August 20, 2012 - Marketwire -- Applied DNA Sciences Inc. (OTCBB:APDN), a provider of DNA-based anti-counterfeiting and security solutions, was named by the Department of Defense (DoD) Defense Logistics Agency (DLA) as the provider of authentication services for microcircuits supplied by defense contractors. On August 3, 2012, DLA posted notice on its DLA Internet Bid Board System (DIBBS) that it will require the use of SigNature DNA marking on microcircuits.
The agency made a statement that it is “implementing new requirements for deoxyribonucleic acid (DNA) authentication marking on items falling within Federal Supply Class (FSC) 5962, Electronic Microcircuits, which have been determined to be at high risk for counterfeiting. A new clause at Defense Logistics Acquisition Directive (DLAD) 52.211-9074, Deoxyribonucleic Acid (DNA) Marking on High Risk Items, will be included in new solicitations and contracts for FSC 5962 items when the item description states that the item requires DNA marking. The clause requires contractors to provide items that have been marked with botanically-generated DNA produced by Applied DNA Sciences or its authorized licensees, if any.”
The number of companies directly affected by the DLA directive is in the hundreds, and includes many of the largest microcircuit manufacturers in the world. APDN reported immediate inquiries from numerous impacted companies.
SigNature DNA uses uncopyable plant-based DNA to mark items, which can then be authenticated throughout the supply chain to assure originality. In effect, the DNA marks provide a traveling, high-tech proof of authenticity.
Applied DNA Sciences' SigNature DNA marking and authentication have been tested at full commercial scale in an eighteen-month project supported by DLA and managed by the not-for-profit consultancy LMI, with uniformly successful results. As part of the project, DLA tasked an independent laboratory to defeat the technology. SigNature DNA was not defeated.
"Finding counterfeits in supply chains is a daunting challenge. DLA is taking a leadership role by mandating a positive way to assure authenticity using SigNature DNA. Warfighter support is DLA's top priority." Janice Meraglia, VP of government and military programs at APDN praised the Agency's efforts to eliminate counterfeit microelectronics from military supply chains.
APDN will sell SigNature DNA marks to chip manufacturers, while for distributors the company will sell a source-verification marking program, to establish traceability from the moment of marking. The company also plans to provide DNA marking services directly to those manufacturers who want immediate implementation before establishing marking capability at their own facilities. Once SigNature DNA-marked, the microchips may be authenticated as originals at any stage along the military supply chain, if a participating company has purchased an authentication program from APDN.
The DLA mandate for SigNature DNA will be implemented in a staged fashion, to ensure a smooth transition for the industry providers of microcircuits falling into FSC 5962, as noted by DLA. In the first stage, already accomplished and consistent with the mandate, SigNature DNA is on the microchips produced in the DLA's Generalized Emulation of Microcircuits (GEM) program.
The electronics industry is facing a new federal law that would strictly enforce new anti-counterfeiting measures by defense contractors. The legal wording of the anti-counterfeiting initiative is found in Section 818 of the National Defense Authorization Act for Fiscal Year 2012 (FY'12 NDAA). While the DLA mandate is not directly connected to the new measures called for by Section 818, it applies in an environment where defense contractors are being strongly urged in various ways to adopt new processes and technologies to combat fakes sneaking into military equipment.
The DoD Office of the Director, Cost Assessment and Program Evaluation last year projected the value of all semiconductors sold to DoD in fiscal year 2011 to be $3.1 billion. The figure for fiscal year 2012 is projected to be $2.84 billion. These figures include both microchips sold stand-alone ("direct sales") for spare parts or prototyping, and also microchips that are embedded in more complex electronic parts sold to the military ("indirect sales"). Indirect sales may range from amplifiers, to computers to aircraft and missile guidance systems.
APDN is a provider of botanical-DNA based security and authentication solutions that can help protect products, brands and intellectual property of companies, governments and consumers from theft, counterfeiting, fraud and diversion. SigNature DNA and smartDNA, our principal anti-counterfeiting and product authentication solutions that essentially cannot be copied, provide a forensic chain of evidence and can be used to prosecute perpetrators. Web site: http://www.adnas.com
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