NASA Federal Acquisition Regulation Supplement: Detection and Avoidance of Counterfeit Parts (NFS Case 2017-N010)
| Published date | 27 August 2020 |
| Citation | 85 FR 52924 |
| Record Number | 2020-16986 |
| Section | Rules and Regulations |
| Court | National Aeronautics And Space Administration |
Federal Register, Volume 85 Issue 167 (Thursday, August 27, 2020)
[Federal Register Volume 85, Number 167 (Thursday, August 27, 2020)]
[Rules and Regulations]
[Pages 52924-52929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16986]
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1812, 1831, 1846, and 1852
RIN 2700-AE38
NASA Federal Acquisition Regulation Supplement: Detection and
Avoidance of Counterfeit Parts (NFS Case 2017-N010)
AGENCY: National Aeronautics and Space Administration.
ACTION: Final rule.
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SUMMARY: NASA is finalizing a revision to the NASA Federal Acquisition
Regulation Supplement (NFS) requiring covered contractors and
subcontractors at all tiers to use electronic parts that are currently
in production and purchased from the original manufacturers of the
parts, their authorized dealers, or suppliers who obtain such parts
exclusively from the original manufacturers of the parts or their
authorized dealers. These changes implement section 823(c)(2)(B) of
Public Law 115-10, the National Aeronautics and Space Administration
Transition Authorization Act of 2017.
DATES: This rule is effective September 28, 2020.
FOR FURTHER INFORMATION CONTACT: Dorice Kenely, NASA HQ, Office of
Procurement, Policy, Training and Pricing Division, LP-011, 300 E
Street SW, Washington, DC 20456-0001. Telephone 202-358-0443; facsimile
202-358-3082.
SUPPLEMENTARY INFORMATION:
I. Overview of the Rule
This rule implements section 823(c)(2)(B) of Public Law 115-10, the
National Aeronautics and Space Administration Transition Authorization
Act of 2017. It revises the NASA Federal Acquisition Regulation
Supplement (NFS) to add new text requiring a covered contractor,
defined as a contractor supplying an electronic part or a product that
contains an electronic part, and their subcontractors at all tiers to
use electronic parts currently in production and purchased from the
original manufacturers, their authorized dealers, or suppliers who
obtain such parts exclusively from the original manufacturers of the
parts or their authorized dealers. If the contractor does not purchase
electronic parts as discussed above, they must purchase the parts from
a NASA identified supplier or contractor-approved supplier. The
contractor then assumes responsibility and be required to inspect, test
and validate authentication of the part. The contractor is also
required to obtain traceability information and provide this
information to the contracting officer upon request. The selection of
contractor-approved suppliers is subject to review and audit by the
contracting officer.
NASA's final rule is a separate but companion action to the FAR
Council rule on Reporting of Nonconforming Items to the Government-
Industry Data Exchange Program (GIDEP) (FAR Case 2013-002) published at
84 FR 64680. While both rules pertain to the topic of counterfeit parts
and suspected counterfeit parts, there are discernable differences as
they are implementing separate acts. These differences are discussed
below.
Scope
While both the FAR and the NFS rule pertain to the topic of
counterfeit parts and suspected counterfeit parts, the FAR has a
broader application in the types of items covered. It is applicable to
all items subject to higher-level quality standards in accordance with
the clause at FAR 52.246-11, Higher-Level Contract Quality Requirement;
all items that the contracting officer, in consultation with the
requiring activity determines to be critical items for which use of the
clause is appropriate; and for the acquisition of services, if the
contractor will furnish, as part of the service, any items that meet
the criteria specified in paragraphs (a)(1) through (a)(2) of this
section. In addition, the FAR covers acquisitions that exceed the
simplified acquisition threshold and are by, or for, the Department of
Defense for electronic parts or end items, components, parts, or
materials containing electronic parts. Based on the requirements of
section 823 the NFS rule applies only to electronic parts for use in a
safety or mission critical applications.
