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September 2015 • SMT Magazine 101 DOD's FIrst pAss At Grey mArKet reGuLAtION continues stephan Halper is the coo and principal of Secure components. To contact the author, click here. 50 SHAdeS oF tHe grey mArKet are limited to covered contractors. 2. The final rule also excludes small busi- ness when stating, "This rule does not ap- ply to small entities as prime contractors." 3. However, small business is not excluded as the flow down requirements enforce the DFARS regulations are implemented at all levels of the supply chain. Fed. Reg.26099 defines, accurately, that all lev- els of the supply chain have the potential to introduce counterfeit or suspect-coun- terfeit electronic components. 4. It should be noted that as currently writ- ten, Section 818 does not cover cyber- physical or cyber regulation. DLA Generates the Qualified testing supplies List (QtsL) and DNA marking: •Establishment of pre-qualified distribu- tors for FSC codes 5961 (semiconductors) and 5962 (microcircuits) managed by DLA Land & Maritime. •Pre-qualified distributors must undergo a site audit of their facility before being added to the QTSL. •QTSL requirements are similar to the re- quirements called out in AS6081, and call for the distributor to have a counterfeit avoidance policy (CAP) in place, and be able to prove that they follow the proto- cols laid out in their CAP for parts pro- cured from the secondary/grey market. •Parts that pass the testing requirements per the QTSL process and procedures are then DNA marked, for purposes of estab- lishing a chain of custody with the parts. •DNA marking is a requirement for parts supplied through the previous established QSLD "Qualified Suppliers List of Distribu- tors". •Initially the DNA marking is performed by an approved third-party marker. •Dec 2014—DLA Land & Maritime requires that all 5962 parts be marked at DLA Land and Maritime per the DLA Counterfeit De- tection and Avoidance Program (CDAP). •Apr 2015—CDAP documentation provid- ed by distributor is amended to include "documentation of traceability or a test report prior to the shipment of parts to DLA L&M, and prohibits the contractor from shipping material until they have received written authorization from the contract administrator." •New CDAP requirements cover material being supplied to DLA either through the QTSL program or QSLD program. Now for the Hard part: Implementation So now that mandates have been issues, and regulations have been set, how has the DoD supply chain benefited from these new rules? What gaps have been created, and how has in- dustry responded to the mandates to make the supply chain safer? This will be the topic of my next column, where I will give some first- person experience, and the importance of high- reliability supply chain professionals can begin implementing some of DoD's and Industry's best practices. smt references 1. Federal Acquisition Streamlining Act (FASA), enacted in 1994, brought the use of COTS into law. 2. SASC 2012. 3. 79 Fed. Reg. 26098. 4. 79 Fed. Reg. 26105 5. QSLD program was developed prior to the QTSL program. Per QSLD—5961/5962 D March, 2014, "The QSLD purpose of the QSLD program is to establish and maintain a list of pre-quali- fied sources for certain electronic components that are purchased and managed by DLA Land and Maritime. QSLD products are provided by suppliers and distributors that combine accept- ed commercial practices and quality assurance procedures that are consistent with industry and international quality standards, which are tailored when necessary to product-unique re- quirements. 6. CDAP/

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