President Signs FY'12 National Defense Authorization Act Into Law, Including Federal Anti-Counterfeiting Amendment
January 03 2012 - 8:00PM
Marketwired
Applied DNA Sciences, Inc. (OTCBB: APDN) announces that it is
positioned and ready to empower government contractors and Federal
Agencies as they move to comply with new Federal
anti-counterfeiting law. A bipartisan amendment (S.AMDT 1092) to
the 2012 National Defense Authorization Act (NDAA) requires that
the Department of Defense, the Department of Homeland Security, and
government contractors "detect and avoid counterfeit parts in the
military supply chain." President Obama signed the NDAA on December
31.
Applied DNA Sciences is already engaged in piloting the only
anti-counterfeiting technology currently funded by the Defense
Logistics Agency (DLA), using a system APDN previously proved able
to screen and block those counterfeit parts from entering the
military supply system. APDN's work was done with a well-known
manufacturer of microchips at full commercial scale, and with one
of the largest electronics distributors in the world.
"We have already tackled scale-up and implementation, and we are
in dialog with electronics integrators," said Dr. James Hayward,
President and CEO of APDN. Referring to the new mandate, he added:
"If the military and its defense contractors come calling tomorrow,
we are ready to go." Hayward points out that the APDN technology
responds to all the desired features and programs of the newly
enacted anti-counterfeiting legislation.
The bipartisan amendment is a result of a Senate Armed Services
Committee (SASC) hearing on November 8, 2011 that exposed upwards
of a million counterfeit parts in U.S. military supply chain. At
the hearing, SASC Chairman Carl Levin (D-Mich) vowed to work with
Senator John McCain (R-Ariz) in a bipartisan effort to legislate a
solution to this "clear and present danger." Highlights of the
legislation, which can be found here, include the following:
- Require the Secretary of Homeland Security to establish a
program of enhanced inspection of electronic parts imported from
any country that is determined by the Secretary of Defense to be a
significant source of counterfeit parts in the DOD supply chain.
Authorize information sharing with original component
manufacturers, to the extent needed to determine whether an item is
counterfeit. (HR. 1540, SEC. 818)
- Require covered contractors that supply electronic parts or
systems that contain electronic parts to establish policies and
procedures to eliminate counterfeit electronic parts from the
defense supply chain. (HR. 1540, SEC. 818)
- Require DOD to adopt policies and procedures for detecting and
avoiding counterfeit parts in its own direct purchases, and for
assessing and acting upon reports of counterfeit parts from DOD
officials and DOD contractors. (HR. 1540, SEC. 818)
The new law authorizes the debarment of contractors who fail to
detect and avoid counterfeit parts, or do not exercise adequate due
diligence. Contractors are now prohibited from charging the DOD for
the costs of rework or corrective work to remove and replace
counterfeit parts. Moreover, defense contractors are now
responsible for the remedies required after the use or inclusion of
counterfeit components they may have accidentally supplied,
regardless of where the counterfeit entered the supply chain.
From the December 31, 2011 blog of Henry Livingston, Technical
Director and Engineering Fellow at BAE Systems:
"In the case of Section 818 of the FY 2012 NDAA, there will be
liability to a contractor regardless of where the counterfeit part
entered the supply chain. This legislation will affect all
contractors at all tiers and is not limited to direct acquisition
of parts. Parts suppliers may be subject to debarment for selling
counterfeit parts, but the contractor or subcontractor will assume
responsibility for the authenticity of parts provided by the
supplier and the costs to remedy a counterfeit part escape."
Dr. Hayward commented: "This law will offer tremendous savings
for the American taxpayer and our military forces, which lose
access to essential equipment when counterfeit chips invade
government systems. We applaud the government for a bipartisan
success that raises the bar for the entire electronics industry.
This benefit should extend beyond military supply chains, and share
benefits with unrelated industries such as medical devices and the
automotive industry. Ultimately the benefits will be counted in
billions of dollars and thousands of lives saved each year. This is
one American problem that can be solved."
About APDN
APDN sells patent-protected DNA security solutions to protect
products, brands and intellectual property from counterfeiting and
diversion. SigNature DNA is a botanical mark used to authenticate
products in a unique manner that essentially cannot be copied, and
provide a forensic chain of evidence that can be used to prosecute
perpetrators. To learn more, go to www.adnas.com where APDN
routinely posts all press releases.
The statements made by APDN may be forward-looking in nature.
Forward-looking statements describe APDN's future plans,
projections, strategies and expectations, and are based on
assumptions and involve a number of risks and uncertainties, many
of which are beyond the control of APDN. Actual results could
differ materially from those projected due to our short operating
history, limited financial resources, limited market acceptance,
market competition and various other factors detailed from time to
time in APDN's SEC reports and filings, including our Annual Report
on Form 10-K, filed on December 8, 2011 and our subsequent
quarterly reports on Form 10-Q. APDN undertakes no obligation to
update publicly any forward-looking statements to reflect new
information, events or circumstances after the date hereof to
reflect the occurrence of unanticipated events.
INVESTOR CONTACT: Debbie Bailey 631-444-8090 fax: 631-444-8848
MEDIA CONTACT: Mitchell Miller fax: 631-444-8848 Email Contact FCMN
Contact: Email Contact Web site: http://www.adnas.com Twitter:
@APDN, @APDNInvestor
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