Reporting/Notification
The FAR requires two reporting requirements which are cleared under
OMB Control number 9000-0187 titled Reporting of Nonconforming Items to
the Government-Industry Data Exchange Program--FAR Sections affected:
52.246-26. One requirement is the submission of a report to GIDEP when
the contractor becomes aware or has reason to suspect, such as through
inspection, testing, record review, or notification from another source
(e.g., seller, customer, third party) that an item purchased by the
Contractor for delivery to, or for, the Government is a counterfeit or
suspect counterfeit item
[[Page 52925]]
or a common item that has a major or critical nonconformance. The
second reporting requirement is a notification to the contracting
officer after becoming aware or having reason to suspect, such as
through inspection, testing, record review, or notification from
another source (e.g., seller, customer, third party) that any end item,
component, subassembly, part, or material contained in supplies
purchased by the Contractor for delivery to, or for, the Government is
counterfeit or suspect counterfeit.
While the NFS rule does not include a GIDEP reporting requirement
it does include a requirement to notify the contracting officer when
the contractor becomes aware, or has reason to suspect, that any end
item, component, part or material contained in supplies purchased by
NASA, or purchased by a covered contractor or subcontractor for
delivery to, or on behalf of, NASA, contains a counterfeit electronic
part or suspect counterfeit electronic part.
Allowability of Costs
As required by statute this NFS rule establishes that costs related
to counterfeit parts, suspect counterfeit parts, or any corrective
action that may be required to remedy the use or inclusion of such
parts is unallowable unless a specific set of criteria is met. The FAR
does not address the allowability of costs as it relates to the
counterfeit parts, suspect counterfeit parts, or any corrective action
that may be required to remedy the use or inclusion of such parts.
Supply Chain Sources
As required by statute the NFS rule establishes required sources
for both electronic parts that are in production or currently available
in stock and separately electronic parts are not in production or
currently available in stock from suppliers. The FAR does not address
sources of items.
Applicability--Commercial/COTS and SAT
Section 823 does not provide for any exemptions. As required by
statute, this NFS rule applies to any electronic part or products that
contain electronic parts, which includes commercial items, including
COTS items, and contracts at or below the SAT. The associated final FAR
rule is not applicable to commercial items or commercially off the
shelf items; additionally, it does not apply to contracts and
subcontracts at or below the simplified acquisition threshold.
II. Summary of Public Comments
The proposed rule was published in the Federal Register at 85 FR
663 on January 7, 2020 with five commenters submitting materials. In
several cases, commenters requested changes to definitions that did not
align with definitions provided in the National Aeronautics and Space
Administration Transition Authorization Act and were therefore not
taken. Two commenters merely affirmed the proposed rule text with no
suggested changes. While no changes were made to the final rule in
response to public comment, NASA's analysis and response to all other
comments are discussed below.
One commenter suggested adding a requirement to electronically
verify if a product was purchased from eBay.com or amazon.com. NASA
notes no changes are necessary to the rule based on this comment
because if the process outlined in the rule is followed, purchases from
these sources will be captured without any additional verification
required. Additionally, the selection of contractor-approved suppliers
is subject to review and audit by the contracting officer.
A commenter recommended requiring covered procuring parts that are
not in production or available in stock to inspect & test the parts
consistent with published industry standards, including reliability
testing and apply additional standards and higher testing requirements
to those parts to mitigate the risk. Additionally, the commenter
requested clarification for the phrase ``in production'' in 1846.7002
and 1852.246-74 specifically, when a manufacturer, authorized
distributor, or authorized aftermarket manufacturer has stock of a
semiconductor in wafer or die form, that it be considered to be ``in
production.'' Lastly, the commenter recommend ``electronic parts'' be
amended to match the definition outlined 48 CFR 252.246-7008(a).
This rule uses the language and definitions as provided by the 2017
NASA Transition Authorization Act so no changes are made to the
definitions. NASA believes no additional changes are necessary because
if the process outlined in the rule is followed, the contractor must
obtain traceability information for the electronic parts (e.g., data
code, lot code, serial number) and provide the information to the
contracting officer upon request. In addition, for unique contract
requirements that involve electronic parts that are not in production,
NASA contractors are subject to NASA internal validation which include
researching part availability from suppliers that meet the defined
criteria, and researching supplier quality histories in the GIDEP
database, NASA-internal supplier quality databases, part inspection and
failure databases, open sources of supplier information indicating
areas of risk, project nonconformance and risk databases, as well as
other subscription-based databases that are designed for sharing
insight about counterfeit risks in the supply chain. Also, NASA
Headquarters' Office of Safety and Mission Assurance executes audits of
Centers' and Projects' adherence to quality policies on a rotating
basis and can instigate special audits when needed to discern
conformance issues and risks.
