New Contracting Rule to Fend Off Counterfeit Parts

Todd Bone, President and Founder of XS International, Inc. and SIA Board member and Advocacy and Outreach Chair, shared this FederalNewsRadio video of Joe Petrillo, a well-known procurement attorney, regarding a new contracting rule intended to fend off counterfeit parts:

The implications for SIA members may be serious…it includes:

  1. New clause for all Federal contracts (This was in place before, but only large Prime Contractors who used Cost Accounting Standards)
  2. New how to source guideline for Contract Officers:
    • If the part is still in production, you can “only” source it from the OEM or one of their authorized resellers. (This is a huge restriction of trade).
    • If the part is no longer being manufactured, then you can buy it from a “Trustworthy Source” (Contractor Approves the source based on DLA criteria based on industry standards – like being ISO Certified)
      • The trustworthy source has to prove traceability back to the OEM, or
      • They have to provide an Inspection, Test and Authentication report that the part is not counterfeit.
    • If the part is no longer being manufactured, and there are no Trustworthy Sources, and there is no traceability to the OEM, the contractor has to send the part out to a 3rd party for verification of authenticity.

Todd has already seen this infiltrate maintenance contracts in the Federal Space and feels that this will also impact Third Party Maintenance Companies, preventing them from bidding on installed equipment that is still in production, not EOL (end of life) and not EOS (end of service). Todd is speaking to Joe Petrillo to learn more and plans to report to SIA’s Board to determine SIA’s plan of action. Please contact Todd at to get involved or for more information.