American Public University Federal Acquisition Regulation & GDMA Scandal Discussion PART 1: Read: Nelson, T. B. A. (2015). A restitution alternative for

American Public University Federal Acquisition Regulation & GDMA Scandal Discussion PART 1:

Read:

Nelson, T. B. A. (2015). A restitution alternative for department of defense agencies to combat program fraud civil remedies act-level cases under FAR 9.4A. Public Contract Law Journal, 44(3), 469-476,478-504. Retrieved from

Discuss the advantages and disadvantages of revising FAR 9.4 for streamlining small-dollar fraud cases in government contracting. Develop discussions as you would in a live class setting. Build on each other’s comments. Use library articles to acquire additional insights.

Discussion should be at least 250 words

PART 2:

Read:

Federal acquisition regulation: Reporting of nonconforming items to the government-industry data exchange program. (2019). (). Washington: Federal Information & News Dispatch, Inc.

Greene, J. (2018). The Glenn defense marine Asia problem: The role of ethics in procurement reform. Public Contract Law Journal, 48(1), 16-34. Retrieved from

Nelson, T. B. A. (2015). A restitution alternative for department of defense agencies to combat program fraud civil remedies act-level cases under FAR 9.4A. Public Contract Law Journal, 44(3), 469-476,478-504. Retrieved from

Prompt:

Read the Greene case study, “The Glenn defense marine Asia problem,” article and integrate ideas from the other listed articles. Determine which of the regulations in the reading violated regulations. Be sure to discuss why the actions in the case study illustrate the selected regulations selected.

Create section titles-use essay title name for the introduction. The introduction should be the only section title with no bold font. The rest of the section titles (levels one and two) should be in bold font.

Instructions

Essay format; not bullet format
Minimum 2 full pages of content (Word Document) of material (does not include a cover page, abstract, nor reference pages)
All charts, graphs, pictures are to go in the appendix (not a substitute for content)

Format according to the APA style guide

Refrain from excessive use of quotes in your response (less than 5%) Federal Acquisition Regulation: Reporting of
Nonconforming Items to the GovernmentIndustry Data Exchange Program
Publication info: The Federal Register / FIND ; Washington , Vol. 84, Iss. 226, (Nov 22, 2019).
ProQuest document link
FULL TEXT
Source: DEPARTMENT OF DEFENSE
Final rule.
CFR Part: “48 CFR Parts 1, 2, 7, 46, and 52”
RIN Number: “RIN 9000-AM58”
Citation: “84 FR 64680”
Document Number: “FAC 2020-02, FAR Case 2013-002; Docket No. FAR-2013-0002, Sequence No. 1”
Page Number: “64680”
“Rules and Regulations”
Agency: “Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and
Space Administration (NASA).”
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to
require contractors and subcontractors to report to the Government-Industry Data Exchange Program certain
counterfeit or suspect counterfeit parts and certain major or critical nonconformances.
DATES:
Effective: December 23, 2019.
FOR FURTHER INFORMATION CONTACT: Ms. Marilyn E. Chambers, Procurement Analyst, at 202-285-7380, or by
email at marilyn.chambers@gsa.gov, for clarification of content. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2020-02, FAR Case 2013002.
SUPPLEMENTARY INFORMATION:
I. Background DoD, GSA, and NASA published a proposed rule at 79 FR 33164 on June 10, 2014, in the Federal
Register, to implement sections 818(c)(4) and (c)(5) of the National Defense Authorization Act (NDAA) for Fiscal
Year (FY) 2012 (Pub. L. 112-81, 10 U.S.C. 2302 Note), which required DoD contractors and subcontractors to report
counterfeit or suspect counterfeit electronic parts purchased by or for DoD to the Government-Industry Data
Exchange Program (GIDEP).
The Presidential Memorandum on Combating Trafficking in Counterfeit and Pirated Goods, issued April 3, 2019,
states that “[c]ounterfeit trafficking . . . may threaten national security and public safety through the introduction
of counterfeit goods destined for the Department of Defense and other critical infrastructure supply chains.”
Accordingly, the Federal Government must improve coordinated efforts to protect national security from the
dangers and negative effects of the introduction of counterfeit goods. This rule furthers that aim by requiring
contractors to screen for and report critical nonconformances, including counterfeits and suspect counterfeits,
which may impede the performance of mission critical systems, where high level quality standards are essential to
protect the integrity of systems requirements, and are necessary for national defense or critical national
infrastructure.
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The U.S. Intellectual Property Enforcement Coordinator’s Annual Intellectual Property Report to Congress, dated
February 2019, reiterated: “Counterfeiting is a significant challenge that can impair supply chains for both the
public and private sectors. In the context of the U.S. Government, acquiring products or services from sellers with
inadequate integrity, security, resilience, and quality assurance controls create significant risks, from a national
security and mission assurance perspective as well as from an economic standpoint (due to the increased costs
to American taxpayers). Counterfeiting can have particularly significant consequences for the Department of
Defense (DoD) supply chain, by negatively affecting missions, the reliability of weapon systems, the safety of the
warfighter, and the integrity of sensitive data and secure networks.” (Appendix, p.51.) This rule is likely to have a
positive impact on national security and critical infrastructure where the Government procures elements of the
infrastructure, for example, Federal Aviation Administration air traffic control systems, Department of Agriculture
food safety equipment, all national defense programs, Department of Transportation monitoring of transportation
systems, Department of Energy monitoring of power generation and distribution networks, etc.
By reporting in GIDEP, contractors are able to share knowledge of counterfeits and critical nonconformances
which reduces the risk of counterfeit and other nonconforming items entering the supply chain and being used in
high value, mission critical defense, space, or critical infrastructure systems where system failure could threaten
national security through the loss of satellite-based critical information, communication and navigation systems,
or other systems resulting in the loss of the ability to control connected systems or secure information within
those systems. Counterfeits are not produced to meet higher-level quality standards required in mission critical
applications and are a significant risk in causing failures to systems vital to an agency’s mission. For weapons,
space flight, aviation, and satellite systems, these failures can result in the death, severe injuries, and millions of
dollars in system damage or loss. For example, if counterfeits are installed in a missile’s guidance system, such
missile may not function at all, may not proceed to its intended target, or may strike a completely unintended
location resulting in catastrophic losses. Critical nonconforming and counterfeits items may cause failures in
navigation or steering control systems, planes and flight control. Counterfeits can create “backdoors” into
supposedly secure programmable devices which could be exploited to insert circuit functions to steal information
and relay it to third parties or command or prevent the device from operating as designed. Defense, space, and
aviation systems in particular must meet rigorous component specifications; failure of even a single one can be
catastrophic causing serious problems and placing personnel and the public in harm’s way.
GIDEP is a widely available Federal database. Timely GIDEP reporting and screening allows all contractors to
promptly investigate and remove suspect parts from the supply chain and to ensure that suspect parts are not
installed in the equipment which would result in experiencing high failure rates. With this knowledge, contractors
can also avoid costs resulting from production stoppage, high failure rates, rework, or lost time due to
maintenance turnaround to remove and replace failed parts. This effect is magnified by the fact GIDEP permits
contractors to learn from the experiences of others across industry.
This rule concentrates on complex items with critical applications where the failure of the item could injure
personnel or jeopardize a vital agency mission. In accordance with the Office of Federal Procurement Policy
