AEROSPACE REPORT NO.

TOR-2014-02200

Counterfeit Parts Prevention Strategies Guide

June 24, 2014

David C. Meshel
-RLQW6SDFH3URWHFWLRQ
GEOINT Futures Office

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National Reconnaissance Office
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Chantilly, VA 20151-1715

Contract No. FA8802-14-C-0001

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Counterfeit Parts Prevention Strategies Guide FA8802-14-C-0001
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 Executive Summary

The proliferation of counterfeit electric, electronic, electro-mechanical, and electro-optical (EEEE)

parts, hereafter referred to as “electronic parts,” detected within the United States government supply
chain has increased dramatically in the last five years. The volume and sophistication of counterfeit
parts is steadily increasing and has been found in almost every sector of the aerospace and defense
industry. Across the industry there has been a 250% increase in suspected counterfeit cases between
2005 – 2008 1 with another 4X increase between 2009 – 2012. 2 If counterfeit parts infiltrate the
procurement system and are delivered in government products, they pose significant performance,
reliability, and safety risks to the end user. In response to this mounting threat the President signed the
2012 National Defense Authorization Act (NDAA). Section 818 of the NDAA requires specific
actions by contractors to eliminate the potential for procurement and utilization of counterfeit parts in
any Department of Defense (DOD) system and places strict financial liability on the contractor for
any impacts caused by counterfeit parts discovered in the product with only a limited safe harbor. 3

The best defense against the proliferation of counterfeit parts is a proactive and strategic approach
that mitigates the risk through:

1. Obsolescence management
2. Maximizing use of low-risk suppliers
3. Enhancing part availability throughout a product’s life cycle through methods such as
identifying acceptable product substitutions and system redesign
4. Implementing robust testing and inspection measures when procuring from higher-risk
suppliers.

To effectively accomplish these defenses, emphasis should be placed on up-front preventive

strategies. Taken together, an effective obsolescence control program and the selection of an
electronic part supplier are the most crucial actions a contractor can make towards the elimination of
the counterfeit part threat. A study of Government-Industry Data Exchange Program (GIDEP)
documents over the past five years shows that over 99% of all suspected counterfeit cases resulted
from the procurement of parts from a source other than an “authorized supplier” [Original Component
Manufacturer (OCM), OCM franchised distributor, or aftermarket manufacturer]. 4 This data shows
that by merely procuring parts from an authorized supplier, the supply chain could eliminate a
significant portion of the counterfeit threat, which would warrant less stringent systems and
procedures to be implemented.

However, there may be occasions where it becomes necessary to procure from an “unauthorized
supplier” (independent distributor or broker) and the use of these “reactive” processes becomes
necessary. Obsolescence and the subsequent lack of part availability are among the primary reasons
that a contractor may have to procure from these high risk suppliers. Regardless of the reason, the risk
of introducing counterfeit parts increases dramatically when this decision is made. At this point, the
only defense available is to mitigate the risk to the greatest extent possible. Due to the higher risk
involved with procuring from unauthorized suppliers, any decisions to use an unauthorized supplier

1
Senator Charles Schumer press release dated July 25, 2011
2
IHS, Inc. Pressroom, Electronic Component Counterfeit Incidents Continue Record Pace as the US Department of Defense Set to Update
Acquisition Rules, October 2, 2012
3
See 2013 NDAA, §833
4
A review of Government-Industry Data Exchange Program (GIDEP) documents yielded 487 documents issued in the 5-year period from
2009-2013 for counterfeit parts with two (2) of these being from OCM franchised distributors.

i
should be reviewed and approved by senior level management. In addition to the proactive measures,
this document provides guidance on specific risk mitigation techniques to ensure the parts acquired
are authentic.

The prime and principal subcontractors from the Space Quality Improvement Council (SQIC) and
Space Suppliers Council (SSC) who represent the contractors for National Security Space (NSS) and
Civil Space sector expressed concern that the requirements contained within Section 818 of NDAA
2012 and in the proposed Defense Federal Acquisition Regulation Supplement (DFARS) rule,
48 CFR 246.870 language 5, posed a schedule and financial risk to their company’s operations. These
contractors raised this issue to the Mission Assurance Improvement Workshop (MAIW) leadership.
The MAIW commissioned a team to develop a document that the contractor community can use as a
guide to assist them in implementing a Counterfeit Detection and Avoidance System that meets the
intent/requirements of Section 818 of the NDAA and the DFARS rule.

This document provides guiding principles and practices that when implemented, could help ensure
that the contractor’s counterfeit electronic part avoidance and detection system aligns to, and is
compliant with the 2012 NDAA law and DOD regulations regarding counterfeit protection. The
framework of this guidebook follows the Counterfeit Electronic Part Avoidance and Detection
System elements outlined in the DFARS rule, 48 CFR 252.246-7007(c). This document is further
differentiated from other existing industry standards in the following ways:

• It addresses preventative techniques in design, program management, obsolescence

management, and procurement management to raise the potential for part availability at the
authorized supplier.
• It provides lessons learned, best practices, observations, driving philosophies and case studies
from government agencies, contractors, and recognized industry subject matter experts
(SMEs) who have been refining counterfeit prevention strategies for years.
• It outlines key topics for building an effective training program and contains links to fully
developed programs that can be evaluated and tailored for incorporation into a supplier’s
training suite.
• It provides recommendations on information that should be captured and forwarded from a
law enforcement perspective.
• Implementation of recommendations and guidance provided in this document can also assist
the supply chain in obtaining certification of their procurement systems to the DFARS rules.
This document is intended to be a valuable guide for all contractors and suppliers, regardless of tier,
to facilitate implementation of an effective counterfeit electronic parts avoidance and detection
system, thereby reducing risk within government products. By increasing awareness and fostering
collaboration throughout the supply chain, the risk of inadvertently procuring and using counterfeit
parts at any level within the supply chain can be prevented.

5
DFARS Rule, 48 CFR 246.870 was released on May 16, 2014, which added three system criteria to the nine originally proposed and
added new section 252.246-7007.

ii
 Acknowledgments

This document was created by multiple authors throughout the government and the aerospace
industry. For their content contributions, we thank the following contributing authors for making this
collaborative effort possible:

Scot Lichty (Co-Lead), Lockheed Martin Corporation

Dave Meshel (Co-Lead), The Aerospace Corporation
Carlo Abesamis, NASA
Ken Baier, Lockheed Martin Corporation
Barry Birdsong, MDA
Greg Hafner, Orbital
Lilian Hanna, Boeing
Mike Kahler, Ball Aerospace & Technologies Corporation
Henry Livingston, BAE Systems
Bob Ricco, Northrop Grumman Electronic Systems
Fred Schipp, MDA/Navy
John Walker, SSL
Michael Woo, Raytheon
George Young, Raytheon
Jackie Wyrwitzke (Program Committee Focal Point), The Aerospace Corporation

A special thank you for co-leading this team and efforts to ensure completeness and quality of this
document goes to Scot Lichty (Co-Lead), Lockheed Martin Corporation.

The Topic Team would like to acknowledge the contributions and feedback from the following
organizations:

Aerojet Rocketdyne
The Aerospace Corporation
Area-51 ESG
Avnet
BAE Systems
Ball Aerospace & Technologies Corporation
The Boeing Company
Defense Contractor Management Agency (DCMA)
DoD Acquisition, Technology & Logistics (AT&L) / RESE GIDEP Program
Department of Justice (DOJ)/Computer Crimes & Proprietary Information Section (CCPIS)
Flextronics
Harris Corporation
Integra Technologies
Lockheed Martin Corporation
Micropac
Missile Defense Agency (MDA)
Moog Inc.
National Aeronautics and Space Administration (NASA)
Northrop Grumman Aerospace Systems
Orbital Sciences Corporation
Raytheon
SMT Corporation

iii
 Space and Missile Systems Center (SMC)
SSL
TTI, Inc.

The authors deeply appreciate the contributions of the subject matter experts who reviewed the
document:

John Adams, The Aerospace Corporation

Gerald (Jerry) Aschoff, The Boeing Company
Sultan Ali Lilani, Integra Technologies LLC
Bob Bodemuller, Ball Aerospace & Technologies Corp.
Christopher Brust, DCMA
Shawn Cheadle, Lockheed Martin Corporation
Jim Creiman, Northrop Grumman
Dave Davis, SMC
David Ford, Flextronics
Dale Gordon, Aerojet Rocketdyne
Larry Harzstark, The Aerospace Corporation
Brian Hughitt, NASA
Yehwan Kim, Moog
Mark King, Micropac
James Koory, Aerojet Rocketdyne
C. J. Land, Harris Corporation
Jim Loman, SSL
Miroslav Maramica, Area-51 ESG
Terita Norton, The Aerospace Corporation
Ed Ortiz, The Aerospace Corporation
Michael Sampson, NASA
Don Sawyer, Avnet
Tom Sharpe, SMT Corp.
Kevin Sink, TTI, Inc.
Anduin Touw, The Boeing Company

iv
 Contents

1. Introduction .................................................................................................................................. 1
1.1 Purpose ............................................................................................................................. 1
1.2 Application ....................................................................................................................... 1
1.3 Exclusions ......................................................................................................................... 1
1.4 Terms and Definitions ...................................................................................................... 1
1.5 Overview........................................................................................................................... 3
1.6 National Security Space (NSS) Systems .......................................................................... 6
2. Design, Operation, and Maintenance of Systems to Detect and Avoid Counterfeit
Electronic Parts............................................................................................................................. 7
2.1 Use and Approval of Suppliers ....................................................................................... 10
2.2 Mechanisms to Enable Traceability of Parts to Suppliers .............................................. 10
2.3 Inspection and Testing of Electronic Parts, Including Criteria for Acceptance and
Rejection ......................................................................................................................... 10
2.4 Reporting and Quarantining of Counterfeit Parts ........................................................... 10
2.5 Flow Down of Counterfeit Avoidance and Detection Requirements ............................. 10
2.6 Training of Personnel...................................................................................................... 10
2.7 Maintaining Currency on Counterfeiting Information and Trends ................................. 10
3. Use and Approval of Suppliers................................................................................................... 11
3.1 Supplier Selection ........................................................................................................... 13
3.1.1 Authorized Suppliers........................................................................................ 13
3.1.2 Supplier Listing (Approved Unauthorized Suppliers)...................................... 14
3.1.3 Supplier Assessment ........................................................................................ 15
3.1.4 Stock Parts........................................................................................................ 16
3.1.5 Priority of Sale ................................................................................................. 16
3.1.6 Validation of Parts............................................................................................ 17
3.2 Approved Supplier Obligations ...................................................................................... 17
3.3 Approved Supplier Evaluation........................................................................................ 18
3.3.1 Factors to Consider .......................................................................................... 18
3.3.2 Inspection and Test Capability ......................................................................... 18
3.4 Site Surveys (Audits) ...................................................................................................... 19
3.5 Removal/Disapproval Justification ................................................................................. 19
3.6 Renewing Approval ........................................................................................................ 19
3.6.1 Periodic Approval ............................................................................................ 19
3.6.2 Approval After Removal/Disapproval ............................................................. 19
4. Mechanisms to Enable Traceability of Parts to Suppliers .......................................................... 20
4.1 Certification of Conformance for Traceability ............................................................... 20
4.1.1 Part Traceability ............................................................................................... 20
4.1.2 Reverse Traceability......................................................................................... 20
5. Inspection and Testing of Electronic Parts, Including Criteria for Acceptance and Rejection .. 23

v
 5.1 Inspection and Test.......................................................................................................... 23
5.1.1 Traceability Documentation ............................................................................. 24
5.1.2 Handling History .............................................................................................. 24
5.1.3 Images ............................................................................................................... 24
5.1.4 Part Marking and Lot Date Code (LDC) .......................................................... 25
5.1.5 Visual Inspection .............................................................................................. 25
5.1.6 X-Ray................................................................................................................ 25
5.1.7 X-Ray Fluorescence (XRF) .............................................................................. 25
5.1.8 Marking and Surface Finishing Tests ............................................................... 26
5.1.9 Decapsulation/Delidding (for all parts) / Die Verification (for active parts).... 27
5.1.10 Electrical testing ............................................................................................... 27
5.1.11 Hermeticity ....................................................................................................... 28
5.1.12 Data................................................................................................................... 28
5.1.13 Test Lab Certification ....................................................................................... 28
6. Reporting and Quarantining of Counterfeit Electronic Parts and Suspect Counterfeit Parts...... 32
6.1 Reporting ......................................................................................................................... 32
6.1.1 Reporting within the Company......................................................................... 33
6.1.2 Reporting Databases ......................................................................................... 33
6.1.3 Reporting External to the Company ................................................................. 34
6.1.4 Reporting to Customers .................................................................................... 38
6.1.5 Reporting to Industry ........................................................................................ 38
6.1.6 Review of Reporting Databases........................................................................ 39
6.2 Quarantining .................................................................................................................... 39
6.2.1 Requirements .................................................................................................... 39
6.2.2 Disposition ........................................................................................................ 40
7. Flow Down of Counterfeit Avoidance and Detection Requirements ......................................... 41
7.1 Scope of Requirements.................................................................................................... 41
7.2 Types of Suppliers Versus Appropriate Requirements Flow Down ............................... 41
7.3 Counterfeit Prevention Clauses and False Claims Act Considerations ........................... 42
7.4 Electronic Part Obsolescence Considerations ................................................................. 42
7.5 Counterfeit Prevention and On-Hand Material Inventory ............................................... 43
7.6 Notification of Purchases from Unauthorized Suppliers ................................................. 43
7.7 Shipments from Authorized Suppliers Consisting of Product Returns ........................... 43
8. Training of Personnel .................................................................................................................. 45
8.1 General Awareness .......................................................................................................... 45
8.1.1 Training for Specific Areas .............................................................................. 45
8.1.2 Training Requirement ....................................................................................... 45
8.1.3 Terms and Definitions ...................................................................................... 45
8.1.4 Mechanics of Counterfeiting ............................................................................ 46
8.1.5 Risk Mitigation ................................................................................................. 46
8.1.6 Counterfeit Mitigation Processes ...................................................................... 46
8.1.7 Requirements .................................................................................................... 47
8.1.8 Miscellaneous ................................................................................................... 47
9. Maintaining Currency for Counterfeiting Information and Trends ............................................ 48
10. Acronyms .................................................................................................................................... 50
11. References ................................................................................................................................... 52

vi
Appendix A. Training Resources .................................................................................................... A-i
Appendix B. Best Practices and Lessons Learned .......................................................................... B-i
Appendix C. Observations and Driving Philosophies .................................................................... C-i
Appendix D. Case Studies .............................................................................................................. D-i
Appendix E. How This Guide Fits in the Total Picture.................................................................. E-i
Appendix F. Counterfeit Prevention, Detection and Avoidance Standards Applicability
Analysis for Hardware Products.................................................................................F-i
Appendix G. Counterfeit Parts Process Audit Checklist Example ................................................. G-i
Appendix H. Checklist for Reporting Counterfeits ........................................................................ H-i

vii
 Figures

Figure 1-1. How law is eventually flowed down to the DOD supply base. .................................... 4
Figure 2-1. Coordinated counterfeit parts mitigation process. ........................................................ 9
Figure 3-1. Suppliers – Authorized vs Unauthorized vs Approved............................................... 13
Figure 4-1. Example 1: Good CoC ................................................................................................ 21
Figure 4-2. Example 2: Bad CoC .................................................................................................. 22

Tables

Table 3-1. Order of Purchase, by Supplier or Stock Classification Status ................................... 16

Table 5-1. Marking and Surface Finishing Test Requirements (as applicable) ........................... 26

viii
 1. Introduction

1.1 Purpose

The purpose of this document is to provide guiding principles and practices, that when implemented,
will help ensure that the contractor’s counterfeit electronic part avoidance and detection system
effectively prevents and/or detects the purchase of counterfeit electric, electronic, electro-mechanical,
and electro-optical (EEEE) parts, hereinafter referred to as “electronic parts,” and is consistent with
the Fiscal Year (FY) 2012 National Defense Authorization Act (NDAA), Section 818, the Federal
Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS)
rule, 48 CFR 252.246-7007.

1.2 Application

This guidance, when implemented, will help ensure that counterfeit electronic parts do not infiltrate
the aerospace industry supply system and be installed in deliverable flight and ground space products.
This guidance can also be used to establish and strengthen counterfeit prevention systems throughout
the supply chain.

This document is intended for program management, procurement, legal, and technical disciplines to
include engineering, production and quality organizations responsible for the creation and
maintenance of counterfeit prevention systems. The guidance provided in this document incorporates
key industry best practices and standards and applies them to the requirements of the DFARS. This
document applies to the procurement of electronic piece parts and assemblies containing electronic
piece parts intended for use in space applications, including spacecraft, launch vehicles, ground
support equipment, and test and launch facilities. This document applies to new acquisitions, as well
as repair, maintenance, and modernization services. This document applies to depots and arsenals,
third party sources, and other value added services. While this document was written with space
application in mind, portions of this document may be suitable for other users.

Appendix E portrays how this guide fits in with FY2012 NDAA, §818, DFARS rule, 48 CFR
252.246-7007, military specifications and industry standards.

1.3 Exclusions

This document does not address tampering and other malicious threats to hardware products
containing electronic parts.

1.4 Terms and Definitions

The following are the key terms and definitions for readers of this document. This list is primarily
based on terms and definitions found in DFARS rule, 48 CFR 252.246-7007(a) and SAE International
AS5553, Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and
Disposition. Customizations of definitions for use in this document are noted in the list. AS5553
should be referenced for an extensive list of terms and definitions.

1
 Term Definition
Counterfeit An unlawful or unauthorized reproduction, substitution, or alteration that has been
Electronic Part knowingly mismarked, misidentified, or otherwise misrepresented to be an authentic,
unmodified electronic part from the original manufacturer or current design activity,
including an authorized aftermarket manufacturer. Unlawful or unauthorized
substitution includes used electronic parts represented as new, or the false
identification of grade, serial number, lot number, date code, or performance
characteristics.
(Source: DFARS rule, 48 CFR 252.246-7007(a))
Suspect Counterfeit An electronic part for which credible evidence (including, but not limited to, visual
Part inspection or testing) provides reasonable doubt that the electronic part is authentic.
(Source: DFARS rule, 48 CFR 252.246-7007(a))
Electronic Part An integrated circuit, a discrete electronic component (including, but not limited to, a
transistor, capacitor, resistor, or diode), or a circuit assembly. (Source: DFARS rule,
48 CFR 252.246-7007(a) with Team modification)
Electric, Electronic, EEEE parts, hereinafter referred to as “electronic parts,” are components designed
Electro-mechanical, and built to perform specific functions, and are not subject to disassembly without
and Electro-optical destruction or impairment of design use. Examples of electrical parts include resistors,
(EEEE) capacitors, inductors, transformers, and connectors. Electronic parts include active
devices, such as monolithic microcircuits, hybrid microcircuits, diodes, and transistors.
Electro-mechanical parts are devices that have electrical inputs with mechanical
outputs, or mechanical inputs with electrical outputs, or combinations of each.
Examples of electro-mechanical parts are motors, synchros, servos, and some relays.
Electro-optical parts include lasers, laser diodes and laser modules, light emitting
diodes, light emitting modules, photo-detectors, photodiodes, photo-detector modules,
optical transmitters and receivers and external modulators. (Source: AS5553 for EEE,
Telcordia GR-468-CORE for electro-optical).
Authorized Supplier Either the OCM or a distributor that has been reviewed and approved by the OCM and
is under contract to distribute its parts or an aftermarket manufacturer possessing
intellectual property rights received from the OCM for the part in question. An
authorized supplier can be referred to as a Franchised Distributor. (Source: Team
definition)
Original Component An organization that designs and/or engineers a part and is pursuing or has obtained
Manufacturer the intellectual property rights to that part. (1) The part and/or its packaging are
(OCM) typically identified with the OCM’s trademark. (2) OCMs may contract out
manufacturing and/or distribution of their product. (3) Different OCMs may supply
product for the same application or to a common specification. (Source: AS5553)
Original Equipment A company that manufactures products that it has designed from purchased
Manufacturer components and sells those products under the company’s brand name. (Source:
(OEM) AS5553)
Franchised A distributor that performs authorized distribution, which is defined as transactions
Distributor conducted by an OCM-Authorized Distributor distributing product within the terms of
an OCM contractual agreement. Contractual Agreement terms include, but are not
limited to, distribution region, distribution products or lines, and warranty flow down
from the OCM. Under this distribution, the distributor would be known as an
Authorized Distributor. For the purposes in this document, Franchised Distribution is
considered synonymous with Authorized Distribution. (Source: AS5553 as modified by
Team)

2
 Term Definition
Aftermarket Products that are no longer available through the OCM or an OCM authorized
Manufacturer distributor may be available through authorized aftermarket manufacturers.
Aftermarket manufacturers generally fall within the following categories:
authorized by the OCM or Intellectual Property (IP) holder to produce and sell parts,
usually due to an OCM or IP holder’s decision to discontinue production of a part,
produces parts using semiconductor die or wafers, manufactured by and traceable to
an OCM or IP holder, or produces parts through reverse-engineering that match the
OCM or IP holder's specifications without violating the OCM or IP holder 's intellectual
property rights and with the OCM or IP holder’s authorization.
While authorized aftermarket manufacturers play a vital role continuing supply once
manufacturers discontinue products and authorized distributor inventory is depleted,
use of aftermarket manufacturers is not a guarantee of support for all products
needed, nor is it a guarantee of infinite supply for products they do support. (Source:
AS5553 as modified by Team)
Approved Supplier A supplier that has been subjected to and successfully passed a contractor’s detailed
evaluation requirements and has been deemed to have acceptable risk mitigation
processes in place. (Source: Team)
Independent A distributor that purchases parts with the intention to sell and redistribute them back
Distributor or Broker into the market. Purchased parts may be obtained from OEMs or Contract
Manufacturers (typically from excess inventories), or from other Distributors
(Franchised, Authorized, or Independent). Resale of the purchased parts
(redistribution) may be to OEMs, Contract Manufacturers, or other Distributors.
Independent Distributors do not normally have contractual agreements or obligations
with OCMs. See definition of Franchised Distributor. In the independent distribution
market, Brokers are professionally referred to as Independent Distributors. (Source:
AS5553)
Supply Chain Documented evidence of a part’s supply chain history. This refers to documentation of
Traceability all supply chain intermediaries and significant handling transactions, such as from
OCM to distributor, or from excess inventory to broker to distributor. (Source: AS5553)
Government- GIDEP is a cooperative activity between government and industry seeking to reduce
Industry Data or eliminate duplicate expenditures of time and money by making maximum use of
Exchange existing knowledge. The program provides a media to exchange technical information.
Program(GIDEP) (Source: GIDEP web page as modified by Team)
Contractor For the purposes of this document “contractor” applies to government agencies and
industry organizations. (Source: Team)

1.5 Overview

The proliferation of counterfeit parts within the United States government supply chain has increased
dramatically in the last five years. Although this is an issue at all levels, the primary avenue for these
parts to enter the supply chain is in the lower tiers, two or more levels separated from the prime
contractor. 6 Reasons such as part obsolescence, cost constraints, and system sustainment may drive
the supplier to purchase outside the authorized supply chain. Because prime contractors have limited
visibility deep into the supply chain and limited resources to verify compliance at all levels, it is
necessary to increase awareness and foster collaboration to reduce the risk of counterfeit electronic
parts throughout the supply chain.

Due to this proliferation and threat to the Department of Defense (DOD) systems, Congress passed
the FY2012 NDAA, §818. 7 The law includes an expectation for contractors to “establish policies and

6
A review of Government-Industry Data Exchange Program (GIDEP) documents yielded 487 documents issued in the 5 year period from
2009-2013 for counterfeit parts with two (2) of these being from OCM franchised distributors.
7
H.R.1540, National Defense Authorization Act For Fiscal Year 2012, Section 818(e), “Improvement of Contractor Systems for Detection
and Avoidance of Counterfeit Electronic Parts”

3
procedures to eliminate counterfeit electronic parts from the defense supply chain, which policies
and procedures shall address … processes to abolish counterfeit parts proliferation” (emphasis
added). 8 The DFARS rule, 48 CFR 252.246-7007, Contractor Counterfeit Electronic Part Detection
and Avoidance System, establishes the system criteria for a counterfeit electronic part detection and
avoidance system. 9 Figure 1-1 shows how a law is flowed down to the supply base.

• NDAA – National Defense Authorization Act. Law passed by Congress and signed by the President of the United States that
defines what actions and policies the DOD is to enact starting that fiscal year of the NDAA.
• USD/AT&L – Under Secretary of Defense for Acquisition, Technology, and Logistics. This is the department within the DOD
that has the overall responsibility for the procurement and fielding of DOD systems. They are responsible for the implementation
of policies that are defined in the NDAA’s and other government laws and regulations.
• Agencies. Agencies are those organizations that are responsible for the procurement of DOD systems of systems. USAF Space
and Missiles Systems Center (SMC), National Reconnaissance Office (NRO), Missile Defense Agency (MDA), and Defense
Logistics Agency (DLA) are examples of “Agencies” who procure systems of systems for the DOD.
• Programs. The actual government program office responsible for procuring a specific DOD system. For example within
USAF/SMC, there are: Navigations System, MILSATCOM, Overhead Persistent InfraRed, and Weather and Space
Situation/Protection Program offices that procure the actual satellite and ground equipment that comprise the system.
• Prime Contractor. The company responsible for the design, development, manufacture, assembly, test, qualification and
deployment of the system being procured by the government program office.
• Suppliers. The term suppliers is used here in a broad sense meaning that any company that provides subsystems, units (black
boxes), components (electronic parts), manufacturing or assembly/test services that are built into the system being delivered by
the prime contractor are considered a supplier. Suppliers include subcontractors, sub-tier suppliers, and component providers and
could be “authorized” or “unauthorized” suppliers.

Figure 1-1. How law is eventually flowed down to the DOD supply base.

The global nature of the supply chain presents significant barriers to eliminating counterfeit products
from the supply chain altogether. While a contractor can implement policies and procedures to

8
H.R.1540, National Defense Authorization Act For Fiscal Year 2012, Section 818(e), “Improvement of Contractor Systems for Detection
and Avoidance of Counterfeit Electronic Parts”
9
DFARS rule, 48 CFR Part 252—Solicitation Provisions and Contract Clauses, subsection 252.246–7007, Contractor Counterfeit
Electronic Part Avoidance and Detection System, (c).

4
prevent counterfeit parts it discovers from re-entering the supply chain, a contractor is not in an
effective position to eliminate counterfeit parts proliferation throughout the supply chain. However,
definitive countermeasures can be applied by contractors to manage this problem more effectively.

A contractor’s Counterfeit Electronic Part Avoidance and Detection System should apply a strategy
consistent with the DOD Counterfeit Prevention Policy. 10 This involves:

• Employing an end-user focused risk-based approach, such as described in AS5553 and

NASA MSFC-STD-3619, to reduce the frequency and impact of counterfeit materiel within
DOD acquisition systems and DOD life cycle sustainment processes
• Applying prevention and early detection procedures to minimize the presence of counterfeit
materiel

Counterfeits tend to find their way into the supply chain through two primary paths:

• Procurement at any point in the supply chain from other than an authorized supplier
• Procurement from independent distributors without sufficient supplier selection and
counterfeit avoidance/detection practices

A Counterfeit Electronic Part Detection and Avoidance System should incorporate the following
central tenets recommended by industry and US government subject matter experts (SMEs):

• Apply supplier preferences for electronic components purchased from authorized suppliers
• Manage component obsolescence risks and engage customers to weigh assembly redesigns to
eliminate obsolete parts versus counterfeit parts risk mitigation associated with acquiring
parts from other than authorized suppliers
• Perform due diligence as outlined in this document to avoid counterfeits when purchases
from sources of supply other than an authorized supplier are necessary
• When counterfeits are discovered, take steps to avoid reintroducing counterfeits into the
supply chain
• Notify government and industry of suspect counterfeits when they are encountered
• Flow down and verification of the above tenets through all levels of the supply chain

Contractors and their sub-tier suppliers should incorporate and flow down key counterfeit avoidance
and detection standards within compliance programs, including TOR-2006(8583)-5235, AS5553,
AS6081, and AS6171 (draft).

The balance of this document offers guidance based on the twelve system criteria as described in the
DFARS rule, 48 CFR 252.246-7007(c) for a contractor's Counterfeit Electronic Part Detection and
Avoidance System. The twelve criteria are:

5. The training of personnel.

6. The inspection and testing of electronic parts, including criteria for acceptance and rejection.
7. Processes to abolish counterfeit parts proliferation.

10
DODI 4140.67, DoD Counterfeit Prevention Policy (26 April 2013) at 3.b

5
 8. Processes for maintaining electronic part traceability.
9. Use of suppliers that are the original manufacturer, sources with the express written authority
of the original manufacturer or current design activity, including an authorized aftermarket
manufacturer or suppliers that obtain parts exclusively from one or more of these sources.
10. The reporting and quarantining of counterfeit electronic parts and suspect counterfeit
electronic parts.
11. Methodologies to identify suspect counterfeit parts and to rapidly determine if a suspect
counterfeit electronic part is, in fact, counterfeit.
12. Design, operation, and maintenance of systems to detect and avoid counterfeit electronic
parts and suspect counterfeit electronic parts.
13. Flow down of counterfeit avoidance and detection requirements.
14. Process for keeping continually informed of current counterfeiting information and trends.
15. Process for screening the Government-Industry Data Exchange Program (GIDEP) reports and
other credible sources of counterfeiting information.
16. Control of obsolete electronic parts.

1.6 National Security Space (NSS) Systems

Although there has been a proliferation of counterfeit parts in recent years this has not generally
affected the space vehicles associated with NSS programs. This is partially due to the rigorous
controls that are applied to the spacecraft procurements of parts, materials and processes (PM&P).
The PM&P requirements are defined in TOR-2006(8583)-5235, which includes provisions for
prevention and detection of counterfeit parts and materials. A portion of this document is based on
lessons learned from PM&P Control Board (PMPCB) activities that have prevented counterfeit parts
from penetrating the DOD space systems.

6
 2. Design, Operation, and Maintenance of Systems to Detect and Avoid
Counterfeit Electronic Parts

DFARS rule, 48 CFR 252.246-7007(c)(8) requires the “Design, operation, and maintenance of
systems to detect and avoid counterfeit electronic parts and suspect counterfeit electronic parts. The
contractor may elect to use current government- or industry-recognized standards to meet this
requirement.”

The prime and sub-tier contractors should design, operate, and maintain a system to detect and avoid
counterfeit electronic parts and suspect counterfeit electronic parts. Policies and procedures should be
created for the purpose of identifying counterfeit and suspect counterfeit electronic components and
preventing their inadvertent inclusion in delivered products. These policies and procedures should be
incorporated as a system and implemented and adjusted over time to achieve their purpose.

Experience has shown reactive measures to be neither adequate nor cost effective. Proactive measures
that prevent the procurement and use of counterfeit parts include: design, obsolescence management,
source selection policies, program planning/schedule management, life cycle management, supply
chain threat assessments11, subcontractor/sub-tier supplier assessments, awareness and training and
requirements flow down.

For most NSS programs parts, materials and processes procured or used are managed by the
program’s PMPCB as defined in TOR-2006(8583)-5235 (MIL-STD-1546). Specific to counterfeit
mitigation the PMPCB approves all procurements from unauthorized suppliers (either approved or
unapproved). In addition, the PMPCB is responsible for the reporting and investigation of any
suspected or confirmed counterfeit parts detected within their program.

Past experience has also indicated that counterfeit electronic parts are as much the result of a lack of
supply chain control as of the electronic system’s design authority to actively monitor the
obsolescence status of the bill of materials. The necessity to utilize unauthorized suppliers largely
stems from insufficient pre-planning, resulting in either a long-lead-time hurdle for procurement, the
realization that a part has gone out of production during a long break in procurement activity, or
additional cost due to minimum buys and convenience. These issues may be avoided through the
application of the following preventative measures:

• Active Management of Electronic Parts Obsolescence

Proactive versus reactive electronic parts obsolescence management is the continuous
monitoring of electronic part obsolescence as opposed to checking the availability of a part
when stock is depleted. The assembly design authority accomplishes active obsolescence
control by first identifying all electronic parts used and documenting these within a database.
By applying electronic part obsolescence information to this database, it is then possible to
identify the requirement for last-time-buys in order to ensure future availability of the parts
before OCM production has ceased. This database can be either company internal or
entrusted to a third party, but by actively monitoring the obsolescence status of electronic
parts, it may be possible to completely avoid procurement from an unauthorized supplier.

