80 FR 56939 - Defense Federal Acquisition Regulation Supplement: Detection and Avoidance of Counterfeit Electronic Parts-Further Implementation (DFARS Case 2014-D005)
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System Federal Register Volume 80, Issue 182 (September 21, 2015)
Defense Acquisition Regulations System
Federal Register Volume 80, Issue 182 (September 21, 2015)
| Page Range | 56939-56944 | |
| FR Document | 2015-23516 |
[Federal Register Volume 80, Number 182 (Monday, September 21, 2015)] [Proposed Rules] [Pages 56939-56944] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-23516] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 202, 212, 246, and 252 [Docket No. 2015-0038] RIN 0750-AI58 Defense Federal Acquisition Regulation Supplement: Detection and Avoidance of Counterfeit Electronic Parts--Further Implementation (DFARS Case 2014-D005) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to further implement a requirement of the National Defense Authorization Act for Fiscal Year 2012, as modified by a section of the National Defense Authorization Act for Fiscal Year 2015, that addresses required sources of electronic parts for defense contractors and subcontractors. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before November 20, 2015, to be considered in the formation of a final rule. ADDRESSES: Submit comments identified by DFARS Case 2014-D005, using any of the following methods: [cir] Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ``DFARS Case 2014-D005'' under the heading ``Enter keyword or ID'' and selecting ``Search.'' Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 2014-D005.'' Follow the instructions provided at the ``Submit a Comment'' screen. Please include your name, company name (if any), and ``DFARS Case 2014-D005'' on your attached document. [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2014-D005 in the subject line of the message. [cir] Fax: 571-372-6094. [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy G. [[Page 56940]] Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060. Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, telephone 571- 372-6106. SUPPLEMENTARY INFORMATION: I. Background DoD is proposing to revise the DFARS to further implement section 818 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2012 (Pub. L. 112-81), as modified by section 817 of the NDAA for FY 2015 (Pub. L. 113-291). On May 6, 2014, DoD published a final rule under DFARS Case 2012-D055, entitled ``Detection and Avoidance of Counterfeit Electronic Parts'' (78 FR 26092). That final rule constituted the initial partial implementation of section 818. After publication of the final rule under FAR Case 2012-D055, DoD published on May 9, 2014, a notice of a public meeting, which was held on June 16, 2014, to address further implementation of detections and avoidance of counterfeit electronic parts. There were 79 registered attendees and eight presenters at the public meeting, as well as robust discussion. Some of the issues raised at the public meeting are addressed in this proposed rule, such as--Removal of embedded software or firmware from the definition of ``electronic part''; Clarification of traceability expectations; and Additional guidance on determination of risk. II. Discussion and Analysis The rule proposes amendments to DFARS 246.870 and a new clause at DFARS 252.246-70XX, Sources of Electronic Parts, to further implement paragraph (c)(3) of section 818 of the NDAA for FY 2012, as modified by section 817 of the NDAA for FY 2015, which requires DoD to issue regulations establishing requirements that DoD and DoD contractors and subcontractors, except in limited circumstances, shall acquire electronic parts from trusted suppliers in order to further address the avoidance of counterfeit electronic parts. Because of the complexities relating to use of trusted suppliers by DoD and the requirement of section 818, paragraph (c)(3)(C), to establish qualification requirements consistent with 10 U.S.C. 2319, those aspects of section 818 will be addressed in a separate DFARS Case 2015-D020, DoD Use of Trusted Suppliers for Electronic Parts. This proposed rule addresses requirements for DoD contractors and subcontractors at all tiers, as set forth in paragraphs (c)(3)(A), (B), and (D). Although some paragraphs of section 818 only apply to contractors subject to the Cost Accounting Standards (CAS), paragraph (c)(3) applies to all DoD contractors and subcontractors, when obtaining electronic parts to be provided to DoD under a DoD contract. DoD proposes to include the new clause at DFARS 252.246-70XX, Sources of Electronic Parts, as prescribed at 246.870-3(b), whenever procuring-- (1) Electronic parts; (2) End items, components, parts, or assemblies containing electronic parts; or (3) Services, if the contractor will supply electronic parts or components, parts, or assemblies containing electronic parts as part of the service. Unlike the clause at 252.246-7007, Contractor Counterfeit Electronic Part Detection and Avoidance System, this new clause is not limited to contractors subject to CAS and will apply to small business set-asides, since paragraph (c)(3) of section 818 applies to all DoD- contractors and subcontractors at all tiers that are providing electronic parts or assemblies containing electronic parts. Therefore, the clause includes flowdown to subcontracts, including subcontracts for commercial items. DoD does not propose to expand the requirements of DFARS 252.246- 7007, or the associated clause DFARS 252.244-7001, Contractor Purchasing System Administration, Alternate I, to non-CAS covered prime contractors, because paragraph (e)(1) of section 818 specifically applies the requirements for a system for avoidance and detection of counterfeit parts to ``covered contractors.'' However, the DFARS flows down the system requirements to subcontractors regardless of CAS coverage. The clause DFARS 252.246-70XX includes new proposed definitions of ``authorized dealer'' and ``trusted supplier.'' DoD notes that ``authorized dealer'' does not equate to ``authorized reseller.'' An authorized reseller is not bound to obtain parts from the original manufacturer. The reseller can obtain parts from an authorized dealer, an aftermarket manufacturer, or independent distributor, for example. An ``authorized dealer,'' however, has a contractual arrangement with the original manufacturer or current design activity, including an authorized aftermarket manufacturer, to buy, stock, repackage, sell, and distribute its product lines. The term ``trusted supplier'' includes not only the original manufacturer, an authorized dealer for the part, or a supplier that obtains the part exclusively from the original component manufacturer of the part or an authorized