(OFPP) Policy Letter 91-3, all Government agencies use GIDEP as the central data base for receiving and
disseminating information about nonconforming products. Contractor participation has been largely voluntary.
This rule requires contractors to screen and report major or critical nonconformances in order to reduce the risk of
counterfeit and other nonconforming items entering the supply chain and impacting the performance of mission
critical items where item failure could result in loss of high value items or loss of life.
GIDEP is a cooperative activity between government and industry participants seeking to reduce and ultimately
eliminate expenditures of resources by sharing technical information essential during research, design,
development, production and operational phases of the life cycle of systems, facilities and equipment. Since
GIDEP’s inception, participants have reported over $2.1 billion in cost avoidance. That means without GIDEP,
participants could have potentially realized additional expenses of over $2.1 billion. In many cases, these costs
could have been passed on to the U.S. Government. In addition to reporting cost avoidance, participants also
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reported how the information helped keep production lines running, preserved readiness or avoided dangerous
situations. This reporting by GIDEP participants is for the purpose of illustrating the value of sharing information
when common items have issues that could impact safety, reliability, readiness and ownership costs.
Proper utilization of GIDEP data can materially improve the total safety, quality and reliability of systems and
components during the acquisition and logistics phases of the life cycle and reduce costs in the development and
manufacture of complex systems and mission critical equipment.
Examples of the value of this reporting include discovery of counterfeiting operations that supplied parts to many
defense and other Government contractors and removal from the supply chain of-* Faulty rivets that could have caused military aircraft failure in flight;
* Counterfeit electronic parts that would have caused a $100M failure of a satellite in orbit;
* Counterfeit bolts securing overhead gantry cranes in a Government industrial facility;
* Counterfeit raw stock materials (aluminum, steel, and titanium) supplied over a decade and used in structural
applications across defense and civil systems and infrastructure;
* Counterfeit refrigerant with explosive properties that led to explosions and fire on several commercial ships;
* Uncertified electronic connectors that shut down large parts of the defense and space industrial base
production for 6 months until solutions to certification could be devised.
What all these examples have in common is that the items in question are largely commercially available common
piece parts or small assemblies that are used throughout the industrial base and in most defense, space, and
critical infrastructure programs and can easily enter any supply stream.
In the proposed rule, the FAR Council extended coverage outside of DoD to other Government agencies, other
types of parts, and other types of nonconformance. The FAR Council proposed this because the problem of
counterfeit and nonconforming parts extends far beyond electronic parts and can impact the mission of all
Government agencies, such as NASA and the Department of Energy, and mission critical systems such as
avionics, satellites, space flight systems, and nuclear facilities. The final rule still applies across all agencies and
to parts other than electronics, but there was some reassessment of costs and benefits, so that rather than
applying to all supplies, in addition to the requirements for section 818(c)(4) with regard to electronic parts for
DoD, the rule focuses on supplies that require higher-level quality standards or are determined to be critical items
(definition added). This and other de-scoping efforts (see preamble sections II.A. and II.B.1.) reduced the estimated
responses from 474,000 to 5,166 responses, and reduces the estimated burden hours from 1,422,000 hours to
30,986 hours, so that information is obtained where it is most critically needed.
A public meeting was held June 16, 2014. Public comments were received from 14 respondents (including
respondents who provided written statements at the public meeting).
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed
the comments in the development of the final rule. A discussion of the comments and the changes made to the
rule as a result of those comments are provided as follows.
A. Summary of Significant Changes From the Proposed Rule
1. Applicability. The final rule is significantly descoped.
* It does not apply to contracts and subcontracts for the acquisition of commercial items, including commercially
available off-the-shelf (COTS) items.
* Section 818(c)(4) of the NDAA for FY 2012 will not apply to contracts and subcontracts at or below the
simplified acquisition threshold (SAT).
* Rather than applying to all supplies, in addition to the requirements for section 818(c)(4) with regard to
electronic parts for DoD, the rule focuses on supplies that require higher-level quality standards or are determined
to be critical items (definition added).
* The rule also exempts medical devices that are subject to the Food and Drug Administration reporting
requirements at 21 CFR 803; foreign corporations or partnerships that do not have an office, place of business, or
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paying agent in the United States; counterfeit, suspect counterfeit, or nonconforming items that are the subject of
an on-going criminal investigation, unless the report is approved by the cognizant law-enforcement agency; and
nonconforming items (other than counterfeit or suspect counterfeit items) for which it can be confirmed that the
organization where the defect was generated (e.g., original component manufacturer, original equipment
manufacturer, aftermarket manufacturer, or distributor that alters item properties or configuration) has not
released the item to more than one customer.
* Flowdown to subcontracts is similarly descoped. The contractor is prohibited from altering the clause other
than to identify the appropriate parties.
2. Definitions. In FAR 46.101 and the FAR clause 52.246-26, Reporting Nonconforming Items, the definition of
“quality escape” is deleted. A definition of “critical item” is added.
