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Jim Burger responds to proposed Department of Defense rule for counterfeit parts

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Jim Burger

Lobbying & Policy partner Jim Burger has spent the past month examining a proposed Department of Defense rule on behalf of two industry groups with much at stake should the rule be adopted in its current form. At issue is a high-profile change to the government's federal acquisition regulations that targets the startling influx of counterfeit parts into the military supply chain.

The problem is very real for all branches of the military. In just one recent example from early July, the Department of Justice charged a Massachusetts man with the sale of fake semiconductors intended for use on nuclear submarines. Undetected, those counterfeit parts could have cost the lives of innumerable U.S. servicemen and women.

Burger has helped draft official comments about the rule on behalf of the Intellectual Property Owners Association and the Semiconductor Industry Association. The E-Commerce Times interviewed Burger for a July 24 story about the problematic proposal, "Federal Plan to Scuttle Phony Electronic Parts Baffles Suppliers."

The IPO Daily News, an e-mail alert for members of the Intellectual Property Owners Association, also cited Burger's work on the association's comments in its July 19 edition. Burger is co-vice chair of the associations' Anti-Counterfeiting and Anti-Piracy Committee, which drafted the comments. Other committee members include executives from Ford Global Technologies, Eli Lilly and Company, Microsoft, and DuPont.

At issue is a proposed amendment to the Defense Federal Acquisition Regulation Supplement that seeks to hold contractors and subcontractors more accountable for the detection and avoidance of counterfeit electronic parts.

"The IPO is a trade association representing over 200 companies and more than 12,500 individuals who are involved in the association either through their companies or as inventor, author, law firm, or attorney members," The group wrote in its comments. "Many of our members produce electronic parts, including military-specification parts, which are frequently targeted by counterfeiters."

The IPO Association urged the DoD to provide more precise definitions about the "legally authorized source" of an electronic part. The group also suggested that contractors should, if necessary, be permitted to purchase parts from "trusted suppliers." Finally, the association encouraged the DoD to expand the reach of the rule to smaller companies that fall outside the rule's current definition of "contractor" or "subcontractor."

"Many counterfeit electronic parts enter the military supply chain through small companies not covered by this standard," the association wrote. "Indeed, at the June 28, 2013, public hearing, an attendee noted that the rule would only cover roughly 10 to 15 percent of its contractors. IPO recommends that the rule be expanded to cover all contractors and subcontractors."

The Semiconductor Industry Association raised similar concerns in its comments, authored by Burger and Thompson Coburn government contracts attorney Kimberly Heifetz and submitted to the Department of Defense in mid-July. The association is the voice of the U.S. semiconductor industry, which represents dozens of microchip manufacturers, including Texas Instruments, IBM, Intel, and Qualcomm.

"Read together, these areas of concern create ambiguity, open various loopholes and gaps in the regulatory coverage of counterfeit electronic, [and] leave open the risk and opportunity for counterfeit electronic parts to enter the DoD supply chain," the industry writes.

What’s more, the industry writes, numerous studies and hearings before the Senate Armed Services and the House Homeland Security Committees have demonstrated that the flood of dangerous counterfeit semiconductors and other life-critical products — including aircraft and auto parts — threaten "the health and safety of Government workers and agency missions."

Jim Burger, an intellectual property attorney and member of Thompson Coburn Lobbying & Policy, has represented information technology companies before Congress, the Administration, and the Federal Communications Commission for more than 30 years.