AGENCY:

Executive Office of the President, Office of Management and Budget.

ACTION:

Request for written submissions from the public.

SUMMARY:

The Federal Government is currently undertaking a significant effort to eliminate counterfeit products from the U.S. Government supply chain. In June 2010, Vice President Biden and White House Intellectual Property Enforcement Coordinator, Victoria Espinel, announced the Joint Strategic Plan on Intellectual Property Enforcement, laying out a coordinated government-wide approach to strengthening intellectual property enforcement and directing the establishment of an inter-agency working group. Recent reports issued by the Department of Commerce and the Government Accountability Office have found that counterfeits have infiltrated many sectors of the U.S. Government supply chain and have the potential to cause serious disruptions in national defense, critical infrastructure and other vital applications. This working group will develop a framework for reducing vulnerability to counterfeits that is flexible enough to accommodate the wide variety of missions across Federal agencies. This cross-functional working group will identify any gaps in legal authority, regulation, policy and guidance that undermine the security of U.S. Government supply chain from counterfeit parts. The working group's examination will include reviewing current industry standards, the ability of prime contractors and their suppliers to authenticate or trace at-risk items to the original manufacturer, government evaluation and detection capabilities and limitations, and contractual enforcement of authenticity.

DATES:

Submissions must be received on or before September 16, 2011 at 5 p.m.

ADDRESSES:

Public comment should be electronically submitted to http://www.regulations.gov, docket number OMB-2011-0003. The regulations.gov Web site is a Federal E-Government Web site that allows the public to find, review and submit comments on documents that agencies have published in the Federal Register and that are open for comment. If you are unable to provide submissions to http://www.regulations.gov, please contact James Schuelke at (202) 395-1808 to arrange for an alternate method of transmission. Submissions filed via the regulations.gov Web site will be available to the public for review and inspection. If you want to submit confidential business information that supports your comments, please contact Michael Lewis at intellectualproperty@omb.eop.gov.

FOR FURTHER INFORMATION CONTACT:

Michael Lewis, Office of the Intellectual Property Enforcement Coordinator, at (202) 395-1808.

SUPPLEMENTARY INFORMATION:

The core members of the Working Group are the Office of the Intellectual Property Enforcement Coordinator (IPEC) in the Office of Management and Budget (OMB) of the Executive Office of the President; Department of Defense (DoD); National Aeronautics and Space Administration (NASA); and the General Services Administration (GSA). These core members, along with other government components, have partnered to identify areas of common interest and compare progress and best practices to ultimately eliminate counterfeits in the government-wide supply chains. The working group will work to accomplish the following objectives:

• Objective #1—Develop procedures for program managers to identify items at risk for counterfeiting or requiring authentication of legitimacy. These procedures will, to the greatest extent practicable, utilize current industry standards.
• Objective #2—Examine whether additional administrative actions, including regulatory actions, are needed to require suppliers to take stronger anti-counterfeiting measures.
• Objective #3—Examine when and how product and package traceability, reporting and marking processes can be used by prime contractors, their suppliers, Federal government personnel and potentially other customers to confirm production authority by the original manufacturer of at-risk items.
• Objective #4—Examine government/industry evaluation capabilities and determine whether improvement is needed.
• Objective #5—Develop an anti-counterfeiting training and outreach strategy for the Federal workforce.
• Objective #6—Examine whether additional measures are needed to protect the rights and interests of the United States, recoup costs and prosecute offenders.Start Printed Page 48906

The purpose of the request for comments and recommendations is to solicit feedback and best practices from industry, academia, research laboratories, and other stakeholders on issues related to identifying areas of common interest and compare progress and best practices to ultimately eliminate counterfeits in Federal Government supply chains. This request for comments and for recommendations is divided into six categories. Responses to this request for comments may be directed to any or all of the six categories.

Request for Comments Categories

Category 1: General

The U.S. Government Inter-Agency Anti-Counterfeiting Working group seeks written comment submissions on the following topics:

• Describe functional responsibilities, procedures and programs specifically designed to address prevention, identification and control of suspect/counterfeit items.
• Describe any procedures for the disposal of items identified as suspect/counterfeit items. Do these procedures include segregation, evaluation of safety/mission impact, extent of condition, removal, destruction or return to the vendor?
• Describe both internal and/or external notification procedures used when a suspect/counterfeit item is discovered. Identify suspect/counterfeit industry information exchanges to which you report counterfeit items.
• Describe any testing and inspection procedures used to authenticate a procured item.
• Describe any rules or procedures that can improve the use and functionality of the Government-Industry Data Exchange Program (GIDEP).
• Recommend best practices for identifying counterfeit products entering the U.S. Government supply chain and for curbing their entry into that supply chain.

Category 2: Objective #1—Establish procedures for program managers to identify items at risk for counterfeiting or requiring authentication of legitimacy. These procedures will, to the greatest extent practicable, utilize current industry standards.

• Describe methodologies for determining the functional criticality of parts and whether critical parts have unintentional or intentional vulnerabilities that may subject them to counterfeiting. For critical parts, describe the consequences of counterfeiting and the likelihood that counterfeiting will occur.
• As the likelihood of the counterfeiting of critical parts increases, describe ways to establish more stringent traceability requirements for direct suppliers and their subcontractors to assure and support evidence of part authenticity.
• Describe processes for the verification of direct suppliers' trustworthiness for consistent delivery of authentic and conforming parts that meet specifications.
• Describe procedures for tracking parts and materials received from suppliers to the original manufacturer, or other acceptable source, to authenticate that they meet the requirements of the customer's specifications.
• Describe procedures that you follow to ensure that counterfeit parts are not incorporated into products during the manufacturing processes, including the means of identifying suspect parts during receiving inspection and preventing their acceptance.
• Describe effective international and industry standards used in anti-counterfeiting risk management efforts.