As a component of obsolescence management, the organization should be committed to

preventive measures such as (1) procuring and maintaining a lifetime stock of critical
electronic components, (2) conducting earlier design modifications and reviews, and (3)

11
DoDI 5200.39, Critical Program Information (CPI) Protection within the Department of Defense

7
 collaboration with critical discrete component [e.g., field effect transistors (FETs), diodes]
manufacturers for sustained designs or earlier obsolescence notice, as required in order to
ensure availability. Regular reviews of projected consumption should be maintained.

• Alternate Parts Review

In the event of a shortage of parts, the organization should perform an alternate parts review
prior to considering procurement from an unauthorized supplier. Alternative (drop-in) parts
from authorized suppliers are preferred over procurement from an unauthorized supplier.
Additionally, up-screening lower level parts from authorized suppliers is preferred over
procurement from an unauthorized supplier. Ultimately, the organization should be willing to
re-qualify designs as necessary to avoid the possibility of encountering a counterfeit part.

• Improved Production Planning

Just-In-Time (JIT) inventory control is key to commercial profits, but in the aerospace
industry, electronic part authenticity assurance is key to mission success and should take
precedence. Improved production planning requires the foresight to allow for lead times for
electronic part procurement through authorized suppliers.

• Realistic Delivery Schedules

As with production planning, the aerospace industry needs to be aware of the pitfalls of
placing pressure on delivery schedules that drive suppliers to look for out-of-the-box ways to
meet schedules. By imposing unrealistic schedule requirements on suppliers, the likelihood of
incurring an unexpected shortcut of brokered electronic part procurement is significantly
increased. An attention to detail regarding procurement only from authorized suppliers should
always take precedence over schedule.

An effective counterfeit parts mitigation system should be coordinated among all of the activities that
are affected. Such a coordinated system can be designed based upon a standard such as AS5553 or
AS6081, as applicable, and certified by a second or third party if appropriate.

The design of such a coordinated system is illustrated in Figure 2-1. Notice that the complete system
covers all aspects of program management, design, and part procurement. It is important that a
coordinated system addresses all of these areas in order to be effective.

When such a system has been implemented, it is critical that the utmost discipline be used in its
operation. Lapses in vigilance and failure to follow the procedures are the most common causes of
counterfeit part problems. The operation of the system should be constantly monitored and
continuously improved as experience dictates.

The subsequent sections of this document will address the individual areas of the system as outlined
below. The process outlined below should be engaged as early in the program planning, design,
manufacture, operation, and maintenance of a system as possible.

8
 Figure 2-1. Coordinated counterfeit parts mitigation process. 12

12
This figure adapted from a similar figure in AS5553, Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and
Disposition

9
2.1 Use and Approval of Suppliers

Section 3 discusses the use and approval of suppliers. The primary source of parts should be
authorized suppliers. Unauthorized suppliers are considered to be at a higher risk for providing
counterfeit product. If it becomes necessary for a contractor to choose an unauthorized supplier this
section guides the supplier selection process. It is necessary to be knowledgeable about the suppliers
chosen to evaluate the risk of using them and to take the necessary steps to assess and approve
suppliers to mitigate any risk.

2.2 Mechanisms to Enable Traceability of Parts to Suppliers

Section 4 establishes an approach for requirements, polices, and activities for managing and
implementing electronic part traceability.

2.3 Inspection and Testing of Electronic Parts, Including Criteria for Acceptance
and Rejection

When procurement outside the authorized supply chain is necessary, the electronic parts should be
inspected and tested to verify their authenticity. Section 5 discusses the steps recommended to
provide the optimal counterfeit protection.

2.4 Reporting and Quarantining of Counterfeit Parts

Section 6 discusses the details of the quarantine and reporting of counterfeit parts. The FY2012
NDAA requires contractors that supply electronic parts or systems that contain electronic parts to
establish policies and procedures to prevent counterfeit electronic parts from entering the defense
supply chain. The fundamental objective of reporting is to minimize impact and maximize
containment of the counterfeit item event and to notify stakeholders and interested parties of findings
which may impact their operations or products.

2.5 Flow Down of Counterfeit Avoidance and Detection Requirements

Section 7 discusses the flow down of counterfeit avoidance and detection requirements as depicted in
Figure 1-1. Requirements flowed down to suppliers should focus on the predominant means by which
counterfeit electronic parts find their way into the supply chain and should embody the central tenets
of counterfeit prevention.

2.6 Training of Personnel

Section 8 discusses the training of personnel. Counterfeit parts training serves a variety of purposes
depending on the maturity and familiarity of the organization’s counterfeit parts mitigation process. A
solid training program will address general awareness and provide detailed expectations and
requirements tailored to specific groups within the organization. Appendix A provides sample
training resources for use and adoption throughout the supply chain.

2.7 Maintaining Currency on Counterfeiting Information and Trends

Section 9 discusses some methods and expectations for keeping continually informed on the evolving
threat of counterfeit electronic parts.

10
 3. Use and Approval of Suppliers

DFARS rule, 48 CFR 252.246-7007(c)(5) requires the “Use of suppliers that are the original
manufacturer, or sources with the express written authority of the original manufacturer or current
design activity, including an authorized aftermarket manufacturer or suppliers that obtain parts
exclusively from one or more of these sources. When parts are not available from any of these
sources, use of suppliers that meet applicable counterfeit detection and avoidance system criteria.”

Obsolescence control decisions and the selection of an electronic part supplier are the most crucial
decisions a company will make towards the elimination of the counterfeit parts threat. Counterfeit
parts tend to find their way into the supply chain through unauthorized suppliers.13 Accordingly, the
single most important practice downstream of obsolescence control is to procure electronic parts from
authorized suppliers. If this practice is strictly followed, the counterfeit part risk may be restricted to
obsolete parts and the rest of this document and many industry standards that describe reactive
processes such as inspection, test, quarantine, and reporting may be unnecessary.

However, there may be occasions when the purchasing organization may need to procure from an
unauthorized supplier. Obsolescence and the subsequent lack of part availability are among the
primary reasons for procuring from these high risk suppliers. Regardless of the reason, the risk of
introducing counterfeit parts increases dramatically when this decision is made. At this point, the only
defense available is to mitigate the risk to the greatest extent possible. The remainder of this section
provides guidance on how to select a supplier that maximizes the potential of acquiring authentic
parts. Using any supplier other than an authorized supplier should be a measure of last resort, used
only when all other avenues have been exhausted, and should be reported to the customer [e.g., as
stated in TOR-2006(8583)-5235]. In fact, if an electronic part is proven to be unavailable from
authorized suppliers and there is significant demand for future parts, the contractor should consider
system redesign, qualification of replacement parts, or approach the OCM and ask if they would be
willing to re-manufacture or re-constitute that product line in order to alleviate the issue. Another
avenue is to contact Defense Microelectronics Agency (DMEA) to determine if they can manufacture
an equivalent part using reverse engineering techniques.

There are multiple terms in the community that describe a supplier’s pedigree and appropriateness for
selection to supply electronic parts. Terms including “authorized,” “qualified,” “approved,”
“preferred,” and “trusted” all exist and have subtle differences. Confusion exists as sometimes these
terms are used interchangeably or inconsistently throughout the community depending on the
contractor or customer. These terms are not created equally, and the fact that they sound similar (and
positive) sometimes leads to a false sense of security for a purchasing organization. Since this is a
guidance document (and not a standard), an attempt has been made to take a complex situation and
make it simple, at the risk of leaving several of these terms and subtleties out of the discussion. In an
effort to provide a basic framework example and to break it down into its simplest terms, only three
terms will be used to describe suppliers: authorized, unauthorized, and approved.

An authorized supplier is the OCM, an OCM franchised distributor, or an aftermarket manufacturer.

Authorized and franchised distributor information can be obtained from the OCM website, although
the data may not always be current. The OCM should be contacted to obtain the most current list of
franchised distributors for their product.

13
A review of Government-Industry Data Exchange Program (GIDEP) documents yielded 487 documents issued in the 5 year period from
2009-2013 for counterfeit parts with two (2) of these being from OCM franchised distributors.

11
Note: The Semiconductor Industry Association promotes “The Authorized Directory” 14 as a resource
for identifying authorized OCM distributors. The Electronic Component Industry Association (ECIA)
maintains data for users to identify authorized sources (ECIAauthorized.com). 15 These sources may
have limitations and further research may be needed to verify accuracy.

When parts are not available from an authorized supplier, another acceptable source of supply are
those suppliers that meet applicable counterfeit detection and avoidance system criteria and only
procure directly from authorized suppliers.

An unauthorized supplier is everyone else – all companies that are not contractually authorized by the
OCM to sell their product. This includes all independent distributors and brokers that may carry the
desired part. It is important to note that this simplification can still be complicated by the fact that a
supplier may be authorized to sell one product from an OCM, but unauthorized to sell other products
from the same OCM.

As stated earlier, if the purchasing organization needs to use an unauthorized supplier, a rigorous
evaluation and assessment process can be conducted to increase the confidence in the unauthorized
supplier, resulting in subsequent “approval” of that supplier for ongoing procurements by the
purchasing organization, or to mitigate risk for a single procurement. Suppliers approved for ongoing
procurements are those suppliers that have been assessed or audited by the appropriate contractor’s
organization, and have been determined to have continuously controlled processes to provide
consistent delivery of authentic, reliable, and quality parts that conform to the contract or purchase
order specification requirements.

An approved supplier can be an OCM, an authorized/franchised distributor, independent distributor or

broker that has passed a number of assessments and evaluations designed to maximize the
contractor’s confidence that the supplier will deliver authentic, reliable product. An approved supplier
should not be mistaken for an authorized supplier. Unauthorized suppliers that have been approved by
the contractor for procurement may be considered a lower risk, but they are still unauthorized
suppliers, and carry a higher risk for the introduction of counterfeit parts than an authorized supplier.
Figure 3-1 depicts the authorized, unauthorized, approved supplier relationship. A subtle, but
important difference is that the contractor approves an independent distributor through risk mitigation
techniques, but only the OCM can authorize or franchise a distributor or aftermarket manufacturer.
There is no mitigation technique that can be employed that lowers the risk of a contractor approved
“unauthorized” supplier to that consistent with the OCM authorized supplier. This is why a contractor
approved “unauthorized” supplier should only be used as a last resort and only if all means are
exhausted to use an OCM authorized supplier.

The remainder of this section predominantly describes risk mitigation techniques, assessments,
evaluations, and other strategies to approve and select an unauthorized supplier for procurement when
authorized suppliers are not available. This section leverages value-added requirements and guidance
from the DLA’s Qualified Suppliers Listing of Distributors (QSLD) and Qualified Testing Suppliers
Listing (QTSL) documents, as well as best practices identified by subject matter experts within the
MDA, Navy, National Aeronautics and Space Administration (NASA), NRO, Army, Air Force,
DLA, and Defense Contract Management Agency (DCMA).

14
http://www.authorizeddirectory.com
15
http://www.eciaauthorized.com/

12
 Figure 3-1. Suppliers – Authorized vs Unauthorized vs Approved.

3.1 Supplier Selection

When a contractor assesses or audits an unauthorized supplier with the intention of giving the
company ‘approved supplier’ status, the supplier’s own supplier selection, approval, avoidance, and
reporting processes should be thoroughly checked for compliance with industry best practices or the
contractor’s own requirements. The remainder of this section addresses the review of an approved
supplier’s processes. These observations should form a part of the contractor’s supplier assessment
process. Appendix G provides a counterfeit parts process audit checklist example that may be used as
a starting point in conducting a supplier assessment.

3.1.1 Authorized Suppliers

3.1.1.1 The contractor purchasing organization should have documented procedures to identify and
differentiate between authorized and unauthorized suppliers. The determination if a supplier is
authorized should be applied individually for each OCM and product line (i.e., a supplier should not
be assumed authorized for all OCMs and product lines). OCM websites or OCM contact personnel
should be used to determine the extent of the supplier’s authority to sell parts. For example, an OCM
that produces electronic parts for multiple product lines (e.g., diodes, transistors, different types of
integrated circuits) might not have the same authorized suppliers for each product line.

3.1.1.2 The contractor purchasing organization should have documented procedures to ensure that all
electronic parts are obtained directly from an authorized supplier, unless the parts are no longer in
production by the OCM or aftermarket manufacturer, and residual stock is no longer available from
franchised distributors. In cases where the organization can obtain parts directly from an authorized
supplier, the authorized supplier should provide traceability documentation (Note: the buyer is
encouraged to periodically confirm the documentation’s authenticity). The buying organization
should have processes in place that require senior level management approval (program, procurement,
and quality managers at a minimum) before the buyer can purchase electronic parts from an
unauthorized supplier.

3.1.1.3 If an authorized supplier cannot provide parts obtained directly from the OCM, the contractor
should be informed, along with the name and address of the source of the parts to the authorized
supplier. This notification and information should be provided at the time of quoting. Authorized

13
suppliers should not stock or sell parts received from unauthorized sources. This includes parts
returned from a customer that are not in original factory-sealed packaging, as other parts may have
been substituted.

3.1.1.4 If electronic parts are purchased from an approved authorized supplier who purchased those
parts directly from the OCM, the parts can be assumed to be authentic without requiring any of the
special actions described in the rest of Section 3.1. For even greater confidence, the contractor may
require the authorized supplier to provide only OCM-direct, never-returned product and a Certificate
of Conformance (CoC) signed by the OCM, or have the product shipped directly from the OCM.

3.1.2 Supplier Listing (Approved Unauthorized Suppliers)

3.1.2.1 The approved unauthorized supplier should maintain a listing of sub-tier suppliers. The listing
should be maintained by a method that allows identification of dates when sub-tier supplier status was
changed (e.g., approved/removed, or reclassified within the listing). The sub-tier supplier listing
should have at least five different confidence levels defined which enable the selection of the lowest-
risk sub-tier suppliers whenever possible. As an example, these levels could be defined as follows:

a. Authorized. The sub-tier supplier is contractually authorized by the OCM to buy parts
directly from the OCM and sell parts to customers with full product traceability and
warranty.
b. Preferred. The unauthorized sub-tier supplier has been fully assessed per Section 3.1.3
and passed the recommendations of this document and any other requirements. The sub-
tier supplier has been used for at least ten purchases of electronic parts by the approved
unauthorized supplier with no suspect or confirmed counterfeit, or major nonconforming
parts detected. There are no outstanding unresolved quality or delivery issues.
c. Acceptable. The unauthorized sub-tier supplier has been fully assessed per Section 3.1.3
and passed the recommendations of this document and any other requirements. The sub-
tier supplier has not yet been used for at least ten purchases, but has had at least two
purchases. There have been no suspect or confirmed counterfeit or major nonconforming
parts detected. There are no outstanding unresolved quality or delivery issues.
d. Probationary. The sub-tier supplier has not been used for at least two total purchases, or
was previously listed Authorized, Acceptable, or Preferred, and was downgraded due to
significant quality or delivery issues identified by the approved supplier, GIDEP or other
industry databases, that have since been resolved. The sub-tier supplier may regain
Acceptable, Preferred, or Authorized status after a minimum of five authentic shipments
and resolution of any other issues above, as well as a re-evaluation of the sub-tier supplier
in accordance with Section 3.1.3. When a sub-tier supplier has no prior transactions, the
sub-tier supplier should be considered Probationary pending full assessment in
accordance with Section 3.1.3. A Prohibited sub-tier supplier that has implemented
acceptable corrective actions and been re-evaluated in accordance with Section 3.1.3 may
be upgraded to this category.
e. Prohibited. The sub-tier supplier has delivered suspect or confirmed counterfeit or major
nonconforming parts, or has significant unresolved quality or delivery issues identified by
the approved unauthorized supplier, GIDEP, or other industry databases. This includes
active suspensions or debarments indicated in the System for Award Management
(SAM), previously known as the Excluded Parties List System (EPLS). A Prohibited sub-
tier supplier that has implemented acceptable corrective actions and been re-evaluated in
accordance with Section 3.1.3 may be upgraded to Probationary.

14
3.1.2.2 If an Authorized, Preferred, Acceptable or Probationary sub-tier supplier is determined to
have supplied suspect or confirmed counterfeit or major nonconforming parts, the approved
unauthorized supplier should request corrective actions and down-grade the sub-tier supplier to
Prohibited. The sub-tier supplier should remain Prohibited until corrective actions have resolved all of
the approved unauthorized supplier’s concerns. If a sub-tier supplier has non-counterfeit issues (such
as those described in 3.1.2.1.d), the approved unauthorized supplier may down-grade the sub-tier
supplier to either Probationary or Prohibited, depending on the severity of the issues.

3.1.2.3 If a sub-tier supplier is classified Prohibited or removed from the supplier listing for shipment
of suspect or confirmed counterfeit parts, the approved unauthorized supplier should review all prior
purchases of electronic parts from the suspect sub-tier supplier for the last two years. Approved
unauthorized suppliers should determine whether testing was sufficient at the time to detect the
reported method of counterfeiting. If the previously purchased parts from the suspect sub-tier supplier
and inspection/testing is deemed insufficient, the approved unauthorized supplier should re-
authenticate in-house parts. If additional parts are determined to be suspect counterfeit, or if parts are
not available for re-authentication, the approved unauthorized supplier should notify all affected
customers in writing.

3.1.3 Supplier Assessment

The approved unauthorized supplier should have a documented process for assessing all new or
previously approved sub-tier suppliers. The process should identify criteria by which the sub-tier
suppliers are deemed not acceptable (e.g., Prohibited). The assessment process below contains
important actions to ensure that a sub-tier supplier is not prone to delivering counterfeit electronic
parts.

The assessment process should include, but is not limited to, the following items. A recommended
periodicity for performing these items is provided. Each contractor purchasing organization should
evaluate and define a periodicity based on their specific conditions.

a. Review of GIDEP database for past unresolved quality issues (monthly), to include
Alerts, Safe-Alerts, Problem Advisories, and Agency Action Notices.
b. Review of other peer databases for past unresolved quality issues if applicable (monthly).
c. Review of the sub-tier supplier’s past history, including quality or delivery problems
(every 3 months).
d. Review of Corrective Action Requests (CARs) as necessary to upgrade/downgrade the
sub-tier supplier.
e. Trade references (for initial screening).
f. Review of active suspensions and debarments indicated in the System for Award
Management (www.sam.gov) (every 3 months).
g. Years in business (for initial screening), indicates stability or whether business has
changed names recently.
h. Banking information (for initial screening), indicates financial stability.
i. Memberships in distributor organizations (for information only).
j. Quality Management System (QMS) certifications (every 6 months).
k. Insurance and warranty (every 6 months).

15
The approved unauthorized supplier should re-evaluate Preferred, Acceptable, or Probationary sub-
tier suppliers before purchase if six months have passed since the last purchase of parts from the sub-
tier supplier.

3.1.4 Stock Parts

Electronic parts already in stock at the approved unauthorized supplier’s facility may be used to fill
orders for the contractor purchasing organization. Parts in stock which can be proven (i.e., traceability
documentation to the OCM) to have been purchased directly from an authorized supplier in original
unopened packaging can be sold as authorized supplier parts and be classified as Authorized Stock. If
the parts in stock were not bought directly from an authorized supplier by the approved unauthorized
supplier, the parts should be considered unauthorized supplier parts. This includes contractor or
government excess parts which the approved unauthorized supplier has bought, unless the parts are in
original factory-sealed packaging with full traceability to the OCM. Electronic parts not bought
directly from an authorized sub-tier supplier should be classified as either Stock Confident or Stock
Unknown. Stock Confident parts that are MIL-Spec parts need to pass all inspections and test
requirements of their original part specification (SMD or MIL-Spec slash sheet). Stock Confident
parts that are not MIL-Spec parts have to pass the inspections and test recommendations provided in
Section 5. Stock Unknown is all remaining product.

Stock parts should be stored in a manner that does not reduce traceability, reliability, and quality of
the parts (e.g., mixed or combined shipments). This may include assignment of unique internal part
numbers to separate parts of different pedigree.

Returned Parts and Restocking: Parts returned to the approved unauthorized supplier for reasons other
than suspect or confirmed counterfeit should be segregated with traceability maintained of the return
status. Those returned parts should be classified as Stock Unknown. In order to regain Stock
Confident status (revalidate traceability documentation), those returned parts should pass all
inspection and test requirements of the original part specification (SMD, MIL-Spec slash sheet), and
those in Section 5, as well as confirming the expected lot and date code information.

3.1.5 Priority of Sale

The approved unauthorized supplier should supply electronic parts to the contractor purchasing
organization in the order indicated in Table 3-1, with parts available in the Order Priority 1 row
supplied first. If parts are available both for purchase from the supply chain and from stock, and the
order priority is identical, the approved unauthorized supplier may choose from where to supply the
parts.

Table 3-1. Order of Purchase, by Supplier or Stock Classification Status

Sub-tier Supplier Classification Stock Classification Status (In

Order Priority Status (Purchase) Stock)
1 Authorized Authorized Stock
2 Preferred Stock Confident
3 Acceptable Stock Unknown
4 Probationary

For example, if parts are available from a Preferred sub-tier supplier and are also available as Stock
Confident parts in the approved unauthorized supplier’s warehouse, either or both sources can be used

16
to supply parts. If, however, Authorized parts are available either through purchase by the approved
unauthorized supplier or in stock, those parts should be first priority.

Stock Confident parts can be provided without additional inspection and test, provided all additional
customer-specific requirements have been met. The compliance report should be provided with the
shipment. Stock Unknown parts should pass the inspection and test requirements of Section 5 or
applicable industry standards such as AS5553, and be upgraded to Stock Confident before the parts
can be provided, with the corresponding report.

The approved unauthorized supplier should notify the contractor in writing (e-mail is acceptable) if
either of the following conditions is a necessary requirement to fulfill the sale:

a. The order of preference specified in Table 3-1 will not be followed (e.g., Stock Confident
is quoted instead of Authorized).
b. The sub-tier supplier will be Probationary or Prohibited.
c. The contractor requires notification if sources or stock other than Authorized are used.

3.1.6 Validation of Parts

All parts purchased by the approved unauthorized supplier that are not provided to the contractor as
Authorized (i.e., purchased directly from an authorized supplier) should undergo the inspection and
test recommendations of the original part specification (SMD, MIL-Spec slash sheet), and those in
Section 5.

All parts purchased by the approved supplier that are not provided to the contractor as Authorized
(i.e., purchased directly from an authorized supplier) should have Objective Quality Evidence (OQE)
verification as identified below:

a. The part traceability should be verified from (1) traceability documentation or (2)
authentication verification (e.g., identification through secure physical markings or
unique surface characteristics), or
b. Inspection and testing should undergo the inspection and test recommendations of the
original part specification (SMD, MIL-Spec slash sheet), and those in Section 5.

3.2 Approved Supplier Obligations

The approved (authorized and unauthorized) supplier should be responsible to comply with all the
recommendations of this section. In addition, the approved supplier should:

a. Meet all contractual specifications and requirements (exceptions or waivers are not
allowed unless provided in writing by the contractor).
b. Maintain records and documents as indicated in this document, and make them available
for examination during surveys or audits.
c. Permit the contractor to conduct site surveys and audits.
d. Document and maintain a corrective/preventive action program to achieve positive results
and continuous improvement.
e. Document and maintain a process for acceptance of returns that ensures returned non-
suspect parts are segregated with return documentation, and parts are revalidated.

17
 f. Document and maintain a process for acceptance of returns that ensures returned
nonconforming or suspect/confirmed counterfeit parts are segregated in a controlled area
for further analysis and disposition.
g. Flow down applicable contractual requirements to all direct sub-tier suppliers and
external testing facilities.
h. Be accountable and responsible for the performance of their sub-tier suppliers and
external testing facilities.
i. Notify the contractor of major changes in the supplier’s QMS, processes, process
controls, personnel, points of contact, equipment, or facility locations prior to
implementation.

All exceptions to the recommendations above should be approved by the contractor (customer).

3.3 Approved Supplier Evaluation

3.3.1 Factors to Consider

An evaluation of the approved unauthorized supplier should be performed by the contractor, and
should include consideration of the following factors:

a. Contract history,
b. QMS certifications,
c. Past performance data (e.g., quality or delivery problems and GIDEP). For government
agencies sources such as Product Deficiency Reporting and Evaluation Program
(PDREP), Joint Deficiency Reporting System (JDRS) including DoD reports, CARs, and
supplier audit reports should be considered.
d. Data from other sources (e.g., supplier audits, Federal Aviation Administration (FAA)
supplier information, NASA database, Nadcap audits, or other independent assessments),
e. Suspensions, exclusions, and debarments as indicated in SAM or other government
listings,
f. Compliance to all other recommendations of this document, and
g. Validation of inspection and test capability (internal or through the use of third-party
facilities), and
h. Insurance and warranty.

3.3.2 Inspection and Test Capability

Validation of inspection and test capability should be accomplished by confirmation that:

a. Facility has passed the DLA laboratory suitability audit for MIL-STD-202, -750 and/or
-883, or
b. Facility is certified to an accepted certification standard and the certifications acceptable
to the contractor and the approved supplier, or
c. Facility has acceptably complied with all recommendation of this document and any
additional contractor requirements.

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3.4 Site Surveys (Audits)

Prior to approving a supplier the contractor should require and perform a site survey (audit) of the
approved supplier’s facility, including any outsourced test facilities. Surveys should include a review
of the QMS and all of the systems and processes that the approved supplier has in place and in use,
under this document, and all OCM agreements for parts and product lines for which the approved
supplier claims to be authorized, including warranty support and OCM product ownership. The
purpose of the audit is to ensure that the approved supplier has in place and in daily use processes
which conform to this document.

Industry or other third-party surveys or audits may be considered by the contractor in addition to, or
in lieu of, site-survey requirements.

3.5 Removal/Disapproval Justification

Continued status as an approved supplier is contingent upon continuing compliance with the criteria
and provisions upon which approval is established. Failure to comply will be cause for removal/
disapproval of the supplier. Examples of reasons for removal/disapproval include, but are not limited
to the following:

a. Failure to comply with the priority of sale requirements which direct purchases from
authorized suppliers as a first priority.
b. Failure to perform and document all applicable inspections and tests.
c. Reporting parts as purchased directly from an authorized sub-tier supplier, but failing to
prove that via traceability documentation.
d. Failure to report suspect or confirmed counterfeit parts to the contractor and GIDEP.
e. Failure to prevent suspect or confirmed counterfeit parts from reentering the supply chain.
f. Failure to disclose the sub-tier supplier, or providing an incorrect sub-tier supplier name.
g. Denial of facility access to the contractor.
h. Debarment.
i. Available information has shown repeated poor quality track record with valid complaints.
j. Failure of an audit.

3.6 Renewing Approval

3.6.1 Periodic Approval

Approval is recommended to be performed at least every two years by the contractor.

3.6.2 Approval After Removal/Disapproval

If a supplier has been removed or unapproved, re-approval should not occur until the contractor has
determined that all noted deficiencies, concerns, or corrective action requests have been corrected.
The supplier should document, to the contractor’s satisfaction, the deficiencies or concerns that have
been corrected and the implementation dates. Any revisions or additions to the Quality Manual since
the removal or disapproval should be documented in the application.

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 4. Mechanisms to Enable Traceability of Parts to Suppliers

DFARS rule, 48 CFR 252.246-7007(c)(4) requires the establishment of “Processes for maintaining
electronic part traceability (e.g., item unique identification) that enable tracking of the supply chain
back to the original manufacturer, whether the electronic parts are supplied as discrete electronic parts
or are contained in assemblies. This traceability process shall include certification and traceability
documentation developed by manufacturers in accordance with government and industry standards;
clear identification of the name and location of supply chain intermediaries from the manufacturer to
the direct source of the product for the seller; and where available, the manufacturer’s batch
identification for the electronic part(s), such as date codes, lot codes, or serial numbers. If IUID
marking is selected as a traceability mechanism, its usage shall comply with the item marking
requirements of 252.211-7003, Item Unique Identification and Valuation.”

This section establishes a recommended approach for requirements, polices, and activities for
managing and implementations for electronic part traceability when buying from an unauthorized
supplier.

4.1 Certification of Conformance for Traceability

4.1.1 Part Traceability

The unauthorized supplier should provide traceability documentation from the OCM to the
unauthorized supplier; including all intermediaries who have had custody of these electronic parts.
The traceability documentation should include, at a minimum, (1) the CoC, which includes the name
and location of all of the supply chain intermediaries from the part manufacturer, (2) the device
number, and (3) the lot number and/or date code to the direct source of the product to the seller. There
may be multiple CoCs.

The contractor should review and validate traceability documentation. This includes verifying the part
number against the purchase order and the marking on the packaging. Verify CoCs against flow down
requirements for accuracies such as misspelled wording, supplier address, quantity listed against
purchase order, and signature of the quality assurance official. See Figures 4-1 and 4-2 for examples
of good and bad CoCs.

In the event that sufficient traceability data is not obtained and satisfactory traceability cannot be
confirmed, then the testing and inspections defined in Section 5 should be implemented.

4.1.2 Reverse Traceability

Reverse traceability is the capability of the OEM to determine the original source of the part once it
has been installed into the end item hardware. For most NSS programs, the contractors have a
requirement to be able to reverse trace parts installed in flight hardware. They are required to provide
the information when requested by the government program office or deliver (as a Contract Data
Requirements List (CDRL)) an As-Built, Parts, Materials and Processes List (ABPMPL). The
specific requirements of the AMPMPL can be found in TOR-2006(8583)-5235. This capability
allows both the contractors and the government program offices to determine if their already built
hardware is affect by a GIDEP or other industry alert. The advantage of the ABPMPL is knowing
what was built into your system and the ability to perform risk assessments and cost estimates when
issues arise when the hardware is installed into the end item system.

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Figure 4-1. Example 1: Good CoC

21
Figure 4-2. Example 2: Bad CoC

22
 5. Inspection and Testing of Electronic Parts, Including Criteria for
Acceptance and Rejection

DFARS rule, 48 CFR 252.246-7007(c)(2) requires the inspection and testing of electronic parts
including the establishment of acceptance and rejection criteria when procuring from other than
authorized suppliers. “Tests and inspections shall be performed in accordance with accepted
government- and industry-recognized techniques. Selection of tests and inspections shall be based on
minimizing risk to the government. Determination of risk shall be based on the assessed probability
of receiving a counterfeit electronic part; the probability that the inspection or test selected will detect
a counterfeit electronic part; and the potential negative consequences of a counterfeit electronic part
being installed (e.g., human safety, mission success) where such consequences are made known to the
contractor.”

Per DFARS rule, 48 CFR 252.246-7007(c)(7), “methodologies to identify suspect counterfeit parts
and to rapidly determine if a suspect counterfeit part is, in fact, counterfeit” are required.

When electronic parts are procured from an unauthorized supplier the following steps are
recommended to reduce the risk of obtaining counterfeit parts.

The minimum number of tests and inspections recommended are listed in Section 5.1 and described
in its subparagraphs. Any discrepancy resulting from the testing/inspection below should be
dispositioned by the using entity. For additional tests and inspections, refer to MIL-STD-750, -883
and -1580.

5.1 Inspection and Test

The contractor purchasing organization should ensure that appropriate inspection and testing is
performed for all part shipments that were not bought directly from an authorized supplier with full
traceability documentation. The testing facility should be assessed and accepted by the customer/
contractor. The contractor should determine who will do this testing and where this testing will be
performed. The following tests are recommended and have been found valuable in detecting
counterfeit parts:

a. Certificate of Conformance (CoC)

b. Complete history of the part
c. Handling history
d. Pictures
e. Part marking and Lot Date Code (LDC)
f. Visual inspection
g. Marking and surface finishing tests
h. X-Ray
i. X-Ray Fluorescence (XRF)
j. Decapsulation / Die Verification
k. 100% electrical testing (room, hot, cold) and Statistical Process Control (SPC)
l. Seal testing, where applicable based on part type
m. Additional tests as required by the customer

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5.1.1 Traceability Documentation

Reference Section 4 for additional guidance on traceability. Documentation should be provided by a

supplier formally declaring that all customer purchase order requirements have been met. Examples
of traceability documentation are:

a. Name, address, and phone number of the authorized supplier

b. Statement that the supplier is not an authorized supplier, when applicable
c. Contractor purchase order number
d. Part number
e. Part manufacturer (OCM)
When available, the CoC from the OCM should be authenticated with the OCM to reduce
the risk of counterfeit parts. It should also be noted that the presence of a CoC does not
guarantee the parts are authentic.
f. Lot code
g. Date code
h. Quantity
i. Name and address of the company that the electronic parts were acquired from and any
CoC available pertaining to the supply chain custody of the part acquired
j. Name and address of the company performing any or all of the baseline inspections and
tests
k. Date that inspections and tests were completed
l. Certification that all parts inspected passed all authenticity inspections and tests
m. Signatures of supplier’s Quality Assurance (QA) manager and inspector

5.1.2 Handling History

Section 5.1.1 discussed the paperwork trail requirements. In addition, each facility that has possession
of the electronic parts should physically handle the parts appropriately. The preferred storage of the
electronic parts should be in the OCM electrostatic discharge (ESD) packaging and all handling
should be at ESD approved work stations by ESD protected personnel. A record of all handling
should be kept in ESD approved bags with the electronic parts. If additional testing is required, a
record of the tests that were performed and the results should also be kept with the electronic parts.

