By Dr. James A. Hayward, CEO and President, Applied DNA Sciences
Today the Federal Register published a new set of regulations for defense suppliers about which the government and industry have been wrangling for nearly 2 1/2 years. It will change everything in electronics.
Known as DFARS Case 2012-D055, this deceptively lifeless government identifier denotes an historic moment for the electronics industry.
It is the day when anti-counterfeiting processes and technologies became, not just law, but law with teeth.
As a company which has worked for years to help protect the safety of our warfighters from the silent scourge of counterfeit parts, and contribute to the health of an electronics supply system under attack, we applaud this moment. While the regulations are not perfect, and will continue to be shaped (either for better or worse) we stand proud to be in the mainstream of those offering solutions to the counterfeit crisis, the target of today's event.
A bit of explanation. Publication in the Federal Register is the trigger-point that signals implementation of new regulations for defense suppliers. It is the final step to codifying procurement guidelines which finally are in the Defense Federal Acquisition Regulation Supplement (DFARS), the daunting, gigantic document that governs all federal defense procurement.
Today's regulations implement the anti-counterfeiting provisions in the National Defense Authorization Act for Fiscal Year 2012, Section 818, and a section of the National Defense Authorization Act for Fiscal Year 2013, both of which required direct suppliers to bring anti-counterfeiting systems online. Enforcement is via strict financial and, in extreme cases, legal consequences.
Now that the Case is published, we will see rules which find their way into contracts, procurement guidelines, and internal Department of Defense oversight processes which will change the way we all do business, our customers and ourselves.
At their heart, the new regulations demand for the first time that defense contractors must establish policies and procedures to eliminate counterfeit electronics from their parts lists destined for the military. Contractors must “monitor and detect” counterfeits, or face rework and replacement charges, or legal remedies including suspension and debarment. We believe that the counterfeiters will surely face much stricter defenses, and far more powerful interdiction technologies such as the ones we offer.
Business as usual? Just another empty government edict? Not quite. Indeed, only a month after Section 818 and was signed into law by President Obama, the Council of Defense and Space Industry Associations (CODSIA) wrote in a letter that the law would "fundamentally change the nature of the existing global supply chain for the defense industrial base.”
When the DOD opened a public hearing for comments on the regulation, back in June, 2013, there was what can only be described as a roar of criticism. There were positive comments too, but it is clear that the regulations were not perfect.
The regulations have been changed in some significant ways in response to the criticism. We intend to assess the changes and make our opinions public. But for the moment, what stands out in today's statement is the federal government’s determination to move ahead, their conviction that the crisis is too imminent and too deep to warrant any delayed action (from the preamble to the final rule): "While DoD is aware that many issues associated with management of the counterfeit parts problem remain to be resolved, DoD cannot afford to wait to take action."
To those who have been waiting for the legislation to go away, or become watered-down or otherwise neutered, we advise them to think again. As Robert Metzger said of Section 818 in an article in February, "The national interest in achieving greater supply chain and cyber security is so compelling that, in the author’s estimation, the federal government will act irrespective of industry’s doubts."
The time is now. Let's adopt technologies, standards, procedures that will be concrete actions against the counterfeiters. There is no time to lose.