dealer, but also includes a supplier that a contractor or subcontractor has identified as a trustworthy supplier, using DoD-adopted counterfeit prevention industry standards and processes, including testing, in accordance with section 818(c)(3)(A)(iii) and (D) of the NDAA for FY 2012, as modified by section 817 of the NDAA for FY 2015. In addition to the requirements to acquire electronic components from trusted suppliers, contractors and subcontractors that are not the original manufacturer are required to have a risk-based system to trace electronic parts from the original manufacturer to product acceptance by the Government. If such traceability is not feasible for a particular part, the contractor system must provide for the consideration of an alternative part or utilization of tests and inspections in order to avoid counterfeit electronic parts. If it is not possible to obtain an electronic part from a trusted supplier, the contractor is required to notify the contracting officer. The contractor is then responsible for inspection, testing, and authentication, in accordance with existing applicable industry standards, of electronic parts obtained from sources other than a trusted supplier. The rule also proposes a definition in DFARS 202.101 of ``original manufacturer'' to include the ``contract electronics manufacturer,'' the ``original component manufacturer,'' or the ``original equipment manufacturer,'' which are also defined. The term ``contract electronics manufacturer'' includes manufacturers that produce goods, using electronic parts, for other companies on a contract basis under the label or brand of the other organizations, or fabricate an electronic part under a contract with, or with the express written authority of, the original component manufacturer, based on the original components manufacturer's designs. [[Page 56941]] In addition, the rule proposes to delete the sentence ``The term `electronic part' includes any embedded software or firmware'' from the definition of ``electronic part.'' Although electronic parts may include embedded software or firmware, the requirements of this rule are more applicable to hardware. Further industry standards are still under development to address testing of embedded software or firmware in electronic parts. There are conforming changes to DFARS clause 252.246-7007, Contractor Counterfeit Electronic Part Detection and Avoidance System, in the definitions and processes for traceability. This rule is part of DoD's retrospective plan, completed in August 2011, under Executive Order 13563, ``Improving Regulation and Regulatory Review.'' DoD's full plan and updates can be accessed at: http://www.regulations.gov/#!docketDetail;D=DOD-2011-OS-0036. III. Determinations of Applicability DoD intends to apply the requirements of section 818(c)(3) to contracts at or below the simplified acquisition threshold (SAT) and contracts for the acquisition of commercial items, including commercial-off-the-shelf (COTS) items. A. Applicability to Contracts at or Below the SAT 41 U.S.C. 1905 governs the applicability of laws to contracts or subcontracts in amounts not greater than the SAT. It is intended to limit the applicability of laws to such contracts or subcontracts. 41 U.S.C. 1905 provides that if a provision of law contains criminal or civil penalties, or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt contracts or subcontracts at or below the SAT, the law will apply to them. The Director, DPAP, is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations. DoD intends to determine that it is in the best interest of the Federal Government to apply the rule to contracts at or below the SAT, because a substantial percentage of electronic parts are valued below the SAT. An exception for contracts at or below the SAT would severely decrease the intended effect of the statute and increase the risk of receiving counterfeit parts, which may present a significant mission, security, or safety hazard. B. Applicability to Contracts for the Acquisition of Commercial Items, Including COTS Items 41 U.S.C. 1906 governs the applicability of laws to contracts for the acquisition of commercial items, and is intended to limit the applicability of laws to contracts for the acquisition of commercial items. 41 U.S.C. 1906 provides that if a provision of law contains criminal or civil penalties, or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt commercial item contracts, the provision of law will apply to contracts for the acquisition of commercial items. Likewise, 41 U.S.C. governs the applicability of laws to COTS items, with the Administrator for Federal Procurement Policy the decision authority to determine that it is in the best interest of the Government to apply a provision of law to acquisitions of COTS items in the FAR. The Director, DPAP, is the appropriate authority to make comparable determinations for regulations to be published in the DFARS, which is part of the FAR system of regulations. Since electronic parts are generally COTS items, and studies have shown that a large proportion of proven counterfeit parts were purchased as commercial items, including COTS items, DoD intends to determine that it is in the best interest of the Federal Government to apply the rule to contracts for the acquisition of commercial items, including COTS items, as defined at FAR 2.101. An exception for contracts for the acquisition of commercial items, including COTS items, would severely decrease the intended effect of the statute and increase the risk of receiving counterfeit parts, which may present a significant mission, security, or safety hazard. IV. Executive Orders 12866 and 13563 Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. V. Regulatory Flexibility Act DoD expects that this proposed rule may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601, et seq. Therefore, an initial regulatory flexibility analysis has been prepared and is summarized as follows: This proposed rule further implements section 818 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2012 (Pub. L. 112-81), as modified by section 817 of the NDAA for FY 2015. The objective of this rule is to avoid acquisition of counterfeit electronic parts by requiring DoD contractors and subcontractors, except in limited circumstances, to buy electronic parts from trusted suppliers, in accordance with section 818(c)(3) of the NDAA for FY 2012. Based on Federal Procurement Data System data for FY 2013 and 2014, DoD estimates that this rule will apply to approximately 33,000 small entities that have DoD prime contracts or subcontracts for electronic parts; end items, components, parts, or assemblies containing electronic parts; or services, if the contractor will supply electronic parts or components, parts, or