5.1.3 Images

The purchasing party should request hi-resolution photos of the parts, including top and bottom of the
package, as well as the side view of the leads, so that all part markings are clearly visible and lead
configuration can be verified. Photos should be examined for evidence of surface sanding to remove
original part markings, font, and layout of existing part marking and OCM logo. This information
should be verified with the OCM or images of known authentic devices for authenticity. Photos or
scanned copies of all paperwork should also be reviewed by the purchasing party. If available, the
photos should be sent to the procuring activity prior to placing the purchase order.

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5.1.4 Part Marking and Lot Date Code (LDC)

If possible, verify part marking with the OCM. All data gathered in Sections 5.1.2, 5.1.3, and 5.1.4
should be forwarded to the OCM for verification. The OCM should validate that the photo of the part
appears to have authentic part marking, the CoC was issued by them and that they manufactured this
type of electronic part with this LDC. If the OCM no longer exists due to obsolescence, then the data
should be compared to a previous purchase order received directly from them by the
customer/contractor. Verify the lot date code is consistent with the production timeline.

5.1.5 Visual Inspection

An incoming enhanced visual inspection is required to validate that the parts received match the
requirements of the parts ordered. Visual inspection should be performed on a 100% basis. The
associated paperwork should also be inspected to validate that it matches the parts.

5.1.5.1 External Package Inspection

All samples should be measured to verify proper package dimensions and lead spacing. There should
be no variation or discrepancy within the lot. The lead finish should be verified with the part
requirement. The leads including the side view should be inspected at 30x minimum for evidence of
re-lead forming, flaking metal finish, or corrosion. The part marking surfaces should be inspected for
evidence of sanding, etching, or scraping with an abrasive tool. If no sanding or scraping is evident,
the surface should be inspected at 30x minimum with bright white light for evidence of residual ink
from previous marking. Parts should be inspected for other evidence of counterfeiting in accordance
with industry standards (e.g., AS5553).

5.1.5.2 Documentation Inspection

All paperwork should be inspected for consistency and should match the parts purchased. If the OCM
CoC is available, it should be reviewed by the OCM to validate its authenticity. All available
screening and qualification data should be per the applicable MIL-Spec and should be validated for
authenticity by the OCM.

5.1.5.3 Part Marking Inspection

A resistance to solvents test per Table 5-1 should be performed on the part marking per
MIL-STD-883, Method 2015. The manufacturer’s logo, the font, and the general marking layout
should be compared to a known good part. Digital pictures can be sent to the OCM to verify
authenticity.

5.1.6 X-Ray

Real time X-ray should be performed per the applicable part specification on a 100% basis. Any
discrepancy (e.g., inconsistent or incorrect internal construction) within the package is rejectable.
Criteria for X-ray inspection should be per the applicable MIL-Spec for that part type. If the part
number has been purchased previously from the same OCM, and radiological images were stored, the
prior images should be compared to the new images for this authentication effort.

5.1.7 X-Ray Fluorescence (XRF)

XRF should be performed on a sample of three (3) to verify plating finish and that no prohibited
materials are present. This test may be omitted if this verification is performed by another test [e.g.,
Energy Dispersive X-Ray (EDX) during Destructive Physical Analysis (DPA)].

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5.1.8 Marking and Surface Finishing Tests

The inspection/test facility should perform the following testing on the parts to determine if the part
surface has been sanded, resurfaced, or remarked. Inspection should check for the removal of ink
markings or surface coatings. The results should be documented to the minimum requirements of
Table 5-1, and should include any noncompliance.

Table 5-1. Marking and Surface Finishing Test Requirements (as applicable)

Further Sample
1,3 4 5,6 2
ID Detail Destructive Size Pass Criteria Supporting Information
3A Resistance to Yes 3 No removal of ink Provide images of worst case part,
Solvents markings or before and after, with used cotton
surface coatings, swab.
per applicable
MIL-Specs for
each device type.
3B Remaining Yes No removal of Provide images of worst case part,
Inspection coating per before and after, with used cotton
(Aggressive AS6081. swab.
Chemical Test)
3C Scrape test Yes 3 No flaking or Provide images of worst case part,
peeling of before and after scrape.
surface.
3D High No for optical 3 No removal of Provide images of worst case part
Magnification microscope surface coatings. before and after.
(SEM or up to Yes for SEM
200X optical
microscope)
Visual
Notes:
1) Samples should be taken from random locations within the shipment.
2) Images should be provided in color at a resolution of at least 5 megapixels.
3) For all solvents, ensure proper safety precautions are used, including proper Personal Protective Equipment (PPE),
a ventilated fume hood, and eliminate any ignition sources.
4) Parts which undergo destructive tests should not be considered acceptable for flight. Parts used for non-destructive
test (test 3D) may be used for one of the destructive tests after completion.
5) For small lot sizes, less than ten (10) devices, this “destruct” test sample size may be reduced to one (1) device at
the discretion of the Cognizant Engineer with Quality Assurance concurrence and Customer approval.
6) Sample sizes derived from AS6081

3A. Resistance to Solvents Inspection

Perform this inspection on the agreed upon sample size per the applicable MIL-Specs. This inspection
should be performed on ink and other markings susceptible to solvents (not applicable to markings
such as molded, laser. or embossed). If this inspection is not performed due to the marking type, the
test report should indicate why the inspection was not performed.

3B. Remarking Inspection Using Aggressive Chemicals

Perform this inspection on the agreed upon sample size per AS6081. Use 1-Methyl-2-pyrrolidinone
and 4-Dynasolve® 711 or 750 (as alternates, Dynasolve® 715 or 760 may be used for this test).

26
3C. Blacktop Scrape Inspection

Perform this inspection on the sample size indicated in Table 5-1 herein. Lightly scrape the device
surface with a sharp blade to see if a coating has been applied to hide original marking re-work.
Peeling or flaking material indicates possible blacktopping.

3D. High Magnification (Scanning Electron Microscopy (SEM) or up to 200X Optical

Microscope) Visual

Visual inspection should be performed in accordance with the test lab standard. The inspector should
identify any of the following:

a. Detection of micro abrasion indicative of original marking removal

b. Detection of abrasive particles indicative of sanding or microblasting
c. Detection of minute surface finish variations indicative of flat lapping

5.1.9 Decapsulation/Delidding (for all parts) / Die Verification (for active parts)

Since DPA per MIL-STD-1580 is required as a normal process of space part verification, the
additional verification below should be performed to mitigate the procurement of counterfeit parts. If
formal DPA is not required then the additional verification steps below should still be performed. The
contractor/ customer should approve the DPA lab and process used.

The inspection/test facilities should decapsulate and examine under magnification (100-500X) a
sample of three (3) pieces of each date code per applicable MIL-Spec for part type (i.e.,
MIL-STD-883 for integrated circuits (IC), MIL-STD-750 for semiconductors, etc.). Prohibited
material verification should be performed to ensure no prohibited material exists. Since this test is
destructive, all devices subjected to this test should be clearly identified and segregated from all other
devices.

Inspect microcircuits, transistors, and diodes (except axial lead hermetic) using MIL-STD-1580.

Inspect axial leaded hermetic diodes and passive parts by cross-section analysis using
MIL-STD-1580. Verify that the component characteristics are consistent with the manufacturer’s data
and/or a known good sample. The device being inspected and the known good sample should be
photo documented for later reference.

For active parts: The magnification should be sufficient to identify basic die layout (e.g., capability to
detect die differences large enough to detect on a full-die photograph), as well as individual die
markings or logos (typically requires at least 300 times magnification). The inspection should look for
variations in the die topology, manufacturer’s logo, and other die markings. All variations from the
known good die should be verified with the manufacturer. The device being inspected should be
compared to known good samples or photographs of known good devices. All photographic images
should be preserved without altering the original spatial resolution or pixel density. The use of Joint
Photographic Experts Group (JPEG) or other ‘lossy’ file formats is not recommended.

5.1.10 Electrical testing

Electrical testing should be performed in order to validate that the parts meet their advertised
datasheet parameters. The parameters tested should be sufficient to verify the key features of the

27
parts, validate no opens or shorts, and verify the parts meet the specification limits. This is necessary
to rule out the parts being electrical rejects from the original production process or mixed with a
counterfeit lot. If the unauthorized supplier has all the electrical test data for the lot and the part
numbers are serialized, then a randomly selected sample test should be performed at 25°C, as well as
the specification high and low temperature per the applicable part specification and/or applicable
MIL-Spec. The sample size should be 10% of the lot or 10 piece minimum if the lots size is smaller
than 100 pieces. This data should be compared to the OCM’s existing data in accordance with
calibration testing parameters (i.e., serial # by serial #). If any discrepancy exists or if data is not
available or the parts are not serialized, then 100% of the lot should be tested at 25°C, high and low
temperature per the applicable specification, including all applicable testing [e.g., Direct Current
(DC), Alternating Current (AC), Functional]. In addition, a 3-sigma calculation should be used to
determine lot variability. Any failures or variability should be reviewed by the customer prior to
accepting the lot to determine if this is common for that part type based on historical data.

Parametric variability or open /short failures may be due to any of the following items:
• Wrong die
• Damaged or stressed or used part
• Production rejects or lower performance parts

If the parts fail to pass the tests listed herein or any other customer-required tests, the unauthorized
supplier should notify the customer within 5 working days of the failure, and provide all relevant
information (e.g., failing parameter, test limits, and reading). The unauthorized supplier should
undertake additional non-destructive inspections or tests (e.g., burn-in with no failures) to determine
if the parts are suspect counterfeit. The customer may request sample parts in order to perform an
assessment or perform life test on a sample basis per the applicable MIL-Spec. Parts should not be
subjected to destructive tests without customer approval. Parts which are determined to be suspect or
confirmed counterfeit due to additional (customer required) testing are subject to the Section 6
reporting and quarantining requirements.

5.1.11 Hermeticity

Seal test should be performed on a 100% basis for all hermetically sealed devices per
MIL-STD-883/Method 1014 (Krypton 85 leak test) or the applicable specification requirement based
on part type to determine that there are no leakers that fail the applicable MIL-Spec requirement.
However, if the parts were previously subjected to gross leak tests using fluorocarbons then the
Krypton 85 leak test is not required.

5.1.12 Data

Document the results of the above tests in a test report. Test data should be reviewed by the
contractor’s cognizant specialty engineer for the part type. If there are any discrepancies or potential
of a suspect part, then the parts need to be locked down. The cognizant specialty engineer and the
contractor’s legal team need to disposition the anomalies. If the anomalies indicate any suspect
counterfeit, then the entire lot needs to be quarantined and handled per Section 6.

5.1.13 Test Lab Certification

All test labs should be certified and approved by the customer prior to use and/or be certified by a
DLA laboratory suitability audit. Certification should include, at a minimum, an audit of the test
facility to validate the part handling procedures, test equipment and operating procedures, and the

28
calibration status of all equipment. A responsible test lab (RTL) should be able to meet the following
criteria.

An RTL, to whom parts are sent by the User/Requester to perform the complete (or agreed upon)
suite of tests for suspect/counterfeit parts inspection, acts as the sole point of contact for the
User/Requester for matters concerning the execution of those tests, including managing the overall
test sequence and completing the formal test report or supplying any requested data. The RTL should
be per ISO/IEC 17025 accredited or be able to meet the requirements of ISO/IEC 17025. The RTL
should communicate with the User/Requester to verify the Test Requirements as specified in the
SOW, including the tier level of risk associated with the parts (if provided). The RTL can be either an
in-house (same organization as the User) Test Laboratory or an outside test facility.

5.1.13.1 Test Laboratory/Test Facility

The Test Laboratory/Test Facility should have documented procedures under revision control and
have the proper equipment, capabilities, and personnel in place to conduct the counterfeit parts
inspection herein that it contracts to perform, including the following:

1. Meet Occupational Safety and Health Administration’s (OSHA’s) regulations that pertain to a
Test Laboratory Facility.
2. Have the proper test equipment, fixtures, support/calibration/standardization equipment, test
material, and reference standards defined in the specific procedures.
3. Subcontracting of Test Methods should only be performed by the RTL. If any inspections are
to be subcontracted by the RTL, the RTL should notify and obtain written approval from the
User/Customer of its intent to subcontract, prior to the initiation of testing.
4. Sufficient technical personnel should be employed by the Test Laboratory, with the proper
credentials.

The Test Laboratory should be able to demonstrate proficiency in those inspection and testing
methods for detecting counterfeit electronic parts by being able to identify known counterfeit parts.

The Test Laboratory seeking to demonstrate proficiency for the specific inspection should establish
an auditable method and a process to validate that the Test Lab is able to meet the provisions of the
specific proficiency requirements. The Test Lab demonstrates its competency though key
comparisons, inter-laboratory comparisons, or proficiency tests appropriate to validate their testing
capability. The process and methodology selected by the Test Lab should include the following:

1. Demonstrate that the required training is obtained by the personnel and is periodically
refreshed.
2. Be able to detect counterfeit parts using the specific inspection technique.
3. The equipment chosen to do the work should be able to meet the accuracy, resolution, and
repeatability required.
4. The laboratory should either have had its competency independently assessed through the
process of laboratory accreditation or performed a complete self-assessment.
5. The specific inspection process should be documented in the form of a written procedure.

Examples of specific proficiency requirements for the specific counterfeit parts inspection process
should be documented in the individual inspection procedures specified herein.

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5.1.13.2 Calibration

The Test Laboratory should have an established Calibration Policy and Procedure that is documented
and under revision control, with the following characteristics:

1. Control measurement processes to ensure the accuracy of measurement results affecting all
Test Methods specified herein.
2. Establish and maintain traceability of measurement results by an unbroken chain of
calibrations through the National Institute of Standards and Technology (NIST), or an
institution recognized by NIST through international agreements, to the International System
of Units (SI) when such units have been established.
3. Control the accuracy, reliability, and use of Measuring and Test Equipment (MTE) through
the use of a calibration system compliant with the requirements of American National
Standards Institute/National Conference of Standards Laboratories (ANSI/NCSL)
Z540.3-2006 and applicable requirements of Society of Automotive Engineers (SAE)
AS9100, subject to the clarifications and modifications provided in the detailed counterfeit
parts inspection procedures specified herein.

Examples of specific calibration requirements for the individual counterfeit parts inspection
procedures should be as documented herein.

5.1.13.3 Device Handling Requirements

The Test Laboratory should have an established Device Handling Policy that is documented and
under revision control, and should include ESD, moisture, and radiological precautions and handling
requirements either as part of the procedure or referenced as a separate procedure under revision
control. If the Test Laboratory has test equipment that emits radiation, the Test Laboratory should
have a Radiation Sensitive device handling policy in place that is part of or referenced by the
laboratories Device Handling Policy for radiation sensitive devices.

The following general precautions should be observed in device handling:

1. Devices should not be subjected to conditions in which voltage or current transients cause the
maximum ratings to be exceeded.
2. Precautions should be observed in testing microelectronic devices in radiographic fields of
energy, not to exceed specified dose levels.
3. For microelectronic device handling, ground all equipment prior to insertion of the device for
electrical test. Keep devices in metal shields, or equivalent until they are inserted in
equipment to test. Where applicable, keep devices in carriers or other protective packages
during test.
4. Provide for interim storage of parts before, during, or after test, as required.

5.1.13.4 ESD Sensitive Devices

The Test Laboratory should have a documented internal process and procedure to handle ESD
sensitive devices. The requirements of either ANSI/ESD S20.20 or Joint Electronics Device
Engineering Council (JEDEC) STD JESD625 should be followed in handling ESD sensitive devices.

30
5.1.13.5 Moisture Sensitive Devices

The Test Laboratory’s Device Handling Policy should include handling procedures in accordance
with JEDEC Standard J-STD-033 or equivalent for moisture sensitive devices. The Test Laboratory
should be notified by the User Organization of the Moisture Sensitivity Level (MSL) of the devices, if
applicable, as part of the Statement of Work (SOW).

5.1.13.6 Radiation Sensitive Devices

The Test Laboratory should have a Radiation Sensitive device handling policy in place that is part of
or referenced by the laboratory’s Device Handling Policy for radiation sensitive devices.

5.1.13.7 Sampling Procedure

The Test Laboratory should generate a Test Sequence document or traveler, to complement the
counterfeit part inspection test plan supplied by the User Organization.

The Test Sequence document should as a minimum delineate or outline the following:

1. Pertinent User Information and device lot Information, including name of user and address,
device type, quantity and nomenclature, original device container(tape/reel), lot size, date/lot
code, location of device manufacture, etc.
2. The specific counterfeit parts scheduled inspections to be performed (e.g., radiographic,
electrical) and the quantity to be inspected.
3. Document the specific procedure on how the samples were selected for inspection, either
randomly from beginning, center, or end of reel, or on devices showing anomalous variations
from the mean of the lot.
4. The procedure for removing samples from the initial container, handling, inspection and
labeling the test samples, and protecting devices while waiting for specific inspections, and
repackaging samples following inspections. This should include specific handling, labeling,
and packaging of moisture and ESD sensitive devices. The handling and storage procedures
should be maintained from receipt of parts through inspections, storage, test, protective
repackaging and shipment back to the User Organization.
5. Procedures and packaging for protection of component leads/solder balls from damage.
6. Transportation packaging, equipment, and methods to prevent packages from being dropped
or dislodged during shipping.

5.1.13.8 Temperature and Relative Humidity

The Device Handling and Test Inspection Area Temperature and Relative Humidity should be
controlled and documented during the period of time that the Test Laboratory receives, inspects, and
sends back the test lot of devices to the User/Requester in accordance with ANSI/ESD S20.20 or
JEDEC STD JESD 625. In areas of low relative humidity, follow the requirements specified in
ANSI/ESD S20.20 Ionization Standard, S3.1. For guidance on areas of low relative humidity, refer to
Appendix B herein.

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 6. Reporting and Quarantining of Counterfeit Electronic Parts and Suspect
Counterfeit Parts

DFARS rule, 48 CFR 252.246-7007(c)(6) requires “Reporting and quarantining of counterfeit

electronic parts and suspect counterfeit electronic parts. Reporting is required to the contracting
officer and to the Government-Industry Data Exchange Program (GIDEP) when the contractor
becomes aware of, or has reason to suspect that, any electronic part or end item, component, part, or
assembly containing electronic parts purchased by the DOD, or purchased by a contractor for delivery
to, or on behalf of, the DOD, contains counterfeit electronic parts or suspect counterfeit electronic
parts. Counterfeit electronic parts and suspect counterfeit electronic parts shall not be returned to the
seller or otherwise returned to the supply chain until such time that the parts are determined to be
authentic.”

In addition to the DFARS requirements companies should also ensure awareness and compliance with
reporting to the Office of the Inspector General of the agency, field command, or other component of
the DOD for their respective customer as prescribed under Federal Acquisition Regulation (FAR)
3.10. 16

This section provides suggested implementation details and benefits of Reporting and Quarantining
suspect and confirmed counterfeit items. Contractor policies to address Reporting and Quarantining
of Counterfeit and Suspect Counterfeit Electronic Parts are a required element of the FY2012
NDAA 17 and DFARS 252.246-7007 (as stated above).

Companies should be mindful that FAR Case 2013-002 “Expanding Reporting of Nonconforming
Supplier” which is currently in development at the time of this publication may provide additional
regulatory requirements for reporting when published.

6.1 Reporting

The fundamental objective of reporting is to minimize the impact and maximize the containment of
the counterfeit item event throughout industry.

Reporting is intended to notify stakeholders and interested parties of findings which may impact their
operations or products. Incident reports should be factual and to the maximum extent possible provide
actionable information in a timely manner under the protection from civil liability for such
disclosures.

When additional or more stringent reporting and/or quarantining of counterfeit and suspect
counterfeit items is part of a contractual requirement, compliance with contract requirements takes
precedence over guidance provided here.

For the purposes of this document the reporting discussion is broken into four fundamental steps.
Each step may require differing levels of coordination or review based on company specific policy.
Two of the four steps, Reporting Within the Company and Reporting to Customers, are topics

16
FAR 52.203-13, Contractor Business Ethics Compliance Program and Disclosure Requirements
17
H.R.1540 National Defense Authorization Act for Fiscal Year 2012, Section 818, Detection and Avoidance of Counterfeit Electronic Parts
(c), (4) & (e) (2) (a) (vi)

32
addressed as part of an International Standards Organization (ISO) 9001:2008 18 or AS9100C 19 quality
management system.

The third and fourth steps, Reporting to Industry and Reporting External to the Company, may
represent requirements beyond the quality management system standards. In any case reporting
practices specific to counterfeit should be included in the company’s counterfeit item detection and
avoidance process.

6.1.1 Reporting within the Company

Reporting internal to the company may be accomplished by various means. Companies generally
require less oversight and review for internal reporting compared to information released to external
sources therefore providing the opportunity to communicate pertinent facts quickly throughout the
company.

Companies may find it beneficial to execute internal reporting in steps or phases providing a “heads
up” upon initial indication of a suspect counterfeit with updates as the investigation progresses and
final conclusions and actions are defined, using protective markings the company may require for
such internal disclosures.

Internal reporting should be directed to appropriate resources to ensure effective containment.

Companies should include the following information as part of the internal reporting process:

• Part number of suspect/counterfeit item

• Manufacturer, Date Code, Lot Code, and other identifiers specific to the suspect/counterfeit
item
• Nomenclature/Description of the suspect/counterfeit item
• Source and procurement information of the suspect/counterfeit item
• Evidence/how has the suspect/counterfeit item been detected
• Where used information

6.1.2 Reporting Databases

Companies should include review of reporting databases in their counterfeit avoidance policy and
procedures. Information from reporting databases can be used as part of supplier and component risk
assessment process. There is a variety of government and industry managed databases available for
use.

6.1.2.1 SMC and NRO Programs

For contractors working on United States Air Force Space and Missiles System Center (USAF/SMC)
and the NRO programs, the Parts, Units, Materials, Processes and Systems (PUMPS) tool should be
used to report suspect/confirmed counterfeit incidents. The tool establishes a repository of quality,
supplier, manufacturing, testing, and workmanship issues and failures that occur on SMC and NRO

18
ISO-9001:2008, Quality Management System Requirements, Paragraph 5.5.3, and Paragraph 7.2.3
19
AS9100C, Quality Management Systems - Requirements for Aviation, Space and Defense Organizations, Paragraph 5.5.3, and
Paragraph 7.2.3

33
programs. Each program enters their information into the tool. The user can upload PowerPoint,
word, PDF, etc. files into the tool that provides the background information about the issue. The tool
alerts/notifies each program of the issue. Then each program is to respond if they are affected or not
affected by this issue.

Some SMC and NRO contractors have been granted limited access to the PUMPS tool. Their access
allows the contractors to upload their issues into the tool. Therefore, if the contractor has a suspect or
confirmed counterfeit part to report, after notifying the contracting officer, they should upload the
report into the PUMPS tool. The PUMPS administrator can then use the contactor information to alert
the other programs to the counterfeit item.

6.1.2.2 GIDEP
Department of Defense Instruction (DoDI) 4140.67 20 and the Aerospace Industries Association (AIA)
support the use of the GIDEP for reporting of suspect/counterfeit incidents. DFARS 252.246-7007
requires that companies use GIDEP as one of the primary places to report counterfeit incidents.

The GIDEP program is managed by the US government and is a tool for government and industry
organizations to issue and access alerts of various types and subject matter including nonconforming
and counterfeit parts. Access to GIDEP reports is limited to organizations in the United States and
Canada. U.S. or Canadian companies that directly or indirectly conduct business with the U.S.
government or support the U.S. government’s acquisition of systems, facilities and materiel, may
voluntarily participate in GIDEP. See the GIDEP Manual Chapter 2, paragraph 2.2. Additional
information regarding GIDEP membership, participation guidelines, and requirements may be
obtained at www.gidep.org.

Other customer or industry specific databases may also be useful for counterfeit incident reporting
and risk assessment. For example, NASA’s Supplier Assessment System contains, in addition to
GIDEP data, seizure data from U.S. Customs and Border Patrol. Organizations such as the FAA,
MDA, the Space Quality Improvement Council (SQIC), and Department of Energy (DOE) also have
reporting and alert processes which should be considered.

In addition to U.S. government managed reporting databases there are private industry reporting
databases that focus on counterfeit incident reporting. Companies should consider use of industry
reporting databases as a supplement to GIDEP membership or for use when companies are not
eligible for GIDEP membership.

6.1.3 Reporting External to the Company

As referenced above, DFARS 252.246-7007(c)(6) 21 clearly states the requirement to report suspect
counterfeit and counterfeit items:

“…to the Contracting Officer and to the GIDEP when the contractor becomes aware of, or
has reason to suspect that, any electronic part or end item, component, part, or assembly
containing electronic parts purchased by the DOD, or purchased by a contractor for delivery
to, or on behalf of, the DOD, contains counterfeit electronic parts or suspect counterfeit
electronic parts.”

20
DoDI 4140.67, DOD Counterfeit Prevention Policy, April 26,2013, (4), (j), (1)
21
See http://www.acq.osd.mil/dpap/dars/dfars/html/current/252246.htm#252.246-7007

34
Companies should implement processes which enable timely reporting (i.e., within 60 days after the
company becomes aware) to help minimize potential impacts throughout the customer and industry
community.

Various customers and government agencies may provide agency, program, or contract specific
reporting requirements which companies should address in concert with the current regulatory
requirements, including mandatory reporting under FAR 3.10, Contractor Code of Business Ethic and
Conduct, when applicable. When conflicts are identified companies should engage their contracts and
legal counsel to resolve the conflicting requirements with their customer.

In March of 2011 the AIA published a Special Report titled “Counterfeit Parts: Increasing Awareness
and Developing Countermeasures” 22. The AIA report includes information regarding a survey
conducted by AIA of the benefits of GIDEP membership and reporting of counterfeits as well as
potential obstacles to reporting counterfeit incidents via GIDEP. As mentioned above, companies
should also be aware the FY2012 NDAA Section 818 23 includes safe harbor language regarding
protecting companies civil liability (e.g., defamation claims) for reporting on “suspect” counterfeit
parts. Companies should consult legal counsel and review their policies to ensure compliance with
FY2012 NDAA Section 818.

The US DOD Inspector General has published information addressing the FY2012 NDAA Section
818 requirement to report suspect counterfeit item to the government. 24 The Office of Inspector
General states “Contractors should report through submission of a contract disclosure.” Contract
disclosure is further defined as the FAR Clause 52.203-13 25, Contractor Business Ethics Compliance
Program and Disclosure Requirements, as proscribed in FAR 3.10. Companies should consult legal
counsel to ensure policies and practices are in compliance with regulatory and contractual
requirements.

Companies should consult legal counsel for guidance regarding reporting outside of the company.

6.1.3.1 Reporting to Law Enforcement

Companies (contractors) play an important role in enforcement because they are often in the best
position to detect counterfeit electronic parts, safeguard important proof, and quickly report a
counterfeit. In a digital world where evidence can disappear at the click of a mouse, swift
investigation is often essential to successfully prosecute a counterfeit case. Reporting counterfeit
electronic parts to law enforcement helps agents develop and pursue criminal cases, ensuring that
counterfeiters are brought to justice. Without such referrals, counterfeiters will continue to reap
profits from their crimes without fear of punishment, hurting victims, and damaging the interests of
the United States. It is vital that companies properly secure evidence of crime so that investigators can
be certain of the integrity of that proof and be able to follow accurate leads. Finally, communicating
early with law enforcement authorities after discovering a counterfeit will allow a company to
coordinate contractual, administrative, or civil proceedings with possible criminal enforcement.

22
Aerospace Industries Association Counterfeit Parts: Increasing Awareness and Developing Countermeasures, March 2011
(http://www.aia-aerospace.org/assets/counterfeit-web11.pdf)
23
H.R.1540 National Defense Authorization Act for FY2012, Section 818, Detection and Avoidance of Counterfeit Electronic Parts (c), (5)
24
United States Department of Defense Office of Inspector General, Contract Disclosure Program (http://www.dodig.mil/programs/cd/)
25
See http://www.acquisition.gov/far/html/52_200_206.html#wp1141983

35
Whether to Report

Companies use their own criteria and procedures, such as those described in this document, to
determine if a received electronic part is a suspect counterfeit part. A company’s determination of
whether a case should be reported to law enforcement will depend upon that company’s judgment and
upon the unique facts and circumstances of a particular case. However, when a company becomes
aware that it has evidence of a potential crime, it should certainly report the matter to law
enforcement. Although individuals or companies can always pursue contractual, administrative, or
civil remedies in case of purchase or receipt of counterfeit electronic parts, criminal sanctions may be
warranted in appropriate cases to punish and deter wrongful activity. In addition, the company may
have evidence that in isolation may seem insignificant, but that may be quite important in the context
of a larger investigation into a counterfeiting operation about which the company knows nothing. As
a result, companies should generally report counterfeit parts to law enforcement.

Congress has continually expanded and strengthened criminal laws for violations of intellectual
property rights (IPR) to protect innovation, keep pace with evolving technology, and—perhaps most
importantly—punish and deter persistent and egregious IPR violations. To determine whether to
report a counterfeit electronic part to law enforcement requires a basic understanding of federal
criminal laws in this area.

For counterfeit items, the most important federal statute is 18 U.S.C. §2320, which covers trafficking
in counterfeit goods as well as counterfeit labels. Note that the definition of a counterfeit electronic
part may be different under the criminal statutes than it is under other laws and regulations [e.g.,
DFARS 48 CFR 252.246-7007(a)].

Where to Report

When a company has located a counterfeit electronic part and believes it has evidence of a crime, it
should quarantine the item and report the matter to law enforcement in addition to reporting to the
contracting officer and the OIG. Although a variety of ways exist to report trafficking of counterfeit
electronic parts to law enforcement, a convenient way to report the matter is through the interagency
National Intellectual Property Rights Coordination Center (IPR Center) in Arlington, Virginia.
Company personnel should go to the link http://www.iprcenter.gov/referral and fill out the online
form or, alternatively, email the referral to iprcenter@dhs.gov.

The IPR Center, led by U.S. Immigration and Customs Enforcement’s Homeland Security
Investigations (HSI), is a collaborative effort by more than 21 U.S., foreign, and multilateral
investigative and regulatory agency partners that work together to combat intellectual property crime.
Members include the Federal Bureau of Investigation (FBI), U.S. Customs and Border Protection
(CBP), Air Force Office of Special Investigations (AFOSI), Defense Criminal Investigative Service
(DCIS), U.S. Army Criminal Investigation Command (Army CID), U.S. Naval Criminal Investigative
Service (NCIS), NASA, Defense Logistics Agency (DLA), General Service Administration’s Office
of the Inspector General, and many others. The IPR Center partners strive to investigate and de-
conflict case leads, interdict counterfeit and pirated goods at the borders, and provide extensive
training and outreach. The IPR Center also works closely with the Department of Justice through the
Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). The IPR Center
encourages victims to visit its website at www.iprcenter.gov to obtain more information about the
IPR Center.

36
Steps to Take When Reporting to Law Enforcement

Because companies are generally in a better position than their customers to detect and report
counterfeit electronic parts, they play a crucial role in referring possible cases to law enforcement.
The Contractor Code of Business Ethics and Conduct (FAR 52.203-13) provides a good starting point
for reporting to and cooperating with law enforcement regarding counterfeit electronic parts by all
companies, not just contractors. This code states that a contractor’s internal control system should
provide for, among other things, “[f]ull cooperation with any government agencies responsible for ...
investigations.....” The code defines “full cooperation” as “disclosure to the government of the
information sufficient for law enforcement to identify the nature and extent of the offense and the
individuals responsible for the conduct. It includes providing timely and complete response to
government ... investigators’ request for documents and access to employees with information.”

The code goes on to state that such cooperation does not restrict contractors from conducting an
internal investigation, or defending a proceeding or dispute arising under the contract or related to a
potential or disclosed violation. Specifically, if a company discovers counterfeit electronic parts, then
it should do at least the following as quickly as possible (reference Appendix J, Checklist for
Reporting Counterfeits, for detailed information).

