The proposed DFARS rule and ‘Contractor Counterfeit Electronic Part Avoidance and Detection Systems’

The proposed DFARS rule on “Detection and Avoidance of Counterfeit Electronic Parts” introduces a requirement for contractors to “establish and maintain an acceptable counterfeit electronic part avoidance and detection system”. The proposed rule, however, fails to define criteria for this system.

SAE Aerospace Standard AS5553 can be used to articulate requirements for “contractor counterfeit electronic part avoidance and detection systems” and serve as criteria for assessing the adequacy these systems. AS5553 was formally adopted by DoD shortly after its original publication in 2009. Over the past year or so, DoD has been using AS5553 requirements for evaluating contractor counterfeit detection and avoidance systems.

The ‘system criteria’ presented within the proposed DFARS rule can be better articulated and defined by drawing upon AS5553 and it would be prudent for A&D industry representatives apply this theme toward comments on the proposed rule. To my knowledge, AS5553 is the only DOD adopted standard for counterfeit electronic parts prevention that would apply to contractors.

Below are my suggestions for modifications to the ‘system criteria’ in sections 246.870 and 252.246–70XX of the proposed rule which offer some clarify and tie nicely with AS5553…

A contractor’s counterfeit electronic part avoidance and detection system shall include practices that—
• Apply supplier preferences for electronic parts purchased from original manufacturers or their authorized distributors,
• Perform due diligence in accordance with recognized industry standards to avoid electronic parts when purchases from sources of supply other than the original component manufacturer and its authorized distribution chain are necessary, and
• Notify government and industry of counterfeit electronic parts or suspect counterfeit electronic parts when they are encountered.

The contractor shall develop and implement policies and procedures to address, at a minimum, the following areas:

(1) The training of appropriate personnel in awareness, avoidance, detection, mitigation and disposition of counterfeit electronic parts.

(2) The inspection and testing of electronic parts received from other than trusted suppliers, including criteria for acceptance and rejection.

(3) Processes to reduce the frequency and impact of counterfeit electronic parts. [Derived this DODI-4140.67 paragraph 3b]

(4) Mechanisms to enable traceability of electronic parts to suppliers.

(5) Use and qualification of trusted suppliers for electronic parts.

(6) The reporting and quarantining of counterfeit electronic parts and suspect counterfeit electronic parts, including reporting of findings of counterfeit electronic parts and suspect counterfeit electronic parts to the Government–Industry Data Exchange Program (GIDEP) and to appropriate Government authorities.

(7) Methodologies to identify suspect counterfeit electronic parts and to determine, where practicable, if a suspect counterfeit electronic part is, in fact, counterfeit.

(8) The operation and maintenance of the “Contractor Counterfeit Electronic Part Avoidance and Detection System”.

(9) The flow down of counterfeit avoidance and detection requirements to subcontractors, except those suppliers of assemblies and equipment containing electronic parts which are “Commercial Items” defined in FAR 2.101. [Discussed in my recent paper]

The Government’s determination of the adequacy of the contractor’s counterfeit electronic part avoidance and detection system shall be based non-Government standards adopted by the Department of Defense.

Henry Livingston

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