A commenter wanted to know how NASA will maintain this NASA-
identified supplier list.
As discussed elsewhere in the rule, NASA-identified suppliers will
be identified on a case-by-case basis, using internal counterfeit
avoidance and contractor validation processes, in lieu of maintaining a
list.
A commenter wanted to know how NASA will mitigate risks for parts
provided by a NASA-identified supplier.
The Agency-identified suppliers will be compliant with and
validated using the policies and procedures discussed in this rule as
well as NASA's standard quality assurance and counterfeit avoidance
policies and procedures and supplier validation practices as described
elsewhere in the rule.
A commenter wanted to know will NASA be accountable for corrective
actions on identified suppliers.
As discussed in the rule costs related to corrective action to
remedy the use or inclusion of counterfeit electronic parts are
allowable costs for covered contractors, including NASA-identified
contractors, that: (a) Have a system to detect and avoid counterfeit
electronic parts and suspect counterfeit electronic parts and (b) whose
system has been reviewed and approved by NASA or the Department of
Defense pursuant to 48 CFR 244.303.
A commenter wanted to know what NASA's validation process be for
their identified suppliers.
The Agency's validation process actively pursues objective evidence
of part and part supplier suitability throughout design, procurement,
and product acceptance which provides the technical authority and risk
management systems continuous/real-time awareness of conformance with
NASA's standard quality assurance and counterfeit avoidance policies
and procedures. Validation practices include
[[Page 52926]]
researching part availability, supplier quality histories in the GIDEP
database, NASA-internal supplier quality databases, part inspection and
failure databases, open sources of supplier information indicating
areas of risk, project nonconformance and risk databases, as well as
other subscription-based databases that are designed for sharing
insight about counterfeit risks in the supply chain.
A commenter recommended the final rule clarify how ``mission
critical'' and ``safety'' applications will be identified.
Section 823 cites the presence of counterfeit electronic parts in
the supply chain as ``a danger to the United States government
astronauts, crew, and other personnel and a risk to the agency
overall'' as such, each unique contract requirement for electronic
parts will be subject to the requirements of this rule when their
presence in the NASA supply chain poses a danger to United States
government astronauts, crew, and other personnel and a risk to the
agency overall.
IV. Applicability to Commercial Item Acquisitions, Including
Commercially Available Off-the-Shelf (COTS) Items, and Acquisitions
Below the Simplified Acquisition Threshold (SAT)
This rule implements section 823 of the National Aeronautics and
Space Administration Transition Authorization Act of 2017 (Pub. L. 115-
10). Section 823 does not limit the application of the requirements of
the statue to non-commercial contracts or contracts above the
simplified acquisition threshold. Consistent with 41 U.S.C. 1905, 1906
and 1907, the NASA Assistant Administrator for Procurement has
determined that it is in the best interest of NASA to apply section 823
to the acquisition of commercial items, including COTS items, and those
requirements below the SAT.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and therefore was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This is not a major rule under 5
U.S.C. 804.
VI. Executive Order 13771.
This rule is not subject to the requirements of E.O. 13771 because
this rule is not significant under E.O. 12866.
VII. Regulatory Flexibility Act
No comments were received on NASA's initial analysis and the Final
Regulatory Flexibility Analysis (FRFA) is summarized below.