• Document All Steps: Describe the counterfeit electronic part, how it was purchased and from
whom, how it was shipped, how it was determined to be counterfeit, and what subsequent
actions were taken. Provide all relevant documents and records.
• Preserve the Evidence: Once it is determined that the part is counterfeit (through the
receiving inspection or other examination or testing), quarantine the item in secure limited
access area, clearly marking it as counterfeit. Do not return the good. Maintain a clear chain
of custody for the part, documenting when it arrived, how it was used, when and how it was
preserved, who had access to it, and any testing or other analysis.
In addition to the infringing item itself, preserve for later use in a legal proceeding any
relevant physical, documentary, or digital evidence acquired in the course of the purchase,
acquisition, use, examination, or testing of the counterfeit item. In particular, be sure to retain
the original packaging and all documentation received with the part, which may contain
valuable details on the item’s origin.
For questions on what to preserve, consult with law enforcement to identify what specific
items, records, and documents might have evidentiary value and should be retained. In
addition, if there are questions regarding how the parts should be handled or secured, or how
long they should be retained, consultation with law enforcement is recommended.
• Document Contact with the Supplier/Seller: Provide documentation regarding all
representations—both written and verbal—made by the supplier and its employees and
representatives, including a copy of the supplier’s website as well as emails, texts, and other
communications.
Note that companies or individuals trafficking in counterfeit electronic parts only commit a
crime if they know that that they are trafficking in parts with counterfeit trademarks. In other
words, it is not enough for someone to sell a counterfeit electronic part; they must also know
that the part is counterfeit.
Thus, once a company determines that it has bought a counterfeit electronic part, it may wish
to contact the supplier and ask where the company purchased the electronic part, in which
country the part was manufactured, and so on. Preserve any documents or records regarding
communications to and from the supplier regarding the counterfeit issue. Even if the supplier

37
 claims that it did not know that the electronic part it sold was counterfeit, those
communications could provide evidence of knowledge later if the supplier continues to
import or to sell those same counterfeit electronic parts. In addition, the OCM/OEM may be
notified of the problem, so it could—if appropriate—send a cease-and-desist letter and/or
take legal action against the supplier. The receipt of such a letter or filing of legal action can
help remove doubt that the supplier knows that it is trafficking in counterfeit electronic parts.
• Contact Law Enforcement Right Away: Early referral to law enforcement is the best way
to ensure that evidence of an intellectual property crime is properly secured and that the
authorities can fully explore all investigative avenues.
Law enforcement has many tools to investigate offenses that are unavailable to companies.
Moreover, communication with investigative authorities shortly after discovery of a
counterfeit electronic part allows an agency or company to coordinate contractual, civil, or
administrative proceedings with possible criminal enforcement.

Use of the advisory reporting checklist provided in Appendix J is recommended to organize the
information gathered and provide relevant information to the company’s law enforcement contact.

6.1.4 Reporting to Customers

Companies should incorporate requirements for customer reporting into their counterfeit control plan
in accordance with DFARS 252.246-7007, which specifically identified reporting to the contracting
officer. Reporting to customers includes suspect counterfeit parts procured as discrete units and parts
supplied to companies that are contained in assemblies. Suspect/counterfeit items that impact
customers should be communicated expeditiously and with appropriate due diligence to ensure
pertinent facts are provided. Companies operating with a QMS compliant to AS9100 will recognize
the requirements for Post Delivery Support 26 and customer communications when problems are
detected after delivery. Companies operating to ISO 9001 or other QMS processes may need to
enhance customer reporting practices. When reporting suspect/counterfeit incidents to the customer,
company processes should include:

• Identification of the suspect/counterfeit item and any impacted customer items.

• Facts regarding the analysis and nature of the evidence associated with the suspect/counterfeit
item.
• Investigation results and actions taken.
• Technical analysis of the item application and impact on delivered items.
• Containment information (i.e., pre and post-delivery).
• Corrective actions taken/planned.
• Remediation proposal/plan forward.

6.1.5 Reporting to Industry

Company processes for reporting to industry databases should include all appropriate due diligence
including compliance with contractual requirements and consultation with legal counsel. As required
by the DFARS, companies must report to GIDEP as part of their process unless other customer or

26
AS9100C, Quality Management Systems - Requirements for Aviation, Space and Defense Organizations, Paragraph 7.5.1.4

38
contractual requirements are provided. GIDEP reports should be processed and submitted in
accordance with GIDEP requirements which are available at www.gidep.org.

Industry reports should include actionable information such as:

• Information regarding the specific identifiers of the suspect/counterfeit item (e.g.,

Manufacturer (as marked or labeled on the part), Part Number, Date Code, Lot Code, Serial
Numbers).
• Information regarding how the suspect/counterfeit item was discovered.
• Facts regarding the analysis and nature of the evidence associated with the suspect/counterfeit
item.
• Investigation results and actions taken.
• Source of supply with all known intermediaries.
• Comments and data from the source of supply.
• Corrective actions taken/planned.

6.1.6 Review of Reporting Databases

Companies should include review of reporting databases in their counterfeit avoidance policy and
procedures. Information from reporting databases should be used as part of supplier and component
risk assessment process, including pre-procurement and receiving inspection processes, material in
stores and delivered items.

Suspect/counterfeit reports require additional assessment beyond the “typical” assessment process.
The “typical” process tends to focus on the part and employ an “if used/where used” approach to
assess impact and if further action is warranted. While “if used/where used” remains important in
suspect/counterfeit report assessment it is only half of the needed due diligence.

Suspect/counterfeit reports should also be assessed for potential risk or impacts that may be
associated with the organizations use of the supplier(s) identified in the report. The supplier’s
response to a reported incident as well as any trends that may be present are important factors to
consider in making a determination if further action is warranted.

6.2 Quarantining

6.2.1 Requirements

The FY2012 NDAA and the DFARS requires contractors that supply electronic parts or systems that
contain electronic parts to establish policies and procedures to eliminate counterfeit electronic parts
from the defense supply chain. The requirement states in part that contractor “policies and procedures
shall address the reporting and quarantining of counterfeit electronic parts and suspect electronic
parts”.27 The DFARS state specifically, “Counterfeit electronic parts and suspect counterfeit

27
H.R.1540 National Defense Authorization Act for FY2012, Section 818, Detection and Avoidance of Counterfeit Electronic Parts (e), (2),
(vi)

39
electronic parts shall not be returned to the seller or otherwise returned to the supply chain until such
time that the parts are determined to be authentic.” 28

Company policy and procedures should address the quarantine and control of suspect/counterfeit
items. The entire lot of suspect/counterfeit items should be quarantined in a secure limited access
area. The parts and or part packaging should be marked appropriately to clearly identify the items as
suspect/counterfeit. When items are removed from the quarantine, a chain of custody process should
be used to ensure material control and accountability.

A complete documentation package should be compiled and available for suspect/counterfeit items in
quarantine. The documentation should include all original documents associated with the part
including:

• Manufacturer information
• Part procurement/acquisition traceability
• Copy of the purchase order
• Any and all correspondence between the buyer and supplier
• Part documentation from the supplier
- Certificate of Compliance
- Certificate of Conformance
- Inspection and test results/reports
• Any additional inspection and test results
• Any correspondence with the original manufacturer

6.2.2 Disposition

Material Returns: Any return of suspect/counterfeit parts provides a risk that the parts could re-enter
the supply chain. It is important that contractors DO NOT return the counterfeit items to the supplier
as prohibited by the DFARS. They may be used as evidence if the government decides to take legal
action, your legal counsel may issue a legal hold to preserve such evidence, and quarantine ensures
that the parts will not be put back into circulation.

Scrap Process: Suspect/counterfeit parts should be approved for disposal prior to destruction; consult
your legal counsel. The approval process should ensure all legal and administrative obligations have
been met. If approved, the scrap process used for suspect counterfeit and counterfeit parts should
ensure the parts are disposed of in a manner that ensures the parts cannot be reused or refurbished in
any way. The preferred scrap process is complete destruction of the part such that there is no
possibility for re-entry into the supply chain other than for raw material reclamation.

28
See http://www.acq.osd.mil/dpap/dars/dfars/html/current/252246.htm#252.246-7007, sub-section (c)(6).

40
 7. Flow Down of Counterfeit Avoidance and Detection Requirements

DFARS rule, 48 CFR 252.246-7007(c)(9) requires the “Flow down of counterfeit detection and
avoidance requirements, including applicable system criteria provided herein, to subcontractors at all
levels in the supply chain that are responsible for buying or selling electronic parts or assemblies
containing electronic parts, or for performing authentication testing.”

Requirements flow down to suppliers should account for risks of potential counterfeit part quality
escapes where the subcontractor’s or service provider’s offering will consist of on-hand materiel
inventory in addition to new materiel procurements. Depending on the extent of due diligence applied
to on-hand materiel, requirements flow down should include additional due diligence. While the
DFARS requires flow down of the substance of the clause to “in subcontracts, including subcontracts
for commercial items, for electronic parts or assemblies containing electronic parts,” the following
sections offer further best practice guidance.

7.1 Scope of Requirements

The focus of this section is the flow down of requirements within the supply chain as referenced in
Figure 1-1. Requirements flowed down to suppliers should focus on the predominant means by which
counterfeit electronic parts find their way into the supply chain:
• Procurement at any point in the supply chain from other than an authorized supplier
• Procurement from unauthorized suppliers without sufficient supplier selection and counterfeit
avoidance/detection practices

Requirements flowed down to suppliers should embody the central tenets to counterfeit prevention:
• Apply supplier preferences for electronic parts purchased from authorized supplier,
• Perform due diligence to avoid counterfeits when purchases from sources of supply other
than authorized suppliers are necessary, and
• In the event that suspect counterfeit or counterfeit electronic parts are discovered, (a)
disposition that precludes their use or reentry into the supply chain, and (b) notify supplier’s
customer(s), government and industry of the finding.

7.2 Types of Suppliers Versus Appropriate Requirements Flow Down

Counterfeit avoidance and detection requirements should be flowed down to the following types of
suppliers:

• Prime contractors and integrators of systems containing electronic parts.

• OEMs that supply equipment or assemblies containing electronic parts.
• Subcontractors that repair or maintain equipment or assemblies containing electronic parts, or
supply electronic parts.
• Contract Manufacturers (CM) and Electronic Manufacturing Service (EMS) providers that
supply equipment or assemblies containing electronic parts.
• Third Party Logistics (3PL) providers of services associated electronic parts.
• Distributors of electronic parts.

41
Counterfeit avoidance and detection requirements flowed down to suppliers should be context
sensitive and relevant for the type of supplier. For example, requirements directed to a prime
contractor or upper tier subcontractor should differ from requirements directed to an electronic part
distributor. In the case of a prime contractor or upper tier subcontractor the flow down should include
all three of the central tenets to counterfeit prevention (see Section 7.1). However, in the case of
electronic part distributor, appropriate requirements could be for the distributor to (1) supply only
product for which it is an authorized supplier or to supply products acquired from a supplier that is an
authorized supplier, (2) provide traceability documentation, (3) do not supply products returned by
other customers, and (4) report if suspect counterfeit or counterfeit parts are encountered.

Counterfeit avoidance and detection requirements flowed down to suppliers should include an
expectation that these requirements are in turn be flowed to its suppliers. There should be sufficient
flow down of requirements to provide counterfeit risk protection. When flow down throughout the
supply chain is not achieved, the end customer should be notified.

7.3 Counterfeit Prevention Clauses and False Claims Act Considerations

According to noted experts in procurement fraud and criminal prosecutions associated with
counterfeiting, selling counterfeit electronic parts to the military or other government agencies can
result in civil (Federal False Claims Act) and administrative (Suspension and Debarment) action as
well as criminal prosecution. A criminal prosecution will focus on the devices sold (including all part
markings) and all representations (verbal and in writing) made to the buyer by the seller and its
employees and representatives. Such charges could include Trafficking in Counterfeit Goods or
Services, (18 U.S.C. 2320), Mail Fraud (18 U.S.C. 1341), Wire Fraud (18 U.S.C. 1343), and
Conspiracy (18 U.S.C. 371).

If a supplier accepts orders subject to counterfeit parts prevention clauses from its customer in support
of a U.S. government DOD contract 29, but does not implement systems to comply with the
requirements of the clause, the supplier can be held liable under the civil False Claims Act (FCA) for
submitting invoices for payment even if no counterfeit parts are delivered to the prime contractor.

Damages do not need to be proven to violate the civil FCA. Therefore, the prime contractor’s or
subcontractor’s mere submission of an invoice for payment, with the knowledge it does not have
systems in place to comply with the broad counterfeit parts prevention clause, is arguably a false
claim.

7.4 Electronic Part Obsolescence Considerations

Defense and aerospace products are particularly vulnerable to counterfeit electronic parts due to part
obsolescence. Microelectronics products, in particular, have life cycles far shorter than the defense/
aerospace products that use them. When obsolete parts are not eliminated from product designs,
independent distributors are often used to obtain components that are no longer in production.
Recognizing this risk, DFARS 252.246-7007(c)(12) requires “Control of obsolete electronic parts in
order to maximize the availability and use of authentic, originally designed, and qualified electronic
parts throughout the product’s life cycle.”

In order to reduce the likelihood of having to purchase parts through riskier supply chains, defense
and aerospace electronics producers and their customers should recognize the need to proactively
manage the life cycle of electronic products versus the life cycles of the parts used within them. When

29
Note well that NASA may implement similar legislation as proposed in H.R. 4412, dated April 7, 2014.

42
assessing product offerings and proposals for production and support contracts, companies should
seek information concerning the potential demand for obsolete parts associated with the product
offering. Assess plans to either assure authorized sources of supply for obsolete electronic parts, or
plans to implement design modifications to eliminate obsolete electronic parts. Counterfeit avoidance
and detection requirements flowed down to suppliers should be based on the outcome of this
assessment and specific plans to modify equipment in order to eliminate obsolete parts, or to proceed
with a mutually agreed upon risk mitigation plan for acquiring obsolete parts from independent
distributors and other sources that are not authorized by the OCM (e.g., Government Furnished
Material (GFM)/Customer Furnished Material (CFM), DLA, customer support contractors that
acquire parts on their behalf).

7.5 Counterfeit Prevention and On-Hand Material Inventory

Subcontractors and service providers (e.g., contract manufacturers, EMS) may have accumulated
inventory to support long term requirements before the counterfeit parts threat and associated supply
chain issues were well understood. Some acquired inventory through mergers and acquisitions
without intimate knowledge of the history of that inventory. Though poised to apply counterfeit
prevention due diligence for materiel procurements going forward, some may not have performed the
same or similar due diligence for its entire inventory. Issues to consider when devising requirements
to flow down to suppliers should include the following:

• Relevant procurement history from authorized suppliers may be missing for parts in
inventory or parts do not have traceability to the OCM.
• Parts acquired from unauthorized suppliers may not be segregated from parts acquired from
authorized suppliers.
• Electronic assemblies in inventory may contain parts where procurement history is unknown
or untraceable to the OCM.

In response to a comment concerning parts already in a contractor’s inventory, provided with the
release of DFARS 246.870 30, it indicates that these parts are subject to the same requirements, such as
traceability and documentation, as are new procurements. These requirements apply if the parts were
not procured in connection with a previous DOD contract.

7.6 Notification of Purchases from Unauthorized Suppliers

Prime and sub-tier contractors should flow down a requirement for suppliers to notify them when the
supplier plans to purchase or otherwise use electronic parts acquired from other than an authorized
supplier. Prime and sub-tier contractors should also consider flowing down a requirement for the
supplier to seek approval for such purchases, to disclose the rationale for such purchases, and to
disclose the specific plan to avoid the purchase of counterfeit electronic parts.

7.7 Shipments from Authorized Suppliers Consisting of Product Returns

Reported cases of counterfeit parts supplied by authorized suppliers are very rare. Though authorized
suppliers supply products acquired directly from the OCM, they occasionally accept product returns
from their customers. Cases have been reported where a customer did not return the same authentic
products acquired from an authorized supplier, but, instead, returned other products that were
counterfeit. If an authorized supplier does not apply sufficient due diligence for product returns from

30
Federal Register Vol. 79, No. 87 at p. 26099

43
customers, counterfeit parts can be inadvertently introduced into its inventory. Product returns
generally comprise a very small subset of an authorized supplier’s total shipments on an ongoing
basis. While it is reasonable to assume the risk of counterfeit parts escapes through authorized
distribution is very low, a review of the authorized supplier’s product return acceptance practices
(e.g., verification of returns, identification, and segregation, if returned to inventory) is a prudent
precaution. Prime and sub-tier contractors should consider forbidding authorized suppliers from
shipping products consisting of products returned by other customers, including aftermarket
manufacturers.

44
 8. Training of Personnel

DFARS rule, 48 CFR 252.246-7007(c)(1) requires “The training of personnel” as an integral part of a
contractor’s counterfeit electronic part detection and avoidance system.

8.1 General Awareness

Counterfeit parts training serves a variety of purposes depending on the maturity and familiarity of
the organization’s counterfeit parts mitigation process. A training program should incorporate at a
minimum general awareness training where participants come away with a basic understanding of the
electronic parts counterfeit problem. This level of training may be appropriate for personnel that are
not directly involved in roles associated with the counterfeit prevention strategy.

8.1.1 Training for Specific Areas

A more advanced training program should be created by going in depth into select areas of the
counterfeit problem and tailoring to specific groups with counterfeit prevention responsibilities. For
example, training can be generated specifically for procurement, quality inspectors, and engineering
personnel. For procurement personnel topics and concepts such as an approved supplier or vendor list
and policies and procedures relative to procuring from such lists should be included in the material.
For quality inspectors, reviewing actual supplier documentation, examples of manufacturer logos and
a hands-on inspection of actual components and reporting requirements in the event suspect
components are found would provide the most benefit and impact. Any counterfeit training geared
towards engineering personnel should include discussions on the risk of encountering counterfeit
parts with heritage designs and obsolete components. As a final example of area specific training,
legal departments should be trained to understand the implications of obsolescence, the elements of
the new law, the reporting requirements (including mandatory reporting to the government where
required), and how to ensure terms and conditions are negotiated for compliance with flow down
requirements.

Lastly, training can also be in the form of a short overview presentation for upper management.

The material can be designed in modules (i.e., a basic awareness module, an inspection training
module) to allow mixing and matching to better meet schedule and budget constraints. Organizing the
training in modules also helps facilitate the creation of more specialized briefings and training if the
need arises.

8.1.2 Training Requirement

Training should be integrated in the basic employee development plan and be managed accordingly
and include aspects such as refresher/recertification requirements. This subject matter is a beneficial
addition to the typical new hire/orientation training. It is suggested that retraining be implemented
every two years.

8.1.3 Terms and Definitions

Basic terms and concepts that will be used in the main body of the training document should be
covered early in the training material. This section can be in a simple list format such as found in
AS5553. The material can also be presented in an interactive flowchart where the instructor steps
through and defines each element in the chosen process. An example of this would be to flow the

45
procurement process and define elements such as OCM, authorized supplier, franchised distributor,
OEM, unauthorized supplier, approved supplier, and independent distributors.

8.1.4 Mechanics of Counterfeiting

This section of the training usually proves to be an eye opener for individuals who have not had much
exposure or training to the electronics parts counterfeit problem. Topics such as part obsolescence,
the role of E-Waste as a contributor to the problem, potential sources and methods to counterfeit parts
should be included in this area of the training. Case studies, news clippings, and documentary videos
also serve as powerful and effective tools that enhance this part of the training.

8.1.5 Risk Mitigation

A key aspect and probably the most important subject that should be addressed in any counterfeit
training is a discussion of the risks involved and the possible steps to mitigate risk. The criticality of
obsolescence management, supplier selection and management, and the consequences of a poor
procurement process should be the prime focus in this part of the course material.

The subject can also be made more relevant with a discussion on how the different departments and
personnel are integrated across multiple organizations. For example, design engineering,
procurement, incoming inspection, and counterfeit parts management may contribute to minimizing
(or exacerbating) the risk of introducing counterfeit parts into the end product.

8.1.6 Counterfeit Mitigation Processes

The processes described in the following paragraphs play a key role in mitigating counterfeit risk and
lend themselves to a thorough examination in this section of counterfeit parts training. Furthermore, it
is beneficial to engage the training participants in evaluating their own organization’s performance in
managing the processes described below.

1. Procurement process – a discussion of the type of policies and procedures helpful in

mitigating risk and what is actually in place in one’s own organization usually brings to light
strengths and weaknesses. The following related questions also serve as enlightening and
educational:
a. Is the organization free to procure from any source?
b. What restrictions and oversight are present?
c. Does the organization have an approved supplier list and what considerations are there
relative to counterfeit parts mitigation in creating the pool of approved suppliers?
d. How are the organization’s suppliers assessed and audited?
2. Authentication/validation process – a discussion of the inspections and tests specific to the
detection of counterfeit parts and systems and what is actually in place in one’s organization
is also an important subject. For example:
a. What inspection criteria is in place?
b. Does the organization inspect all or some of the goods?
c. Are there any special inspection tools or equipment used?
d. How is traceability and provenance verified?

46
 3. Reporting and Incident Response process – a discussion of the steps an organization may be
required to take in the event counterfeit product is discovered in the course of doing business.
Considerations include:
a. What are the avenues for reporting a counterfeit occurrence?
b. What contract clauses come into play in the event suspect counterfeit goods are acquired
from a supplier?
c. What processes are in place in one’s organization if suspect products are found to have
passed inspection and are in stores or installed in an assembly.
d. What steps are to be taken if a suspect counterfeit part is discovered in product that has
been delivered to a customer?

8.1.7 Requirements

A review of the various industry standards written for counterfeit parts mitigation and a review of the
various laws and regulations, policies and procedures that may be applicable to the participant’s
organization as well as internal counterfeit mitigation policies and procedures are key elements of a
counterfeit training program. The FY2012 NDAA, SAE Standard AS5553, TOR-2006(8583)-5235,
and TOR-2006(8583)-5236 are notable examples of the above. Anchoring the counterfeit mitigation
and training process to actual requirements shows the issue from a different perspective that may be
beneficial to the participants and may help identify compliance gaps that could be potential audit
findings.

8.1.8 Miscellaneous

Incorporating a hands-on inspection of actual components during the training program, if possible,
engages the participants and can be used as an educational tool to emphasize some of the visual
anomalies found on suspect counterfeit parts. There are also numerous videos and actual case studies
that should be incorporated into the training to help illustrate the concepts covered in the material.

Examples of training material, best practices and lessons learned, and other useful information can be
found in Appendix A, Training Links; Appendix B, Best Practices and Lessons Learned; Appendix
C, Observations and Driving Philosophies; and Appendix D, Case Studies.

47
 9. Maintaining Currency for Counterfeiting Information and Trends

DFARS rule, 48 CFR 252.246-7007(c)(10) states that a contractor’s counterfeit electronic part
detection and avoidance system shall include a “process for keeping continually informed of current
counterfeiting information and trends, including detection and avoidance techniques contained in
appropriate industry standards, and using such information and techniques for continuously upgrading
internal processes.”

Continuous assessment and improvement of the counterfeit prevention system is necessary to stay
ahead of the threat and to keep processes at their best. The methodologies employed by unethical
companies to counterfeit electronic parts continue to evolve and become more sophisticated.
Companies need to maintain awareness of the techniques being used by counterfeiters and methods to
combat these techniques. As stressed throughout this document the preferred and primary method to
preclude the counterfeit electronics part problem is to procure only from the OCM or current design
authority, including an authorized aftermarket manufacturer or suppliers that obtain parts exclusively
from one or more of these sources. However, when this is not possible, periodic analysis of the threat,
assessment of company processes, and the continual improvement of company prevention techniques
are necessary.

Showing continuous improvement and keeping informed of current counterfeiting information and
trends can be accomplished in many ways. The following is a list of possible methods to meet the
DFARS requirement. Objective evidence for the list below will be helpful to show that the contractor
is maintaining currency and continually strengthening internal processes.

• Perform a “gap analysis” and revision of the company command media as a result of new or
revised laws, government specifications, or industry standards.
• Evaluate and freshen company training programs annually based on the evolving threat or
requirements changes.
• Conduct internal audits to ensure employees are performing to all counterfeit prevention
system requirements.
• Develop a set of measures and metrics to ensure success key parameters are monitored and
trended for potential preventative action.
• Conduct periodic analysis of GIDEP documents (www.gidep.org) and other industry
sources associated with counterfeit electronic parts.
• Implement a closed-loop system that updates and strengthens command media based on
counterfeit escapes, near-misses, audit findings, metric violations, and lessons learned.
• Join industry organizations that are on the cutting edge of developing prevention techniques
or that are chartered with revising an industry standard.
• Attend seminars and workshops. Examples include:
- University of Connecticut Center for Hardware Assurance, Security, and Engineering
(CHASE) – https://www.chase.uconn.edu/
- University of Maryland Center for Advanced Life Cycle Engineering (CALCE) –
http://www.calce.umd.edu/
- Hardened Electronics And Radiation Technology (HEART) Conference –
http://www.heart-conference.org/

48
 - The Aerospace Corporation Space Parts Working Group –
http://www.cvent.com/events/2014-space-parts-working-group/event-summary-
50472b2a31c6490ea33ae2f9c884e5b2.aspx (2014 Working Group link provided)
• Reference the Department of Justice (DOJ) National Intellectual Property Rights (IPR)
Coordination Center for the latest on prosecutions of counterfeiters – www.iprcenter.gov
• Periodically perform a risk assessment on company processes and present the results and
improvement recommendations to leadership.

49
 10. Acronyms

3PL Third Party Logistics

ABPMPL As-Built Parts, Materials and Processes List
AC Alternating Current
AFOSI Air Force Office of Special Investigation
AIA Aerospace Industries Association
ANSI American National Standards Institute
ASL Approved Supplier List
CAR Corrective Action Request
CBP Customs and Border Protection
CCPIS Computer Crime & Intellectual Property Section
CDRLs Contract Data Requirements List
CFM Customer Furnished Material
CFR Code of Federal Regulations
CID Criminal Investigation Command
CM Contract Manufacturer
CoC Certificate of Conformance
CoC/T CoC Supply Chain Traceability
COTS Commercial-Off-The-Shelf
DC Direct Current
DCIS Defense Criminal Investigative Service
DCMA Defense Contract Management Agency
DFARS Defense Federal Acquisition Regulation Supplement
DID Data Item Description
DLA Defense Logistics Agency
DMEA Defense Microelectronics Agency
DoD Department of Defense
DoDI Department of Defense Instruction
DOE Department of Energy
DPA Destructive Physical Analysis
ECIA Electronic Component Industry Association
EDX Energy Dispersive X-Ray (verify)
EEEE Electric, Electronic, and Electro-mechanical, Electro-optical
ELDRS Enhanced Low Dose Rate Sensitivity
EMS Electronic Manufacturing Service
EPLS Excluded Parties List System
ESD Electro-Static Discharge
FAA Federal Aviation Administration
FAR Federal Acquisition Regulation
FBI Federal Bureau of Investigation
FCA False Claims Act
FET Field Effect Transistor
FY Fiscal Year
GFM Government Furnished Material
GFSC Goddard Space Flight Center
GIDEP Government-Industry Data Exchange Program
GPO Government Printing Office
HIS Homeland Security Investigations
IC Integrated Circuit

50
IPR Intellectual Property Rights
ISO International Standards Organization
IUID Item Unique Identification
JDRS Joint Deficiency Reporting System
JEDEC Joint Electronics Device Engineering Council
JIT Just-In-Time
LDC Lot Date Code
MAIW Mission Assurance Improvement Workshop
MDA Missile Defense Agency
MSL Moisture Sensitivity Level
MTE Measuring & Test Equipment
NASA National Aeronautics and Space Administration
NCIS Naval Criminal Investigative Service
NCSL National Conference of Standards Laboratories
NDAA National Defense Authorization Act
NIST National Institute of Standards & Technology
NRO National Reconnaissance Office
NSS National Security Space
OCM Original Component Manufacturer
OEM Original Equipment Manufacturer
OQE Objective Quality Evidence
OSHA Occupational Safety & Health Administration
PDREP Product Deficiency Reporting and Evaluation Program
PM&P Parts, Materials & Processes
PMPCB Parts, Materials & Processes Control Board
PPE Personal Protective Equipment
PUMPS Parts, Units, Materials, Processes and Systems
QA Quality Assurance
QMS Quality Management System
QSLD Qualified Suppliers Listing of Distributors
QTSL Qualified Testing Suppliers Listing
RTL Responsible Test Laboratory
SAE Society of Automotive Engineers
SAM System for Award Management
SCD Specification Control Drawing
SEM Scanning Electron Microscope
SI Systems of Units
SMC Space and Missiles Systems Center
SME Subject Matter Expert
SOW Statement of Work
SPC Statistical Process Control
SQIC Space Quality Improvement Council
SSC Space Suppliers Council
TOR Technical Operating Report
URL Universal Resource-Locators
USAF United States Air Force
USD/AT&L Under Secretary of Defense for Acquisition, Technology & Logistics
USD/I Under Secretary of Defense for Intelligence
XRF X-Ray Fluorescence

51
 11. References

H.R. 1540, FY2012 Improvement of Contractor Systems for Detection and Avoidance of
NDAA, §818(e) Counterfeit Electronic Parts
H.R. 4310, FY2013 Contractor Responsibilities in Regulations Relating to Detection and
NDAA, §833 Avoidance of Counterfeit Electronic Parts

FAR Case 2013-002 Expanding Reporting of Nonconforming Supplies

FAR 52.203-13 Contractor Code of Business Ethics and Conduct
FAR 2.101 Definitions
FAR 3.10 Contractor Code of Business Ethics and Conduct

DFARS Rule, 48 CFR Contractors’ Counterfeit Electronic Part Detection and Avoidance
246.870 Systems
DFARS Rule, 48 CFR Contractor Counterfeit Electronic Part Detection and Avoidance
252.246-7007 System
DFARS 252.211-7003 Item Unique Identification and Valuation

DoDI 4140.67 DoD Counterfeit Prevention Policy

DoDI 5200.39 Critical Program Information (CPI) Protection within the Department
of Defense

MIL-STD-202 Test Method Standard, Electronic and Electrical Component Parts

MIL-STD-750 Test Method Standard for Semiconductor Devices
MIL-STD-883 Test Methods and Procedures for Microcircuits
MIL-STD-3018 Parts Management
MIL-STD-1546 Parts, Materials, and Processes Standardization, Control, and
Management Program for Space and Launch Vehicles
MIL-STD-1580 Department of Defense Test Method Standard Destructive Physical
Analysis for Electrical, Electronic, and Electromagnetic Parts
MIL-PRF-38535 Integrated Circuits (Microcircuits) Manufacturing, General
Specification for

Aerospace TOR- Parts, Materials, and Processes Control Program for Space Vehicles
2006(8583)-5235
Aerospace TOR- Technical Requirements for Electronic Parts, Materials, and Processes
2006(8583)-5236 Used in Space Vehicles

NASA MFSC-STD- MSFC Counterfeit Electrical, Electronic, and Electromechanical Parts

3619 Avoidance, Detection, Mitigation, and Disposition Requirements for
Space Flight and Critical Ground Support Hardware

ISO-9001 Quality Management System - Requirements

ISO/IEC 17025 General Requirements for the Competence of Testing and Calibration
Laboratories

AS5553 Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection,

Mitigation, and Disposition

52
AS6081 Fraudulent/Counterfeit Electronic Parts: Avoidance, Detection,
Mitigation, and Disposition Distributors
AS6171 (proposed) Test Methods Standard; Counterfeit Electronic Parts
AS6174 Counterfeit Material; Assuring Acquisition of Authentic and
Conforming Material
ARP6178 Fraudulent/Counterfeit Electronic Parts; Tool for Risk Assessment of
Distributors
AIR6273 (proposed) Terms and Definitions – Fraudulent/Counterfeit Electronic Parts
AS6301 (proposed) Compliance Verification Criterion Standard for SAE AS6081,
Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection,
Mitigation, and Disposition – Distributors
AS6462 AS5553 Counterfeit Electronic Parts; Avoidance, Detection,
Mitigation, and Disposition Verification Criteria
AS6496 (proposed) Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection,
Mitigation, and Disposition – Authorized/Franchised Distribution
AS9003 Inspection and Test Quality System
AS9100 Quality Management Systems – Requirements for Aviation, Space and
Defense Organizations
AS9120 Quality Management Systems – Aerospace Requirements for Stockist
Distributors
SAE TB-003 Counterfeit Parts & Materials Risk Mitigation
ANSI/ESD S20.20 For the Development of an Electrostatic Discharge Control Program for
Protection of Electrical and Electronic Parts, Assemblies and
Equipment (Excluding Electrically Initiated Explosive Devices)
ANSI/NCSL Z540.3- Requirements for the Calibration of Measuring and Test Equipment
2006
ANSI/EIA-933-A Standard for Preparing a COTS Assembly Management Plan
ANSI/EIA-4899-2002 Standard for Preparing an Electronic Components Management Plan
TechAmerica STD- Standard for Preparing a Diminishing Manufacturing Sources and
0016 Material Shortages (DMSMS) Management Plan

FAA AC 00-56 Voluntary Industry Distributor Accreditation Program

JEDEC JESD 31 General Requirements for Distributors of Commercial and Military

Semiconductor Devices
JEDEC J-STD-033 Handling, Packing, Shipping and Use of Moisture/Reflow Sensitive
Surface Mount Devices
JEDEC JESD 625 Requirements for Handling Electrostatic-Discharge-Sensitive (ESDS)
Devices

Telcordia GR-468- Generic Reliability Assurance Requirements for Optoelectronic

CORE Devices Used in Telecommunications Equipment

CCAP-101 Counterfeit Components Avoidance Program, Certification For

SEMI T20-0710 Specification for Authentication of Semiconductors and Related

Products
SEMI T20.1-1109 Specification for Object Labeling to Authenticate Semiconductors and
Related Products in An Open Market

53
SEMI T20.2-1109 Guide for Qualifications of Authentication Service Bodies for
Detecting and Preventing Counterfeiting of Semiconductors and
Related Products

EIA/ECA-CB21 Counterfeit Passive Components

IEC/TS 62668-1 Process Management for Avionics – Counterfeit Prevention – Part 1:
Avoiding the Use of Counterfeit, Fraudulent and Recycled Electronic
Components
IEC/TS 62668-2 Process Management for Avionics – Counterfeit Prevention – Part 2:
(proposed) Managing Electronic Components from Non-Franchised Sources

54
Appendix A. Training Resources

A-i
This appendix includes links to publically accessible NASA and MDA training packages that may be
downloaded and tailored when improving or establishing a counterfeit prevention program.

