DoD Broadens Allowability for Cost Associated with Counterfeit Electronic Parts
Client Alert | 1 min read | 09.01.16
On August 30, 2016, DoD published a final rule that expands allowability of costs of actual or suspect counterfeit electronic parts and the cost of rework or corrective action due to their use. Whereas, previously, such costs were only allowable if the parts were government-furnished property, effective August 30, 2016, such costs will also be allowable if the parts are obtained in accordance with the newly added DFARS 252.246-7008 concerning sourcing of electronic parts; the contractor becomes aware of the part through inspection, testing, authentication, or other means; and it provides notice to the cognizant COs and GIDEP within 60 days of becoming aware.
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Recent sustain decisions by the U.S. Government Accountability Office (GAO) in Fluor Federal Solutions, LLC and Reliance Test & Technology send a clear message: when an agency tries to fix a Procurement Integrity Act (PIA) violation by committing a second one, the cure can be just as fatal as the disease. The cases involved the U.S. Air Force’s $1.8 billion procurement for O&M services at Elgin Air Force Base. During discussions, the Air Force inadvertently released a pricing overview slide with all offerors’ bottom-line evaluated costs to Reliance Test & Technology, which immediately notified the agency of the error. In response, the Air Force decided to level the playing field by providing the same information to all the other offerors in the procurement, stating, “[o]fferors may consider this disclosure in their [final proposal revision].”
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