The rule will apply to all ``covered contractors.'' Covered
contractors, as defined by Public Law 115-10 are contractors, including
small entities, that supply an electronic part, or a product that
contains an electronic part to NASA. While the rule will apply to all
classes of small business, it will not necessarily affect all of those
business because the rule requires reporting only when nonconforming
defective and/or suspect counterfeit parts are present or there is
suspicion that counterfeit parts are present in the supply chain. Since
this rule requires contractors and subcontractors to purchase
electronic parts that are currently in production from the original
manufacturer, the authorized dealers or suppliers who obtain parts
exclusively from the original manufacturer or for products that are not
currently in production use of a NASA identified contractor, NASA
believes that there is very little risk that a contractor or
subcontractor will have a counterfeit part in the supply chain and thus
very little risk that a small contractor will have to report. As
reported in FPDS, NASA has had contract obligations with 3,120, 3,023
and 2,805 small business contractors in 2016, 2017 and 2018,
respectively and no counterfeit parts were found in the supply chain.
Further, based on the initial scope of the rule, NASA has assessed the
number of commercial item acquisitions for electronic items procured
above and below the simplified acquisition threshold and believe the
impact of this proposed rule will be minimal. An analysis of data for
the last three fiscal years from the FPDS revealed the following:
------------------------------------------------------------------------
Number of Total dollar
actions amount of actions
------------------------------------------------------------------------
2019:
Electronic Commercial Items...... 131 $17,810,644
Under the SAT.................... 110 6,348,554
Above the SAT.................... 21 11,462,089
2018:
Electronic Commercial Items...... 275 38,516,656
Under the SAT.................... 229 10,922,058
Above the SAT.................... 46 27,594,598
2017:
Electronic Commercial Items...... 526 38,020,457
Under the SAT.................... 498 16,934,479
Above the SAT.................... 28 21,085,978
------------------------------------------------------------------------
The policy requires covered contractors and subcontractors to
notify the applicable NASA contracting officer in writing not later
than 30 calendar days after the date the covered contractor becomes
aware, or has reason to suspect, that any end item, component, part or
material contained in supplies purchased by NASA, or purchased by a
covered contractor or subcontractor for delivery to, or on behalf of,
NASA, contains a counterfeit electronic part or suspect counterfeit
electronic part.
The final rule also requires covered contractors and subcontractors
to purchase electronic parts that are currently in production from the
original manufacturer, their authorized dealers or suppliers who obtain
parts exclusively from the original manufacturer or their authorized
dealers. Electronic parts that are not currently in production or
available in stock shall be obtained from NASA identified suppliers or
contractor-approved suppliers and the contractor
[[Page 52927]]
assumes responsibility for the authenticity, inspection, testing and
traceability of the part. Contractor-approved suppliers are subject to
review and audit by the Contracting Officer.
VIII. Paperwork Reduction Act
This rule contains information collection requirements that
requires the approval of the Office of Management and Budget under the
Paperwork Reduction Act (44 U.S.C. chapter 35). Accordingly, NASA has
submitted a request for approval of a new information collection
requirement associated with NFS Case 2017-N010 Detection and Avoidance
of Counterfeit Parts to the Office of Management and Budget.
List of Subjects in 48 CFR:
Parts 1812 ``Acquisition of Commercial Items''; 1831 ``Contract
Cost Principles and Procedures''; 1846 ``Quality Assurance'': 1852
Provisions and Clauses. Government procurement.
Geoffrey Sage,
NASA FAR Supplement Manager.
Accordingly, 48 CFR parts 1812, 1831, 1846, and 1852 are amended as
follows:
0
1. The authority citation for parts 1816, 1832 and 1852 continues to
read as follows:
Authority: 51 U.S.C. 20113(a) and 48 CFR chapter 1.
PART 1812--ACQUISITION OF COMMERCIAL ITEMS
0
2. Amend section 1812.301 by redesignating paragraph (f)(i)(T) as
paragraph (f)(i)(U) and adding a new paragraph (f)(i)(T) to read as
follows.
1812.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
(f)(i) * * *
(T) 1852.246-74, Counterfeit Electronic Part Detection and
Avoidance.
(U) 1852.247.71, Protection of the Florida Manatee.
PART 1831--CONTRACT COST PRINCIPLES AND PROCEDURES
0
3. Add section 1831.205-71 to read as follows:
1831.205-70 Costs related to counterfeit electronic parts and suspect
counterfeit electronic parts.
(a) Scope. This section implements the requirements of section
823(c)(2)(B), the NASA Transition Authorization Act of 2017 (Pub. L.
