Senators approved Nov. 29 by unanimous consent an amendment to the Senate's version of the fiscal 2012 defense authorization bill (S. 1867) that would require contractors to actively monitor for counterfeit parts in their supply chains.

The amendment (.pdf), proposed by Carl Levin (D-Mich.) and John McCain (R-Ariz.), the chairman and ranking member respectively of the Senate Armed Services Committee, comes weeks after SASC held a hearing on counterfeit parts in Defense weapons systems. The bill in its entirety has yet to be voted on by the full Senate.

The amendment would permit the Defense Department to make a list of "trusted suppliers" as well as a list of "untrusted suppliers," and require defense contractors whenever possible to buy parts either from trusted suppliers or directly from original manufactures and their authorized dealers.

In addition, the Homeland Security Department would have to set up an enhanced inspection program for electronic parts imported from any country designated by the secretary of defense as a "significant source" of counterfeit electronics.

Contractors whose products are found to have counterfeit parts in them would be responsible for the cost of reworking the product to have genuine parts.

The amendment would also create criminal penalties of up to $5 million and 20 years imprisonment for individuals who knowingly trade in counterfeit goods for defense procurements and fines of up to $15 million for companies.

For more:
- go to the THOMAS page for S. 1867
- download a copy of the Levin-McCain amendment (.pdf)

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