assemblies containing electronic parts as part of the service. In addition to the requirements to acquire electronic components from trusted suppliers, contractors and subcontractors that are not the original manufacturer or authorized dealer are required have a risk- based process to trace electronic parts from the original manufacturer to product acceptance by the Government. If that is not feasible, the Contractor shall have a process to complete an evaluation that includes consideration of alternative parts or utilization of tests and inspections commensurate with the risk. If it is not possible to obtain an electronic part from a trusted supplier, the contractor is required to notify the contracting officer. The contractor is responsible for inspection, testing, and authentication, in accordance with existing applicable industry standards, of electronic parts obtained from sources other than a trusted supplier. Notifying the contracting officer if it is not possible to obtain an electronic part from a trusted supplier would probably involve a mid-level of executive involvement. No relevant Federal rules duplicate, overlap, or conflict with the proposed rule. [[Page 56942]] The rule does not duplicate, overlap, or conflict with any other Federal rules. DoD was unable to identify any significant alternatives that would reduce the economic impact on small entities and still fulfill the requirements of the statute. DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities. DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2014-D005), in correspondence. VI. Paperwork Reduction Act The rule contains information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). Accordingly, DoD has submitted a request for approval of a new information collection requirement concerning ``Detection and Avoidance of Counterfeit Electronic Parts-- Further Implementation'' to the Office of Management and Budget. A. Public reporting burden for this collection of information is estimated to average one hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. The annual reporting burden estimated as follows: Respondents: 1,000. Responses per Respondent: 1. Total Annual Responses: 1,000. Preparation Hours per Response: 1 hour. Total Response Burden Hours: 1,000. B. Request for Comments Regarding Paperwork Burden. Written comments and recommendations on the proposed information collection, including suggestions for reducing this burden, should be sent to Ms. Jasmeet Seehra at the Office of Management and Budget, Desk Officer for DoD, Room 10236, New Executive Office Building, Washington, DC 20503, or email Jasmeet_K._Seehra@omb.eop.gov, with a copy to the Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060. Comments can be received up to 60 days after the date of this notice, but comments to OMB will be most useful if received by OMB within 30 days after the date of this notice. Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the DFARS, and will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060, or email osd.dfars@mail.mil. Include DFARS Case 2014-D005 in the subject line of the message. List of Subjects in 48 CFR Parts 202, 212, 246, and 252 Government procurement. Jennifer L. Hawes, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR parts 202, 212, 246, and 252 are proposed to be amended as follows: 0 1. The authority citation for parts 202, 212, 246, and 252 continues to read as follows: Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. PART 202--DEFINITIONS OF WORDS AND TERMS 0 2. Amend section 202.101 by-- 0 a. Adding, in alphabetical order, the definitions for ``Contract electronics manufacturer,'' ``Original component manufacturer,'' ``Original equipment manufacturer,'' and ``Original manufacturer''; and 0 b. Revising the definition of ``Electronic part''. The additions and revision read as follows: 202.101 Definitions. * * * * * Contract electronics manufacturer means an organization that-- (1) Produces goods, using electronic parts, for other companies on a contract basis under the label or brand name of the other organization; or (2) Fabricates an electronic part under a contract with, or with the express written authority of, the original component manufacturer based on the original component manufacturer's designs, formulas, and/ or specifications. * * * * * Electronic part means an integrated circuit, a discrete electronic component (including, but not limited to, a transistor, capacitor, resistor, or diode), or a circuit assembly (section 818(f)(2) of Pub. L. 112-81). * * * * * Original component manufacturer means an organization that designs and/or engineers a part and is pursuing, or has obtained, the intellectual property rights to that part. Original equipment manufacturer means a company that manufactures products that it has designed from purchased components and sells those products under the company's brand name. Original manufacturer means the contract electronics manufacturer, the original component manufacturer, or the original equipment manufacturer. * * * * * PART 212--ACQUISITION OF COMMERCIAL ITEMS 0 3. Amend section 212.301 by adding paragraph (f)(xviii)(C) to read as follows: 212.301 Solicitation provisions and contract clauses for the acquisition of commercial items. (f) * * * (xviii) * * * (C) Use the clause at 252.246-70XX, Sources of Electronic Parts, as prescribed in 246.870-3(b), to comply with section 818(c)(3) of Public Law 112-81, as amended by section 817 of the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291). * * * * * PART 246--QUALITY ASSURANCE 0 4. Revise section 246.870 heading to read as follows: 246.870 Contractor counterfeit electronic part detection and avoidance. 246.870-1 [Redesignated as 246.870-0] 0 5. Redesignate section 246.870-1 as 246.870-0. 0 6. In newly redesignated section 246.870-0, revise paragraph (a) to read as follows: 246.870-0 Scope. * * * * * [[Page 56943]] (a) Partially implements section 818(c) and (e) of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81), as amended by section 817 of the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291); and * * * * * 0 7. Add section 246.870-1 to read as follows: 246.870-1 Definitions. As used in this section-- Authorized dealer means a supplier with a contractual arrangement with the original manufacturer or current design activity, including an authorized aftermarket manufacturer, to buy, stock, re-package, sell, and distribute its product lines. Trusted supplier means-- (1) The original manufacturer of a part; (2) An authorized dealer for the part; (3) A supplier that obtains the part exclusively from the original component manufacturer of the part or an authorized dealer; or (4) A supplier that a contractor or subcontractor has identified as a trustworthy supplier, using DoD-adopted counterfeit prevention industry standards and processes, including testing (see https://assist.dla.mil). 