WASHINGTON – A bipartisan amendment that passes the cost of counterfeit electronic component mitigation to contractors has passed the US Senate by an overwhelming margin.

"S.AMDT.1092: to bolster the Detection and Avoidance of Counterfeit Electronic Parts," introduced by Sen. Carl Levin (D-MI) and John McCain (R-AZ), passed in the US Senate by a 97-3 margin.     

The Levin-McCain amendment against counterfeiting of critical electronic parts includes new provisions that require large defense contractors to establish systems for detecting and avoiding counterfeit parts. It authorizes reductions in contract payments to contractors who fail to do so. For the first time, Congress is requiring contractors to absorb the costs of fixing problems caused by counterfeit parts, rather than deferring costs to the Defense Department.   

The amendment also requires the Secretary of Homeland Security to establish enhanced inspection of electronic parts, and requires the DoD to adopt policies and procedures for detecting and avoiding counterfeit parts in its direct purchases, and for assessing and acting on reports of counterfeits. Military officials and contractors that learn of counterfeit parts in the supply chain must provide written notification to the contracting officer, the DoD Inspector General, and to the Government-Industry Data Exchange Program.

The amendment is attached to the fiscal 2012 National Defense Authorization Act.

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