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NDAA 2012 Section 818

NDAA 2012 Section 818. Further Implementation for Trusted Suppliers. March 27, 2014 Fred Schipp Naval Surface Warfare Center, Crane Division 812-854-5848 frederick.schipp@navy.mil. NDAA 2012 Section 818. What does Section 818 (c)(3) require whenever possible?

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NDAA 2012 Section 818

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  1. NDAA 2012 Section 818 Further Implementation for Trusted Suppliers March 27, 2014 Fred Schipp Naval Surface Warfare Center, Crane Division 812-854-5848 frederick.schipp@navy.mil

  2. NDAA 2012 Section 818 What does Section 818 (c)(3) require whenever possible? • Government and Contractors shall buy in-production electronic parts direct from authorized suppliers, or one level removed via trusted suppliers. • Government and Contractors shall buy obsolete parts from trusted suppliers. • If the above can’t be met, there shall be inspection, test, and notification of DoD. • Government shall establish qualification requirements for trusted suppliers. • Contractors may also identify trusted suppliers. Contractors: • must use established industry standards, • are responsible for authenticity, and • choices may be reviewed/audited by Government.

  3. NDAA 2012 Section 818 What DO we require of trusted suppliers via DFARS 2012-D055 (May 16, 2013)? • Contractors’ Counterfeit Electronic Part Avoidance and Detection System must address the use and qualification of trusted suppliers. What CAN we require of trusted suppliers? • Avoidance (supply chain management) • Detection (inspection and test) • Containment (do not return) • Notification (to customer) • Reporting (to GIDEP) Trusted suppliers are currently ‘defined’ by DoD (DLA, MDA, Navy, etc.), Prime Contractors, and Subcontractors. How consistent is this?

  4. NDAA 2012 Section 818 Avoidance • We should tell our trusted suppliers to buy from authorized suppliers as a first priority (whenever possible). Detection • We should tell our trusted suppliers how, what, and where to inspect and test parts for authenticity. Containment • We should tell our trusted suppliers not to return suspect counterfeit electronic parts. What does ‘whenever possible’ mean? Last resort? Schedule? Budget? Non-competitive? What is the impact of requiring full manufacturer’s warranty for all electronic part purchases?

  5. NDAA 2012 Section 818 Notification • DFARS 2012-D055 requires DoD notification when suspect counterfeit electronic parts are installed, but not when the contractor plans to buy from untrusted suppliers. Reporting • We should tell our trusted suppliers that we expect them to report suspect counterfeit electronic parts to GIDEP. Audits/Review • We should tell our auditors what to require in a trusted supplier. • Electronic parts intended for DoD systems are seldom reported to GIDEP if they are detected by the ‘trusted supplier’. Why? • Contractor does not own the parts • Trusted supplier fears retaliation from a valuable supplier • Stigma

  6. NDAA 2012 Section 818 We should explore the potential flow down (to trusted suppliers) of every subcontractor anti-counterfeit requirement. THANK YOU

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