0 8. Amend section 246.870-2 by-- 0 a. Redesignating paragraphs (a) and (b) as paragraphs (b)(1) and (2), respectively; 0 b. In newly redesignated paragraph (b)(1), removing the paragraph heading and adding a comma after the second use of ``electronic parts''; 0 c. In the newly redesignated paragraph (b)(2), further redesignating paragraphs (1) through (12) as paragraphs (b)(2)(i) through (xii), respectively; 0 d. Adding paragraph (a); 0 e. Adding a paragraph (b) heading; 0 f. In newly redesignated paragraph (b)(2) introductory text, removing ``see 252.246-7007'' and adding ``see the clause at 252.246-7007'' in its place; and 0 g. In newly redesignated paragraph (b)(2)(v), adding the phrase ``, or use of other trusted suppliers, as identified by the contractor (see paragraph (a)(1)(ii) of this section)'' at the end of the sentence, before the period. The additions read as follows: 246.870-2 Policy. (a) Sources of electronic parts. (1) Except as provided in paragraph (a)(2) of this section, the Government requires contractors and subcontractors at all tiers, to-- (i) Obtain electronic parts that are in production or currently available in stock from-- (A) The original manufacturers of the parts; (B) Their authorized dealers; or (C) Suppliers that obtain such parts exclusively from the original manufacturers of the parts or their authorized dealers; (ii) Obtain electronic parts that are not in production, or not currently available from stock, from suppliers identified by the contractor or subcontractor as trusted suppliers, provided that-- (A) The contractor uses established counterfeit prevention industry standards and processes, including testing, for identifying such trusted suppliers; (B) The contractor or subcontractor assumes responsibility for the authenticity of parts provided by such suppliers (see 231.205-71); and (C) The selection of such trusted suppliers is subject to review and audit by appropriate Department of Defense officials. (iii) If authorized to purchase electronic parts from the Federal Supply Schedule, contractors and subcontractors are still required to comply with the requirements of paragraph (a)(1) or (2) of this section, as applicable. (2) If electronic parts are not available from trusted suppliers, the Government requires contractors and subcontractors to comply with the notification, inspection, testing, and authentication requirements of paragraph (c) of the clause at 252.246-70XX, Sources of Electronic Parts. (b) Contractor counterfeit electronic part detection and avoidance system.* * * * * * * * 0 9. Amend section 246.870-3 by-- 0 a. Redesignating paragraphs (a) and (b) as paragraphs (a)(1) and (2), respectively; 0 b. In the newly redesignated paragraph (a)(1), further redesignating paragraphs (1) through (3) as paragraphs (a)(1)(i) through (iii), respectively; 0 c. In newly redesignated paragraph (a)(1), removing ``paragraph (b)'' and adding ``paragraph (a)(2)'' in its place; 0 d. In newly redesignated paragraph (a)(1)(iii), removing ``Services where'' and adding ``Services, if'' in its place; 0 e. In newly redesignated paragraph (a)(2), removing ``set-aside'' and adding ``set aside'' in its place; and 0 f. Adding paragraph (b). The addition reads as follows: 246.870-3 Contract clause. * * * * * (b) Use the clause at 252.246-70XX, Sources of Electronic Parts, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, when procuring-- (1) Electronic parts; (2) End items, components, parts, or assemblies containing electronic parts; or (3) Services, if the contractor will supply electronic parts or components, parts, or assemblies containing electronic parts as part of the service. PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 0 10. Amend section 252.246-7007 by-- 0 a. In the introductory text, removing ``246.870-3'' and adding ``246.870-3(a)'' in its place; 0 b. Removing the clause date ``(MAY 2014)'' and adding ``(DATE)'' in its place; 0 c. In paragraph (a)-- 0 i. Adding, in alphabetical order, the definitions of ``Authorized dealer,'' ``Contract electronics manufacturer,'' ``Original component manufacturer,'' ``Original equipment manufacturer,'' ``Original manufacturer,'' and ``Trusted supplier''; and 0 ii. Revising the definition of ``Electronic part''; and 0 d. Revising paragraphs (c)(4) and (5). The additions and revisions read as follows: 252.246-7007 Contractor Counterfeit Electronic Part Detection and Avoidance System. * * * * * (a) * * * Authorized dealer means a supplier with a contractual arrangement with the original manufacturer or current design activity, including an authorized aftermarket manufacturer, to buy, stock, re-package, sell, and distribute its product lines. Contract electronics manufacturer means an organization that-- (1) Produces goods, using electronic parts, for other companies on a contract basis under the label or brand name of the other organization; or (2) Fabricates an electronic part under a contract with, or with the express written authority of, the original component manufacturer based on the original component manufacturer's designs, formulas, and/ or specifications. * * * * * Electronic part means an integrated circuit, a discrete electronic component (including, but not limited to, a transistor, capacitor, resistor, or diode), [[Page 56944]] or a circuit assembly (section 818(f)(2) of Pub. L. 112-81). * * * * * Original component manufacturer means an organization that designs and/or engineers a part and is pursuing, or has obtained, the intellectual property rights to that part. Original equipment manufacturer means a company that manufactures products that it has designed from purchased components and sells those products under the company's brand name. Original manufacturer means the contract electronics manufacturer, the original component manufacturer, or the original equipment manufacturer. * * * * * Trusted supplier means-- (1) The original manufacturer of a part; (2) An authorized dealer for the part; (3) A supplier that obtains the part exclusively from the original component manufacturer of the part or an authorized dealer; or (4) A supplier that a contractor or subcontractor has identified as a trustworthy supplier, using DoD-adopted counterfeit prevention industry standards and processes, including testing (see https://assist.dla.mil). * * * * * (c) * * * (4) Processes to-- (i) Enable tracking of electronic parts from the original manufacturer to product acceptance by the Government, whether the electronic parts are supplied as discrete electronic parts or are contained in assemblies; and (ii) If the Contractor cannot establish this traceability from the original manufacturer for a specific