NASA Counterfeit Awareness Training – Basic

http://mttc.jpl.nasa.gov/files/COUNTERFEIT%20PARTS%20AWARENESS%20TRAINING_B
asic.pptx
NASA Counterfeit Awareness Training - Intermediate
http://mttc.jpl.nasa.gov/files/COUNTERFEIT%20PARTS%20AWARENESS%20TRAINING_In
termediate.pptx
NASA Counterfeit Awareness Training – Inspection
http://mttc.jpl.nasa.gov/files/COUNTERFEIT%20PARTS%20AWARENESS%20TRAINING_In
spection.pptx
MDA Counterfeit Part Training – Avoidance, Detection, Containment, and Reporting
MDA_Counterfeit_Training_(December_11_2013)_-_MAIW_Release

A-1
This presentation contains information pertaining to the avoidance, detection,
containment, and reporting of counterfeit parts. It represents experience gained
through many hours of work by employees of the Missile Defense Agency, and is
intended to aid all affected MDA and MDA Contractor personnel, including - but not
limited to - purchasers, program managers, engineers, inspectors, and quality
personnel.

1
After completing this training program, you should be aware of the very real risk that
counterfeit parts manifest to the United States military, including knowledge of the
Missile Defense Agency’s experience with counterfeit parts. You should have a better
understanding of how counterfeit parts can dramatically impact MDA’s various
programs. You should understand why it is so important to be diligent in how we buy
parts, especially who we buy them from. You will learn about the many types of
counterfeit parts, and which inspections and tests can be most counted on to detect
these parts. Lastly, you will learn about the current anti-counterfeit requirements and
efforts in place by MDA and the Department of Defense, or DoD.

Some of the information you will see in this presentation involves data gathered from
the commercial sector, but most of it involves parts and materials that can be or are
used in DoD hardware.

10
First, a little information about the Missile Defense Agency. Founded in 1983
as the Strategic Defense Initiative, there are several reasons why MDA remains
a vital part of our defense capabilities.

The number of ballistic missiles of all ranges continues to increase every year,
as the chart on the right indicates. If we exclude Russia, China, and the NATO
member countries, the majority are short and medium range missiles.
However, as potential adversaries like North Korea and Iran continue
development of longer range missiles, the threat to the United States and our
allies continues to grow.

The photos on the bottom show examples of missiles either currently in

development or recently deployed.

3
3
Missile defense technology being developed, tested and deployed by the
United States is designed to counter ballistic missiles of all ranges—short,
medium, intermediate and long. Since ballistic missiles have different ranges,
speeds, size and performance characteristics, the Ballistic Missile Defense
System is an integrated, “layered” architecture that provides multiple
opportunities to destroy missiles and their warheads before they can reach
their targets. The system’s architecture includes ground-, sea-, and space-based
networked sensors, ground- and sea-based radars for target detection and
tracking, ground- and sea-based interceptor missiles for destroying incoming
threats, and a command, control, battle management, and communications
network providing the operational commanders with the needed links between
the sensors and interceptor missiles.

Missile defense elements are operated by United States military personnel

from U.S. Strategic Command, U.S. Northern Command, U.S. Pacific Command,
U.S. Forces Japan, U.S. European Command and others.

4
4
This graphic shows the integrated network charged with protecting the United
States from the ballistic missile threat. U.S. Northern Command and Pacific
Command personnel man the C2BMC system, utilizing data from strategically-
located sensors to identify all incoming threats. The C2BMC determines a plan
of action, and reacts accordingly by launching interceptors with the greatest
chance of destroying the threats. The ground-based midcourse defense system
is the primary defense asset for protecting the United States.

5
5
MDA assets are also deployed to help defend our European allies. Along with
U.S. Northern Command, NATO and European allies help assess and react to
the ballistic missile threat. Sea-based Aegis, land-based Aegis Ashore, and the
Patriot PAC-3 missile batteries are the primary defense assets for this arena.
MDA is working with partner countries like Poland, Romania, Turkey, Germany,
and the Netherlands to establish a robust missile defense system.

6
6
In the Asia-Pacific region, U.S. Pacific Command and Northern Command
monitor the threat. Radars located in Japan and aboard Aegis-equipped ships
identify incoming missiles. Strategically-placed Aegis, Patriot, and THAAD
interceptors will stand ready to act to protect this region.

7
7
MDA headquarters is located in Fort Belvoir, VA, with the main workforce
located in Huntsville, AL. There are several additional major installations within
the continental U.S. and Hawaii, that concentrate on command and control,
sensors, and launch facilities. MDA also uses hundreds of U.S. contractors to
design and build this complex, integrated defense system.

8
8
In this section, you should learn the basic facts about counterfeit parts and materials.
It will concentrate heavily on counterfeit electronic parts. Counterfeit mechanical
parts and materials are also a serious risk to the MDA ballistic missile defense system,
and will be discussed. However, it is generally recognized that electronic parts are
more widely counterfeited, and also have the greatest potential for malicious
tampering. Therefore, electronic parts will be the main focus of this training course.

At each section title, there will be a listing on the bottom that indicates the personnel
job types recommended to review that section.

7
Most people agree that counterfeiting has been on the rise for years. This chart was
recently generated by ERAI to show how much counterfeit part reporting has risen in
the past ten years – in fact, it’s increased almost tenfold since 2003, to almost 100
reports per month.

10
There are many different types of electronic parts, in many shapes and sizes. Prices
range from less than a penny to thousands of dollars each. Some parts are readily
available from trusted sources, and others are very difficult to find. Electronic parts
include integrated circuits, or IC’s, transistors, diodes, resistors, capacitors, inductors,
relays, connectors, displays, and many other part types.

The pie chart was compiled from a listing of over 1,000 suspect counterfeit parts
reported to ERAI in 2012. The data shows the majority of these parts, over five out of
every six counterfeited electronic parts, are integrated circuits.

8
Active parts are those parts which contain semiconductor devices. Semiconductors
are the building blocks of our most complex electronic circuits, like processors,
amplifiers, and memory chips. Transistors, diodes, and integrated circuits, or IC’s, are
the most common active electronic parts. In fact, IC’s are made from hundreds,
thousands, or even millions of tiny transistors and diodes, connected together with
other tiny parts to make a complex circuit. The data shows that about 95 percent of
the counterfeited electronic parts are active parts.

Most other electronic devices, like capacitors, resistors, inductors, relays, and
connectors, are considered passive parts.

8
Practically any electronic part is susceptible to being counterfeited. However, the
most likely parts to be counterfeited are integrated circuits that offer significant profit,
either due to high volume or high value. Parts that have many versions at different
speeds, temperatures, and capacities are prime candidates, because the counterfeiter
can modify a ‘low end’ version to appear to be a high quality part, and sell it for
significant profit. Memory devices, operational amplifiers, voltage regulators, digital
gates, and programmable devices all fit this bill.

In addition, high complexity devices like processors, high reliability parts like military
components, and high demand parts like obsolete parts are all excellent candidates for
counterfeiting, because selling just a few parts can still be very profitable.

10
As mentioned on the previous slide, integrated circuits are made of tiny electronic
parts, both passive and active, that are connected together to make a circuit that
performs a specific function. The tiny parts are designed and produced in a very small
package called a die. The outputs on the die are attached to a lead frame by very tiny
wires, called bond wires. The lead frame includes the part’s external connections,
usually called pins or leads.

The die and bond wires are protected from damage by a protective material that
covers the die and lead frame. This covering is usually made of metal or ceramic for
military-grade parts, or plastic for commercial-grade parts. With the DoD efforts to
utilize commercial technology, most military systems now use many plastic-
encapsulated integrated circuits. These parts must be carefully assessed to ensure
they will be reliable in the systems, because plastic packaging is more susceptible to
moisture and temperature effects.

11
Counterfeit electronic parts are defined as parts illegally copied or substituted, or
whose material, performance, or characteristics were knowingly misrepresented by a
supplier. This includes any supplier, not just the one who sold you the parts. In other
words, if a supplier unknowingly sells you counterfeit parts that were knowingly sold
to him, the parts are still counterfeit.

There are hundreds of actual counterfeit electronic part examples. Some of those
examples include, but are not limited to:
1. The part might be a lesser part with the wrong internal components.
2. The part might be a reclaimed or refurbished part, cleaned up to look new.
3. The part might be the wrong package style or lead plating, or it was incorrectly
processed.
4. The part may have been pulled from a legitimate production line before
completing all the tests, but be sold as if it has completed the processes.
5. The part might be a standard part that is misrepresented to have undergone
upscreening, like vibration, radiation hardening, or extended temperature
screening.
6. The part or packaging may contain false markings which misrepresent the form, fit,
function, grade, manufacturer, or other parameters.

12
Virtually every counterfeit part is initially classified as suspect counterfeit. Usually it
takes analysis of all the concerns noted during the parts’ inspection and test, before
the part can be classified as a counterfeit part. Ideally this should include support
from the supposed manufacturer of the part.

The legal community is divided over some of the definitions of counterfeit parts.
Some consider the definition of a counterfeit part not to include used parts sold as
new ones, instead considering this to be fraud. MDA and the National Defense
Authorization Act of 2012, Section 818, do consider these parts to be counterfeit.
Therefore, throughout this course, the word ‘counterfeit’ describes all cases of
misrepresentation of a part, including used parts sold as new ones.

13
Electronic waste is thought to be the leading contributing factor for counterfeit
electronic parts. Electronic waste, or e-waste, is the term which describes electronic
parts and assemblies that have reached the end of their useful life. Much of this
product is shipped to developing countries with cheap labor. These countries may
disassemble or melt the product to retrieve valuable metals like gold, silver, and
copper. Often, instead of destroying the parts for precious metals, the parts are
removed, refurbished, cleaned up, and resold as new parts. This part of the
commerce is illegal, and is the basis for most counterfeiting today.

It is estimated that 50 million tons of e-waste is generated every year, with the United
States contributing 3 million tons, followed by China with 2.3 million tons. The
recycling of this e-waste leads to serious health and pollution problems for the
workers, and heavy metals and other contaminants may poison the drinking water.
However, since recycling of e-waste is a very profitable industry which produces tax
revenue and employs people, countries often turn a blind eye to these facts.

14
Here are some example photos of e-waste as it is received and sorted. The waste
product might be computers, radios, televisions, cell phones, or any other electronic
hardware. As you can see, it is handled carelessly, with little or no consideration given
to maintaining the quality of the part.

15
Here are additional photos of e-waste products. Electronic parts are exposed to harsh
weather and other environmental conditions at the recycling areas. E-Waste is often
stacked and stored outside, exposed to the elements. The bottom left photo shows
how different size electronic parts are separated by shaking them through a series of
screens with different size openings, similar to panning for gold. The smaller parts are
captured in the smaller screens, and all parts are later sorted. The bottom right photo
is of a box of integrated circuits that have been removed from e-waste assemblies.
Most of the IC’s in the box have badly bent leads.

16
When electronic waste is tossed around or stacked up, the assemblies are twisted and
flexed, and are exposed to both vibration and shock. This can cause parts to be
damaged both externally and internally. Cracks in the package can allow contaminants
to reach the die, leading to corrosion and future failures. Parts that are handled this
way can be damaged both mechanically and chemically. It is impossible to predict the
reliability of parts that have been handled carelessly.

17
Additionally, the assemblies must be heated in order to melt the solder which keeps
the parts attached to the board. Parts can be safely heated without being damaged –
as long as the process is not too quick or too hot. However, these recycling or
refurbishing operations do not use proper heating practices, as evidenced in the
photograph at the bottom of this slide. Uncontrolled heating processes like this can
cause thermal damage like cracks and delamination, leading to latent failures.
Delamination is the separation of internal layers which can break wire bonds or allow
corrosive materials to enter the part.

In addition, electrostatic discharge, or ESD, can cause electrical damage to the parts if
they are handled without proper grounding. Some electronic parts can be damaged by
an electrical shock of a hundred volts or less. For comparison, when you feel a zap on
a doorknob after walking on carpet, you transferred at least 3,000 volts to the
doorknob.

18
These images are all of electronic parts that have either failed, or are likely to fail soon.
The handling, stacking, removal, and refurbishment of electronic parts and assemblies,
if not closely controlled, will cause damage like this. None of the damage is readily
visible on the outside of the package. Parts can be damaged mechanically, chemically,
thermally, and electrically.

19
Look at the photos and try to detect which of the parts are counterfeit, and which
ones are authentic. Can you tell the difference? The answers are on the next slide.

20
All of the parts in the photos are counterfeit, with altered or sanded top surfaces. You
might have seen photos of badly counterfeited parts - misspelled words, uneven
markings, obvious recoatings, etc. Don’t consider these images typical counterfeit
parts. Today’s counterfeit parts are not poorly-modified parts that you can expect to
fail the first time they are tested. They are usually carefully-modified parts that have
been specially selected for a high probability of passing visual inspection and electrical
test.

However, the parts should still be considered potentially unreliable, regardless of the
test results. Just because a counterfeit part passes all of the electrical tests today,
does not mean it won’t fail tomorrow or the next day, when the system may be
needed to save lives.

21
There are also numerous non-electronic parts or electronic assemblies that have been
counterfeited. This slide shows a few of the recent examples. Moving clockwise from
the top left, Cisco interface cards have been found with duplicate serial numbers and
many used parts, including inductors, connectors, and labels. Bolts with improper
heat treatment or insufficient strength are also common. Smoke detectors were sold
in Atlanta that contained counterfeit Underwriters Laboratory labels, and were of
extremely poor quality – some would not even function. Mixing and mislabeling of
refrigerants has resulted in explosions and deaths. And counterfeit fire extinguishers
dispense flour or sawdust instead of flame retardants. These are just a few examples
of counterfeit material that is not an electronic part.

21
Test your knowledge of this section by reading each of the four questions. What is
your answer for each one? Go to the next slide to see how you did.

23
Integrated circuits are the most commonly counterfeited electronic parts. Perhaps 85
percent of all counterfeit electronic parts are IC’s.

Badly controlled handling, alteration, or refurbishment of electronic parts can result in

mechanical, chemical, thermal, and electrical damage. Usually this damage is difficult
or impossible to detect by just inspecting the part’s exterior.

It is estimated that the world generates 50 million tons of electronic waste every year,
with much of it being shipped to developing countries for reclamation.

MDA does consider used parts sold as new ones to be counterfeit.

24
In this section you will briefly learn about the different types of electronic part
suppliers, and why some are less risky than others with respect to the counterfeit
parts risk. You will also learn the four basic rules for keeping counterfeit electronic
parts out of MDA hardware.

25
Let’s start with some supplier definitions. Original Component Manufacturers, or
OCMs, are the companies that design and own the intellectual property rights for an
electronic part. OCMs warrant the quality and reliability of the parts through
extensive analysis, test, and processing controls, and attach the company logo or
trademark to the documentation, and often the part itself.

26
Aftermarket manufacturers are companies that produce parts equivalent to an OCM’s
parts, with OCM permission. This usually happens when a part is discontinued, but is
still in demand. The aftermarket manufacturer may purchase wafers, die, tooling, or
intellectual property rights for the part, so that equivalent parts can be manufactured
to supply the market. The parts typically have the aftermarket manufacturer’s logo,
but are advertised as replacement parts. The key to aftermarket manufacturers being
considered legitimate is the authorization from the OCM to produce the parts.

MDA considers the risk of buying parts from aftermarket manufacturers to be no

greater than buying from OCM’s.

27
Here are several examples of companies that meet the definition of an original
component manufacturer. These companies make electronic parts under their own
brand name and trademark. This includes aftermarket manufacturers like Rochester
Electronics and E2V, who buy the rights to manufacture replacement parts, and sell
them under their own trademark.

28
Authorized suppliers have contractual agreements with original component
manufacturers which allow the companies to buy electronic parts directly from the
manufacturer. Because these companies are audited and verified by the OCMs to
handle, track, and ship parts in compliance with the OCM’s requirements, the parts
can be sold with full manufacturer’s support and warranty. Authorized suppliers
generally are referred to as authorized or franchised distributors. The two terms are
interchangeable. Buying parts from an authorized supplier is the next best thing to
buying the parts directly from the OCM.

29
Companies like Arrow, Avnet, Future, and several others are examples of authorized
suppliers. There are many additional authorized suppliers not listed here. All of these
companies should be considered good sources for authentic electronic parts.

However, it is important to understand that no single company is authorized to sell

parts from every electronics manufacturer. If any company sells parts without being
authorized by the OCM to sell those parts, that company is not an authorized supplier
for that sale.

30
It’s time to learn what an unauthorized supplier is, because this type of supplier is the
source of over 99 percent of all counterfeit electronic parts. Unauthorized suppliers
do not make their own electronic parts. Instead, they buy them from a supplier and
sell them to a customer. They might buy the parts from any number of supplier types,
including other unauthorized suppliers. Unauthorized suppliers do not usually have
contractual agreements with original component manufacturers, or OCMs. Therefore,
an unauthorized supplier cannot usually offer a full manufacturer’s warranty for parts
sold. Unauthorized suppliers are often referred to as independent distributors, non-
franchised distributors, or brokers. This training uses the terms interchangeably.

31
A purchaser can’t always determine the size and capability of an independent
distributor by checking out the website. Small or limited-capability independent
distributors can mask their size and limitations by boasting very large line cards, or
OCM listings, exaggerating test capabilities, using commercial shipping locations to
mask a residential business, and in the case of Company B, even inserting a
photograph of someone else’s business in order to look more ‘corporate’.

The two examples here are actual U.S.-based independent distributors that were
residential businesses in 2009 when MDA contacted them. The quotes in red
extracted from the websites imply the companies are large businesses with significant
capabilities. Actually, the majority of independent distributors are very small
companies, with 10 or fewer employees. In 2010 a sampling of ERAI’s member
addresses indicated that over 10 percent of the companies conducted business from a
house. And this does not count companies which used commercial mail facilities, like
a UPS Store, to mask their true location.

32
Unauthorized suppliers are tasked with finding electronic parts for their customers. The parts
are found primarily from three sources.

1. If the parts are not out of production, OCMs and authorized suppliers often have parts
available, although many OCMs will not sell electronic parts directly to an unauthorized
supplier such as an independent distributor.

2. Original equipment manufacturers, or OEMs, contractors, and contract manufacturers

often sell excess parts, if the parts are no longer needed. This is an important source of supply
for unauthorized suppliers, who bid against other unauthorized suppliers for the parts, usually
in large mixed lots. The photo is an example lot that an independent distributor ‘won’ from a
large defense contractor. The parts usually are missing traceability to the supplier, and as
seen here, may be packed haphazardly.

3. Most of an unauthorized supplier’s parts are bought from other unauthorized suppliers. It
is common for an independent distributor to have hundreds, if not thousands of approved
suppliers to refer to, as well as maintain memberships in several internet-based search
engines for finding electronic parts. By this method, even the smallest independent
distributor can appear to be well-connected and have access to millions of parts and a large
warehouse, even if the actual business is a den in the owner’s house. Unless an unauthorized
supplier is very concerned about the counterfeit parts risk, and is determined to only use
similarly concerned suppliers, it will almost certainly buy counterfeit electronic parts from time
to time.

33
Approved suppliers can be OCM’s, aftermarket manufacturers, authorized suppliers,
and unauthorized suppliers. These are companies that have been assessed by a
potential customer – for example an MDA contractor - and have been approved by
that customer to provide parts or materials. Do not confuse an approved supplier with
an authorized supplier!

34
There are plenty of reasons to buy from an OCM or authorized supplier. This chart lists
several of them. While parts bought from authorized suppliers might be more
expensive, there are reasons for this. With parts bought from the authorized supply
chain, the OCM will provide warranty and technical support. The part lot has also
undergone testing to the data sheet, and the parts have been handled in accordance
with industry standards. Not all of these ‘pluses’ relate to counterfeit parts avoidance,
but they do contribute to the customer having reliable parts, backed by the
manufacturer.

35
This illustrates the supply chain risk for counterfeit parts. Original component
manufacturers are the only organizations in the supply chain that can be considered
completely safe to sell authentic parts. However, the OCM’s authorized suppliers can
also be considered a very low risk. Unauthorized suppliers like independent
distributors, stocking distributors, and brokers, should always be considered risky.
Even excess parts that contractors sell should be considered risky. Approved suppliers
can be in any of the three supplier type categories.

Purchases from unauthorized suppliers can be mitigated in several ways, which will be
discussed in later sections.

36
MDA has two core requirements documents for counterfeit parts and materials. The
first one is the Parts, Materials, and Processes Mission Assurance Plan, or PMAP
(pronounced ‘PEE-map’). The PMAP establishes guidance and requirements for new
and modified safety and mission critical hardware. Revision B was released in March
2012. The PMAP’s anti-counterfeit requirements are primarily listed in sections 3.6.7,
Counterfeit Parts and Materials, and 3.7.1, Supplier/Vendor Selection and Surveillance,
although there are anti-counterfeit requirements scattered throughout the document.
The requirements govern avoidance, detection, containment, reporting, and disposal
of counterfeit parts and materials, as well as training and flow down.

The PMAP is the basis for all prime contractor Parts, Materials, and Processes, or PMP
plans. As the document is flowed down through MDA’s supply chain, it may be
tailored as justified by cost, risk, and applicability, with MDA Program Office approval.
The actual requirements will flow from each subcontractor’s direct customer.

37
MDA’s Policy Memo #50 was released in 2009 to apply a few of the PMAP’s core
purchasing requirements to heritage mission and safety critical hardware. With the
release of Revision B of the PMAP in 2012, Policy Memo #50 was revised as well. The
new revision applies most of the requirements of PMAP sections 3.6.7 and 3.7.1 to
heritage hardware.

When MDA requirements are discussed in a later section, there will be a designation
to indicate whether the requirements apply to only new and modified critical, or to all
critical hardware.

38
MDA’s leader, Lieutenant General Patrick O’Reilly, also testified at the hearing at SASC
request. MDA was viewed in a positive light by the investigators for their proactive
efforts to combat counterfeit electronic parts, and for Lieutenant General O’Reilly’s
tough stance on the reliability of counterfeit parts. At the hearing Lieutenant General
O’Reilly disclosed that MDA had already had seven known counterfeit part incidents,
which had resulted in the removal and replacement of over 1,000 parts. He listed $4.5
million as the rework/repair costs, shared by MDA and its contractors. Lieutenant
General O’Reilly also indicated that MDA on-site assessments of American
independent distributors had found over 60 percent of them with at least a moderate
risk of selling counterfeit electronic parts. The general’s closing statement was that
“we do not want a $12 million missile defense interceptor’s reliability compromised by
a $2 counterfeit part”.

53
54
57
In 2010, investigators raided VisionTech, an independent distributor in Florida that
knowingly sold counterfeit electronic parts to 867 different U.S-based customers, most
of them independent distributors. The company had a commercial address and a
professional website, yet almost all of the product they sold to their customers was
remarked counterfeit product bought from Chinese suppliers. Millions of counterfeit
parts were likely sold between 2007 and 2010. The yellow highlighted excerpts were
found by investigators in VisionTech’s records, and proves the company knew the parts
were counterfeit. VisionTech told their suppliers to use better remarking inks,
instructed their employees to act surprised when their customers reported failures,
and removed labels that might cause suspicion.

58
Here is another example. MVP Micro, an independent distributor in the Los Angeles
area, sold electronic parts to 302 different U.S-based customers, most of them
independent distributors. The company sold parts under at least seven different
independent distributor aliases, each with its own professional website. MVP Micro
sent parts to another company for remarking, and was also removing the internal die
from used or scrap electronic parts for repackaging as more expensive parts.

59
Here’s a die removal story shared by a former MVP Micro employee. The ICM7170IPG
part is an integrated circuit that is apparently readily available at cheap prices.
Employees would remove the die using acid – which can cause chemical damage, heat
– which can cause thermal damage, and a razor knife – which can cause mechanical
damage. The parts would be sent overseas to be installed into a brand new package,
and sent back as a counterfeit ICM7170AIBG part, a smaller but more expensive part.
MVP Micro could make hundreds of thousands of dollars doing this at high volume.

In this particular case, the issue would be very difficult for the customer to detect. The
package is brand new, with no remarking. The pins or leads are also new. The die is
authentic. The ‘new’ part is in a smaller package, and is marked as if it’s a better part.
The only sure way to detect the crime without destroying parts would be if the
external markings were poor quality, if the part was tested to the complete electrical
parameters, or if the die was sufficiently damaged to cause immediate test failures.
Barring these possibilities, the customer would unknowingly be placing used,
unreliable parts into his system.

59
Test your knowledge of this section by reading each of the upcoming three questions.
What is your answer for each one? Go to the next slides to see how you did.

62
For question #1, contractors and test labs reported 1,800 cases of counterfeit parts to
the Senate Armed Services Committee, totaling over one million parts. The reports
covered a two-year span.

Question #2 is false – because of internet trading platforms and sophisticated search

engines, US-based independent distributors can readily find and purchase parts from
all over the world. And they often do.

63
Here is the third question.

64
VisionTech and MVP Micro took many actions to disguise their efforts to sell
counterfeit electronic parts. In fact, the only thing on the list they didn’t do was report
the counterfeiters to investigators.

65
In this section you will find out about MDA’s firsthand experience with counterfeit
electronic parts. This is the only section in this training that is considered ‘For Official
Use Only’.

66
This section has been shortened to make it acceptable for public release. Individual
MDA counterfeit part instances are not listed. Instead, commonalities and trends are
summarized to provide a basic overview of MDA’s experience with counterfeit
electronic parts.

79
Here are the common points from the MDA counterfeit part events:
1. All of the parts were integrated circuits.
2. All of the parts were bought from independent distributors, by a Tier 2 or 3
subcontractor.
3. The electrical test failure rate of most of the parts was below ten percent.
4. Proper inspection and chemical tests would’ve detected the parts, if they were
tailored to counterfeit parts detection.
5. The majority of the parts had the correct die, and even the parts with incorrect die
had a limited failure rate.
Almost half of the counterfeit parts were still in production at the time of detection,
and therefore could have been bought from authorized suppliers.

79
Test your knowledge of this section by reading each of the three statements. What is
your answer for each one? Go to the next slide to see how you did.

79
The first answer is ‘true’. Probably all of MDA’s detected parts would’ve been found
immediately, if the organization had solid inspection and test methods in place at
Receiving.

The second answer is ‘false’. Most of MDA’s detected counterfeit parts had low failure
rates. In several cases there were no failures. This does not mean the parts can be
counted on to perform reliably.

The third answer is ‘true’. Four of the ten detected part numbers were still in
production when the parts were bought. Those parts should have been bought from
authorized suppliers, in compliance with Rule #1.

80
This section touches on the various requirements flowed to or from the Department of
Defense to date. As you will see, OSD and DoD’s reaction to counterfeit parts is still in
development. 2013 will see the release of additional policies or procedures to combat
counterfeit electronic parts.

81
Because of the November 2011 Senate Armed Services Committee hearing, Section
818 was added to the 2012 National Defense Authorization Act, or NDAA, to force DoD
into implementing robust anti-counterfeit procedures. This slide and the next one
detail the more important requirements from Section 818:
1. Covered contractors are liable for all costs of counterfeit parts, including system
repair and rework. This requirement was loosened somewhat in 2013.
2. DoD and contractors are directed to buy only from authorized suppliers or the
OCM.
3. DoD and contractors are directed to use trusted suppliers when parts are no longer
available in production, and those trusted suppliers shall be flowed strict
inspection and test requirements.
4. DoD and contractors are directed to report all suspect or confirmed counterfeit
parts to the Government-Industry Data Exchange Program, or GIDEP, within 60
days of discovery.
5. Contractors are directed to notify the Government if parts cannot be bought from
authorized or trusted suppliers.

88
Additional major requirements of NDAA 2012 Section 818 are:
1. The Office of the Secretary of Defense, or OSD, is directed to establish a definition
of counterfeit parts. The definition shall include used parts sold as new.
2. OSD shall also provide guidance to DoD on counterfeit electronic parts avoidance.
3. OSD shall establish qualification requirements for trusted suppliers.
4. OSD shall develop a training program for DoD.
5. Fines and jail times up to 30 years or $30 million for repeat offenders who
knowingly supply counterfeit parts to DoD.
6. OSD was directed to revise the Defense Federal Acquisition Regulations
Supplement, or DFARS (pronounced DEE-farz), to address the prevention and
detection of counterfeit electronic parts. The revision is still in development.

The deadlines for implementation on the program were 180 days and 270 days after
signoff of the document, or June and September of 2012. While some of the changes
have been implemented, such as the counterfeit parts definition, and DoD guidance,
there are many requirements that are not as yet implemented.

88
In November of 2012, DoD released the 5200.44 instruction, titled “Protection of
Mission Critical Functions to Achieve Trusted Systems and Networks”, also known as
TSN. This instruction directed the use of the Program Protection Plan, and Information
Assurance, to manage risk throughout a system’s life cycle. There is a requirement to
detect, reduce, and mitigate the risk of counterfeit or malicious parts or functions.

There was also modification to the requirements of NDAA 2012, Section 818. These
allowances were signed into law on January 3, 2013, as Section 833 of the National
Defense Authorization Act for 2013. Section 833 allows for covered contractors to be
relieved of the liability costs for counterfeit electronic parts if all three of the following
items are true:
1. The contractor has a counterfeit parts program that has been reviewed and
approved by DoD.
2. The parts were provided as Government property.
3. The contractor has complied with the NDAA 2012 Section 818 requirements for
prompt reporting of counterfeit parts.

88
In April 2013, OSD released DoD Instruction 4140.67, titled “DoD Counterfeit
Prevention Policy”. This instruction superseded and cancelled the interim Kendall
Memorandum from 2012. The policy establishes anti-counterfeit measures for
avoidance, detection, mitigation, investigation, reporting, and restitution. Unlike the
prior memorandum which requires actions in some cases specific to electronic parts,
DoDI 4140.67 applies to all materiel. The guidance and policy do not specifically
address electronic parts.

88
This slide and the next one list the major requirements of DoDI 4140.67, with the
responsible DoD party listed for each requirement. The green highlighted items fall
under the responsibility of Component and Agency Heads, including the Missile
Defense Agency. While those items in the left columns tend to be policies, the right
columns are generally expected to develop procedures to implement those policies.

In this slide, MDA is tasked to develop anti-counterfeit procedures, like the PMAP. We
are also required to identify and document critical materiel, as well as materiel that is
more susceptible to counterfeiting. MDA is also directed to use Item Unique
Identification, or IUID, per DoD Instruction 8320.04, for critical materiel that is
susceptible to counterfeiting.

DoD Components are directed to establish supplier qualification criteria for managing
the counterfeit materiel risk.

88
Procedures must also force the purchase of materiel from low-risk suppliers, and have
mitigation processes for high-risk supplier purchases. Additionally, there are
requirements to detect parts through testing and audits, report suspect and confirmed
counterfeit parts to GIDEP, and notify investigators as well as DoD peers. DoD
Components must also remediate the occurrences of counterfeit materiel.

Components are directed to implement training and education programs, like this
course, to their workforce. And finally, DoD Components are to develop metrics that
will enable the effectiveness and efficiency of the procedures to be monitored.

89
Shown here is the DoD definition of counterfeit materiel as stated in the April 2013
DoD Instruction. The term ‘materiel’ refers to electronic parts, mechanical parts,
assemblies, material, etc.

Unfortunately, DoDI 4140.67 does not specifically address used electronic parts sold as
new components. Therefore, we remind you of Section 1, and that MDA does
consider new parts sold as new to be counterfeit, even if they have not been remarked
or recoated.

In addition to the documents discussed previously, there is an effort underway to

modify the Defense Federal Acquisition Regulations Supplement, or DFARS, to allow
DoD Components greater flexibility to select authorized suppliers for electronic parts.

91
Three more proposed changes to DoD acquisition requirements are planned. The first
case, DFARS Case 2012-D055, is in its second revision, and might be released later this
year. While establishing contractor liability for costs, and requirements for the
contractors’ counterfeit electronic part avoidance and detection system, the current
draft does not require purchases from authorized suppliers as a first choice, nor is it
very specific on other requirements.

The next two amendments in process are to change changes to the Federal Acquisition
Regulations, or FAR. The changes are reportedly to add reporting and quality
requirements, although neither of these draft has been released yet.

89
Test your knowledge of this section by reading each of the four true/false statements.
What is your answer for each one? Go to the next slide to see how you did.

92
The first statement is true. According to Section 818, contractors who supply
counterfeit parts are liable for all costs, including repair and rework.

The second statement is true. DoD Instruction 4140.67 establishes policy for all
materiel. However, once critical and susceptible materiel is identified, the list of
affected materiel will be significantly reduced.

The third statement is true. The Defense Federal Acquisition Regulations

Supplements, or DFARS, has not yet been revised to allow purchasers more freedom to
buy from authorized suppliers.

The fourth statement is false. DoD and contractors are required to report counterfeit
parts to GIDEP, but the deadline is 60 days after detection, not 90 days.

93
This section gives a detailed overview of MDA’s current requirements for avoiding,
detecting, containing, reporting, disposing, and otherwise mitigating the risk of
counterfeit parts.

In this section you will see ‘(N/M)’ and ‘(All)’ designations next to the requirements.
This is to indicate whether that requirement applies only to new and modified critical
systems via the PMAP only, or if it applies to all critical systems via both PMAP and
Policy Memo #50.

94
With respect to selection of approved suppliers, there are several requirements, as
indicated on the next two slides. Remember, approved suppliers have been assessed
by the contractor and found acceptable to provide electronic parts. The requirements
include:
1. Suppliers shall be certified to ISO 9001, AS 9120, or an equivalent quality standard,
or justify why not.
2. Suppliers shall have no significant quality or authenticity problems, as found in the
GIDEP or ERAI databases.
3. Suppliers shall have documented criteria for adding and removing suppliers from
their approved supplier listing.
4. Suppliers shall always buy parts from authorized suppliers or OCMs as a first
priority.
5. Handling of parts shall comply with electrostatic discharge and moisture sensitivity
industry standards.
6. Suppliers shall perform specific inspections and test for parts bought from
unauthorized suppliers.
7. Suppliers shall contain and report counterfeit parts.

95
Additional supplier assessment requirements include:
1. Authorized Information Assurance, or IA, hardware suppliers shall be on a
Government-approved list.
2. Processes shall attempt to ensure critical components are free from malicious
code, counterfeit parts, or unauthorized part substitution.

MDA encourages the approval of unauthorized suppliers via on-site assessments.

96
MDA also requires contractors that must buy parts from unauthorized suppliers to
document this request to MDA and the prime contractor through an unauthorized
purchase report. The report must:
1. Justify the reason for buying from an unauthorized supplier.
2. Provide traceability information, if available.
3. Provide the inspection and test plan and results.
4. Identify any shortened or tailored inspections or tests noncompliant to PMAP Table
5.

In addition, MDA contractors are required to assess the feasibility of applying the anti-
counterfeit processes from the PMAP to critical Commercial-Off-The-Shelf, or COTS
(pronounced ‘cots’) product, while limiting purchases of COTS products to authorized
suppliers or OCMs.

97
As the timeline above indicates, OCM parts like integrated circuits are usually in
production several years before being designed into a military system. In addition,
most military systems have life cycles much longer than their commercial
counterparts. While commercial systems are often discontinued or redesigned in less
than ten years, military systems may need to be supported virtually unchanged for
over twenty years. This, combined with the longer initial design stage, often results in
a part being discontinued by the OCM years before the system itself is discontinued.
The end result is that parts must be procured and stored as part of a lifetime buy, or
unauthorized suppliers must be used to try to find authentic parts.

98
ERAI maintains a database of reported suspect counterfeit parts. MDA performed an
analysis of over 1,000 suspect counterfeit electronic part reports in 2012. NSWC Crane
maintains an obsolescence database of thousands of parts, that allows
characterization of the data by part type, obsolescence, temperature range, and
component manufacturer, or OCM.

As indicated in the pie chart, almost three fourths of the reported parts were obsolete
at the time of detection. This means that over 250 of the ERAI-reported suspect
counterfeit parts from 2012 would not have been bought if the company had only
followed Rule #1, and bought the parts from authorized suppliers.

99
The two best ways to find out whether a distributor is authorized to sell a particular
OCM’s product are to:
1. Use the website www.eciaauthorized.com to find authorized suppliers and
available parts for a particular part number. See the left graphic example of a
search for the LM358D, which found ST Microelectronics parts available from
authorized distributors Nu Horizons and Arrow, for about 10 cents each.
2. Call the OCM or check the ‘Contact Us’ tab on the website to determine which
distributors are authorized. See the right graphic example which shows Digi-Key,
Mouser, Arrow, and Avnet are among the authorized distributors for ST
Microelectronics parts.
Don’t ever rely on the distributor’s response about whether it is authorized for an
OCM.

100
MDA’s PMAP Table 5 requires specific part-level inspections and tests for all parts
bought from unauthorized suppliers. Those required inspections and tests are called
authenticity tests, and they are listed on the next three slides. They include:
1. Documentation check, which checks for spelling, grammatical, or other errors in
the part or packaging labels and paperwork.
2. Bar code check, which compares human-readable information with the
corresponding machine-readable data.
3. Visual inspection to the guidelines of IDEA-STD-1010 , the latest revision.
4. Marking permanency test with mineral spirits and alcohol, to see if ink markings or
false coatings are removed.
5. Surface finish permanency test with acetone, to see if false coatings are removed.

101
Continued from the previous slide, MDA’s authentication testing requirements include:
6. Surface finish permanency test with aggressive solvents, to see if false coatings are
removed.
7. X-ray fluorescence to determine if the lead plating is the expected composition.
8. X-ray to inspect for inconsistent die size or lead frame design.
9. Scanning acoustic microscopy, or C-SAM (pronounced ‘SEE-sam) to check for
internal delamination or covered laser markings.
10. Die verification to check for inconsistent die markings or the wrong OCM.

102
The notes list important information such as sample size, test sequence, and guidance
on selecting parts. For further guidance on performing authentication testing, contact
the customer or the MDA Program Office.

103
How much does it cost to validate whether a shipment of electronic parts is authentic? MDA
queried five industry test laboratories, as well as a government test facility. While the
estimates varied widely, the average cost of performing all of MDA’s required inspections and
tests should be approximately $1,150 per lot or date code. These estimates assumed the part
was a medium complexity integrated circuit, although the cost did not change significantly for
part complexity or lot size.

There are several other inspections and tests that can be required by an MDA contractor.
These include:
1. scraping the part’s surface with a razor knife to see if coating is removed,
2. testing solderability of the part leads to see if there is contamination or oxidation,
3. magnifying the surface with a scanning electron microscope, or SEM, to inspect for signs of
recoating, or of microblasting,
4. examining all the parts using an automatic-feed x-ray system to check inconsistent lead
frame or die,
5. scanning the surface with equipment designed to compare surface texture differences top
vs bottom, or good vs suspect, and
6. electrically testing the part to determine if it passes the selected requirements.

Electrical testing is the most difficult to estimate a cost for, as it varies widely based on the
part type or complexity, the extent of testing required, and how much of the testing needs to
be developed anew. This can run into the thousands of dollars very easily. The other tests are
much less costly, although the estimates given here are rough at best.

104
Part-level electrical test for authenticity is not currently required by MDA for parts
bought from unauthorized suppliers. However, several MDA contractors do require it,
with MDA’s blessing. Here is a listing of several options for electrical test.

If electrical testing is performed, the failure rate should be closely monitored. Failure
rates over three to five percent is cause for concern, and the contractor should
consider additional analysis of the failures for root cause. Simply accepting the test as
a screening process does not address the risk that the parts may have a reduced life
expectancy.

105
The items listed here are all requirements within MDA’s PMAP. They address a couple
critical processes that are contributors to the counterfeit part risk. The actual wording
has been shortened, but the basic requirements are:
1. Should manage obsolescence to reduce the need to buy parts from unauthorized
suppliers.
2. Shall select and confirm authorized suppliers whenever possible.
3. Shall assess unauthorized suppliers, maintain an approved suppliers listing, and
require traceability and test.
4. Should develop quality and liability clauses and flow them to suppliers.
5. Shall train personnel in anti-counterfeit processes.
6. Shall flow down requirements to subcontractors.

106
MDA also establishes containment requirements for suspect and confirmed
counterfeit parts or materials. The main requirements for performing an adequate
containment are as follows:
1. Impound all suspect parts and materials.
2. Locate and contain all products with the same suspect parts or materials.
3. Contain the parts once they are determined to be counterfeit, and make them
available to investigative agencies for further investigation or prosecution.
4. Retain counterfeit parts until the destruction has been approved by investigative
authorities or the MDA Parts, Materials, and Processes Board, or PMPB.
5. DO NOT RETURN COUNTERFEIT PARTS.

107
MDA specifies three straight-forward requirements to the MDA supply chain for the
reporting of counterfeit parts.

First, the prime contractor and MDA must be informed of the incident. This should
include a status of the containment of all affected assemblies.

Second, the contractor must contact both the supposed maker of the part – the OCM -
and the supplier who provided the counterfeit parts, if that is applicable to the issue.

Third, the contractor shall submit a GIDEP alert within 60 days which documents the
instance with appropriate information that may help other GIDEP members identify
counterfeit parts at their own facilities.

108
The Defense Logistics Agency, or DLA, has established two lists, the QSLD (Qualified Suppliers
List of Distributors) and QTSL (Qualified Testing Suppliers List), for combatting the risk of
counterfeit electronic parts. Parts from Federal Stock Classes 5961 (semiconductors) and 5962
(integrated circuits) must be bought and tested from suppliers on these lists.

AS5553 is an anti-counterfeit document for government or aerospace organizations and

contractors who use electronic parts. Organizations cannot be certified to this standard.

AS6174 is an anti-counterfeit document for government or aerospace organizations and

contractors who use mechanical parts and materiel. Organizations cannot be certified to this
standard.

ARP6178 provides a means of numerically rating unauthorized suppliers for their risk of selling
counterfeit electronic parts to government or aerospace organizations and contractors.

AS6081 is an anti-counterfeit document for distributors who sell electronic parts. Distributors
can be certified to this standard.

AS6171 is an inspection and test requirements document for assessing whether electronic
parts are counterfeits. This document is still in development.

89
Within MDA the level of GIDEP membership is lower than it should be. This chart
indicates the percentage GIDEP membership by MDA program, for Companies located
in the United States or Canada. The blue line only counts if the contractor’s specific
location has GIDEP membership, while the red line indicates the maximum level,
which counts a contractor as long as any of its locations is a member of GIDEP. The
total MDA contractor membership in GIDEP appears to be 50 to 64 percent, with
significant variation among programs. This should be much higher.

109
Shown on this slide are several contacts for notification about suspect or confirmed
counterfeit parts or materials.

110
Test your knowledge of this section by reading each of the next seven questions. What
is your answer for each one? Work your way through the next several slides to see
how you did.

111
Before parts can be bought and installed in MDA systems, the contractor must notify
MDA and the prime contractor by way of the Parts, Materials, and Processes Control
Board, or PMPCB. Part of the notification includes justifying that an unauthorized
supplier was the only viable option, providing any traceability available, and
developing a plan for the inspection and test of the parts to the requirements of PMAP
Table 5.

112
In which of the cases below is it acceptable to buy parts from an unauthorized
supplier?

113
Electronic parts must only be purchased from unauthorized suppliers if there is no
other legitimate choice. Obsolescence is the best reason. A long lead time might also
be valid, as long as it is agreed to by MDA. There may also be times when the
contractor’s customer has directed a purchase from an unauthorized supplier. In all
these cases, the contractor must still notify MDA via his customer and the PMPCB.

Other options, such as responsiveness, familiarity, and cost, are not valid reasons to
buy electronic parts from an unauthorized supplier. In order to maintain system
reliability, it is vitally important that Rule #1 be adhered to.

114
Answer the following true/false statements as a final test of your Section 6 knowledge.

115
Statement 3 is false. Counterfeit parts cannot be scrapped without approval from
MDA or investigative authorities.

Statement 4 is true. All suspect and confirmed counterfeit parts in the lot or date code
must be impounded.

Statement 5 is false. The website is www.eciaauthorized.com, not

eciaunauthorized.com.

Statement 6 is true. Counterfeit parts or materials must be reported to GIDEP within

60 days.

Statement 7 is false. Suspect or confirmed counterfeit parts may not be returned for
any reason. Returned parts might be resold to another customer.

116
In this section you will find several examples of counterfeit parts and materials. These
examples are all from GIDEP reports, or other Government and Industry information
since 2012. Therefore, these represent the most recently discovered counterfeit parts
and materials.

117
118
The information in the next three slides provides many potential indicators of a
counterfeit electronic part, along with guidance on the importance of the indicator.
Defects in orange shading are strong evidence of counterfeiting. All of the other
defects may also indicate the part is counterfeit, but the confidence is reduced. A
minor indicator for counterfeiting might still be a moderate or major quality concern.

141
Here is the second slide on counterfeit part indicators. These indicators in concern
levels were generated from information in IDEA-STD-1010B, GIDEP Alerts, and inputs
from various DoD representatives. This should not be assumed to include all
counterfeit indicators for electronic parts.

142
This is the final slide of indicators. Keep in mind that this assumes that the customer
has requested new parts. There are many refurbished, or used, parts available in the
open market. If they are not being sold as new parts they are not counterfeit, unless
the parts have been misrepresented in other ways, such as wrong die, date code,
temperature range, and so on.

143
Test your knowledge of this section by reading each of the questions. What is your
answer for each one? Go to the next slide to see how you did.

150
The two best ways to gain confidence that a suspect electronic part is indeed
counterfeit are to detect multiple indicators during the inspection and test phase, and
to obtain support from the OCM about the part’s authenticity.

Parts bought from unauthorized suppliers should not be considered equivalent to parts
bought from authorized suppliers or OCMs, even if they pass the inspection and test
requirements. Even if the parts are authentic, the handling in the supply chain may
not have been to industry best practices. In addition, the warranty may be void, since
the parts were purchased outside the OCM’s authorized supply base.

151
In this section you will learn about the risk of counterfeit electronic parts with
malicious intent. There is potential for adversaries to tamper with or produce new
parts that have embedded capabilities to potentially exploit the system.

152
While the majority of counterfeit electronic parts are produced and sold in order to
make money, there is growing concern over the potential for parts to be altered, with
malicious functions added. Critical military components like processors and field
programmable gate arrays, or FPGAs, and also computers, routers, network switches
and other information technology components are among the part types most
susceptible to tampering. These parts, if counterfeited, might contain malicious codes
or hardware that would potentially allow our adversaries to steal important data or
disable our systems.

153
Of over 850 suspect counterfeit integrated circuits reported to ERAI in 2012, over 63
percent of them were either memory circuits, programmable devices, processors, or
controllers. This is significant because these part types might provide the most value if
an enemy wished to insert malicious code or circuitry into the part. These parts are
the most likely to store critical system information, or be able to cause complete
system failure if so desired.

154
This slide from the University of Connecticut’s Center for Hardware Assurance,
Security, and Engineering, or CHASE (pronounced ‘chase’), shows how a critical part
can be modified slightly, leaving very little visual evidence of the change. The part
could then be called upon by our enemy to:
1. Monitor system information via an inserted antenna.
2. Send erroneous or malicious information to fool the system.
3. Cause the integrated circuit to fail or shut down, disabling the system.

Any of the possibilities above represent a serious breach of the integrity of a

potentially critical system.

155
This additional slide from CHASE indicates that control over the ‘destruct state’ is likely
to be limited. However, the part might be designed to monitor key events and data
transfers, which increases the chances of shutting the system down during a critical
activity.

Organizations like CHASE are currently actively working to develop tamper-proof

methods for integrated circuits, including processes to detect changes to the part’s die.

156
Test your knowledge of this section by reading each of the questions. What is your
answer for each one? Go to the next slide to see how you did.

157
The three integrated circuit functional part types most likely to be tampered with
maliciously are memory devices, programmable devices, and processors or controllers.

Additionally, information technology, or IT assemblies such as computers and other

network assemblies are at risk if they are procured from unauthorized suppliers.

158
In this section you will learn about MDA contractor audits for counterfeit parts
procedures, and what our contractors’ strengths and weaknesses are.

159
MDA initiated enhanced contractor audits in 2012. Contractors had been undergoing
MDA audits for several years, but MDA developed a 40-plus question checklist that
allowed the auditor to generate a score for each of eight major anti-counterfeit areas,
as well as an overall score. Each question can be scored from 1 to 5, with scoring
guidance provided with the checklist. Use of this checklist in 2012 has identified
several weaknesses in the MDA contractor supply chain for counterfeit electronic
parts.

The primary weaknesses were determined to be Supplier Approval and Training. The
rightmost image depicts nine questions from the Supplier Approval section as an
example.

160
The most evident contractor Supplier Approval weakness was a confusion over the
phrases ‘authorized supplier’ and ‘approved supplier’. As MDA defines these, an
authorized supplier is authorized by the OCM to buy parts directly, and sell them with
full warranty. An approved supplier has been assessed by the contractor and approved
to sell parts to the contractor. Considering an approved unauthorized supplier to be
the same as an authorized supplier has resulted in contractors not informing MDA of
unauthorized supplier purchases. This is a direct violation of both MDA’s PMAP and
Policy Memo 50.

We also found unauthorized supplier assessment procedures at the lower tiers to be

lacking in detail to ensure the approved suppliers would be a low risk.

There is also almost universal mixing of authorized and unauthorized approved

suppliers on the approved supplier listings. If the procedures are not specifically
worded to force purchases from the authorized supplier first, there can be
unnecessary purchases from approved, but unauthorized, suppliers.

Another comment mistake is that contractors are reviewing GIDEP reports only to see
if the reported part is used within the facility. GIDEP reports should also be checked to
see if the reported supplier is approved by the contractor, and if so, assess whether
the supplier should be disapproved. In one case we found a supplier approved at a
contractor facility, even though a different facility for the same contractor had
identified serious concerns through GIDEP.

161
The other major weakness was in training. Smaller contractors do not have the
expertise to develop a robust anti-counterfeit training program. The programs tend to
be ‘awareness courses’ that do not go into sufficient depth to quantify the counterfeit
risk to all affected parties such as program management, purchasing, supplier
development, engineering, quality technicians and part inspectors.

Most of the training programs did not provide a broad immersion in all aspects
including avoidance, detection, containment, reporting, and disposal. Therefore, this
MDA program was developed as a standalone program that could be provided to MDA
contractors to use as is, or to enhance existing programs.

162
Let’s recap the training objectives for this course.

163
You should have learned that parts and materials of all types, from electronic parts to
fire extinguishers to refrigerants, are being counterfeited for profit. Government and
investigative reports have shown that counterfeit electronic parts are widely available
throughout the world, and internet trading platforms make it easy to find them. The
risk cannot be ignored. Only through the use of diligent and active steps can the risk
be reduced to a manageable level.

Also, MDA has detected parts in system hardware, leading to expensive rework and
repair in a few instances. Most of the detected counterfeit parts failed at a low level,
or not at all. To help combat counterfeit parts and materials, MDA has developed the
PMAP, and Policy Memo 50 documents, with a robust set of requirements for avoiding,
detecting, containing, reporting, and disposing of counterfeit parts and materials.

167
Counterfeit parts have likely been exposed to mechanical, chemical, thermal, and
electrical stress during the removal, refurbishment, or reclamation of the parts. Or the
parts may not have ever been tested to the system requirements. In both cases, this
results in unreliable system performance. Late detection of counterfeit parts can lead
to expensive rework and repair costs.

A robust counterfeit parts program must include steps for the avoidance, detection,
containment, reporting, mitigation, and disposal of counterfeit parts. It must also
address training and requirements flow down. Only by aggressively addressing all
phases can the counterfeit parts risk be minimized.

167
Electronic parts are the most commonly counterfeited critical components. Of all
electronic parts, integrated circuits comprise the lion’s share of counterfeited parts.
The inspections and tests required in PMAP Table 5 increase the detectability of
counterfeit electronic parts, although additional tests can give even further
confidence. All suspect and confirmed counterfeit parts must be reported to MDA and
the prime contractor. A GIDEP report must be submitted within 60 days of detection.

MDA, DoD, and the aerospace community have taken active steps to combat
counterfeit parts and materials. There is more policy in development by the Office of
the Secretary of Defense in reaction to the National Defense Authorization Act of
2012. This policy should be released in 2013.

167
This concludes the Missile Defense Agency’s anti-counterfeit training program. If you
have comments or questions, please feel free to contact any of the names listed here.
Thank you.

167
Appendix B. Best Practices and Lessons Learned

B-i
This appendix provides best practices and lessons learned from industry and government SMEs that have
been intimately involved with the detection and avoidance of counterfeit electronic parts and the
establishment of processes to prevent these parts from inadvertently getting into government products.

NOTE: Click on Link to see Best Practice/Lessons Learned Detail

B1: Reconstitute versus Redesign
B2: Check other Government Programs and Agencies for Excess Inventory
B3: Ensure Parts Inspected and Tested for Authenticity Prior to Shipment
B4: Categorize Your Suppliers and Train Appropriate Personnel
B5: Use Cross-Functional Team When Developing Counterfeit Parts Prevention Strategy
B6: Understand Lower-Tier Supplier Risk Tolerance Level
B7: Establish Known Inspection/Test Requirements and Ensure Understanding
B8: Remain Diligent When Electrical Test Failures Encountered
B9: Additional Actions Required When Electronic Parts Receive Value-Added Service
B10: Include Check of Approved Supplier List When Evaluating GIDEPs
B11: Investigate All Parts Received from Supplier When Evaluating GIDEPs
B12: Perform Due Diligence Before Tailoring Terms and Conditions
B13: Understand Requirements of Quality Clauses and Terms and Conditions
B14: Drop Shipping Requires Additional Coordination
B15: Know When “Return” Parts are Being Received
B16: Provide Adequate Training Program for Lower-Tier Supplier Use
B17: Ensure Timely Training of Appropriate Personnel
B18: Perform Periodic Assessments of Counterfeit Parts Process
B19: Clearly Define Terms and Definitions
B20: Maintain Currency and Knowledge of Counterfeit Legislation
B21: Retention and Control of ‘Gold Standards’

B1: Reconstitute versus Redesign

Another approach to obsolescence management is to approach the OCM and ask if they would be willing
to reconstitute a manufacturing/technology line. Example: On one satellite program two black boxes
required obsolete microcircuits. The cost to the government for the OEM to redesign and requalify the
black boxes was over $12 million. The government approached the OCM of that obsolete component and
asked: “Would you be willing to reconstitute that component technology and what would it take (schedule
and cost) to do it and by the way make it Class V and L-level Enhanced Low Dose Rate Sensitivity
(ELDRS) qualified.” In this case the OCM came back with a cost of $750,000 (NRE) and a unit cost of
$350 per piece part. The lesson being, it cannot hurt to go back and ask the OCM for some help. (back)

B2: Check other Government Programs and Agencies for Excess Inventory

If a government program has a need for a EEEE part (whether obsolete or not) the needing contractor can
request for their program office to query other programs offices if they have excess or available
inventory. The NRO and USAF/SMC have a parts management tool that can used to query programs
within their organization. The Parts, Units, Materials, Processes and Systems (PUMPS) tool is used to
alert programs when failures, manufacturing, quality issues with parts, materials or processes are

B-1
identified by one program. The PUMPS tool can also be used to request parts availability from program’s
existing inventories.

For example, NASA Goddard Space Flight Center (GFSC) sent a request to the NRO when they had an
immediate need for a voltage regulator because of a lot qualification failure at their supplier. GSFC was
told that there would be a delay of about one year for them to get their parts. The NRO systems
engineering directorate loaded the request into the PUMPS tool. As it turned out, one NRO program had
excess inventory on the requested part. After some negotiations, the NRO was able to provide the quantity
of parts needed by GSFC. The parts were delivered with the full data package and CoC. About one year
later GSFC returned the parts when they received their part from their supplier. (back)

B3: Ensure Parts Inspected and Tested for Authenticity Prior to Shipment

Third party laboratory analysis verification of authenticity should be completed prior to allowing
unauthorized supplier electronic parts to be received. The unauthorized supplier should be willing to ship
the parts to a third party laboratory with inspection and analytical capabilities sufficient to ensure
authenticity. Only after successfully passing these tests should the parts be conveyed to the user in order
to ensure containment. (back)

B4: Categorize Your Suppliers and Train Appropriate Personnel

Consider identifying your electronic suppliers into three categories under your approved supplier list
(ASL) and train Supply Chain Procurement personnel to look for these categories in the company ASL to
reduce risk of ordering a counterfeit electronic part.

1. OCM. Little or no risk in using this type of supplier.

2. OCM Authorized Supplier. Little or no risk in the use of this supplier. Supply Chain will need to
verify the supplier is an authorized supplier for this electronic part being procured.
3. Unauthorized Supplier. Very high risk. Supply Chain will need to let the program know this is
high risk procurement and should have a risk mitigation plan for this electronic part.

The ASL should be separated between authorized and unauthorized suppliers. An ideal ASL would list
which OCMs the suppliers are authorized to sell products for. Purchasing of parts from unauthorized
suppliers should be impossible within the purchasing system (blocked electronically) without justification
to and approval by management. The risks and potential costs should be specified when requesting
management approval. (back)

B5: Use Cross-Functional Team When Developing Counterfeit Parts Prevention Strategy

Utilize a cross-functional team to develop your counterfeit parts prevention process, including legal
representation. When developing your anti-counterfeiting processes, your team should be composed of
personnel who have the most “real world” knowledge of how your company works. Given the economic
consequences of delivering a counterfeit part, the best and most experienced personnel should be utilized.
(back)

B-2
B6: Understand Lower-Tier Supplier Risk Tolerance Level

In order for prime or upper tier contractor to perform a meaningful product assurance and end item
performance risk assessment, the contractor should have visibility into how its subcontractors apply risk
assessment approaches. The key is understanding the lower-tier supplier approach to countering the risk
of procuring counterfeit parts. This understanding provides the opportunity for the prime or upper-tier
contractor to establish controls to ensure their risk tolerance level is met. Without this visibility, the prime
or upper tier contractor is left with a “faith-based” risk assessment. (back)

B7: Establish Known Inspection/Test Requirements and Ensure Understanding

Some contractors require inspection/test from distributors or labs before accepting parts bought from
unauthorized suppliers, but the quality/engineering personnel are not familiar enough with counterfeit part
detection to know if the resultant report has adequately checked the parts for authenticity. To alleviate this
a contractor should establish a known listing of inspection/test requirements, as well as a report format
(checklists, photos, etc.) that allows adequate review. This could be a process where:

• Inspection/test requirements are documented and available to persons reviewing the data/reports.
• Test report template/guidelines are developed to help minimize variability and ensure the
consistency and quality of test reports.
• The number of sources approved to conduct counterfeit inspection/test tasks is minimized.
• Test reports are thoroughly reviewed by persons knowledgeable in:
- The commodity being evaluated
- Counterfeiting techniques
- Methods of counterfeit detection
- Industry and or company specific definitions/criteria for classification of items as
counterfeit/suspect counterfeit (back)
B8: Remain Diligent When Electrical Test Failures Encountered

Failure analysis of electrical test failures should include an automatic check of whether the identified
failing part was bought from an unauthorized supplier. Additional questions are required if the purchase
was from an unauthorized source to determine if the part is authentic. (back)

B9: Additional Actions Required When Electronic Parts Receive Value-Added Service

Original OEM/franchised distributor parts that go through any valued added service company (e.g., test
house, solder dipping, IC PROM programming house) should go through additional testing and
verification when received by purchaser to ensure no part substitutions occurred. (back)

B10: Include Check of Approved Supplier List When Evaluating GIDEPs

Contractors may not generally check GIDEP counterfeit part alerts to determine if the reported supplier is
currently approved by the contractor. They check manufacturer, part number, and lot/date code, but if
there is no match, often nothing is done – the contractor ignores the fact that one of its approved suppliers
may have just been reported for selling counterfeit parts. GIDEP search processes should include
checking the reported supplier against the contractor's ASL. If there is a match, the supplier should be
contacted and requested to describe its corrective and preventive actions or refute the report. If the

B-3
contractor is unable to confirm the supplier has adequate counterfeit prevention processes, the supplier
should be removed from the ASL. (back)

B11: Investigate All Parts Received from Supplier When Evaluating GIDEPs

When investigating usage for a reported counterfeit incident (GIDEP), do not focus on just the part
number mentioned in the GIDEP. The investigation should determine if any part was received from the
supplier noted in the GIDEP, not just the part number(s) noted. If one counterfeit part passes through a
supplier’s processes, others may have as well. Evaluating any and all usage of a supplier may provide
early detection of other incidents and enable more proactive resolutions, even if subsequent GIDEPs are
issued against this supplier. (back)

B12: Perform Due Diligence Before Tailoring Terms and Conditions

Allow minimal deviations to your Terms and Conditions, you will ultimately become liable. The present
legislation contains severe financial penalties for delivering counterfeit parts to the government. Do not
tailor your rights away by accepting more of the financial burden/liability. Always consult Legal consul.
(back)

B13: Understand Requirements of Quality Clauses and Terms and Conditions

Have a clear understanding of the Quality Clauses/Terms and Conditions. When your customer applies
Quality Clauses/Terms and Conditions related to counterfeiting, you need to understand and comply with
them. If you have a question you need to go back to your customer for clarification. If you can’t comply
you need to inform your customer immediately. Ignorance of these contractual requirements or
government regulations could have dire financial consequences for your company. (back)

B14: Drop Shipping Requires Additional Coordination

Establish a process when drop shipping of products is required. Drop shipped goods present a challenge
since an unbroken chain of traceability (i.e., visibility to every intermediary in the supply chain) for each
shipment is a requirement of DFARS 252.246-7007(c)(4). This more than likely will require special
handling and coordination between the organization and it’s supplier. (back)

B15: Know When “Return” Parts are Being Received

Include a clause in the purchase order that authorized and approved suppliers shall notify the purchaser if
parts ordered are a “return.” If they are a return, then additional testing would be required to ensure parts
were not remarked and die is authentic (typically via DPA and die comparison). (back)

B16: Provide Adequate Training Program for Lower-Tier Supplier Use

The higher tiers, or DOD/aerospace should provide an adequate training program to the lower tiers for
use. Lower tier contractors may not have the higher level knowledge of counterfeit parts, or the funding to
learn counterfeit parts well enough to develop an adequate training program at their own facility.
Counterfeit training generated by a small company (less than 500 people) is likely to concentrate
primarily on buying from authorized suppliers and calling out AS5553. It will often lack counterfeit
examples, military/customer requirements, guidelines for assessing suppliers, knowing the difference
between authorized and unauthorized suppliers, etc. Appendix A of this guidebook provides examples of
training programs. (back)

B-4
B17: Ensure Timely Training of Appropriate Personnel

Train as soon as possible, do not delay. Get the word out early and often regarding the importance of your
anti-counterfeiting processes. Train all relevant personnel, such as: Design Engineers, Procurement
Personnel, Quality/Receiving Inspection, Program Management, and Legal representation. (back)

B18: Perform Periodic Assessments of Counterfeit Parts Process

If you think your process is bullet proof, think again. Do not assume anything, question everything. Once
your process is established, and up and running, perform a detailed audit to verify that the process is
actually working. Examine samples of purchase orders to be sure that the parts being bought are truly
coming from an authorized supplier. This needs to be part of your internal audit process and evaluated on
a regular basis. Ensure your process is working; then, if you ever have an incident you can demonstrate it
wasn’t neglected. (back)

B19: Clearly Define Terms and Definitions

Have clear and unambiguous definitions. Terms like approved supplier, OCM, OEM, authorized supplier,
unauthorized supplier, need to be clearly defined and understood. Personnel in different organizations will
have a different understanding of what a term will mean. Example: An “approved supplier” in a Quality
database may only be based on the supplier’s quality rating or quality systems approval, not that this
supplier is an OCM authorized source of supply. An “approved supplier” in a procurement database could
have an entirely different connotation. All of these systems need to be consistent in defining terms and
expectations. (back)

B20: Maintain Currency and Knowledge of Counterfeit Legislation

Become knowledgeable in the status of current legislation. The law on this subject is new and growing.
The DFARS was released on May 16, 2014. These new laws and regulations WILL affect your business.
Obtain legal counsel; ignorance of the law will not be an acceptable excuse if there is a counterfeit part
incident with your company. (back)

B21: Retention and Control of ‘Gold Standards’

‘Gold standards’ are a major tool for identifying if a part is likely to be counterfeit. In some instances the
nameplate manufacturer (i.e., the manufacturer whose name and/or logo is marked on the part or the
accompanying documentation) is either not available to assist in identifying part authenticity or is
uncooperative. A good practice is to maintain and control detailed information on known good electronic
part information from each manufacturer. This may include known good part samples, images,
dimensions, performance curves, materials analysis, etc. (back)

B-5
Appendix C. Observations and Driving Philosophies

C-i
This appendix provides observations and philosophies from industry and government SMEs that have
been intimately involved with the detection and avoidance of counterfeit electronic parts and the
establishment of processes to prevent these parts from inadvertently getting into government products.