3. Prohibited disclosures. The FAR clause 52.246-26 states explicitly the GIDEP policy that GIDEP reports shall not
include trade secrets or confidential commercial or financial information protected under the Trade Secrets Act, or
any other information prohibited from disclosure by statute or regulation.
4. Timeframe for notification to the contracting officer. In paragraph (b)(2) of FAR 52.246-26, the timeframe for
contractor notification to the contracting officer of a counterfeit or suspect counterfeit item is revised from 30 to
60 days, for consistency with the statute.
B. Analysis of Public Comments
1. Scope/Applicability
a. Limit Scope to Statutory Requirement, or at Least Exclude Nonconformances
Comment: Sections 818(c)(4) and (c)(5) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY)
2012 apply to all defense contractors and subcontractors who become aware, or have reason to believe, that any
item purchased by or for DoD may contain counterfeit or suspect counterfeit electronic parts. The proposed rule
applied the reporting requirements Governmentwide to all supplies (not just electronic parts) and addressed all
major or critical nonconformances as well as counterfeit or suspect counterfeit items.
* Multiple respondents recommended limiting scope of the mandatory reporting rule to the statutory
requirement: Counterfeit electronic parts and suspect counterfeit electronic parts from defense suppliers. Some
respondents thought the rule should only apply to contractors/subcontractors covered by the cost accounting
standards (CAS). One respondent recommended that FAR Case 2013-002 be withdrawn and a DFARS case be
proposed instead. Another respondent stated that significant research has identified the problems and risks of
counterfeit electronic part infiltration into the defense supply chain, but is concerned whether the benefits of such
broad expansion of the scope of the rule justify the additional burdens and costs it will impose, not just on
industry, but on the Government as well.
* Several respondents questioned the statutory authority for extending requirements to contractors for items
that are not counterfeit. These respondents indicated that GIDEP reporting should be strictly limited to counterfeit
items. These respondents stated that counterfeiting and nonconformance are two distinct problems that require
different solutions. Another respondent indicated that expanding GIDEP reporting to include quality issues could
also reduce the overall effectiveness of the GIDEP system for combating counterfeit-part proliferation and
recommended “deleting the requirement for contractor reporting of nonconformances into GIDEP and, instead,
continuing the process of deferring to the contracting officer to make the determination regarding which
nonconformances should be reported to GIDEP”.
Response: As stated in the preamble to the proposed rule, the problem of counterfeit and other nonconforming
parts extends far beyond electronic parts and can impact the mission of all Government agencies. The Councils
note that, despite an erroneous statement in the preamble to the proposed rule, the statutory requirement for
reporting to GIDEP is not limited to CAS-covered contractors and subcontractors but applies to all defense
contractors and subcontractors. By requiring contractors to report to GIDEP counterfeit or suspect counterfeit
items, as well as common items that have a major or critical nonconformance, the rule will reduce the risk of
counterfeit items or items with major or critical nonconformance from entering the supply chain. Reducing the risk
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of potential damage to equipment, mission failure, and even injury or death of personnel is a matter of national
security, particularly for DoD and NASA, improving operational readiness of personnel and systems. It supports the
national security pillars of readiness, safety and reliability of systems and personnel. The FAR Council has the
authority under 40 U.S.C. 101 and 121, and 41 U.S.C. 1303, to prescribe Governmentwide procurement policies in
the FAR.
However, in response to public comments, after weighing the risks of failure against the cost of compliance with
this rule, the final rule has significantly descoped the applicability (see FAR 46.317) of FAR clause 52.246-26, so
that it applies only to acquisition of-* Items that are subject to higher-level quality standards in accordance with the clause at FAR 52.246-11, HigherLevel Contract Quality Requirement;
* Items that the contracting officer, in consultation with the requiring activity, determines to be critical items (see
FAR 46.101) for which use of the clause is appropriate;
* Electronic parts or end items, components, parts, or assemblies containing electronic parts, if this is an
acquisition by, or for, the Department of Defense, as provided in paragraph (c)(4) of section 818 of the NDAA for FY
2012 (Pub. L. 112-81) that exceeds the SAT; or
* Services, if the contractor will furnish, as part of the service, any items that meet the above-specified criteria.
The clause will not be required in contracts for the acquisition of commercial items (see paragraph II.B.1.b.) or the
acquisition of medical devices that are subject to the Food and Drug Administration reporting requirements at 21
CFR 803 (see paragraph II.B.5.e.).
Even if the clause is included in the contract, the contractor is not required to submit a report to GIDEP (see FAR
52.246-26(c)) if-* The Contractor is a foreign corporation or partnership that does not have an office, place of business, or fiscal
paying agent in the United States (see paragraph II.B.3.b.);
* The contractor is aware that the counterfeit suspect counterfeit or nonconforming item is the subject of an ongoing criminal investigation, unless the report is approved by the cognizant law-enforcement agency (see
paragraph II.B.7.b.); or
* For nonconforming items (other than counterfeit or suspect counterfeit items), it can be confirmed that the
organization where the defect was generated (e.g., original component manufacturer, original equipment
manufacturer, aftermarket manufacturer, or distributor that alters item properties or configuration) has not
released the item to more than one customer.
b. Exclude Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items
Comment: Multiple respondents commented that the proposed rule is overly burdensome for commercial item
providers, both prime contractors and subcontractors. One respondent stated that application of the regulation to
commercial-item contractors is …
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