part, complete an evaluation that includes consideration of alternative parts or utilization of tests and inspections commensurate with the risk (see paragraph (c)(2) of this clause). (5) Use of trusted suppliers in accordance with the clause at 252.246-70XX, Sources of Electronic Parts. * * * * * 0 11. Add section 252.246-70XX to read as follows: 252.246-70XX Sources of Electronic Parts. As prescribed in 246.870-3(b), use the following clause: SOURCES OF ELECTRONIC PARTS (DATE) (a) Definitions. As used in this clause-- Authorized dealer means a supplier with express written authority of a contractual arrangement with the original manufacturer or current design activity, including an authorized aftermarket manufacturer, to buy, stock, re-package, sell, and distribute its product lines. Contract electronics manufacturer means an organization that-- (1) Produces goods, using electronic parts, for other companies on a contract basis under the label or brand name of the other organization; or (2) Fabricates an electronic part under a contract with, or with the express written authority of, the original component manufacturer based on the original component manufacturer's designs, formulas, and/or specifications. Electronic part means an integrated circuit, a discrete electronic component (including, but not limited to, a transistor, capacitor, resistor, or diode), or a circuit assembly (section 818(f)(2) of Pub. L. 112-81). Original component manufacturer means an organization that designs and/or engineers a part and is pursuing, or has obtained, the intellectual property rights to that part. Original equipment manufacturer means a company that manufactures products that it has designed from purchased components and sells those products under the company's brand name. Original manufacturer means the contract electronics manufacturer, the original component manufacturer, or the original equipment manufacturer. Trusted supplier means-- (1) The original manufacturer of a part; (2) An authorized dealer for the part; (3) A supplier that obtains the part exclusively from the original component manufacturer of the part or an authorized dealer; or (4) A supplier that a contractor or subcontractor has identified as a trustworthy supplier, using DoD-adopted counterfeit prevention industry standards and processes, including testing (see https://assist.dla.mil). (b) Trusted suppliers. In accordance with section 818(c)(3) of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81), as amended by section 817 of the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291), except as provided in paragraph (d) of this clause, the Contractor shall-- (1) Obtain electronic parts that are in production or currently available in stock from-- (i) The original manufacturers of the parts; (ii) Their authorized dealers; or (iii) Suppliers that obtain such parts exclusively from the original manufacturers of the parts or their authorized dealers; and (2) Obtain electronic parts that are not in production, or not currently available in stock, from suppliers identified by the Contractor as trusted suppliers, provided that-- (i) The Contractor uses established counterfeit prevention industry standards and processes, including testing, for identifying such trusted suppliers; (ii) The Contractor assumes responsibility for the authenticity of parts provided by such suppliers (see DFARS 231.205-71); and (iii) The Contractor's selection of such trusted suppliers is subject to review and audit by appropriate Department of Defense officials. (c) Traceability. If the Contractor is not the original manufacturer of, or authorized dealer for, an electronic part, the Contractor shall have risk-based processes (taking into consideration the consequences of failure of an electronic part) that-- (1) Enable tracking of electronic parts from the original manufacturer to product acceptance by the Government, whether the electronic part is supplied as a discrete electronic part or is contained in an assembly; and (2) If the Contractor cannot establish this traceability from the original manufacturer for a specific part, complete an evaluation that includes consideration of alternative parts or utilization of tests and inspections commensurate with the risk. Determination of risk shall be based on the assessed probability of receiving a counterfeit electronic part; the probability that the inspection or test selected will detect a counterfeit electronic part; and the potential negative consequences of a counterfeit electronic part being installed (e.g., human safety, mission success) where such consequences are made known to the Contractor. (d)(1) Non-trusted suppliers. If it is not possible to obtain an electronic part from a trusted supplier, as described in paragraph (b) of this clause, the Contractor shall notify the Contracting Officer. If an entire lot of assemblies require an obsolete component, the Contractor may submit one notification for the entire lot, providing identification of the assemblies containing the parts (e.g., serial numbers). (2) The Contractor is responsible for inspection, testing, and authentication, in accordance with existing applicable industry standards, of electronic parts obtained from sources other than those described in paragraph (b) of this clause. (e) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (e), in subcontracts, including subcontracts for commercial items that are for electronic parts or assemblies containing electronic parts. (End of clause) [FR Doc. 2015-23516 Filed 9-18-15; 8:45 am] BILLING CODE 5001-06-P
![Federal Register / Vol. 80, No. 182 / Monday, September 21, 2015 / Proposed Rules 56939
(7) The requirements of § 806.16 action on an individual approval (3) The Commission may approve,
apply to the review of NOIs to any application. approve with conditions or deny an
general permit. ■ 7. Add § 806.18 to read as follows: application for major modification.
(8) Upon reissuance or amendment of Dated: September 11, 2015.
§ 806.18 Approval modifications.
a general permit, all project sponsors Stephanie L. Richardson,
permitted to divert, withdraw or (a) General. A project sponsor shall
submit an application for modification Secretary to the Commission.
consumptively use water in accordance
of a current approval prior to making a [FR Doc. 2015–23304 Filed 9–18–15; 8:45 am]
with the previous general permit shall
be permitted to continue to operate with change in the design, operational plans, BILLING CODE 7040–01–P
the renewed or modified general permit or use as presented in the application
unless otherwise notified by the upon which the approval was originally
Commission. issued, and that will affect the terms DEPARTMENT OF DEFENSE
(d) Denial of coverage. The Executive and conditions of the current approval.
