A proposed rule regarding the detection and avoidance of counterfeit electronic parts would create barriers to the Defense Department’s access to key technologies, the Professional Services Council (PSC) said in comments submitted to DoD through the Council of Defense and Space Industry Associations (CODSIA) on July 15.
While PSC and CODSIA support Congress’ intent to prevent counterfeit electronic parts from entering into products and services sold to the Defense Department, the six CODSIA associations that signed the statement highlighted several failings in the proposed rule published on May 16.
“As written, the proposed rule subsumes commercial items in the coverage, thus potentially severing Defense Department access to key, commercial sources of leading edge technologies,” said PSC Executive Vice President and Counsel Alan Chvotkin, a co-chair of CODSIA, in a press statement. In addition, instead of DoD taking any risk or responsibility for sourcing decisions, the rule shifts all the risk and cost to industry.
The proposal also fails to align with other counterfeit parts rules—some of which have yet to be written. Further, it fails to address responsibilities between prime and sub-contractors or deal with the risks associated with DoD’s continued use of obsolete and out-of-production parts. In fact, the rule does not even acknowledge that government acquisition practices can be a significant contributor to the counterfeit risk and threats in the supply chain.
“Supply chain security is challenging and costly, yet the government’s current relentless drive to push prices downward beyond what is fair and reasonable fails to account for how that affects business operations and who is willing to compete for work,” Chvotkin said. “When price is the overriding factor, it limits the competitive opportunities for those suppliers that have invested in those additional steps to assure the traceability and security in their supply chain.”
