NDAA for Fiscal Year 2012

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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS Subtitle C—Amendments to General Contracting Authorities, Procedures, and Limitations
P. L. 112-	House Conference Report 112-705
SEC. 833. CONTRACTOR RESPONSIBILITIES IN REGULATIONS RELATING TO DETECTION AND AVOIDANCE OF COUNTERFEIT ELECTRONIC PARTS. Section 818(c)(2)(B) of the National Defense Authorization Act for Fiscal Year 2012 (Public Law 112-81; 125 Stat. 1493; 10 U.S.C. 2302 note) is amended to read as follows: `(B) the cost of counterfeit electronic parts and suspect counterfeit electronic parts and the cost of rework or corrective action that may be required to remedy the use or inclusion of such parts are not allowable costs under Department contracts, unless-- `(i) the covered contractor has an operational system to detect and avoid counterfeit parts and suspect counterfeit electronic parts that has been reviewed and approved by the Department of Defense pursuant to subsection (e)(2)(B); `(ii) the counterfeit electronic parts or suspect counterfeit electronic parts were provided to the contractor as Government property in accordance with part 45 of the Federal Acquisition Regulation; and `(iii) the covered contractor provides timely notice to the Government pursuant to paragraph (4).'.	Contractor responsibilities in regulations relating to detection and avoidance of counterfeit electronic parts (sec. 833) The House bill contained a provision (sec. 816) that would provide that costs associated with the use of counterfeit parts are allowable costs on the defense contracts of a contractor that has a system to detect and avoid such parts that has been reviewed and approved by the Department of Defense and that gives timely notice to the Government of any discovery or suspicion of such parts in its supply chain if: (1) the parts were procured from a trusted supplier; or (2) the parts were provided to the contractor as government-furnished property in accordance with part 45 of the Federal Acquisition Regulation. The Senate amendment contained no similar provision. The Senate recedes with an amendment that would provide that such costs are allowable costs only if the parts were provided to the contractor as government-furnished property.
	House Report 112-479
	SECTION 816--CONTRACTOR RESPONSIBILITIES IN REGULATIONS RELATING TO DETECTION AND AVOIDANCE OF COUNTERFEIT ELECTRONIC PARTS This section would amend section 818 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law 112-81) to provide an exception to the prohibition on allowable costs under Department of Defense contracts for the cost of rework or corrective actions that may be required to remedy the use or inclusion of counterfeit parts.

SEC. 833. CONTRACTOR RESPONSIBILITIES IN REGULATIONS RELATING TO DETECTION AND AVOIDANCE OF COUNTERFEIT ELECTRONIC PARTS.