115-10).
(b) The costs of counterfeit electronic parts, suspect counterfeit
electronic parts, and any corrective action that may be required to
remedy the use or inclusion of such parts are unallowable, unless--
(1)(i) The covered contractor, as defined in section 1846.7001, has
an operational system to detect and avoid counterfeit electronic parts
and suspect counterfeit electronic parts that has been reviewed and
approved by NASA or the Department of Defense pursuant to 48 CFR
244.303; and
(ii) The covered contractor, including subcontractors, notifies the
applicable NASA contracting officer in writing in accordance with
1846.7002(c); or
(2) The counterfeit electronic parts or suspect counterfeit
electronic parts were provided to the covered contractor as Government
property in accordance with part 45 of the Federal Acquisition
Regulation.
PART 1846--QUALITY ASSURANCE
0
4. Add subpart 1846.70 to read as follows:
Subpart 1846.70--Counterfeit Electronic Part Detection and
Avoidance.
Sec.
1846.7000 Scope of subpart.
1846.7001 Definitions.
1846.7002 Policy.
1846.7003 Contract clause.
1846.7000 Scope of subpart.
This subpart implements section 823(c), the NASA Transition
Authorization Act of 2017 (Pub. L. 115-10).
(a) Prescribes policy and procedures for preventing counterfeit
electronic parts and suspect counterfeit electronic parts from entering
the supply chain when procuring electronic parts or end items,
components, parts, or assemblies that contain electronic parts; and
(b) Applies to electronic parts when their presence in the NASA
supply chain poses a danger to United States government astronauts,
crew, and other personnel and a risk to the agency overall.
(c) Contracting officers, in consultation with the requiring
activity, are responsible for making a determination concerning the
applicability of this section and the appropriate use of the prescribed
contract clauses.
1846.7001 Definitions.
``Authentic part'' means a new and unmodified part produced by the
original component manufacturer, or a source with the express written
authority of the original manufacturer or current design activity,
including an authorized aftermarket manufacturer.
``Authentication'' means a process to verify that a part is not
counterfeit or suspect counterfeit.
``Authorized aftermarket manufacturer'' means an organization that
fabricates an electronic part under a contract with, or with the
express written authority of, the original component manufacturer based
on the original component manufacturer's designs, formulas, and/or
specifications.
``Authorized supplier'' means a supplier, distributor, or an
aftermarket manufacturer with a contractual arrangement with, or the
express written authority of, the original manufacturer or current
design activity to buy, stock, repackage, sell, or distribute the part.
``Contract manufacturer'' means a company that produces goods under
contract for another company under the label or brand name of that
company.
``Contractor-approved supplier'' means a supplier that does not
have a contractual agreement with the original component manufacturer,
but has been qualified as trustworthy by a contractor or subcontractor
as having met prescribed counterfeit electronic part detection and
avoidance system criteria using established counterfeit prevention
industry standards and processes.
``Covered contractor'' means a contractor that supplies an
electronic part, or a product that contains an electronic part, to
NASA.
``Counterfeit electronic part'' means an unlawful or unauthorized
reproduction, substitution, or alteration that has been knowingly
mismarked, misidentified, or otherwise misrepresented to be an
authentic, unmodified electronic part from the original manufacturer,
or a source with the express written authority of the original
manufacturer or current design activity, including an authorized
aftermarket manufacturer. Unlawful or unauthorized substitution
includes used electronic parts represented as new, or the false
identification of grade, serial number, lot number, date code, or
performance characteristics.
``Electronic part'' means a discrete electronic component,
including a microcircuit, transistor, capacitor, resistor, or diode,
that is intended for use in a safety or mission critical application.
``Original component manufacturer'' means an organization that
designs and/or engineers a part and is entitled to any intellectual
property rights to that part.
``Original equipment manufacturer'' means a company that
manufactures products that it has designed from purchased components
and sells those
[[Page 52928]]
products under the company's brand name.
``Original manufacturer'' means the original component
manufacturer, the original equipment manufacturer, or the contract
manufacturer.
