Section 818 of National Defense Authorization Act for Fiscal Year 2012  calls for DoD to implement a risk based approach to counterfeit prevention and to establish regulations for contractors to “eliminate counterfeit electronic parts from the defense supply chain”. DoD Instruction 4140.67, DoD Counterfeit Prevention Policy , describes a realistic approach to counterfeit prevention. DODI 4140.67 states it is DoD policy to “Not knowingly procure counterfeit materiel” and calls for DoD to “employ a risk based approach to reduce the frequency and impact of counterfeit material”. Furthermore, DODI 4140.67 identifies “prevention and early detection” as the “primary strategy in eliminating counterfeit materiel within the DoD”. This strategy is consistent with recommendations the defense industry has communicated to DoD on several occasions over the past few years. Rather than extending this risk based approach to contractors, however, the strategy within the proposed DFARS rule on “Detection and Avoidance of Counterfeit Electronic Parts”  seeks to address the counterfeit electronic parts threat through (a) the purchasing systems of prime and upper tier contractors; (b) DoD approval of these purchasing systems; and (c) the withholding of payments to contractors. While definitive countermeasures can be applied by contractors to manage this problem more effectively, the global nature of the supply chain and current U.S. Government policies, including requirements described within this proposed DFARS rule, continue to present significant barriers to eliminating counterfeit products from the supply chain altogether.
Here are examples of the imbalanced approach to counterfeit prevention described within the proposed DFARS rule on “Detection and Avoidance of Counterfeit Electronic Parts”: