Fighting Fakes

The Senate on Tuesday approved an amendment to the fiscal year 2012 defense authorization bill that would “strengthen protections against a flood of counterfeit electronic parts coming into the defense supply system,” the Senate Armed Services Committee announced in a statement that sums up the new protections this way:

* Prohibits contractors from charging the Defense Department for the cost of fixing the problem when counterfeit parts are discovered.

* Requires the department and its contractors whenever possible to buy electronic parts from original component manufacturers and their authorized dealers or trusted suppliers who meet established standards for detecting and avoiding counterfeit parts.

* Requires military officials and contractors who learn of counterfeit parts in the supply chain to provide written notification to the contracting officer, the Department of Defense Inspector General and to the Government-Industry Data Exchange Program.

* Requires the Secretary of Homeland Security to establish a methodology for the enhanced inspection of electronic parts after consulting with the Secretary of Defense as to the sources of counterfeit parts in the defense supply chain.

* Requires large defense contractors to establish systems for detecting and avoiding counterfeit parts, and authorizes reductions in contract payments to contractors who fail to do so.

* Requires DOD to adopt policies and procedures for detecting and avoiding counterfeit parts in its direct purchases, and for assessing and acting on reports of counterfeits.

* Adopts provisions of a bill sponsored by Sen. Sheldon Whitehouse, (D-RI) to toughen criminal sentences for counterfeiting of military goods or services.

* Requires DOD to define the term “counterfeit part,” and at a minimum to include in that definition previously used parts represented as new.