``Suspect counterfeit electronic part'' means an electronic part
for which credible evidence (including, but not limited to, visual
inspection or testing) provides reasonable doubt that the electronic
part is authentic.
1846.7002 Policy.
The government and its contractors and subcontractors at all tiers
are required to obtain electronic parts as prescribed in this section,
whether the electronic parts are procured as discrete items or
contained in an assembly.
(a) The covered contractor and subcontractors at all tiers shall
obtain electronic parts that are in production or currently available
in stock from--
(1) The original manufacturers of the parts;
(2) Their authorized dealers; or
(3) Suppliers who obtain such parts exclusively from the original
manufacturers of the parts or their authorized dealers.
(b) If electronic parts are not in production or currently
available in stock from suppliers as stated in paragraph (a) of this
section, the covered contractor shall obtain electronic parts from NASA
identified suppliers or contractor-approved suppliers for which--
(1) The covered contractor assumes responsibility for the
authenticity of parts; and
(2) The covered contractor performs inspection, testing and
authentication of parts; and
(3) The covered contractor obtains traceability information for the
electronic parts (e.g., data code, lot code, serial number) and
provides this information to the contracting officer upon request; and
(4) The selection of contractor-approved suppliers is subject to
review and audit by the contracting officer.
(c) The covered contractor, including subcontractors, shall notify
the applicable NASA contracting officer in writing not later than 30
calendar days after the date the covered contractor becomes aware, or
has reason to suspect, that any end item, component, part or material
contained in supplies purchased by NASA, or purchased by a covered
contractor or subcontractor for delivery to, or on behalf of, NASA,
contains a counterfeit electronic part or suspect counterfeit
electronic part.
1846.7003 Contract clause.
For acquisitions with covered contractors as defined in section
1846.7001, use the clause at 1852.246-74, Contractor Counterfeit
Electronic Part Detection and Avoidance, in solicitations and
contracts, when procuring--
(a) Electronic parts;
(b) End items, components, parts, or assemblies containing
electronic parts; or
(c) Services, if the covered contractor will supply electronic
parts or components, parts, or assemblies containing electronic parts
as part of the service.
PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. Add section 1852.246-74 to read as follows:
1852.246-74 Contractor Counterfeit Electronic Part Detection and
Avoidance.
As prescribed in 1846.7003, use the following clause:
CONTRACTOR COUNTERFEIT ELECTRONIC PART DETECTION AND AVOIDANCE.
(DATE)
(a) Definitions. As used in this clause--
``Authentic part'' means a new and unmodified part produced by
the original component manufacturer, or a source with the express
written authority of the original manufacturer or current design
activity, including an authorized aftermarket manufacturer.
``Authentication'' means a process to verify that a part is not
counterfeit or suspect counterfeit.
``Authorized aftermarket manufacturer'' means an organization
that fabricates a part under a contract with, or with the express
written authority of, the original component manufacturer based on
the original component manufacturer's designs, formulas, and/or
specifications.
``Authorized supplier'' means a supplier, distributor, or an
aftermarket manufacturer with a contractual arrangement with, or the
express written authority of, the original manufacturer or current
design activity to buy, stock, repackage, sell, or distribute the
part.
``Contract manufacturer'' means a company that produces goods
under contract for another company under the label or brand name of
that company.
``Contractor-approved supplier'' means a supplier that does not
have a contractual agreement with the original component
manufacturer, but has been qualified by the contractor or
subcontractor approved by the contractor or government as having met
prescribed counterfeit electronic part detection and avoidance
system criteria using established counterfeit prevention industry
standards and processes.
``Counterfeit electronic part'' means an unlawful or
unauthorized reproduction, substitution, or alteration that has been
knowingly mismarked, misidentified, or otherwise misrepresented to
be an authentic, unmodified electronic part from the original
manufacturer, or a source with the express written authority of the
original manufacturer or current design activity, including an
authorized aftermarket manufacturer. Unlawful or unauthorized
substitution includes used electronic parts represented as new, or
the false identification of grade, serial number, lot number, date
code, or performance characteristics.
``Electronic part'' means a discrete electronic component,
including a microcircuit, transistor, capacitor, resistor, or diode,
that is intended for use in a safety or mission critical application
(section 823 (d)(2) of Pub L. 115-10).