(b) Applications for modification. (1) Defense Acquisition Regulations
Director will deny or revoke coverage System
under a general permit when one or A project sponsor may apply for a
more of the following conditions exist: modification of a current approval by
submitting an application for 48 CFR Parts 202, 212, 246, and 252
(1) The project or project sponsor does
not or can no longer meet the criteria for modification to the Commission. [Docket No. 2015–0038]
coverage under a general permit. (c) Minor modifications. The
following are considered minor RIN 0750–AI58
(2) The diversion, withdrawal or
consumptive use, individually or in modifications: Defense Federal Acquisition
combination with other similar (1) Correction of typographical errors; Regulation Supplement: Detection and
(2) Changes to monitoring or metering Avoidance of Counterfeit Electronic
Commission regulated activities, is
conditions; Parts—Further Implementation
causing or has the potential to cause
(3) Addition of sources of water for
adverse impacts to water resources or (DFARS Case 2014–D005)
consumptive use;
competing water users.
(4) Changes to the authorized water AGENCY: Defense Acquisition
(3) The project does not meet the uses; Regulations System, Department of
requirements of § 806.21(a) or (b). (5) Changes to conditions setting a Defense (DoD).
(4) The project includes other schedule for developing, implementing, ACTION: Proposed rule.
diversions, withdrawals or consumptive and/or reporting on monitoring, data
uses that require an individual approval collection and analyses; SUMMARY: DoD is proposing to amend
and the issuance of both an individual (6) Changes to the design of intakes; the Defense Federal Acquisition
approval and a general permit for the (7) Increases to total system limits that Regulation Supplement (DFARS) to
project would constitute an undue were established based on the projected further implement a requirement of the
administrative burden on the demand of the project; and National Defense Authorization Act for
Commission. (8) Modify approval to allow the Fiscal Year 2012, as modified by a
(5) The Executive Director determines modification of extraction well network section of the National Defense
that a project cannot be effectively used for groundwater remediation Authorization Act for Fiscal Year 2015,
regulated under a general permit and is systems. that addresses required sources of
more effectively regulated under an (d) Major modifications. Major electronic parts for defense contractors
individual approval. modifications are changes not and subcontractors.
(e) Requiring an individual approval. considered to be minor modifications. DATES: Comments on the proposed rule
If coverage is denied or revoked under Major modifications may include, but should be submitted in writing to the
paragraph (d) of this section, the project are not limited to: address shown below on or before
sponsor shall be notified in writing. The (1) Increases in the quantity of water November 20, 2015, to be considered in
notice will include a brief statement for withdrawals, consumptive uses or the formation of a final rule.
the reasons for the decision. If coverage diversions; ADDRESSES: Submit comments
under a general permit was previously (2) Increases to peak day consumptive identified by DFARS Case 2014–D005,
granted, the notice will also include a water use; using any of the following methods:
deadline for submission of an (3) Increases to the instantaneous Æ Regulations.gov: http://
application for an individual approval. withdrawal rate or changes from a single www.regulations.gov. Submit comments
Timely submission of a complete withdrawal rate to a varied withdrawal via the Federal eRulemaking portal by
application will result in continuation rate; entering ‘‘DFARS Case 2014–D005’’
of coverage of the applicable (4) Changes affecting passby flows under the heading ‘‘Enter keyword or
withdrawal, consumptive use or requirements; and ID’’ and selecting ‘‘Search.’’ Select the
diversion under the general permit, (5) Changes that have the potential for link ‘‘Submit a Comment’’ that
until the Commission takes final action adverse impacts to water resources or corresponds with ‘‘DFARS Case 2014–
on the pending individual approval competing water users. D005.’’ Follow the instructions provided
application. (e) Notice and approval. (1) at the ‘‘Submit a Comment’’ screen.
(f) Action of the commission. Action Applications for modifications are Please include your name, company
rmajette on DSK7SPTVN1PROD with PROPOSALS
by the Executive Director denying or subject to the notice requirements of name (if any), and ‘‘DFARS Case 2014–
revoking coverage under a general § 806.15. D005’’ on your attached document.
permit under paragraph (d) of this (2) The Commission or Executive Æ Email: osd.dfars@mail.mil. Include
section, or requiring an individual Director may approve, approve with DFARS Case 2014–D005 in the subject
approval under paragraph (e) of this conditions or deny an application for line of the message.
section, is not a final action of the minor modification, or direct that an Æ Fax: 571–372–6094.
Commission until the project sponsor application for major modification be Æ Mail: Defense Acquisition
submits and the Commission takes final made. Regulations System, Attn: Ms. Amy G.
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![56942 Federal Register / Vol. 80, No. 182 / Monday, September 21, 2015 / Proposed Rules
The rule does not duplicate, overlap, if received by OMB within 30 days after basis under the label or brand name of
or conflict with any other Federal rules. the date of this notice. the other organization; or
DoD was unable to identify any Public comments are particularly (2) Fabricates an electronic part under
significant alternatives that would invited on: Whether this collection of a contract with, or with the express
reduce the economic impact on small information is necessary for the proper written authority of, the original
entities and still fulfill the requirements performance of functions of the DFARS, component manufacturer based on the
of the statute. and will have practical utility; whether original component manufacturer’s
DoD invites comments from small our estimate of the public burden of this designs, formulas, and/or specifications.
business concerns and other interested collection of information is accurate, * * * * *
parties on the expected impact of this and based on valid assumptions and Electronic part means an integrated
rule on small entities. methodology; ways to enhance the circuit, a discrete electronic component
DoD will also consider comments quality, utility, and clarity of the (including, but not limited to, a
from small entities concerning the information to be collected; and ways in transistor, capacitor, resistor, or diode),
existing regulations in subparts affected which we can minimize the burden of or a circuit assembly (section 818(f)(2)
by this rule in accordance with 5 U.S.C. the collection of information on those of Pub. L. 112–81).
