Contracting (or Subcontracting) with DLA? Check for Counterfeit Parts Clauses | Morrison & Foerster LLP – Government Contracts Insights

[co-author: Anna Sturgis]

In the past several years, there has been an ongoing focus on avoiding and detecting counterfeit parts, culminating in the issuance of new DFARS sections and contract clauses in May 2014 concerning Contractors’ Counterfeit Electronic Part Detection and Avoidance Systems.  Although the DFARS clause focuses on electronic parts, any company contracting or subcontracting with the Defense Logistics Agency (DLA) may be subject to far broader agency clauses concerning the traceability of products and components.  For example, DLAD 52.211-9014 requires contractors to maintain information that, at a minimum, provides evidence “sufficient to establish the identity of the item, its manufacturing source, and conformance to the item description.”  Another clause requires contractors to have evidence to show that supplies “were produced by the manufacturer” if the contractor is not the original manufacturer of the supplies.  DLAD 52.246-9008.

Although these DLA clauses might not be attracting the attention of companies’ contract and purchasing organizations to the same degree as the DFARS clauses, despite the volume of acquisitions from DLA (over $40 billion of supplies and services annually), failure by a contractor to consider the DLA clauses can have comparable adverse consequences.  This is reflected in the ASBCA’s recent decision in Appeal of Military Aircraft Parts, ASBCA No. 60904, 2017 BCA ¶_______(March 27, 2017).

In Military Aircraft Parts, DLA issued a Request for Quotations for air duct assemblies.  The solicitation incorporated the terms and conditions in DLA’s Master Solicitation for EProcurement Automated Simplified Acquisitions Revision 8.  This Master Solicitation included a number of provisions traceability requirements, including those described above.

DLA awarded the contractor a unilateral Purchase Order for eight air duct assemblies, which required the contractor to provide duct assemblies…

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