Reporting Nonconforming Items
Contractors must promptly identify, report, and manage counterfeit and nonconforming items, ensuring robust quality controls and timely communication with the government.
Overview
FAR 52.246-26, Reporting Nonconforming Items, establishes requirements for contractors to identify, report, and manage counterfeit, suspect counterfeit, and nonconforming items in government contracts. The clause defines key terms, mandates screening of GIDEP reports, and outlines specific notification and reporting obligations to both the Contracting Officer and the Government-Industry Data Exchange Program (GIDEP). It also details exceptions, confidentiality requirements, and flow-down obligations for certain subcontracts, particularly those involving critical items, higher-level quality standards, or electronic parts for the Department of Defense. The clause aims to prevent the introduction of counterfeit and unsafe items into the government supply chain and to ensure prompt communication and corrective action when such items are identified.
Key Rules
- Screening GIDEP Reports
- Contractors must review GIDEP reports as part of their quality control to avoid delivering counterfeit or nonconforming items, unless they are foreign entities without a U.S. presence.
- Notification and Reporting
- Contractors must notify the Contracting Officer within 60 days of discovering or suspecting counterfeit or suspect counterfeit items, and retain such items until instructed otherwise.
- GIDEP Reporting
- Contractors must report counterfeit, suspect counterfeit, or major/critical nonconforming common items to GIDEP within 60 days, with specific exceptions.
- Exceptions to Reporting
- Reporting is not required for certain foreign contractors, ongoing criminal investigations, or when nonconforming items have not been distributed to multiple customers.
- Confidentiality
- Reports must not include trade secrets or information prohibited by law.
- Subcontract Flow-down
- The clause must be included in certain subcontracts, with exceptions for commercial products/services and FDA-regulated medical devices.
Responsibilities
- Contracting Officers: Receive notifications, provide disposition instructions, and ensure clause flow-down in applicable subcontracts.
- Contractors: Screen GIDEP reports, notify the Contracting Officer, report to GIDEP, retain suspect items, and flow down the clause to qualifying subcontracts.
- Agencies: Oversee compliance, provide guidance, and protect confidential information.
Practical Implications
- This clause is designed to protect the government supply chain from counterfeit and unsafe items, especially in critical and electronic components. Contractors must have robust inspection and reporting systems, understand the definitions and thresholds, and ensure timely communication and documentation. Failure to comply can result in supply chain risks, contractual remedies, or legal consequences.