610. Interested parties must submit such who are to respond, through the use of
comments separately and should cite 5 * * * * *
appropriate technological collection Original component manufacturer
U.S.C. 610 (DFARS Case 2014–D005), in techniques or other forms of information
correspondence. means an organization that designs and/
technology. or engineers a part and is pursuing, or
VI. Paperwork Reduction Act To request more information on this has obtained, the intellectual property
proposed information collection or to rights to that part.
The rule contains information obtain a copy of the proposal and
collection requirements that require the Original equipment manufacturer
associated collection instruments, means a company that manufactures
approval of the Office of Management please write to the Defense Acquisition
and Budget under the Paperwork products that it has designed from
Regulations System, Attn: Ms. Amy G. purchased components and sells those
Reduction Act (44 U.S.C. chapter 35). Williams, OUSD(AT&L)DPAP/DARS,
Accordingly, DoD has submitted a products under the company’s brand
Room 3B941, 3060 Defense Pentagon, name.
request for approval of a new Washington, DC 20301–3060, or email
information collection requirement Original manufacturer means the
osd.dfars@mail.mil. Include DFARS contract electronics manufacturer, the
concerning ‘‘Detection and Avoidance Case 2014–D005 in the subject line of
of Counterfeit Electronic Parts—Further original component manufacturer, or the
the message. original equipment manufacturer.
Implementation’’ to the Office of
Management and Budget. List of Subjects in 48 CFR Parts 202, * * * * *
A. Public reporting burden for this 212, 246, and 252
collection of information is estimated to PART 212—ACQUISITION OF
Government procurement.
average one hour per response, COMMERCIAL ITEMS
including the time for reviewing Jennifer L. Hawes,
■ 3. Amend section 212.301 by adding
instructions, searching existing data Editor, Defense Acquisition Regulations
System.
paragraph (f)(xviii)(C) to read as follows:
sources, gathering and maintaining the
data needed, and completing and Therefore, 48 CFR parts 202, 212, 246, 212.301 Solicitation provisions and
reviewing the collection of information. and 252 are proposed to be amended as contract clauses for the acquisition of
The annual reporting burden follows: commercial items.
estimated as follows: ■ 1. The authority citation for parts 202,
(f) * * *
Respondents: 1,000. 212, 246, and 252 continues to read as (xviii) * * *
Responses per Respondent: 1. (C) Use the clause at 252.246–70XX,
follows:
Total Annual Responses: 1,000. Sources of Electronic Parts, as
Preparation Hours per Response: 1 Authority: 41 U.S.C. 1303 and 48 CFR prescribed in 246.870–3(b), to comply
hour. chapter 1.
with section 818(c)(3) of Public Law
Total Response Burden Hours: 1,000. 112–81, as amended by section 817 of
B. Request for Comments Regarding PART 202—DEFINITIONS OF WORDS
AND TERMS the National Defense Authorization Act
Paperwork Burden. for Fiscal Year 2015 (Pub. L. 113–291).
Written comments and ■ 2. Amend section 202.101 by— * * * * *
recommendations on the proposed ■ a. Adding, in alphabetical order, the
information collection, including definitions for ‘‘Contract electronics PART 246—QUALITY ASSURANCE
suggestions for reducing this burden, manufacturer,’’ ‘‘Original component
should be sent to Ms. Jasmeet Seehra at manufacturer,’’ ‘‘Original equipment ■ 4. Revise section 246.870 heading to
the Office of Management and Budget, manufacturer,’’ and ‘‘Original read as follows:
Desk Officer for DoD, Room 10236, New manufacturer’’; and 246.870 Contractor counterfeit electronic
Executive Office Building, Washington, ■ b. Revising the definition of part detection and avoidance.
DC 20503, or email Jasmeet_K._Seehra@ ‘‘Electronic part’’.
omb.eop.gov, with a copy to the Defense The additions and revision read as 246.870–1 [Redesignated as 246.870–0]
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Acquisition Regulations System, Attn: follows: ■ 5. Redesignate section 246.870–1 as
Ms. Amy G. Williams, 246.870–0.
OUSD(AT&L)DPAP/DARS, Room 202.101 Definitions. ■ 6. In newly redesignated section
3B941, 3060 Defense Pentagon, * * * * * 246.870–0, revise paragraph (a) to read
Washington, DC 20301–3060. Contract electronics manufacturer as follows:
Comments can be received up to 60 means an organization that—
days after the date of this notice, but (1) Produces goods, using electronic 246.870–0 Scope.
comments to OMB will be most useful parts, for other companies on a contract * * * * *
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![56944 Federal Register / Vol. 80, No. 182 / Monday, September 21, 2015 / Proposed Rules
or a circuit assembly (section 818(f)(2) Contract electronics manufacturer means for, an electronic part, the Contractor shall
of Pub. L. 112–81). an organization that— have risk-based processes (taking into
(1) Produces goods, using electronic parts, consideration the consequences of failure of
* * * * * for other companies on a contract basis under an electronic part) that—
Original component manufacturer the label or brand name of the other (1) Enable tracking of electronic parts from
means an organization that designs and/ organization; or the original manufacturer to product
or engineers a part and is pursuing, or (2) Fabricates an electronic part under a acceptance by the Government, whether the
has obtained, the intellectual property contract with, or with the express written electronic part is supplied as a discrete
rights to that part. authority of, the original component electronic part or is contained in an
Original equipment manufacturer manufacturer based on the original assembly; and
means a company that manufactures component manufacturer’s designs, formulas, (2) If the Contractor cannot establish this
products that it has designed from and/or specifications. traceability from the original manufacturer
Electronic part means an integrated circuit, for a specific part, complete an evaluation
purchased components and sells those a discrete electronic component (including, that includes consideration of alternative
products under the company’s brand but not limited to, a transistor, capacitor, parts or utilization of tests and inspections
name. resistor, or diode), or a circuit assembly commensurate with the risk. Determination
Original manufacturer means the (section 818(f)(2) of Pub. L. 112–81). of risk shall be based on the assessed
contract electronics manufacturer, the Original component manufacturer means probability of receiving a counterfeit
original component manufacturer, or the an organization that designs and/or engineers electronic part; the probability that the
original equipment manufacturer. a part and is pursuing, or has obtained, the inspection or test selected will detect a
intellectual property rights to that part. counterfeit electronic part; and the potential
* * * * *
Original equipment manufacturer means a negative consequences of a counterfeit
Trusted supplier means— company that manufactures products that it
(1) The original manufacturer of a electronic part being installed (e.g., human
has designed from purchased components safety, mission success) where such
part; and sells those products under the consequences are made known to the
(2) An authorized dealer for the part; company’s brand name. Contractor.
