these updates, there were several other interesting developments published in the Federal Register this month, showing hopeful signs of simplified and improved governance. And we all like improvements.Continue Reading What’s New Out There? A Regulatory Update (“Promising Improvements” Edition)

By David Gallacher

Two months ago, we published a brief list of compliance tips to keep in mind when dealing with Buy American requirements. We got an awful lot of…

Continue Reading Buy American Redux – 15 Tips for Navigating the Buy American Maze

By Shauna E. Bailey

Proposed DoD Rule: Detection and Avoidance of Counterfeit Electronic Parts (DFARS Case 2012-D-005)

On May 16, 2013, the Department of Defense (“DoD”) issued a proposed rule that would amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) relating to the detection and avoidance of counterfeit parts, in partial implementation of the National Defense Authorization Act (“NDAA”) for Fiscal Year (“FY”) 2012 (Pub. L. 112-81) and the NDAA for FY 2013 (Pub. L. 112-239). 78 Fed. Reg. 28780 (May 16, 2013). The proposed rule would impose new obligations for detecting and protecting against the inclusion of counterfeit parts in their products. Public comments in response to the proposed amendment are due by July 15, 2013.Continue Reading What’s New Out There? A Regulatory Update

By David Gallacher

1. There is no single “Buy American” requirement – there are numerous statutes with differing requirements. Make sure you know which one applies.

2. Whether you are a prime or a subcontractor, certify only to the specific “Buy American” requirements in the RFP; do not make a broader certification than is required.Continue Reading “Buy American” Compliance Tips

By David Gallacher

2012 saw several updates with regard to free trade agreements (“FTAs”) between the U.S. and its international trading allies. The most notable of these was the U.S.-Korea FTA (“KORUS”), but several other changes were made to the U.S. procurement regulations implementing other free trade agreements. Regrettably, negotiations with China remain stalled with no firm promises on the horizon. Following is a summary of some of the key changes over the last year.Continue Reading Free Trade Agreement Updates for 2012