NOTE: Click on Link to see Details on Observations and Driving Philosophies

C1: “Trusted” Suppliers
C2: Independent Distributors and Brokers
C3: Considerations When Using A Contract Manufacturer (CM), Electronic Manufacturing Service
(EMS), Or Third Party Logistics Provider (3PL)
C4: Considerations When Partnering With Small Business
C5: Obsolescence Management And Its Relationship To Counterfeit Electronic Part Avoidance
C6: Controlled Maintenance and Repair Operations – What Is Not A Counterfeit Electronic Part?
C7: Counterfeit Detection Through Inspections And Tests Conducted By Independent Distributors
C8: Counterfeit Detection Through Inspections And Tests Conducted By Independent Test Laboratories
And Material Analysis Facilities
C9: Revealing Disguises And Damage
C10: ‘MIL-Spec’ Versus Industry Standard Test Methods
C11: Assembly And Equipment Level Tests
C12: Disposition Of Counterfeit Electronic Parts
C13: Counterfeit Prevention And Commercial-Off-The-Shelf (COTS) Electronics
C1: “Trusted” Suppliers

Section 818 of the FY2012 NDAA uses the term trusted supplier. This terminology is not used in the
DFARS rule and is not used in this guide. Its use in the NDAA differs significantly from its current use
with respect to the “DOD Trusted Foundry Program,” 31 an accreditation plan for design, fabrication,
packaging and test services across a broad technology range for specialized governmental applications. In
the context of counterfeit part avoidance, use of the term trusted supplier should describe a preference for
the use of an authorized supplier and include suppliers who obtain electronic parts exclusively from
authorized suppliers. (back)

C2: Independent Distributors and Brokers

Independent distributors are not all created equally. Some independent distributors have demonstrated
capabilities and standards of ethics above others. Some are members of various industry organizations
supporting the independent distributor market. Some have pursued certifications to various product
quality related programs (e.g., AS9120, CCAP-101). Even with these credentials, independent distributors
and brokers are not authorized nor do they generally have the ability to verify the authenticity of products
they sell.

31
https://dap.dau.mil/career/log/blogs/archive/2012/01/24/dod-trusted-foundry-program.aspx

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For example, independent distributors and brokers are not well poised to:

• Certify compliance to manufacturer specifications or US government specifications

(e.g., MIL-PRF-38535 QML product)
• Verify traceability to the original manufacturer
• Demonstrate that parts have been properly handled and stored by other supply chain
intermediaries
• Perform inspections and tests needed to provide sufficient product assurance for many defense
and aerospace applications. (back)

C3: Considerations When Using A Contract Manufacturer (CM), Electronic Manufacturing

Service (EMS), Or Third Party Logistics Provider (3PL)

Some electronic equipment developers outsource manufacturing services to a Contract Manufacturer

(CM), Electronic Manufacturing Service (EMS), Third Party Logistics provider (3PL) or Value Added
Service provider. The term “CM” or “EMS” generally refers to an organization that manufacturers
products developed by others. Prominent examples include Foxconn Technology Group and Pegatron
Corporation who produce iPhones and iPads for Apple Inc. Some CMs perform “consignment
manufacturing” where a product developer outsources the assembly of its products, but maintains direct
control over some portion of the overall manufacturing supply chain in-house, such as materiel
procurement and system level assembly. Other CMs offer “turnkey manufacturing” services which
perform all manufacturing functions, including material procurement, inventory control, receiving, and
kitting. A “3PL” or “Value Added Service provider” performs part or all of a customer’s supply chain
management functions. These services can also include value-added services related to the procurement
of materiel and preparing materiel for assembly manufacturing (e.g., testing, packaging, termination
resurfacing, etc.).

Some turnkey manufacturing companies 3PL, and value added service providers also function as an
independent distributor or have established a formal partnership with an independent distributor. The
selection of these services should include a review of purchasing practices, material control and materiel
transfer practices to identify potential vulnerabilities to counterfeit electronic parts. (back)

C4: Considerations When Partnering With Small Business

Why would one use other suppliers when parts are currently produced by and available from an
authorized supplier? U.S. government agencies, including the DOD, flow down expectations to enhance
subcontracting opportunities for small and small disadvantaged business concerns. One method that
contractors use to be responsive to these expectations is to outsource part procurement to small and small
disadvantaged businesses. Section 818 of the FY2012 NDAA supports this approach. Referring to
Section 818(c)(3)(A), DFARS rule 252.246-7007 (c)(5) requires the “use of suppliers that are the original
manufacturer, or sources with the express written authority of the original manufacturer or current design
activity, including an authorized aftermarket manufacturer or suppliers that obtain parts exclusively from
one or more of these sources. When parts are not available from any of these sources, use of suppliers that
meet applicable counterfeit detection and avoidance system criteria.” The DOD and its contractors should
recognize, however, that counterfeit electronic parts tend to enter the supply chain through independent
distributors and brokers and many independent distributors and brokers are small or small disadvantaged
businesses.

C-2
When selecting small and small disadvantaged businesses to be suppliers of electronic components, the
DOD and its contractors should flow down requirements to small and small disadvantaged businesses
directing procurement from an original manufacturer or its authorized dealer. In cases where a contractor
considers the use of small and small disadvantaged businesses to acquire electronic parts that are not
available from an original manufacturer or its authorized dealer, the buyer should ensure effective
counterfeit avoidance, detection, and risk mitigation processes are in place or apply significant oversight
to ensure the authenticity of parts. (back)

C5: Obsolescence Management And Its Relationship To Counterfeit Electronic Part Avoidance

Defense and aerospace products are particularly vulnerable to counterfeit parts due to part obsolescence.
Microelectronics products, in particular, have life cycles far shorter than the defense/aerospace products
that use them. When obsolete parts are not eliminated from product designs, independent distributors are
often used to obtain components that are no longer in production. While changes to procurement practices
will reduce the number of purchases from higher risk suppliers, the prominence of through-life support
contracts will make part obsolescence a larger challenge and counterfeits a possibly bigger problem for
DOD and defense companies in the future.

Obsolescence management and its relationship to counterfeit electronic part avoidance is generally known
to DOD and it contractors. It has been a prominent topic at DMSMS & Standardization conferences for
the past several years. Training and awareness programs established by the Defense Acquisition
University describe the relationship between obsolescence management and counterfeit electronic part
avoidance. A presentation by the U.S. Navy at the December 2008 public meeting on FAR Case 2008-
019, Authentic Information Technology Products, included a discussion on this topic. It was also
discussed extensively during the November 2011 U.S. Senate Armed Services Committee Hearing to
receive testimony on the Committee’s investigation into counterfeit electronic parts in the DOD supply
chain. In order to reduce the likelihood of having to purchase parts through riskier supply chains, defense
electronics producers and their customers recognize the need to proactively manage the life cycle of
electronic products versus the life cycles of the parts used within them. Customers, however, are often
constrained regarding their ability to support and fund approaches to eliminate the use of obsolete
components.

When assessing product offerings and proposals for production and support contracts, seek out
information concerning the potential demand for obsolete parts associated with the product offering.
Assess plans to either assure authorized sources of supply for obsolete electronic parts, or plans to
implement design modifications to eliminate obsolete electronic parts. (back)

C6: Controlled Maintenance and Repair Operations - What Is Not A Counterfeit Electronic Part?

A significant number of counterfeit part discoveries involve parts that were used, but represented by the
supplier as new and unused. Forensic analysis of several examples show evidence of termination
refurbishing and reclamation; many also exhibited other indications of damaging exposures and included
disguises intended to deceive a buyer. Exposures during counterfeiting operations can damage the
components and can cause them to fail in use.

In contrast, controlled maintenance and repair operations do not subject parts to the abuse associated with
e-waste feedstock for counterfeiters. Quite the contrary, these operations apply precautions to avoid
damaging parts. In the case of DOD depots and contractor operated rework and repair facilities that apply
reclamation practices (where parts are salvaged from used assemblies), this is generally done as a last
resort to fill critical supply shortages and with full knowledge of the end customer. Though there may be
a degree of concern with respect to reliability (after all, these parts have seen some amount of operation

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and, therefore, their service life is reduced), controlled maintenance and repair is a necessary and well
understood practice. (back)

C7: Counterfeit Detection Through Inspections And Tests Conducted By Independent

Distributors

Despite the inspection and testing protocols applied by independent distributors and brokers, counterfeit
products have escaped detection and were first identified to them by their customers. Inspections and tests
performed by independent distributors tend to include low cost and expedient techniques that reveal easily
detectable counterfeits. More rigorous, costly and time consuming methods are necessary to (1) detect
more subtle variants of counterfeiting that can affect performance in the end use application, and (2)
reveal defects from damage induced by inadequate handling and storage, termination refurbishing, or
reclamation. Many parts acquired from independent distributors may have started life as authentic parts,
but show evidence of poor storage and handling conditions, or evidence of termination refurbishing or
reclamation.

Close examination of the GIDEP reports reveals that the testing and inspection approach applied by the
independent distributor did not include important methods, particularly the more rigorous, costly and time
consuming methods that have greater potential to detect more subtle variants of counterfeiting that can
affect performance in the end use application and defects from damage induced by inadequate handling
and storage, termination refurbishing, or reclamation. Examination of the GIDEP reports reveals other
examples where the supplier was not applying methods to counter newer and more advanced
counterfeiting techniques discussed at various industry conferences, symposia and training programs
available to independent distributors and brokers.

Existing standards commonly used by independent distributors may only specify minimum tests and
inspections based on the limited capabilities of most independent distributors. These minimum required
tests and inspections, however, may not provide sufficient due diligence and product assurance needed for
defense and aerospace applications.

Mature industry and government inspection and test methods were designed to verify the integrity of
authentic parts … not to detect counterfeits. Test protocols offered by suppliers may not detect damage
associated with used parts. While adjustments to and combinations of these methods can detect suspect
counterfeits, they are not foolproof.

Individual methods may not definitively distinguish authentic parts, or detect damage induced by
inadequate handling and storage, termination refurbishing, or reclamation. A suite of inspections and tests
are necessary to detect counterfeits and eliminate infant mortality defects, and to establish high level of
confidence of failure free performance and to support an assembly/system level reliability assessment.

Documentation provided by an independent distributor or broker may not be authentic. Cases have been
reported where forged documents were provided by independent distributors as evidence that parts sold
were authentic and to provide traceability to the OCM. Examples of such documents include certification
documents, traceability documentation, and test reports. (Reference Case Study #2)

Users should either acquire or consult subject matter expertise necessary to interpret documentation and
assess the technical merits of inspection/testing protocols offered to detect counterfeits, and to assess the
results of forensics and tests. (back)

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C8: Counterfeit Detection Through Inspections And Tests Conducted By Independent Test
Laboratories And Material Analysis Facilities

Test and material analysis laboratories are accustomed to evaluating compliance to mature industry and
government standards and specifications. When selecting independent test laboratories and material
analysis facilities, assess their subject matter expertise in conducting inspections and tests specifically
designed to detect counterfeits and in analyzing the results of these inspections and tests.

SMEs in failure analysis and counterfeit detection conducted a round robin technical evaluation of several
independent test labs to assess the ability of these laboratories to identify counterfeit devices and specific
counterfeit attributes. Each lab was provided counterfeit and authentic samples of microcircuits. Each lab
was encouraged to apply its standard counterfeit detection flow and requested to perform an assortment of
specific tests and inspections commonly used for counterfeit detection. Laboratory results were compared
to results from the aerospace electronics industry representative’s analysis; where results differed, the
representative’s results were validated.

Observations from this round robin evaluation include the following:

• A significant variance was observed in the depth of analysis performed by each lab as well as
variances in the fidelity of performed tests between labs.
• The training level and understanding of counterfeiting techniques of operators varied; a general
lack of standardized certification was observed. The SME offered a compelling observation
associated with these findings: “analysis isn’t about performing a defined process; it is based on
interpretation of observations. It is very difficult to standardize accreditation in this area.”
• Poorly reported data can provide misleading conclusions; conclusions are not always well
supported by the lab reports.

When outsourcing counterfeit detection activity, buyers should be specific concerning tests and
inspections to be performed, oversee detection testing and analysis reporting, and consult SMEs on the
results of detection testing and conclusions from analysis results. When assessing supplier and
subcontractor expertise, (1) monitor the selection and specification of tests and inspections necessary to
detect counterfeit parts, and (2) oversee execution of counterfeit detection testing, and the assessment of
third party lab test results. (back)

C9: Revealing Disguises And Damage

When investigating counterfeit parts findings in the 2007 timeframe, industry SMEs observed that a
significant number of these cases involved parts that were used, but represented by the supplier as new
and unused. Forensic analysis of these parts showed evidence of termination refurbishing and
reclamation; many also exhibited other indications of counterfeiting. When devising a counterfeit
detection protocol, these SMEs selected tests that would reveal disguise techniques used by
counterfeiters, but also included tests better suited to revealing defects from damage induced by abuse and
contamination associated with counterfeiting operations – excessive heat, moisture, contaminants,
electrostatic discharge and the combinational effects of these exposures. The tests and inspections
selected to reveal this sort of damage included electrical testing, thermal cycle testing, fine and gross leak
testing (for hermetic devices), and burn-in.

Since devising this process flow, more sophisticated counterfeit detection methods have been developed
in recent years, but, at the same time, counterfeiters continue to hone their craft to counter these methods.
This can perpetuate the potential for parts to escape process flows that only include techniques designed

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to reveal disguises. Without applying tests to reveal damage associated with counterfeiting operations,
escapes may occur that can affect performance in the end use application. (back)

C10: ‘MIL-Spec’ Versus Industry Standard Test Methods

Concerns are voiced on occasion about the use of ‘MIL-Spec’ test methods for counterfeit detection.
These concerns tend to surround commercial and industrial grade components where conditions for
‘environmental tests’ may exceed the use conditions specified by the device manufacturer. Tests such as
thermal cycle testing, fine and gross leak testing, and burn-in (including electrical testing as acceptance
criteria) are frequently associated with military standard test methods for ‘MIL-Spec’ parts. These tests
are also defined by industry standards developed by semiconductor physics and packaging reliability
subject matter experts to apply to commercial parts in conjunction with ongoing failure-mechanism-
driven reliability monitoring. Elevated stresses are used to produce failure mechanisms observed under
use conditions, but in a shorter time period. These elevated stresses can include exposure to higher and
lower temperatures and higher moisture than would be associated with normal use conditions.

Research conducted by SEMATECH paved the way to reliability evaluation methods used today by the
semiconductor manufacturing industry …

• “Use Condition Based Reliability Evaluation of New Semiconductor Technologies,” 32

SEMATECH Tech Transfer Document 99083810A-XFR, August 20, 1999
• “Comparing the Effectiveness of Stress-based Reliability Qualification Stress Conditions,” 33
SEMATECH Tech Transfer Document 04034510A-TR, April 12, 2004
• JEDEC Publication JEP122G, “Failure Mechanisms and Models for Semiconductor Devices”34

Industry standards defining tests currently used by the semiconductor industry include the ‘JEDEC
Standards’ 35, such as …

• JESD22-A101 Steady State Temperature Humidity Bias Life Test

• JESD22-A104 Temperature Cycling
• JESD22-A108 Temperature, Bias, and Operating Life
• JESD22-A110 Highly Accelerated Temperature and Humidity Stress Test (HAST) (back)

C11: Assembly And Equipment Level Tests

Do not assume that assembly and equipment level tests will detect counterfeit parts that may be
contained within them. Determine the extent to which assembly and equipment level testing
replicates part level tests designed to detect counterfeits.

When assessing field performance as the basis for the risk assessment of untraceable parts, verify the
assemblies included in that assessment contain the same untraceable parts, and determine the extent to
which field use replicates part level tests designed to detect counterfeits. (back)

32
http://www.sematech.org/docubase/abstracts/99083810A-XFR.htm
33
http://www.sematech.org/docubase/abstracts/04034510A-TR.htm
34
http://www.jedec.org/standards-documents
35
http://www.jedec.org/standards-documents

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Appendix D. Case Studies

D-i
This appendix provides two case studies that provide specific examples of the actions taken to prevent
counterfeit parts from being installed in government products.

CASE STUDY #1 – DUE DILLIGENCE FOR GMF AND CFM

On 14 September 2010, Federal prosecutors in Washington, DC unsealed an indictment charging a

Florida pair with conspiracy, trafficking in counterfeit goods, and mail fraud. The indictment alleges these
individuals and others imported counterfeit integrated circuits from China and Hong Kong and sold them
to the U.S. Navy, defense contractors and others, marketing some of these products as “military-grade.”
In its press release the United States Attorney’s Office describes how “This case shows our determination
to work in coordination with our law enforcement partners and the private sector to aggressively
prosecute those who traffic in counterfeit parts.” There were numerous customer complaints regarding the
counterfeit integrated circuits sold by the defendants and others, including the following event described
in the indictment:

“An August 2007 sale of 75 counterfeit National Semiconductor Corporation ICs to a company in
California that was fulfilling a joint contract with BAE Systems Technology Solutions & Services
and the Naval Air Warfare Center Aircraft Division (“NAWCAD”), Detection and Surveillance
Branch, Integrated Logistics Engineering. The ICs were intended to be used for production of
ship-based antenna equipment, the Identification Friend Foe (“IFF”) system, which is used to
determine an airplane’s identification and intentions while in flight.”

This event associated with BAE Systems and NAWCAD is an example of how collaboration between
DOD and industry can effectively combat counterfeit electronic components as they exist today:

• When purchases from sources of supply other than the original component manufacturer and its
authorized distribution chain are necessary, due diligence should be performed to avoid
counterfeits.
• When counterfeits are discovered, steps should be taken to avoid reintroducing counterfeits into
the supply chain.
• U.S. government agencies, contractors, and lower tier suppliers should promptly communicate
their findings of counterfeits they encounter.

The specific parts associated with this event were integrated circuits. The original component
manufacturer of these parts discontinued production of this product in 1993. The only suppliers offering
these parts were independent distributors and brokers. Schedule and funding constraints did not allow for
design changes necessary to eliminate the obsolete part.

Before considering the use of parts acquired from an independent distributor or broker, BAE Systems
recommended to NAWCAD that it apply counterfeit avoidance practices developed by BAE Systems.
These counterfeit avoidance practices are included in SAE Aerospace Standard AS5553 – Counterfeit
Electronic Parts; Avoidance, Detection, Mitigation, and Disposition. The counterfeit detection procedure
included within these practices revealed that the parts were suspect counterfeit. BAE Systems discussions
with the OCM confirmed that the parts were counterfeit. The counterfeit parts were immediately
segregated and quarantined, and did not re-enter the DOD supply chain.

BAE Systems initiated a GIDEP Alert to notify government and industry of this finding. NAWCAD
notified the Naval Criminal Investigative Service (NCIS) of this counterfeit part incident. The GIDEP
Alert submitted by BAE Systems prompted NCIS to refer the case to the US Department of Justice for
further investigation and prosecution.

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Considerations for Government Furnished Material (GFM) and Customer Furnished Material (CFM)

Users should not assume that GFM (including product sources through DLA) or CFM was acquired from
authorized suppliers. In the case where GFM or CFM was acquired from authorized suppliers, do not
assume that sufficient due diligence was performed to ensure the products furnished by customers of the
government sources are not counterfeit products.

CASE STUDY #2 – “IF YOU ARE GOING TO RELY ON PAPER, AT LEAST DO MORE THAN
JUST RELY ON THE DOCUMENT ITSELF.”

The “China Law Blog” posting on “China Business Scams and How to Avoid Them” 36 includes an
important lesson about depending on documentation to establish confidence in business practices and
products. …

“There is probably no document that has not been faked thousands of times in China. I have seen
fake bills of lading, fake bank statements, fake contracts, fake purchase orders, fake company
registrations, fake IP registrations, even fake lawyers. If you are going to rely on paper, at least
do more than just rely on the document itself. At minimum, check with the company or the
governmental body that purportedly issued it.”

Those involved in counterfeit avoidance and detection activity can learn from this as it relates to
certificates of compliance (CofC), test reports, and other documentation provided as evidence that a
product is authentic. Applicable industry documents such as SAE TB-0003, TOR-2006(8583)-5235,
TOR-2006(8583)-5236, and SAE International Standard AS5553 provide valuable insight in this area.

Though this specific article is presented in the context of the practical aspects of Chinese law and how it
impacts business in China, the problem of bogus documentation is not unique to China.

36
http://www.chinalawblog.com/2012/09/china-business.html

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Appendix E. How This Guide Fits in the Total Picture

E-i
Appendix E is a pictorial representation of how the Counterfeit Parts Prevention Guide aligns with Federal Law and DFARS, military
requirements, and industry standards. Information from each of these sources have been incorporated to provide a comprehensive guide.

E-1
Appendix F. Counterfeit Prevention, Detection and Avoidance Standards Applicability
Analysis for Hardware Products

F-i
Appendix F is a matrix of various publications associated with counterfeit parts prevention. This includes military
specifications, ISO, SAE International (e.g., AS5553, AS6081), TechAmerica, FAA, Semiconductor Equipment
and Materials International (SEMI), and others. The matrix shows which standards have been adopted by the
DOD, their applicability to different users (i.e., OCMs, OEMs, System Integrators, and Component Distributors)
and whether the standard addresses elements such as product traceability, risk mitigation, procurement practices,
verification/detection, containment/disposition, reporting, and obsolescence management.

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Technical Operating Reports (TORs) / Military Specifications…
TOR-2006(8583)-5235, Parts, Materials, and Parts, Materials,
Processes Control Program for Space and Processes X X X X X X X X
Launch Vehicles Control Program
Parts, Materials,
TOR-2006(8583)-5236, Technical Requirements
Processes Does not cover counterfeit prevention,
for Electronic Parts, Materials, and Processes X X X X X X
Selection and detection and avoidance elements.
Used in Space and Launch Vehicles
Use

MIL-STD-202, Test Method Standard Electronic Uniform Test Does not cover counterfeit prevention,
X X X X X
and Electrical Component Parts Methods detection and avoidance elements.

MIL-STD-750, Test Methods for Semiconductor Uniform Test Does not cover counterfeit prevention,
X X X X X
Devices Methods detection and avoidance elements.

MIL-STD-883, Test Method Standard Uniform Test Does not cover counterfeit prevention,
X X X X X
Microcircuits Methods detection and avoidance elements.

Parts, Materials,
MIL-STD-1546, Parts, Materials, and Processes Processes
X X X X X X X X
Control Program for Space and Launch Vehicles Selection and
Use

Parts
MIL-STD-3018, Parts Management Management X X X X X X X X X X
Program (PMP)

MIL-STD-1580, Destructive Physical Analysis for Electronic Parts

Does not cover counterfeit prevention,
Electronic, Electromagnetic, and DPA X X X X X
dection and avoidance elements.
Electromechanical Parts Requirements
International Organization for Standardization (ISO) …
Parts, Materials,
ISO 9001 Quality Management Systems - Does not cover counterfeit prevention,
Assemblies and 17-Apr-01 X X X X
Requirements detection and avoidance elements
Equipment
SAE International …
SAE AS9100 Quality Systems – Aerospace –
Parts, Materials,
Model for Quality Assurance in Design, Does not cover counterfeit prevention,
Assemblies and 1-Mar-02 X X X X
Development, Production, detection and avoidance elements
Equipment
Installation and Servicing

SAE AS9120 Quality Management Systems – General requirement to "prevent the

Parts, Materials
Aerospace Requirements for Stockist X X purchase of counterfeit/suspect
and Assemblies
Distributors unapproved products." No criteria.

SAE AS9003 Inspection and Test Quality Electronic Does not cover counterfeit prevention,
X X X X
System Components detection and avoidance elements
Released April 2009
SAE AS5553 Counterfeit Electronic Parts; Electronic
31-Aug-09 X X X X X X X X X Revised January 2013
Avoidance, Detection, Mitigation, and Disposition Components
Comprehensive coverage for all elements

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SAE AS6174 Counterfeit Materiel; Assuring Parts and
17-Jun-13 X X X X X X X X Released May 2012
Acquisition of Authentic and Conforming Materiel materials

SAE AS6081 Fraudulent/Counterfeit Electronic

Electronic
Parts: Avoidance, Detection, Mitigation, and 10-Jun-13 X X X X X X Released November 2012
Components
Disposition – Distributors

ARP6178 Fraudulent/Counterfeit Electronic Electronic

X X X X X X Released December 2011
Parts; Tool for Risk Assessment of Distributors Components

AS6462
AS5553, Counterfeit Electronic Parts; Electronic
X X X X X X X X X Released November 2012
Avoidance, Detection, Mitigation, and Disposition Components
Verification Criteria
Proposed AS6301
AS6081, Fraudulent/Counterfeit Electronic Parts: Electronic
X X X X X X X X Work In Progress
Avoidance,Detection,Mitigation,and Disposition – Components
Distributors Verification Criteria

Proposed AS6171 Test Methods Standard; Electronic

X X X X Work In Progress
Counterfeit Electronic Parts Components

Proposed AS6496 Fraudulent/Counterfeit

Electronic Parts: Avoidance, Detection, Electronic
X X X Work In Progress
Mitigation, and Disposition – Components
Authorized/Franchised Distribution

Proposed AIR6273 Terms and Definitions - Electronic

X X X X Work In Progress
Fraudulent/Counterfeit Electronic Parts Components

TechAmerica …
TechAmerica-TB-0003 Counterfeit Parts & Parts and Released February 2009.
X X X X X X X X
Materials Risk Mitigation materials High level guidance

EIA-4899 Standard for Preparing an Electronic Electronic

X X X
Components Management Plan Components

Rev A requires a "Counterfeit Electronic

EIA-933 Standard for Preparing a COTS
Assemblies X X X X X Parts Control Plan" for flight critical
Assembly Management Plan
assemblies

TechAmerica/ANSI STD-0016
Parts, Materials
Standard for Preparing a DMSMS Management X Replaces EIA-GEB1
and Assemblies
Plan
Federal Aviation Administration (FAA) …
Does not cover counterfeit prevention,
FAA AC 00-56 Voluntary Industry Distributor Parts, Materials
X X detection and avoidance elements other
Accreditation Program and Assemblies
than 'Product Traceabity'
JEDEC …
JESD31 General Requirements for Distributors of Semiconductor Traceability and C of C requirements for
7-Sep-11 X X
Commercial and Military Semiconductor Devices Components military semiconductor devices only.
Semiconductor Equipment and Materials International (SEMI) …

SEMI T20-0710 Specification for Authentication Semiconductor Defines a mechanism authenticate a

X X
of Semiconductors and Related Products Components product within the supply chain.

SEMI T20.1-1109 Specification for Object

Semiconductor
Labeling to Authenticate Semiconductors and X X Subordiate to SEMI T20-0710
Components
Related Products In An Open Market
SEMI T20.2-1109 Guide for Qualifications of
Authentication Service Bodies for Detecting and Semiconductor
X X Subordiate to SEMI T20-0710
Preventing Counterfeiting Of Semiconductors and Components
Related Products
Electronic Components, Assemblies and Materials Association (ECA) …
Passive
EIA/ECA-CB21 Counterfeit Passive Components X X X X High level guidance
Components

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International Electrotechnical Commission (IEC) …
IEC/TS 62668-1 Process management for
Released May 2012.
avionics - Counterfeit prevention - Part 1: Electronic
X X X X X X X X X X High level guidance refering to other
Avoiding the use of counterfeit, fraudulent and Components
standards for implementation.
recycled electronic components
Proposed IEC/TS 62668-2 Process management Work In Progress.
for avionics - Counterfeit prevention - Part 2 Electronic Per 4.12.13.2, GIFAS/5052/2008 to be
X X X X X X
(purchasing components outside of franchised Components adopted and modified to be published as
distribution networks) IEC/TS 62668-2
Groupement des Industries Françaises Aéronautiques et Spatiales (GIFAS) …
GIFAS/5052/2008 Guide for managing electonic
Electronic Released October 2008.
component sourcing through non-franchised X X X X X X
Components High level guidance
distributors. Preventing fraud and counterfeiting.
Independent Distributors of Electronics Association (IDEA) …
IDEA-STD-1010 Acceptability of Electronic Electronic Includes inspection techniques for
X X
Components Distributed in the Open Market Components counterfeit detection.
Components Technology Institute, Inc …
CCAP-101 Counterfeit Components Avoidance Electronic
X X X X
Program, Certification For Components

LEGEND:

User (For use by):

•        System Integrators (SI)
•        Original Equipment Manufacturers (OEM)
•        Component Distributors (CD)
•        Original Component Manufacturers (OCM)

Counterfeit Prevention, Detection and Avoidance Elements:

•        Product Traceability: methods to retain traceability of products from the original manufacturer to the end user.
•        Risk Mitigation: approaches to assess and mitigate end use appication risks of procuring parts from riskier sources.
•        Procurement Practices: procurement practices developed specifically to prevent the acquisition of counterfeit parts
•        Verification / Detection: methods applied specifically to detect counterfeits
•        Containment / Disposition: containment and disposition guidance for use when counterfeits are discovered
•        Reporting: reporting guidance so that both industry and US Government organizations can determine whether or not they are similarly affected
•        Component Obsolescence Management: includes guidance to address component obsolescence and, therefore, reduce the likelihood of having to acquire parts through riskier suppliers

F-3
Appendix G. Counterfeit Parts Process Audit Checklist Example

G-i
Appendix G provides an example of a checklist that could be used to assess suppliers on their capabilities of detecting and avoiding the inadvertent introduction
of counterfeit electronic parts in the parts or assemblies they provide. The checklist may be tailored to ensure the most appropriate items are applied during a
supplier assessment. Note that this checklist targets primarily microcircuits and discrete semiconductor products.

Supplier Audited:________________________________________________________________

Audit Date:_________________________________________________________________

Auditor(s):_______________________________________________________________

Reviewed by: Approved by:

_______________________________ _______________________________
Name Name
Title Title
Date Date

Prepared by:

_____________________________ _____________________________
Name Name
Title Title
Date Date

G-1
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
1 General Information
1.1 Is the distributor being audited as franchise or
independent?

1.2 Is the distributor affiliated with any other Request to see evidence of transactions with
distributors? What type of business relationship affiliate distributors. Is the affiliated
exists between the distributor and its affiliates? distributor a common source for hard to find
parts? Verify parts’ traceability documents.

1.3 Is the distributor aware and hold a copy of Verify if the distributor holds a copy of SAE
Counterfeit Parts standard SAE International International AS5553. If so, request to see
AS5553? Have any of those requirements being evidence of implementation of parts control
implemented within the facility? plan per the standard.

1.4 Have any customers flowed down any If yes, review a sample of customer purchase
requirements listed in SAE International orders to verify if SAE International AS5553
AS5553? shows as a requirement.

1.5 Is the Distributor certified or compliant to SAE Request evidence of distributor holding
International AS6081? certification to SAE International AS6081.

1.6 Do you currently sell product to DoD/NASA If so, review sales receipts to DoD/NASA
prime contractors, or to independent primes (e.g., Boeing, Lockheed Martin,
distributors who supply DoD/NASA prime Northrop, ATK…) review part traceability
contractors, or any other DoD/NASA documents and assess whether it was
organization? purchased from a legitimate source.

2 Procurement
2.1 Do you purchase product from other Review approved supplier list and identify
distributors outside of the U.S., and who do foreign suppliers. Review several purchase
you purchase from. orders to those foreign suppliers and question
their legitimacy.

G-2
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
2.2 Does the distributor have an Approved Supplier Request copy of ASL and assess several
List (ASL) and is it being maintained? suppliers on the list, are there purchase orders
to approved suppliers. Seek evidence on how
the ASL is maintained.

