Counterfeit Parts Prevention Guidance
1.
Introduction .............................................................................................................. 2
2.
Definitions ................................................................................................................ 2
1.
Acronyms ................................................................................................................... 3
3.
Risk Management .................................................................................................... 4
4.
Customer and/or Regulatory Requirements/Flow Down .......................................... 6
5.
Counterfeit Parts Control Plan.................................................................................. 7
6.
Training .................................................................................................................... 8
7.
Obsolescence .......................................................................................................... 9
1.
Develop Parts/Material Plan ....................................................................................... 9
2.
Conduct Design Trade Studies ..................................................................................10
3.
9.
Engage in DMSMS (Diminishing Manufacturing Sources and Material Shortages)
Planning ....................................................................................................................11
4.
Plan for Part Availability throughout the Product Lifecycle .........................................12
8.
Procurement......................................................................................................................12
1.
Supplier Approval ......................................................................................................13
2.
Source Selection .......................................................................................................15
3.
PO Placement ...........................................................................................................16
Traceability
........................................................................................................................17
10. Part Authentication ............................................................................................................18
11. Determination of Suspect Counterfeit ................................................................................20
12. Handling of Suspect/Confirmed Counterfeit Parts..............................................................21
13. Reporting...........................................................................................................................22
14. Monitoring information and trends .....................................................................................24
15. Internal/External Audits .....................................................................................................24
16. Accreditation/Certification ..................................................................................................25
Appendix A
Counterfeit Parts Reporting and Monitoring Agencies ........................................26
Appendix B
Government Reporting Methods ........................................................................27
Appendix C
Risk Based Inspection Chart ..............................................................................28
Appendix D
Product Family Risks and Mitigation Strategies .................................................29
Appendix E
Test Report Information .....................................................................................33
Appendix F
Counterfeit Part Control Plan Template ..............................................................34
1.
Introduction
This guidance defines the best practices to prevent proliferation of counterfeit
goods in the supply chain. The extent of your organization’s formal compliance to
any industry standards and government regulations, above and beyond these
practices, may depend on your organization’s customer contracts.
Depending on your organization’s role and position within the supply chain, your
risk of receiving counterfeit parts or assemblies with counterfeit parts will vary.
The more supply chain intermediaries (e.g. sub-tiers, distributors, customers,
services, etc.) incorporating parts into products or assemblies the greater your
risk. Depending on individual contracts for products and services, your
organization may have multiple roles in the supply chain, and each needs to be
considered.
This guidance is not intended to re-state industry and government regulations,
but rather provide guidance and best practices. References will be made to
existing standards when applicable.
Links to additional information are provided throughout this document however
the IAQG is not responsible if the information or links are revised or no longer
available. It is the intent of the IAQG to update the guidance on a periodic basis.
This guidance material is published in the Supply Chain Management Handbook
SCMH and is for use at all levels of the supply chain at no cost subject to
accepting the terms and conditions of the SCMH.
2.
Definitions
Counterfeit Part – an unauthorized copy, imitation, substitute, or modified
material, part, or component which is knowingly misrepresented as a specified
genuine part of an original or authorized manufacturer. This includes used parts
represented as new, or the false identification of grade, serial number, lot
number, date code, or performance or material characteristics.
Suspect Counterfeit Part – a material, part, or component for which credible
evidence (including, but not limited to, visual inspection or testing) provides
reasonable doubt that the material, part, or component is authentic.
Other terms often used in the counterfeit parts context are “Unapproved Parts”,
“Unauthorized Product Substitution”, and “Nonconforming Material”. And by
definition, while all counterfeit parts are unapproved, unauthorized and
nonconforming; not all unapproved, unauthorized and nonconforming parts are
counterfeit.
Note: Further effort is necessary to determine if a suspect counterfeit part is
actually counterfeit.
Note: There are many definitions of counterfeit among all of the different
standards, laws, and regulations. It is important to work with your customer to
coordinate with their definition of counterfeit. And as this definition may be
different than those identified in civil and criminal laws, any legal actions related
to counterfeiting would need to follow the laws of the governing jurisdiction.
2.1.