``Original component manufacturer'' means an organization that
designs and/or engineers a part and is entitled to any intellectual
property rights to that part.
``Original equipment manufacturer'' means a company that
manufactures products that it has designed from purchased components
and sells those products under the company's brand name.
``Original manufacturer'' means the original component
manufacturer, the original equipment manufacturer, or the contract
manufacturer.
``Suspect counterfeit electronic part'' means an electronic part
for which credible evidence (including, but not limited to, visual
inspection or testing) provides reasonable doubt that the electronic
part is authentic.
(b) Sources of electronics parts. In accordance with section
823(c)(3), the NASA Transition Authorization Act of 2017 (Pub. L.
115-10), the covered contractor shall--
(1) Obtain electronic parts that are in production by the
original manufacturer or an authorized aftermarket manufacturer or
currently available in stock from--
(i) The original manufacturers of the parts;
(ii) Their authorized dealers; or
(iii) Suppliers who obtain such parts exclusively from the
original manufacturers of the parts or their authorized dealers;
(2) If electronic parts are not in production or currently
available in stock from suppliers as stated in paragraph (b) of this
clause, the covered contractor shall obtain electronic parts from
NASA identified suppliers or contractor-approved suppliers for
which--
(i) The covered contractor assumes responsibility for the
authenticity of parts; and
(ii) The covered contractor performs inspection, testing and
authentication of parts; and
(iii) The covered contractor obtains traceability information
for the electronic parts (e.g., data code, lot code, serial number)
and provides this information to the contracting officer upon
request; and
(iv) The selection of contractor-approved suppliers is subject
to review and audit by the contracting officer.
(c) Notification. The covered contractor, including
subcontractors, shall notify the NASA contracting officer in writing
not later
[[Page 52929]]
than 30 calendar days after the date the covered contractor becomes
aware, or has reason to suspect, that any end item, component, part
or material contained in supplies purchased by NASA, or purchased by
a covered contractor or subcontractor for delivery to, or on behalf
of, NASA, contains a counterfeit electronic part or suspect
counterfeit electronic part.
(d) Costs related to counterfeit electronic parts and suspect
counterfeit electronic parts. In accordance with section
823(c)(2)(B), the NASA Transition Authorization Act of 2017 (Pub. L.
115-10), the costs of counterfeit electronic parts and suspect
counterfeit electronic parts and the costs of rework or corrective
action that may be required to remedy the use or inclusion of such
parts are unallowable, unless--
(1) The covered contractor has a system to detect and avoid
counterfeit electronic parts and suspect counterfeit electronic
parts that has been reviewed and approved by NASA or the Department
of Defense pursuant to 48 CFR 244.303; and
(2) The covered contractor, including a subcontractor, notifies
the applicable NASA contracting officer in writing in accordance
with paragraph (c) of this clause; or
(3) The counterfeit electronic parts or suspect counterfeit
electronic parts were provided to the covered contractor as
Government property in accordance with part 45 of the Federal
Acquisition Regulation.
(e) Subcontracts. The covered contractor shall insert this
clause, including this paragraph (e), in subcontracts for--
(1) Electronic parts;
(2) End items, components, parts, or assemblies containing
electronic parts; or
(3) Services where the covered contractor will supply electronic
parts or components, parts, or assemblies containing electronic
parts as part of the service, including subcontracts for commercial
items that are for electronic parts or assemblies containing
electronic parts, unless the subcontractor is the original
manufacturer. The covered contractor shall not alter the clause
other than to identify appropriate parties.
(f) Corrective Action. In the event that the covered contractor
supplies a counterfeit electronic part, suspect counterfeit
electronic part or end item, component, or assembly containing a
counterfeit electronic part to NASA, the covered contractor shall
take such corrective actions as the Administrator considers
necessary to remedy the use or inclusion of additional counterfeit
electronic parts, suspect counterfeit electronic part or end items,
components, or assemblies containing a counterfeit electronic part.
(End of clause)
[FR Doc. 2020-16986 Filed 8-26-20; 8:45 am]
BILLING CODE 7510-13-P
