Focus Areas for an A&D Contractor Industry Counterfeit Prevention Strategy

A high level counterfeit prevention strategy is needed to address standards gaps and to resolve implementation issues that, to some degree, are driven by new and forthcoming US Government requirements directed to the aerospace and defense (A&D) Contractor Industry. Collaboration between A&D Contractor Industry companies is key to developing such a strategy, focusing limited resources and driving meaningful implementation at appropriate levels within the supply chain.

I offer the following thoughts on focus areas to include in a high level counterfeit prevention strategy developed from the perspective of A&D contractors.


Counterfeit Part Risk Analysis

Devise a quantitative risk-based approach consistent with the methodology described in the “Risk Management Guide for DOD Acquisition”. Result should align with DoD implementation of NDAA 2012 § 818 and support the “Supply Chain Risk Management” element of Program Protection Planning activity described in DoDI 5200.44.

Move from “subjective assessments” to risk analysis supported by empirical data and defensible estimates:

  • Likelihood of counterfeiting across product types (don’t boil the ocean)
  • “Trusted Supplier” criteria (probability of counterfeit quality escape vs. type of supplier)
  • Types of counterfeits (probability of each type of counterfeit circulating in the supply chain and the specific defects associated with them)
  • Inspection and Testing (quantify the likelihood of counterfeit part quality escapes versus on the extent of tests and inspections applied to detect them) NOTE: work is underway within SAE G19A

Identify implementation issues requiring further research needed to devise a quantitative risk-based approach.

Develop proposals for standards activities based on the results.

Compliance Programs

Define a rule-based contractor / subcontractor compliance program (business systems) for counterfeit parts avoidance and detection that aligns with NDAA 2012 § 818(e) – Improvement of Contractor Systems for Detection and Avoidance of Counterfeit Electronic Parts; forthcoming DoD Instruction on counterfeit prevention; and forthcoming regulations.

Define a rule-based component supplier compliance program for counterfeit parts avoidance and detection that aligns with DoD’s expectations described within NDAA 2012 § 818(3)(c) – Trusted Suppliers; forthcoming DoD Instruction on counterfeit prevention, and forthcoming regulations.

Pursue a plan to establish high level QMS coverage (e.g. modify ISO 9001/AS9100); consider an interim measure, such as to add a quality clause to ARP9009 – Aerospace Contract Clauses (e.g. require organizations to institute processes for controlling counterfeit parts; clause would be an add-on to AS9100 contract requirement).

Devise a plan for accreditation / certification programs for specific standards, including a plan to address gaps in lower level supplier capabilities (avoid another “AS6081 compromise”).

Coordinate action plans with relevant standards organizations and certification bodies (e.g. SAE, IECQ, NADCAP, IAQG).

Requirements for Items Other Than Electronic Components and COTS Hardware

Develop specific guidance within AS6174 and AS5553 (with regard to “fraudulent parts”) to provide clear direction and focus to help industry and government implement meaningful or effective counterfeit avoidance policies or risk management approaches.

  • Focus on materiel that present the greatest counterfeiting risk, including “used parts represented as new”; establish realistic expectations for a “Materiel Assurance Plan” and traceability based on this focus; and provide guidance based on facts and data.
  • Assess the degree to which gaps exist today with respect to coverage for “fraudulent parts” (other than “counterfeit parts”) in current QMS and lower level standards and the magnitude of problems caused by these gaps in standards when compared to the counterfeit electronic parts problem
  • Identify changes needed to one’s business systems that will be necessary to encompass fraudulent part avoidance and detection vs. counterfeit part avoidance and detection.
  • Provide findings concerning AS6174 to SAE G21 and provide findings concerning AS5553A to SAE G19.

Counterfeit Prevention Requirements for COTS Hardware

Propose an approach to address counterfeit parts mitigation for COTS assemblies (e.g. commercial IT hardware).

  • Consider the COTS producer’s business practices and its compatibility with the specific counterfeit parts avoidance methodology described in Sec 818 of the FY2012 NDAA.
  • Consider the practice of purchasing commercially available off-the-shelf products containing electronic parts directly from the OEM or its authorized dealer while adapting to the ability of DoD procurement organizations and contractors to influence the COTS OEM’s business practices.
  • Provide findings to SAE G21

Standards Gap Analysis

Assess standards coverage for all elements of a compliance program for counterfeit prevention.

  • Assess the alignment and conflicts between standards used by lower level suppliers vs. primes and upper tier contractors (definitions, scope, requirements, etc.); identify changes needed in existing standards and candidates for new standards to fill gaps and address conflicts.
  • Incorporate direction from the aforementioned projects.
  • Develop a plan to propose to standards bodies to fill gaps and address conflicts, including plans for accreditation / certification programs.
  • Identify areas requiring further research before effective standards can be developed.

Feel free to post a reply if there are other specific focus areas that are not identified above, but are of compelling interest to your organization.

Feel free to post a reply with thoughts on other elements to include in the focus areas described above.

I look forward to hearing from you.

Henry Livingston


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