Category 3: IPEC Objective #2—Examine Whether Regulations Are Needed To Require Suppliers To Take Stronger Anti-Counterfeiting Measures

• Describe contractual requirements used by customers to assure the authenticity of the products upon delivery. Describe the provisions of these requirements, if any. Describe any process or procedures used to flow authenticity requirements down to suppliers. Describe any conflicts between requirements from different customers.
• Are contract clauses that notify suppliers that they are prohibited from providing suspect/counterfeit items effective?
• Describe any special quality assurance provisions that may be contained in anti-counterfeiting contract clauses that require parties to confirm compliance.
• Describe effective methods for addressing counterfeit prevention during the source selection process.
• Describe any risk factors used in determining risk for counterfeit items/commodity groups.
• Describe procedures for processing potentially counterfeit items. Describe any requirements imposed on suppliers when potential counterfeit items are identified.

Category 4: IPEC Objective #3—Examine When and How Product and Package Traceability, Reporting and Marking Processes Can Be Used by Prime Contractors, Their Suppliers, Federal Government Personnel and Potentially Other Customers To Confirm Production Authority by the Original Manufacturer of At-Risk Items

• Describe procedures that require the labeling, stamping or marking of authentic parts and/or part packaging prior to purchasing parts and material for installation in products.
• Describe the use of part markings to address the following:

(1) Identification of distributors and/or suppliers who have a documentation system, and receiving inspection system that ensures the traceability of their parts to a production or design authority-approved source, and

(2) Methods of screening part markings to identify unfamiliar distributors and/or suppliers to determine if the parts present a potential risk of being unapproved by a production or design authority.

• Describe procedures for establishing product and packaging identification and authenticity documentation requirements for at-risk items and applying these requirements to suppliers to ensure traceability of product authenticity throughout the supply chain.
• Describe how the use of enhanced product/package identification marking methods (such as marking products/packages with globally unique item identifiers (UIIs) using international standards, and then registering these UIIs and their product/package pedigree information in a database to enable tracking them back to their originating source as they transit the supply chain) might help reduce or eliminate counterfeits in the supply chain. Does the use of these identification marking methods impose a substantial burden on manufacturers/suppliers? Identify the types of incentives that would encourage manufacturers/suppliers to consistently use identification markings.
• Describe how the use of advanced technology for ensuring the integrity of products delivered in the supply chain (including such techniques as digital signatures, hologram tags, tamper-resistant and tamper-evident packaging) might help reduce or eliminate counterfeits in the supply chain.
• Describe any techniques that may be employed when product authentication cannot be confirmed by use of product and packaging identification and authenticity documentation requirements.Start Printed Page 48907

Category 5: IPEC Objective #4—Examine Government/Industry Evaluation Capabilities and Determine Whether Improvement Is Needed.

• List physical inspection, non-destructive examination, and laboratory testing equipment that your organization owns and operates and that is capable of authenticating a suspected counterfeit part.
• Describe specific products that can be inspected/tested using this equipment and how the inspection/testing technique(s) can be used to distinguish counterfeit product from authentic product.
• List any laboratory/testing certifications or accreditations that your facility(ies) maintains.
• List any governmental or industry customers that employ your testing facilities.
• Describe handling and storage techniques that your facility employs to prevent comingling, tampering and unauthorized release of suspect counterfeit items.
• How much capacity would your facility be able to manage—how many parts per day can you handle? Can your test facility handle classified information?

Category 6: IPEC Objective #5—Establish an Anti-Counterfeiting Training and Outreach Strategy for the Federal Workforce

• Does your organization provide anti-counterfeit training for employees? Identify the type of training that is available. List the types of employees who receive anti-counterfeit training (e.g., Buyers, Inspectors, Engineers, Project Managers).

○ Did you model your training after another industry standard or company, or outsource the training? If so, please describe.

○ How frequently do you provide anti-counterfeiting training to your employees?

○ How do you educate/train your new hires?

○ What is the venue and medium for this training? (e.g., Classroom, Web-based, Reading materials)

○ How long are the training sessions?

• How do you track and benchmark the effectiveness of your training in anti-counterfeiting?
• What training resources do you provide to suppliers or customers on anti-counterfeit tactics and strategies for your industry or products?
• Do you formally test recipients on the contents of the training and/or provide formal qualifications/certifications upon completion of the training?
• Describe the scope and contents of your anti-counterfeiting training.

Request for Information Response Guidelines: Responses to this Request for Comments must be submitted electronically to http://www.regulations.gov docket number OMB-2011-0003.

To submit comments via http://www.regulations.gov, enter docket number OMB-2011-0003 on the home page and click “search”. The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice by selecting “Notice” under “Document Type” on the left side of the search-results page, and click on the link entitled “Submit a Comment.” (For further information on using the http://www.regulations.gov Web site, please consult the resources provided on the Web site by clicking on “How to Use This Site” on the left side of the home page.)

The http://www.regulations.gov site provides the option of providing comments by filling in a “Type Comment and Upload File” field, or by attaching a document. It is expected that most comments will be provided in an attached document. If a document is attached, it is sufficient to type “See attached” in the “Type Comment and Upload File” field. If you want to submit confidential business information that supports your comments, please contact Michael Lewis at intellectualproperty@omb.eop.gov.