Overview
FAR 46.317 prescribes the inclusion of clause 52.246-26, which mandates that contractors report nonconforming items to mitigate supply chain risks. It specifically targets critical items, higher-level quality standard acquisitions, and electronic parts within the Department of Defense.
Key Rules
- Mandatory Inclusion (All Agencies): The clause is required for items subject to higher-level quality standards (FAR 52.246-11) or items designated as "critical" by the contracting officer and requiring activity.
- DoD Electronic Parts: For the Department of Defense, the clause is mandatory for acquisitions exceeding the Simplified Acquisition Threshold (SAT) involving electronic parts, components, or materials containing electronics.
- Service Contracts: The requirement extends to service contracts if the contractor provides physical items meeting the criteria for critical or electronic parts as part of the service.
- Exemptions: The clause shall not be used for FAR Part 12 commercial product/service acquisitions or for medical devices already subject to FDA reporting requirements.
- Reporting Mechanism: While reports are generally submitted by the contractor to the Government-Industry Data Exchange Program (GIDEP), agencies may modify the clause to have the agency submit the contractor's data to GIDEP instead.
Practical Implications
- Contractors must maintain robust quality control and supply chain monitoring systems to identify and report nonconformities to GIDEP within mandatory timelines.
- Contracting Officers must perform early coordination with technical requirements personnel to identify "critical items" to ensure the appropriate risk-mitigation clauses are inserted into solicitations.