2.3 What is the process for approving and Review the supplier approval procedure and
removing suppliers in the ASL system? verify method for approving or removing
suppliers from the ASL. If approved by
auditing the supplier, verify audit results on
several suppliers. Also, assess if a low rating
causes removal of a supplier. If so, review
causes of low supplier rating.
2.4 How do you rate your suppliers, and what Verify procedure outlining criteria for rating a
criteria do you use? supplier and whether it is adequate. Ensure
suppliers are rated on their ability to supply
authentic product.
2.5 How does the distributor ensure suppliers are Verify procurement documentation on several
providing authentic product? If not, how is it orders to ensure authentic product is being
avoided? procured.

Note:
Agreed upon requirements must be verifiable
at receiving inspection and parts testing.
2.6 Given multiple sources available from your From the ASL, select several suppliers with
ASL, would you buy product from a supplier low rating and verify if parts have been
with lower quality rating. If so, how do you purchased lately. Assess whether appropriate
mitigate potential risks of receiving a justification was used for using a low rating
counterfeit / sub-standard part? supplier.

2.7 What documentation (CoC, photos, etc…) is Select several types of components and verify
required from your suppliers prior to purchase documentation on product received. Ensure
of product. documents follow a trail to authenticity of the
component including photos.

G-3
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
2.8 Does the distributor have strict “Terms and If available, review the “Terms and
Conditions” document for buying and selling? Conditions” document. Determine if adequacy
on strict sub-tier supplier responsibility to
provide authentic/traceable parts.
2.9 Does the distributor have a robust process to Verify the process for screening new
screen new suppliers prior to doing business suppliers. Is there evidence of assessing new
with them? supplier capabilities and clear traceability of
parts?

2.10 Does the distributor pursue authorized sources Assess whether their part locator process
first? How is this ensured? shows the steps taken in locating authentic
parts from authorized sources first.

2.11 Are there other risk mitigating measures used Review buying process to ensure risk
by the supplier to ensure buying mitigating steps are taken to ensure authentic
legitimate/authentic electronic components? parts are purchased.

2.12 When buying components from an Review several procurement documents to

unauthorized supplier, what type of risk verify whether special risk measures are
mitigation action is taken? employed when procuring from unauthorized
suppliers.

2.13 How is it ensured that product from an Assess three key areas where product may be
authorized supplier is not mixed with other mixed such as receiving inspection,
product? component testing, and storage areas.

2.14 Is the distributor certified to: If distributor claims to be certified, request

1. ISO 9001 evidence of certification. Take a copy of
2. AS9120 certificates.
3. ANSI/ESD S20.20
Under which Certification Bodies?

G-4
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
2.15 Does the distributor hold any other industry Ask if other certification exists. Take copies
known certifications? of certificates.
2.16 How is it ensured that customer special Review a few customer purchase orders to
requirements are met (e.g., date code, RoHS, assess whether special requirements have been
vendor section). imposed by customers. Verify evidence that
those requirements have been carried out.
3 Parts Inspection, Verification, and
Handling.
3.1 What traceability or authenticity records do you Verify if their procedure requires traceability
require with incoming shipments? Is this or authenticity of parts. Is it also evident that
requirement ever waived? this requirement is included in purchase orders
and subsequently verified in receiving
inspection or other inspection areas?
3.2 What type of traceability or authenticity Verify whether the distributor provides
records do you provide with shipped product? authenticity records with shipments. Review
Is this provision ever waived? several orders shipped seeking evidence of
authenticity records.

G-5
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
3.3 What type of in-house test and/or inspection Verify which of the following are performed:
capabilities does the distributor have?
Documentation Check
Physical Dimensions
Note: Circle in-house capabilities from the list Visual Inspection (Texture and
provided. Characteristics)
Lead inspection
Marking permanency
Solderability Test
Decapsulation and Die Analysis
X-Ray Analysis
Scanning Acoustic Microscopy
X-Ray Fluorescence
Leak Test
Basic Electrical Test ( e.g., pin continuity,
curve trace, LCR)
Burn-In Test
Functional Electrical Test, 25C
Functional Electrical Test, Full Temperature
Range.
Destructive Physical Analysis (DPA)

G-6
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
3.4 Does the distributor outsource any test Verify which of the following are performed:
inspections to external test or inspection labs?
Documentation check (P/N, Qty, CoC)
Physical dimensions
Note: Circle outsourced inspections from the Lead Inspection
list provided. Marking permanency
Solderability Test
Decapsulation and Die Analysis
X-Ray Analysis
Scanning Acoustic Microscopy
X-Ray Fluorescence
Leak Test
Basic Electrical Test ( e.g., pin continuity,
curve trace, LCR)
Burn-In Test
Functional Electrical Test, 25C
Functional Electrical Test, Full Temperature
Range.
Destructive Physical Analysis (DPA)
3.5 Are there any other inspection/test capabilities Ask if the distributor has other capabilities not
to verify authenticity of parts either in-house or listed in sections 3.3 and 3.4 above. If any, ask
out-sourced? how those tests ensure part authenticity.

3.6 Are all handling/storage areas compliant or Verify that all component handling areas and
certified to ANSI/ESD S20.20? personnel are compliant to ANSI/ESD S20.20
standard meeting guidelines set in tables 1, 2,
and 3.

3.7 How are external test labs assessed, approved Review criteria used for assessing external
and monitored for quality? labs. Seek evidence on how labs are approved.
Are on-site assessments performed? How are
these labs and approved status maintained?

G-7
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
3.8 Does the distributor have a robust process for Review the distributor’s inspection criteria.
inspecting product capable of detecting Ensure it follows a best practice approach to
counterfeit and/or sub-standard parts? inspecting product for detecting
counterfeit/substandard components.

3.9 At what magnification level are inspections Review several inspection records to verify
done to? Does the distributor have magnified magnification level used while inspecting
digital photo capability? product. Do the records indicate evidence of
digital photo capability? Ask if distributor has
this capability.

3.10 Does the distributor have visual inspection Select a sample of microscopes or other visual
capabilities which include magnification? inspection equipment used and verify if it is
capable of reaching magnification levels
required.

3.11 What other visual inspection techniques does Assess the inspection area to verify if
the distributor use? additional visual inspections are performed.

3.12 How is physical dimensional inspection Assess the distributor’s inspection area and
performed, is the distributor using a caliper, note the type of equipment utilized to perform
micrometer, or optical comparator? physical dimensioning of parts.

3.13 Does the inspection process differ when Review inspection criteria and several records
inspecting parts from authorized versus of completed inspections on parts procured
unauthorized suppliers? from authorized and unauthorized suppliers
and compare.

3.14 Does the distributor perform Marking Verify several completed test records to
Permanency Test (mineral spirits and alcohol) ensure they include the marking permanency
in-house? Is this performed on all parts? test as performed. If not performed on all
parts, question why.

G-8
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
3.15 Are other chemicals used in-house to check Review inspection procedure and assess
marking or surface finishes? whether other marking or surface finish
checks are being performed.

3.16 How are third-party test facilities assessed for Request to see records of on-site audits
suitability and authenticity testing? performed at third-party facilities. Do those
audits ensure all capabilities are assessed?

3.17 Is the original component manufacturer’s data Select several receiving inspection documents
sheet being reviewed? of OCM parts procured and verify that data
sheets are also reviewed as part of the
inspection criteria.

3.18 Of the inspections/tests described in Section Request the inspection criteria and assess
3.3 above, which are performed as standard which tests are performed on all parts. Use the
practice? list in section 3.3 and 3.4 to mark which tests
are performed as standard.

3.19 Are there any specific inspection/requirements Verify test records on several types of
procedures followed for NASA/U.S. components sold to NASA/U.S.
Defense/Aerospace customers? Defense/Aerospace customers and compare to
other components tested for industry
customers.
3.20 Have you ever been notified by a customer that If yes, review customer communication
you provided counterfeit/sub-standard suspect records as evidence of notification that
product? How was this issue addressed? counterfeit parts were reported. Seek evidence
on how this was handled.

3.21 Is the distributor’s storage and inspection areas Ask if storage areas are kept under
temperature and humidity controlled, and to temperature and humidity controlled
what levels? environment, and ask per what requirement.

G-9
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
3.22 Does the distributor maintain a photo library of If so, review the photo collection and verify
all parts procured, stocked, and shipped? Is the that it is being utilized as reference to identify
library used as reference to verify new part authenticity of recent purchased parts.
authenticity?

3.23 What type of inspection records do you Select a sample of records on inspected
maintain, and are they made available to components and verify they are maintained.
customers. Ask if these are made available to customers.

4 Training
4.1 Does the distributor have a well-documented Seek evidence that a documented process
training plan in place? exists containing the inspection training plan
at minimum.

4.2 Are all inspectors performing inspections If yes, verify inspectors’ qualifications and
certified? certifications training records.

Note: is there other ways to ensure proper

training for inspectors.
4.3 How many component/QC inspectors do you Request to see the list of certified inspectors.
have, and are they certified to an appropriate Verify several inspectors’ names and ensure
standard? they are certified to an appropriate standard.
Note if inspectors hold other inspection
certifications.
5 Nonconforming Material
5.1 Does the distributor have a counterfeit parts Ask if the distributor has a counterfeit parts
control plan as required by SAE International control plan whether it has been flowed down
AS5553? as a customer requirement or not.

G-10
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
5.2 Is there a process in place to disposition suspect Verify if the distributor has a well-
counterfeit product? documented process to disposition suspect
counterfeit product and assess its adequacy.
Note: DFARS 252.246-7007(c)(6) specifies
that suspect counterfeit and counterfeit
electronic parts are NOT returned to the
supplier until determined to be authentic.
5.3 Does the distributor have a process to Review documentation delineating the process
disposition confirmed counterfeit product? for disposition of confirmed counterfeit
product. Verify its adequacy and whether
product is quarantined and permanently
disposed of.
5.4 How does the distributor scrap product? Seek evidence of procedure followed to
destroy nonconforming product.

6 Corrective Action
6.1 Is there a corrective action program, and under Verify that the distributor has a documented
what circumstances is it required to initiate a process for corrective action. Assess whether
corrective action request? it includes the three steps: remedial,
corrective, and preventive action including
root cause analysis.
6.2 Under what circumstances are internal Verify the effectiveness of corrective action
corrective actions initiated? taken. Review several closed corrective action
files. Ensure it includes all the appropriate
steps exhibiting effective implementation.

6.3 Has the distributor ever shipped counterfeit Review several customer communication
product? And how did the distributor respond records and verify whether it has been
with respect to corrective/preventive actions? communicated that customer has received
counterfeit product. Verify records and that
appropriate corrective action was taken.
7 Document Control and Record Retention

G-11
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
7.1 Does the document control system require Review documentation that delineates an
management review and approval? effective document control system. Does the
process include management review and
approval?
7.2 Are all documents with latest revisions Select several work stations and verify that
available at point of use? latest procedures and work instructions are
readily available to personnel performing the
work.

7.3 What is the retention period for all quality, Review record retention procedure and several
purchasing, and part traceability and closed quality and procurement files. Verify
authentication records? that records are being retained per their
procedure. Verify required length for record
retention dates are being met.

8 Reporting of suspect parts

8.1 Does the distributor report any suspect Review records and reports submitted during
counterfeit/sub-standard parts to GIDEP? If so, the last 12 months.
how often?

Note: DFARS 252.246-7007(c)(6) requires

reporting suspect counterfeit and counterfeit
parts to GIDEP.
8.2 Are confirmed counterfeit/suspect parts Request to see any documentation indicating
reported to any investigative agencies that counterfeit product has been reported to
authorities shortly after being discovered. If
no records are available, verify if there is a
documented process in place at minimum.

G-12
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
8.3 What additional steps are taken to alert peers Review records of supplier, affiliates and
and/or customers on counterfeit/substandard customer communication to verify how peers
parts? are made aware of discovered
counterfeit/substandard parts.

Note: This type of awareness allows for other

organizations become vigilant on specific
type of suspect parts to avoid shipping bad
parts inadvertently.

9 Liability and Disposition

9.1 What guarantees or warranties are offered for Review several records of product shipped.
product sold? Verify the type of warrantees or guarantees
offered (implicit or explicit)

9.2 Do you provide a standard product warranty Review records of sold product and verify
period with all shipments? What is that period? whether a warranty period is provided.

9.3 What is the distributor’s policy for accepting Ask if the distributor has a policy for
return of suspect counterfeit/substandard accepting counterfeit/substandard product.
product from a customer? Verify the process for handling returned
product as in 3.20 above.
9.4 Does the distributor buy and/or sell product Verify whether the distributor buys/sells
under escrow agreements? product under escrow arrangement. Assess if
appropriate controls are in place to ensure
authenticity of product.
9.5 Is used or refurbished product clearly identified Assess the inspection and marking areas to
before selling it to customers? verify that product is appropriately identified
to confirm product purchased.

G-13
 Counterfeit Parts Audit Checklist (Example)
# Question Method of Verification Results Remarks
Guidance Accept/ Audit Notes
Concern
9.6 Does the distributor maintain “Preferred” status Verify if the distributor maintains a
with any NASA/U.S. Defense/Aerospace “preferred” list of customers. If so, are any
customers? Provide list of customers. government agencies listed?

RESULTS CODES : M = MAJOR NONCONFORMANCE C = COMMENDATION

N = MINOR NONCONFORMANCE S = VERIFIED SATISFACTORY
O = OBSERVATION N/A = NOT AUDITED

G-14
Appendix H. Checklist for Reporting Counterfeits

H-i
Appendix H provides a checklist of items to consider when reporting the discovery of counterfeit
electronic parts to law enforcement agencies. This checklist does not take the place of contractual and
regulatory reporting requirements. Companies should consult legal counsel for guidance regarding
reporting outside of the company.

1. Contact Information
Company/Agency Name:
Address:
Point of Contact:
Work Phone:
Mobile Phone:
E-mail:
Fax:
Note that an anonymous report may be submitted to law enforcement regarding a counterfeit good.
However, doing so could limit or otherwise compromise authorities’ efforts to conduct an
investigation based on your information.

2. Description of Counterfeit Item

Describe the item that the company believes has a counterfeit trademark/service mark/certification
mark. Include the name of the apparent manufacturer, part number, lot code, date code, country of
origin, part markings, and other manufacturing information. Provide high-quality photographs of the
item (front and back) and the counterfeit mark.

Describe the counterfeit mark.

Is the mark registered on the principal register of the U.S. Patent and Trademark Office?
___ YES ___NO
If yes, provide the following:
• Registration Date:
• Registration Number:
Has the counterfeit item been preserved, documenting the chain of custody?
___ YES ___NO
Provide information about the supplier/seller of the item, including any relevant documents or
records.
• Supplier name:
• Physical address:
• Website:
• Contact individual:
• Phone number:
• E-mail address:
• Other identifiers:
Provide information about the supply/purchase of the item, including any relevant documents
or records.
• Quantity purchased:
• Unit price and total price:

H-1
• Item specifications, special terms and conditions, or quality or conformance
requirements:
• Date and time of purchase:
• Method of payment:
• Describe communications with supplier (provide copies):
• Other information about supply/purchase:
Provide information about the shipping/installation of the item, including any relevant
documents or records.
• Date and manner of shipment/delivery of item:
• Other items included in shipment with item:
• Date and time of installation (if any):
• Date and time of repair (if any):
If any other companies/individuals were involved in supplying/selling the counterfeit good,
provide the same information requested above (if known) for each of those
companies/individuals.
What is the approximate retail value of the infringed good (i.e., the authentic good if
purchased directly from the OEM/OCM or authorized distributor)?
Describe how the counterfeit item was discovered including the date of discovery and details
regarding any inspection, examination, analysis, evaluation, failure, or testing. Provide all
inspection, examination, analysis, evaluation, failure, and testing reports.
Describe the reasons it is believed the good is counterfeit, including whether the item is
recycled or remarked, and any specific indicators of counterfeiting.
Describe any reporting database consulted regarding the supplier or the item, and what was
discovered.
Have any goods from this supplier been received previously? Provide details regarding that
supply/purchase.
If goods were previously received from this supplier, were any of those later determined or
suspected to be counterfeit? ___YES ___NO
If yes, was the supplier placed on notice that a counterfeit good was received? Were any
contractual actions taken against the supplier? Any administrative action? Any civil action?
Was there a criminal referral? Please provide all relevant details. In addition, if the
government took any legal action against the supplier, identify the name of the court or
administrative body and case/complaint number; date of filing; names of attorneys; and status
of case/complaint.
Is the company aware of whether the supplier, in connection with counterfeit goods, has been
the subject of an allegation of breach of contract or a previous civil, administrative, or
criminal enforcement action not described above? If so, provide a general description of the
matter as well as the name of the court or administrative body and case/complaint number (if
known).
If an internal investigation regarding the counterfeit good has been conducted, describe any
evidence acquired not described above and submit, if possible, all investigative reports.
Describe the company’s estimated losses thus far from discovery of the counterfeit good.

H-2
3. Origin and Entry into the United States (If Applicable)
Identify the country of origin of the counterfeit item.
Identify the date, location, and mode of entry into the United States.
Provide applicable shipping and customs information including the names of shippers or
other entities/individuals involved in the shipping process as well as the Harmonized Tariff
Schedule (HTS) designation for the shipment. More information about HTS designations
may be found at: http://hts.usitc.gov.

4. Additional Information, Records, and Documents

Provide any information concerning the suspected crime or violation of law not described
above that might assist law enforcement.

H-3
 AEROSPACE REPORT NO.
TOR-2014-02200

Counterfeit Parts Prevention Strategies Guide

Approved Electronically by:

Russell E. Averill, GENERAL Jacqueline M. Wyrwitzke, Jackie M. Webb-Larkin,

MANAGER PRINC DIRECTOR SECURITY SPECIALIST III
SPACE BASED MISSION ASSURANCE GOVERNMENT SECURITY
SURVEILLANCE DIVISION SUBDIVISION SECURITY OPERATIONS
SPACE PROGRAM SYSTEMS ENGINEERING OPERATIONS & SUPPORT
OPERATIONS DIVISION GROUP
SPACE SYSTEMS GROUP ENGINEERING &
TECHNOLOGY GROUP

Technical Peer Review Performed by:

Jacqueline M. Wyrwitzke, PRINC DIRECTOR

MISSION ASSURANCE SUBDIVISION
SYSTEMS ENGINEERING DIVISION
ENGINEERING & TECHNOLOGY GROUP

© The Aerospace Corporation, 2014.

All trademarks, service marks, and trade names are the property of their respective owners.
SK0671
 External Distribution

REPORT TITLE

Counterfeit Parts Prevention Strategies Guide

REPORT NO. PUBLICATION DATE SECURITY CLASSIFICATION

TOR-2014-02200 June 24, 2014 UNCLASSIFIED

Charles Abernethy Scott Anderson Ken Baier

charles.abernethy@aerojet.co scott.anderson@seaker.com ken.b.baier@lmco.com
m Seaker Lockheed Martin
Aerojet

Carlo Abesamis Aaron Apruzzese Dean Baker

abesamis@jpl.nasa.gov aaron.apruzzese@atk.com bakerdea@nro.mil
NASA ATK NRO

Andrew Adams Chic Arey Mark Baldwin

andrew.c.adams@boeing.co areyc@nro.mil Mark.L.Baldwin@raytheon.c
m NRO om
Boeing Raytheon

David Adcock Brent Armand Lisa Barboza

adcock.david@orbital.com Armand.Brent@orbital.com Lisa.Barboza@gd-ais.com
Orbital Orbital General Dynamics

Robert Adkisson Larry Arnett Glenn Barney

robert.w.adkisson@boeing.co arnett.larry@ssd.loral.com glenn.barney@comdex-
m Loral use.com
Boeing Comdev-USA
David Beckwith Christopher Brust Will Caven
beckwith@nro.mil Christopher.Brust@dcma.mil caven.will@ssd.loral.com
NRO DCMA Loral

Theresa Beech Alexis Burkevics Shawn Cheadle

tbeech@metispace.com Alexis.Burkevics@rocket.co shawn.cheadle@lmco.com
Metispace m Lockheed Martin
Rocket

Barry Birdsong Thomas Burns Janica Cheney

barry.birdsong@mda.mil thomas.burns@noaa.gov janica.cheney@atk.com
MDA NOAA ATK

Ruth Bishop Edward Bush Brian Class

ruth.bishop@ngc.com Edward.Bush@ngs.com class.brian@orbital.com
Northrop Grumman Northrop Grumman Orbital

Robert Bodemuller Tim Cahill Brad Clevenger

rbodemuller@ball.com tim.cahil@lmco.com brad_clevenger@emcore.co
Ball Lockheed Martin m
EMCORE

Silvia Bouchard Kevin Campbell Jerald Cogen

silver.bouchard@ngc.com kevin.campbell@exelisinc.co Jerald.Cogen@FreqElec.com
Northrop Grumman m FREQELEC
Exelis Inc

Wayne Brown Larry Capots Bernie Collins

wayne.brown@ulalaunch.co larry.capots@lmco.com bernie.f.collins@dni.gov
m Lockheed Martin DNI
ULA Launch
Jeff Conyers Douglas Dawson David Eckhardt
jconyers@ball.com douglas.e.dawson@jpl.nasa.g david.g.eckhardt@baesystem
Ball ov s.com
NASA BAE Systems

Kevin Crackel Jaclyn Decker Robert Ellsworth

kevin.crackel@aerojet.com decker.jaclun@orbital.com robert.h.ellsworth@boeing.co
Aerojet Orbital m
Boeing

James Creiman Larry DeFillipo Matt Fahl

James.Creiman@ngc.com defillipo.aryy@orbital.com mfahl@harris.com
Northrup Grumman Orbital Harris Corporation

Stephen Cross Ken Dodson James Farrell

stephen.d.cross@ulalaunch.c ken.dodson@sslmda.com james.t.farrell@boeing.com
om SSL MDA Boeing
ULA Launch

Shawn Cullen Tom Donehue Tracy Fiedler

shawn.cullen@jdsu.com tom.donehue@atk.com tracy.m.fiedler@raytheon.co
JDSU ATK m
Raytheon

Louis D'Angelo Mary D'Ordine Brad Fields

louis.a.d'angelo@lmco.com mdordine@ball.com fields.brad@orbital.com
Lockheed Martin Ball Orbital

David Davis Susanne Dubois Sherri Fike

David.Davis.3@us.af.mil susanne.dubois@ngc.com sfike@ball.com
SMC Northrop Grumman Ball
Richard Fink Matteo Genna Joe Haman
richard.fink@nro.mil matteo.genna@sslmda.com jhaman@ball.com
NRO SSL Ball

Bruce Flanick Helen Gjerde Lilian Hanna

bruce.flanick@ngc.com helen.gjerde@lmco.con lilian.hanna@boeing.com
Northrop Grumman Lockheed Martin Boeing

Mike Floyd Ricardo Gonzalez Harold Harder

Mike.Floyd@gdc4s.com ricardo.gonzalez@baesystem harold.m.harder@boeing.co
General Dynamics s.com m
BAE Systems Boeing

David Ford Dale Gordon Bob Harr

david.ford@flextronics.com dale.gordon@rocket.com bob.harr@seaker.com
Flextronics Rocket Seaker

Robert Frankievich Chuck Gray Frederick Hawthorne

robert.h.frankievich@lmco.c Chuckg@fescorp.com frederick.d.hawthorne@lmco
om Fescorp .com
Lockheed Martin Lockheed Martin

Bill Frazier Luigi Greco Ben Hoang

wfrazier@ball.com luigi.greco@exelisinc.com Hoang.Ben@orbital.com
Ball Exelis Inc Orbital

Jace Gardner Gregory Hafner Rosemary Hobart

jgardner@ball.com Hafner.Gregory@orbital.com rosemary@hobartmachined.c
Ball Orbital om
Hobart Machined
Richard Hodges Amanda Johnson Mark King
richard.e.hodges@jpl.nasa.go johnson.amanda@orbital.co markking@micropac.com
v m Micopac
NASA Orbital

Paul Hopkins Edward Jopson Andrew King

paul.c.hopkins@lmco.com edward.jopson@ngc.com andrew.m.king@boeing.com
Lockheed Martin Northrop Grumman Boeing

Kevin Horgan Jim Judd Byron Knight

kevin.horgan@nasa.gov judd.jim@orbital.com knightby@nro.mil
NASA orbital NRO

Eugene Jaramillo Geoffrey Kaczynski Hans Koenigsmann

eugenejaramillo@raytheon.c gkazynik@neaelectonics.com hans.koenigsmann@spacex.c
om NEA Electronics om
Raytheon SpaceX

Dan Jarmel Mike Kahler James Koory

dan.jarmel@ngc.com mkahler@ball.com james.koory@rocket.com
Northrop Grumman Ball Rocket

Robert Jennings Yehwan Kim Brian Kosinski

rjennings@raytheon.com ykim@moog.com Kosinski.Brian@ssd.loral.co
Raytheon Moog m
SSL

Mike Jensen Jeff Kincaid John Kowalchik

mike.jensen@ulalaunch.com Jeffrey.Kincaid@pwr.utc.co john.j.kowalchik@lmco.com
ULA Launch m Lockheed Martin
Power
Rick Krause Eric Lau Henry Livingston
rkrause@ball.com lau.eric@ssd.loral.com henry.c.livingson@baesyste
Ball SSL ms.com
BAE Systems

Steve Krein Marvin LeBlanc Art Lofton

steve.krein@atk.com Marvin.LeBlanc@noaa.gov Art.Lofton@ngc.com
ATK NOAA Northrop Grumman

Steve Kuritz Scott Lee James Loman

steve.kuritz@ngc.com Scott.lee@ngc.com james.loman@sslmda.com
Northrop Grumman Northrop Grumman SSL

Louise Ladow Don LeRoy Jim Loman

louise.ladow@seaker.com dleroy@bardenbearings.com loman.james@ssd.loral.com
Seaker Barden Bearings SSL

C J Land Scot Lichty Lester Lopez

cland@harris.com scot.r.lichty@lmco.com llopez04@harris.com
Harris Lockheed Martin Harris

Chris Larocca Sultan Ali Lilani Frank Lucca

clarocca@emcore.com sultan.lilani@integra- frank.l.lucca@1-3com.com
EMCORE tech.com 1-3 Com
Integra - Tech

Robert Lasky Josh Lindley Joan Lum

lasky.robert@orbital.com joshua.lindley@mda.mil joan.l.lum@boeing.com
Orbital MDA Boeing
Brian Mack Jeff Mendenhall Deanna Musil
mack.brian@orbital.com mendenhall@ll.mit.edu deanna.musil@sslmda.com
Orbital MIT SSL

Julio Malaga Jo Merritt Thomas Musselman

malaga.julio@orbital.com jmerritt@avtec.com thomas.e.musselman@boeing
Orbital AVTEC .com
Boeing

Kevin Mallon Charles Mills John Nelson

Kevin.P.Mallon@1- charles.a.mills@lmco.com john.d.nelson@lmco.com
3com.com Lockheed Martin Lockheed Martin
1-3 Com

Miroslav Maramica Edmond Mitchell Dave Novotney

miroslav@area51esq.com edmond.mitchell@jhuapl.edu dbnovotney@eba-d.com
Area 51 APL EBA

John Mc Bride Dennis Mlynarski Ron Nowlin

Mcbride.John@orbital.com dennis.mlynarski@lmco.com ron.nowlin@eaglepicher.com
Orbital Lockheed Martin EaglePicher

Ian McDonald George Mock Mike Numberger

ian.a.mcdonald@baesystems. gbm3@nyelubricants.com nurnberger@nrl.navy.mil
com NYE Lubricants Navy
BAE Systems

Kurt Meister Nancy Murray Michael O'Brien

kurt.meister@honeywell.com Nancy.murray@saftbatteries. michael.obrien@exelisinc.co
Honeywell com m
Safety Batteries Exelis Inc
Michael Ogneovski Paulette Megan David Rea
michael.ognenovski@exelisi paulette.megan@orbital.com david.a.rea@baesystems.com
nc.com Orbital BAE Systems
Exelis Inc

Debra Olejniczak Mark Pazder Forrest Reed

Debra.Olejniczak@ngc.com mpazder@moog.com forrest.reed@eaglepicher.co
Northrop Grumman Moog m
EaglePicher

Larry Ostendorf Steven Pereira Thomas Reinsel

Lostendorf@psemc.com Steven.Pereira@jhuapl.edu thomas_j_reinsel@raytheon.c
psemc APL om
Raytheon

Anthony Owens Richard Pfisterer Bob Ricco

anthony_owens@raytheon.co Richard.Pfisterer@jhuapl.edu bob.ricco@ngc.com
m APL Northrop Grumman
Raytheon

Joseph Packard Angela Phillips Mike Rice

Joseph.packard@exelisinc.co amphillips@raytheon.com mrice@rtlogic.com
m Raytheon RT Logic
Exelis Inc

Peter Pallin Dave Pinkley Sally Richardson

peter.pallin@sslmda.com dpinkley@ball.com richardson.sally@orbital.com
SSL Ball Orbital

Richard Patrican Kay Rand Troy Rodriquez

Richard.A.Patrican@raytheo kay.rand@ngc.com troy_rodriquez@sierramicro
n.com Northrop Grumman wave.com
Raytheon Sierra Microwave
Ralph Roe Michael Sampson Michael Settember
ralph.r.roe@nasa.gov michael.j.sampson@nasa.gov michael.a.settember@jpl.nas
NASA NASA a.gov
NASA

Mike Roller Victor Sank Tom Sharpe

mike.roller@utas.utc.com victor.j.sank@nasa.gov tsharpe@smtcorp.com
UTAS NASA SMT Corp

John Rotondo Don Sawyer Jonathan Sheffield

john.l.rotondo@boeing.com don.sawyer@avnet.com jonathan.sheffield@sslmda.c
Boeing AVNET om
SSL

William Rozea Fred Schipp Andrew Shroyer

william.rozea@rocket.com frederick.schipp@navy.mil ashroyer@ball.com
Rocket MDA - Navy Ball

Dennis Rubien Jim Schultz Fredic Silverman

dennis.rubien@ngc.com james.w.schultz@boeing.co fsilverman@hstc.com
Northrop Grumman m HSTC
Boeing

Larry Rubin Gerald Schumann Rob Singh

Rubin.larry@ssd.loral.com gerald.d.schumann@nasa.go rob.singh@sslmda.com
SSL v SSL
NASA

Lane Saechao Annie Sennet Kevin Sink

lane.saechao@rocket.com Annie.Sennet@saftbarries.co kevin.sink@ttinc.com
Rocket m TTINC
Safety Batteries
Melanie Sloane David Swanson Marvin VanderWeg
melanie.sloane@lmco.com swanson.david@orbital.com marvin.vanderwag@spacex.c
Lockheed Martin Orbital om
SpaceX

Jerry Sobetski Mauricio Tapia Gerrit VanOmmering

jerome.f.sobetski@lmco.com tapia.mauricio@orbital.com gerrit.vanommering@sslmda.
Lockheed Martin Oribital com
SSL

LaKeisha Souter Jeffrey Tate Michael Verzuh

lakeisha.souter@ngc.com jeffery_tate@raytheon.com mverzuh@ball.com
Northrop Grumman Raytheon Ball

Jerry Spindler Bill Toth John Vilja

Jerry.Spindler@exelisinc.co william.toth@ngc.com jussi.vilja@pwr.utc.com
m Northrop Grumman Power UTC
Execlis Inc

Peter Stoltz Ghislain Turgeon Vinvent Stefan

pstoltz@txcorp.com ghislain.turgeon@sslmda.co vincent.stefan@orbital.com
TX Corp m Orbital
SSL

Thomas Stout Deborah Valley James Wade

thomas.stout@ngc.com deborah.valley@ll.mit.edu james.w.wade@raytheon.co
Northrop Grumman MIT m
Raytheon

George Styk Fred Van Milligen John Walker

george.styk@exelisinc.com fvanmilligen@jdsu.com JohnF.Walker@sslmda.com
Exelis Inc JDSU SSL
Brian Weir Larry Wray
weir_brian@bah.com wray.larry@ssd.loral.com
Booz Allen Hamilton SSL

Arthur Weiss Mark Wroth

arthur.weiss@pwr.utc.com mark.wroth@ngc.com
Power UTC Northrop Grumman

Craig Wesser Jian Xu

craig.wesser@ngc.com jian.xu@aeroflex.com
Norhtrop Grumman Aeroflex

Dan White George Young

dan.white@comdev-usa.com gyoung@raytheon.com
Comdex-USA Raytheon

Thomas Whitmeyer
tom.whitmeyer@nasa.gov
NASA

Charlie Whitmeyer
whitmeyer.charlie@orbtial.co
m
Orbital

Michael Woo
michael.woo@raytheon.com
Raytheon

APPROVED BY_________________________________________________________________ DATE_______________

(AF OFFICE)