False Claims & Misrepresentation Get Expensive
- 14 hours ago
- 2 min read
Made in America Regulations
Summary
Enforcement under Fair Claims Act and Made in America Act has moved from warnings to financial penalties, targeting source of origin misrepresentation and violations.
Significant increase in case volume: Currently ~260 active Department of Justice cases involving misrepresentation, transshipment, defective pricing, substitution of non-conforming parts, and overbilling in federal contracts.
Violations: Cases span manufacturing (origin misrepresentation), electronics (misclassification and transformation failures), automotive (false “Made in USA” labeling), and retail (relabeling imported goods).
Personal liability: Company executives are being held directly liable in cases of misrepresentation of origin and supply chain fraud. Corporate structures may not protect individuals from penalties.
Sustain360™ - Supply Chain Intelligence allows U.S. companies to rapidly and cost effectively identify, visualize and report potential violations and risks before they become a unplanned cost.
What Is the Federal Acquisition Regulation (FAR)?
The FAR governs how the U.S. federal government procures goods and services and sets the legal baseline for all contracts. Established in 1984, it remained largely unchanged until April 2025, when the Revolutionary FAR Overhaul (RFO) was introduced.
Executive Order 14275 initiated the most significant revision to the FAR, implemented through phased class deviations across agencies.
Major changes introduced:
Higher “domestic content” thresholds
Move away from self-certification (check boxes) to active verification
Prohibited sources and foreign entities of concern
Overhaul of the Substantial Transformation test
As examples, the Domestic content requirements under RFO increased thresholds from 65% to 75% by 2029, and total domestic sourcing required for iron and steel. Further, the National Defense Automation Act (NDAA) restricts sourcing from designated foreign entities and extends traceability requirements across materials, processing, and refining stages.
More significantly, self-certification is no longer sufficient. Compliance now requires active verification, including the ability to produce Bills of Materials and documented supply chain paths, with misrepresentation leading to exclusion from federal contracts.
This shift exposes structural limitations with IT Enterprise systems. Incumbent systems track transactions and lack multi-tier traceability or regulatory validation, leaving many organizations compliant on paper but not under audit.
Risk Mitigation with Sustain360°™
Sustain360°™ integrates with existing fragmented internal and external data sources to provide an early warning to potential violations, risks and cost impacts. Further, Sustain360°™ enables modeling of alternative sources and plan mitigation strategies to reduce exposure.
RFO changes the standard of proof – from THINKING an enterprise is compliant to KNOWING they are compliant. Compliance now depends on the ability to produce verifiable, audit-ready evidence of origin, composition, and transformation across the entire supply chain.
Sustain360°™ enables organizations to:
Map supply networks across all Tiers of the supply chain
Generate audit-ready analysis and reports to meet compliance
Track domestic content percentages against regulatory thresholds
Simulate alternative sources of supply
This represents a shift from declarative compliance to evidentiary compliance.
Assessing Readiness for the FAR Overhaul
Instead of assuming compliance, organizations must validate whether systems can support active verification.
Sustain360°™ offers a compliance readiness assessment to identify traceability gaps and benchmark supply chain visibility.
Book a discovery session to assess exposure, strengthen compliance posture, and establish audit-ready traceability across the supply chain.
