In an ongoing effort by the government to detect and avoid counterfeit products, the Department of Defense, GSA and NASA announced a proposed FAR regulation to expand the requirements for contractors and subcontractors to report nonconforming items. The preamble of the proposed rule indicates that its purpose is to expand the reporting requirement for counterfeit goods beyond electronics and to all contractors, and will largely be accomplished through amendments to the quality assurance provisions of FAR part 46.4
The proposed rule would require reporting of items that are counterfeit that have a major or critical nonconformance. These new requirements will build largely on pre-existing definitions, but will require contractors to evaluate the Government-Industry Data Exchange Program (GIDEP) to ensure that parts or components are authentic and to avoid the delivery of products that could be classified as counterfeit. The new rules would also require contractors to report to GIDEP within 60 days of learning that an item purchased by the contractor contains a major or critical nonconformance, if the item is a common item and constitutes a “quality escape” that has resulted in the release of like nonconforming items to more than one customer.