Applied DNA Sciences Inc (APDN)

[ddeisz]

Guys - my stats are not incorrect for FSC5962 purchases by DLA. I pull summary data every single quarter from the DIBBS board and decide who is a broker and who is Authorized. I have been running quarter on quarter summaries since the quarter before the mandate took effect. As you know, DLA posts all purchases which is how you saw some to Rochester. DNA marking of semiconductors into DLA has doubled the costs to DLA since the mandate.

How can that be?

The Authorized sources refused to mark parts. If the Authorized sources were to sell to the brokers who will mark parts for DLA at the same price they were selling to DLA direct prior to the mandate, you have your answer. This mandate has created consequences of cost while adding risk. The brokers know they have no competition from Authorized sources into DLA. The brokers are not only getting reimbursed, but jacking up the price because they can. The biggest Authorized distributors out there still sell to brokers, only sell at the same price they used to sell to DLA on a direct basis. Now, the unfortunate thing is that the brokers with the most business into DLA today have no component test capability for doing reliability testing or at-speed full temp testing of components....only visual inspection. Visual inspection of parts will pass clones that don't work across temperature and voltage conditions. DLA has added more risk to the warfighter running across counterfeit....only now it has DNA on it and we may not know about it for years when they ship parts off their shelves.

Now, DLA will claim they have a fix to their broken internal supply chain because they know who they bought parts from. That's great (and not free to validate per part by the way), but for the additional $10M/year they are now spending, there are other methods and they could be purchasing much more from Authorized sources where the odds of counterfeit are much less.

Now you have some more perspective....