Supply Chain Traceability

Purpose: This article gives guidance on how and why documentation is key to supply manufacturer traceability.

Navigate:

• What is Traceability?
• Why is Supply Chain Traceability Important?
• What Information is in Traceability Documentation?
• How to Respond to a Request for Traceability?

Resources and Terms Glossary

What is Traceability?

Traceability is the principle that there should be documented evidence showing the source of the material obtained by the Vendor.

Traceability documentation is typically requested by the Government from the Vendor. The Vendor will provide the traceability information as prescribed by Defense Logistics Agency Directives (DLAD) Procurement Note C03 Contractor Retention of Supply Chain Traceability Documentation (2020) (PDF).

The Government requires the Vendor to provide evidence to substantiate their offer to supply material from the quoted approved source, including the country of origin, and conforms to contractual technical requirements.

Traceability is typically asked for when the Vendor or Supplier submits a quote or offer and they are not the Original Equipment Manufacturer (OEM) or Original Component Manufacturer (OCM).

Other reasons why traceability may be requested:

• Result of a protest after a Vendor receives an award (i.e., FAR 52.233-3 )
• Vendor/Supplier has no past DLA history
• Price offered is lower than the price of an authorized distributor/OEM for the item
• Price offered is out of line with other quotes or past pricing history
• Price offered for the new item is lower than the price offered for surplus material
• Manufacturer's CAGE code specified in offer is different from the approved source's CAGE code specified in the solicitation
• Vendor/Supplier's contact information is missing, incorrect, or suspicious of ill intent
• Vendor/Supplier's invoices for material without delivering

For more information, see Defense Logistics Acquisition Directive 11.392 Traceability Documentation.

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Why is Supply Chain Traceability Important?

When the Vendor is asked to provide traceability (requested from a DLA Contracting Officer or Acquisition Specialist), they are required to give or obtain confirming documentation within five business days of when the traceability request was made. Failure to timely and adequately respond to this request will be interpreted as a repudiation of the order. A Government representative can request traceability at any time.

The Government Contracting Officer (KO) then determines if the traceability documentation provided is acceptable and sufficient to prove supply chain traceability.

If the Vendor fails to provide proper documentation, or the KO finds the provided documentation unacceptable, the KO may take corrective actions, included, but not limited to:

• Canceling/terminating undelivered contracts/orders
• Rejecting previously delivered material
• Requesting a refund

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What Information is in Traceability Documentation?

When traceability documentation is given, it asserts the Vendor has a working agreement with the approved source as asserted in the offer.

Supply Chain Traceability Documentation for an item, at a minimum includes:

• Item description and nomenclature
• Part number and/or National Stock Number (NSN)
• Manufacturing source information (i.e., name, address, contact details)
• Manufacturing source's Commercial and Government Entity (CAGE) Code
• Clear identification of all the names and locations of any supply chain intermediaries (i.e., middlemen) from the manufacturer to the Vendor

It is also preferrable that the Vendor includes:

• The manufacturer's batch identification for the material, including:
  • Date codes
  • Lot codes
  • Serial numbers

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How to Respond to a Request for Traceability?

A Vendor's response to a traceability request will differ based on one of the following situations:

• Currently an active distributor in a business agreement with the approved source
• No longer in an active business agreement with the approved source after awarded the contract
• Not currently in an active business agreement with approved source
• Notified the Government that the item is "shipped" or "in stock/currently owned by Vendor"

Currently an active distributor in a business agreement with the approved source

Examples of acceptable Supply Chain Traceability Documentation from the authorized Vendor include, but are not limited to:

• A copy of the item's current dealer/distributor agreement
• An item authorization letter from the approved manufacturer or source

No longer in an active business agreement with the approved source after awarded the contract

If the relationship between the Vendor/Distributor and the approved source (i.e., manufacturer) changes while the awarded contract is active, the Vendor must immediately notify their Contracting Officer/Acquisition Specialist.

 If proper notification is not given, it may result in award cancellation(s) or a termination for default (whichever is more applicable based on Vendor performance and risk).

Not currently in an active business agreement with the approved source

When a Vendor is not an authorized dealer/distributor for the approved source of the item and the Vendor states the item is "not in stock or currently owned by Vendor" or "not yet manufactured," the Vendor will need to obtain and maintain a verifiable quote or item authorization letter from the approved source or associated authorized dealer/distributor.

If receiving traceability from an associated dealer/distributor, they must also provide traceability in the form of either:

• A copy of the item's current dealer/distributor agreement
• An item authorization letter from the approved manufacturer or source

Notified the Government that the item is "shipped" from approved source or "in stock/currently owned by Vendor"

When the Vendor notifies the Government that the item has been "shipped" or "in stock or currently owned by Vendor," the Vendor needs to provide one of these documents as proof of delivery:

• Invoice received by the Vendor from the approved source or authorized dealer/distributor
• Packing slip received by the Vendor that came with the material from the approved source or authorized dealer/distributor that includes the packing slip number

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Resources:

• Supply Chain Traceability Documentation Requirements (Word)
• DLAD Procurement Notes - C03 Contractor Retention of Supply Chain Traceability Documentation (JUN 2020) (PDF)

Terms Glossary

Find meanings for acronyms, abbreviations, and codes used throughout the process article below in the table: