On February 24, 2021, President Biden signed an Executive Order entitled “Executive Order on America’s Supply Chains” (the “Order”). Among other things, the Order is an initial step toward accomplishing the Biden Administration’s goal of building more resilient American supply chains that avoid shortages of critical products, facilitate investments to maintain America’s competitive edge, and
Supply Chain Management
CISA Information and Communications Technology Supply Chain Risk Management Task Force Releases New Guidance on Security Resiliency
On May 5, 2020 the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency’s (“CISA”) Information and Communications Technology (“ICT”) Supply Chain Risk Management (“SCRM”) Task Force (the “Task Force”) released a six-step guide for organizations to start implementing organizational SCRM practices to improve their overall security resilience. The Task Force also released a revised fact sheet to further raise awareness about ICT supply chain risk.
As we discussed in a prior blog post on the Task Force’s efforts, the Task Force was established in 2018 with representatives from 17 different defense and civilian agencies, as well as industry representatives across the information technology and communications sectors. The Task Force has been focused on assessing and protecting security vulnerabilities in government supply chains. Since its founding, the Task Force has inventoried existing SCRM efforts across the government and industry, including some of the practices reflected in the guide.
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New FAR Rule Expands Counterfeit Reporting Obligations
Last week, the FAR Council issued a Final Rule, setting forth new FAR provisions that require the reporting of certain counterfeit and suspect counterfeit parts and certain major or critical nonconformances to the Government – Industry Data Exchange Program (“GIDEP”). This Final Rule comes more than five years after the rule was first proposed in the Federal Register in June 2014. The FAR Council describes the Final Rule as “significantly de-scoped” from the version proposed in 2014, but it nonetheless constitutes a significant expansion of the existing counterfeit part reporting obligations, which to date have applied only to electronic parts under DOD contracts.
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Proposed Counterfeit Parts Rule Envisions New Restrictions, Universal Applicability for DoD Contractors
On September 17, 2015, Covington hosted a Symposium in the firm’s Washington office focusing on key trends and emerging issues for government contractors. Both Senator John McCain and former Attorney General Eric Holder addressed the procurement and enforcement challenges faced by the government and contractors, and several panels of leading experts discussed a wide variety of topics ranging from cybersecurity developments to contractor responsibility. The full-day program also offered a series of break-out sessions focused on operational business considerations, including the increasing importance of contractor supply chain management. That topic now appears to have been particularly timely in light of DoD’s September 21, 2015 announcement of a new proposed rule addressing counterfeit electronic parts in contractor supply chains.
The new proposed rule is further implementation of section 818 of the 2012 National Defense Authorization Act (“NDAA”), which required the Secretary of Defense to assess DoD’s “acquisition policies and systems for the detection and avoidance of counterfeit electronic parts.” As discussed below, because the proposed rule would impose new substantive sourcing requirements and apply far more broadly than existing regulations, it would, if adopted, further increase the overall compliance burden on the defense contracting community.
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