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Enhanced Requirement to Report Counterfeit, Suspect Counterfeit, and Nonconforming Goods

Client Alert | 2 min read | 11.25.19

In an effort to further harden the critical-to-mission component supply chain, a new FAR clause published November 22 finalizes a FAR provision that dramatically expands the mandatory reporting of counterfeit and certain nonconforming parts to the Government-Industry Data Exchange Program (GIDEP) and, in some instances, the relevant contracting officer. Although DFARS 252.246-7007, Contractor Counterfeit Electronic Part Detection and Avoidance System, requires GIDEP reporting, the clause is narrowly tailored to defense contractors and to counterfeit electronic parts only. The new FAR rule expands GIDEP reporting to all contractors, to non-electronic counterfeit and suspect counterfeit parts, and to other nonconformances. 

At a high level, the clause will be included in procurements conducted by any agency—including the DoD—for: (1) items subject to FAR clause 52.246-11, Higher-Level Contract Quality Requirement; (2) items identified by the contracting officer as critical items; (3) electronic parts and end items, components, parts or assemblies containing electronic parts; and (4) services where the contractor will furnish, as part of the service, any of items (1)-(3). The new reporting obligations will be triggered by a contractor or subcontractor’s identification of certain counterfeit and suspect counterfeit goods, as well as and goods with major nonconformances (defined as those likely to result in failure of the supplies or materially reduce usability) or critical nonconformances (defined as those likely to result in hazardous or unsafe conditions or prevent performance of a vital mission). The final rule is more narrow in scope than the proposed rule released in 2014. Specifically, unlike the proposed rule, the final rule explicitly excludes procurements for commercial items, medical devices subject to FDA reporting, and commercially-available off-the-shelf items.

Additionally, contractors are now required to review the GIDEP database so they may be able to investigate and remove suspect parts from the supply chain. In response to questions about this process, the Government has recommended using Batch Match to monitor for any references to components or parts of interest. Contractors should be prepared in the coming month to review and revise their existing counterfeit parts programs or establish a counterfeit parts program to comply with the new rule. The new rule will go into effect on December 23, 2019.

We will be conducting a webinar on December 17 to discuss this rule and its implications. More detail about the webinar to follow.

Insights

Client Alert | 3 min read | 10.15.25

Clean Energy Project Developers Adapt Their Timelines and Strategies for Wind and Solar Projects Following Stricter Beginning of Construction Requirements and Expected IRS Enforcement Activity

On August 15, 2025, the Treasury Department and IRS released updated guidance concerning Beginning of Construction requirements to qualify for clean energy tax credits. This new guidance is critical for developers to consider as they rush to qualify for the tax credits before they expire entirely. The much-anticipated guidance followed the July 7, 2025 Executive Order 14315, Ending Market Distorting Subsidies for Unreliable, Foreign-Controlled Energy Sources (“July 7, 2025 Executive Order”), which signaled that the Trump Administration was planning to strictly enforce the termination of production and investment tax credits for solar and wind facilities that are set to expire under the One Big Beautiful Bill Act (OBBB Act), covered in more detail here. The new guidance comes at a time when many in the industry are struggling to keep up with the myriad ways that the new administration is working to roll back wind and solar tax credits, leaving developers to piece through the recent guidance to determine how best to structure and invest in clean energy projects given the volatile position of the current administration vis-a-vis wind and solar energy....