(3) A supplier that obtains the part Original manufacturer means the contract (d)(1) Non-trusted suppliers. If it is not
exclusively from the original component electronics manufacturer, the original possible to obtain an electronic part from a
manufacturer of the part or an component manufacturer, or the original trusted supplier, as described in paragraph
authorized dealer; or equipment manufacturer. (b) of this clause, the Contractor shall notify
(4) A supplier that a contractor or Trusted supplier means— the Contracting Officer. If an entire lot of
subcontractor has identified as a (1) The original manufacturer of a part; assemblies require an obsolete component,
trustworthy supplier, using DoD- (2) An authorized dealer for the part; the Contractor may submit one notification
adopted counterfeit prevention industry (3) A supplier that obtains the part for the entire lot, providing identification of
exclusively from the original component the assemblies containing the parts (e.g.,
standards and processes, including
manufacturer of the part or an authorized serial numbers).
testing (see https://assist.dla.mil). dealer; or (2) The Contractor is responsible for
* * * * * (4) A supplier that a contractor or inspection, testing, and authentication, in
(c) * * * subcontractor has identified as a trustworthy accordance with existing applicable industry
(4) Processes to— supplier, using DoD-adopted counterfeit standards, of electronic parts obtained from
(i) Enable tracking of electronic parts prevention industry standards and processes, sources other than those described in
from the original manufacturer to including testing (see https://assist.dla.mil). paragraph (b) of this clause.
product acceptance by the Government, (b) Trusted suppliers. In accordance with (e) Subcontracts. The Contractor shall
whether the electronic parts are section 818(c)(3) of the National Defense include the substance of this clause,
supplied as discrete electronic parts or Authorization Act for Fiscal Year 2012 (Pub. including this paragraph (e), in subcontracts,
L. 112–81), as amended by section 817 of the including subcontracts for commercial items
are contained in assemblies; and National Defense Authorization Act for Fiscal
(ii) If the Contractor cannot establish that are for electronic parts or assemblies
Year 2015 (Pub. L. 113–291), except as containing electronic parts.
this traceability from the original provided in paragraph (d) of this clause, the
manufacturer for a specific part, (End of clause)
Contractor shall— [FR Doc. 2015–23516 Filed 9–18–15; 8:45 am]
complete an evaluation that includes (1) Obtain electronic parts that are in
BILLING CODE 5001–06–P
consideration of alternative parts or production or currently available in stock
utilization of tests and inspections from—
commensurate with the risk (see (i) The original manufacturers of the parts;
paragraph (c)(2) of this clause). (ii) Their authorized dealers; or DEPARTMENT OF TRANSPORTATION
(5) Use of trusted suppliers in (iii) Suppliers that obtain such parts
exclusively from the original manufacturers National Highway Traffic Safety
accordance with the clause at 252.246–
of the parts or their authorized dealers; and Administration
70XX, Sources of Electronic Parts. (2) Obtain electronic parts that are not in
* * * * * production, or not currently available in 49 CFR Part 578
■ 11. Add section 252.246–70XX to read stock, from suppliers identified by the
as follows: Contractor as trusted suppliers, provided [Docket No. NHTSA–2015–0090]
that—
252.246–70XX Sources of Electronic Parts. RIN 2127–AL38
(i) The Contractor uses established
As prescribed in 246.870–3(b), use the counterfeit prevention industry standards
Civil Penalty Procedures and Factors
following clause: and processes, including testing, for
identifying such trusted suppliers; AGENCY: National Highway Traffic
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SOURCES OF ELECTRONIC PARTS (DATE) (ii) The Contractor assumes responsibility Safety Administration (NHTSA),
(a) Definitions. As used in this clause— for the authenticity of parts provided by such
Department of Transportation.
Authorized dealer means a supplier with suppliers (see DFARS 231.205–71); and
express written authority of a contractual (iii) The Contractor’s selection of such ACTION: Notice of proposed rulemaking
arrangement with the original manufacturer trusted suppliers is subject to review and (NPRM).
or current design activity, including an audit by appropriate Department of Defense
authorized aftermarket manufacturer, to buy, officials. SUMMARY: NHTSA is proposing a rule
stock, re-package, sell, and distribute its (c) Traceability. If the Contractor is not the prescribing procedures for the
product lines. original manufacturer of, or authorized dealer assessment of civil penalties and for
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Document Created: 2015-12-15 09:39:16
Document Modified: 2015-12-15 09:39:16
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Proposed rule. | |
| Dates | Comments on the proposed rule should be submitted in writing to | |
| Contact | Ms. Amy G. Williams, telephone 571- 372-6106. | |
| FR Citation | 80 FR 56939 | |
| RIN Number | 0750-AI58 | |
| CFR Citation | 48
CFR
202 48 CFR 212 48 CFR 246 48 CFR 252 |
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