SOURCE: Applied DNA Sciences

Applied DNA Sciences

December 06, 2011 08:50 ET

Senate: DoD Suppliers Must Act vs. Counterfeits; A Solution Is At Hand, Applied DNA Sciences Poised to Act

STONY BROOK, NY--(Marketwire - Dec 6, 2011) - Applied DNA Sciences, Inc. (OTCBB: APDN) announces that a readily available, proven solution is at hand for the national crisis of counterfeit electronics now flooding the U.S. military supply chain. After a heated Senate Armed Services Committee hearing on November 8th, the Senate approved an amendment that requires large defense contractors to establish systems for detecting and avoiding counterfeit parts, among many other strict provisions. The hearings had identified specific missile systems, aircraft, and combat support systems that have been infiltrated by counterfeit parts.

In light of the new proposed legislation, APDN emphasizes that it is ready to offer just such a system, which can ramp up and scale quickly. The company is already engaged in piloting the only anti-counterfeiting technology currently funded by the agency that manages the military supply chain, the Defense Logistics Agency.

The APDN system marks microchips with uncopyable DNA codes, which can then be used to authenticate the originality of chips anywhere along the supply chain.

Staying true to their promise to legislate a solution to this crisis that is a clear and present danger to national security, Senators Levin and McCain introduced bi-partisan legislation, "S.AMDT.1092: to bolster the Detection and Avoidance of Counterfeit Electronic Parts," last week in the FY'12 National Defense Authorization Act (S.1867). The amendment was accepted and the legislation passed in the U.S. Senate last week by an overwhelming 97-3 margin.

The Levin-McCain amendment is the toughest legal measure against counterfeiting of critical electronic parts in recent memory, and includes new provisions that:

  • Require large defense contractors to establish systems for detecting and avoiding counterfeit parts, and it authorizes reductions in contract payments to contractors who fail to do so.
  • Require contractors for the first time to absorb the costs of fixing the problem when counterfeit parts are discovered, rather than deferring such costs to the Defense Department.
  • Require the Secretary of Homeland Security to establish enhanced inspection of electronic parts.
  • Require DoD to adopt policies and procedures for detecting and avoiding counterfeit parts in its direct purchases, and for assessing and acting on reports of counterfeits.
  • Require military officials and contractors who learn of counterfeit parts in the supply chain to provide written notification to the contracting officer, the Department of Defense Inspector General and to the Government-Industry Data Exchange Program.

The APDN technology can indeed "enhance inspection," and goes much farther to actually forensically verify originality. Botanical DNA is used to create taggants to mark the product in a unique way. The DNA could be added to ink that is used to print lot code, for example. At any node in the supply chain the chip may be tested for the presence of the DNA marker, which can then be submitted for forensic tests to determine originality.

Dr. James A. Hayward, President and CEO of Applied DNA Sciences, commented: "I applaud the U.S. Senate for their aggressive action to address this national security crisis. If this legislation becomes law, it will make everyone in the electronics industry adhere to an aggressive time frame to put in place anti-counterfeiting detection. Our company brings years of proven experience in combating the crisis of counterfeits in our military supply chain. We are one of only a handful of entities ready, willing and able to provide the core of the solution demanded by the new law."

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 15, 2010 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.

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