DoD puts safe harbour in place for electronics contractors

Companies that unwittingly use counterfeit electronics components in US Department of Defense contracts now have some cost protection - provided they have adequate anti-counterfeit measures in place.

A Federal Register notice published this week notes that the costs of fraudulent electronic parts - and the cost of rework or corrective action that may be required to remedy their use - is allowable provided the contractor has a DoD-approved system to detect and avoid counterfeits.

The notice also stipulates that costs are not allowable unless contractors must fulfil the requirement of providing timely notification of counterfeit or suspected counterfeit parts to the federal government (within 60 days of discovery).

The notice is the latest amendment in the revision to the 2016 Defense Federal Acquisition Regulation Supplement (DFARS), which was published in March and became a final rule on August 2.

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