Acronyms
ANAB
ANSI National Accreditation Board
ANSI
American National Standards Institute
BOM
Bill of Materials
CAAP
Counterfeit Avoidance Accreditation Program
CofC
Certificate of Conformance
DDPA
De-Lid/De-Capsulation Physical Analysis
DFARS
Defense Federal Acquisition Regulation Supplement
DMSMS
Diminishing Manufacturing Sources and Material Shortages
EASA
European Union Aviation Safety Agency
EEE
Electrical, Electromechanical, Electronic
ERAI
Electronic Retailers Association International
GIDEP
Government - Industry Data Exchange Program
FAA
Federal Aviation Administration
IAQG
International Aerospace Quality Group
3.
IECQ
International Electrotechnical Commission Quality
Assessment System for Electronic Components
IECQ CAP
IECQ Counterfeit Avoidance Program
MRO
Maintenance, Repair, Overhaul
NAVSEA
Naval Sea Systems Command
OCM
Original Component Manufacturer
OEM
Original Equipment Manufacturer
QMS
Quality Management System
RFQ
Request for Quote
SCMH
Supply Chain Management Handbook
UKEA
United Kingdom Electronic Alliance
Risk Management
Counterfeit goods pose a significant risk to the supply chain, potentially resulting
in loss of materiel, mission, or life.
Your risk of receiving counterfeit parts or assemblies with counterfeit parts will
vary . The more supply chain intermediaries (e.g. sub-tiers, distributors,
customers, services, etc.) incorporating parts the greater your risk. Consider,
“what can go wrong?”, “how likely it is to happen?”, and “what are the
consequences of it happening?”
Figure 1 - Example of Risk in an Avionics Supply Chain
Risk is dependent on both the sources of supply and the product application.
There is risk associated with the procurement source. Buying directly from the
original manufacturer obviously poses less risk than buying from non-authorized
sources (grey market), where traceability to the original manufacturer may have
been lost or ignored.
Then there is the risk the parts themselves represent in the product. For
example, an electronic part used in a personal computer may represent less risk
than a similar part used on a satellite. A satellite, once launched, cannot be
repaired or returned for a replacement. The more risk the part represents, the
higher the level of controls required to ensure the part will function in its intended
use and environment. Parts bought from the same source can present different
risks based on the product application.
Risk management weighs the likelihood that an event will occur against the
consequence of the occurrence.
Risk assessment and mitigation are collaborative efforts between sub-assembly
manufacturer, design authority, and the manufacturer of the end product.
If your organization is not the design authority, then pre-coordination with your
customers (and the design authority) is crucial and may also be required in the
customer’s contract.
Contract Review is an important part of the risk assessment and mitigation
processes. The customer requirements often indicate the level of risk by the
counterfeit part requirements flowed down (e.g. 91XX, AS5553, AS6174, IEC/TS
32668 series, DFARS 252.246-7007 & -7008, and any unique customer
requirements related to counterfeit controls). It is important that the correct
functions within your organization review the contract language to confirm your
organization’s ability to comply with the customer’s requirements.
This handbook provides risk assessment and mitigation methods within each of
the sections (i.e. Design, Procurement, Traceability, etc.). An example of a
product family risk mitigation strategy is included in Appendix D.
4.
Customer and/or Regulatory Requirements/Flow Down
Customers frequently specify design and production process requirements that
they want to see applied to the product. These requirements can include
counterfeit avoidance measures and regulatory requirements that the customer
wants to see in place at its sub tiers to lower its own risk of getting counterfeit
material. It is important that your organization have a flow down process that
receives the latest requirements from the customer and distributes them to the
internal functions where compliance is to be demonstrated. When the customer
is flowing down counterfeit avoidance requirements, it is important to:
a. Ensure common understanding of customer counterfeit requirements. A
protocol has to be established for reviewing the requirements with customer
and where customer specialists and in-house specialists can discuss and
agree on the interpretations of the flowed down requirements.
b. Understand the customer's strategy on obsolescence management.
c. Ensure all customer requirements are flowed down internally
d. Ensure lifecycle (obsolescence management) planning and counterfeit
avoidance planning are compliant with the customer requirements. The
customer may want to review and approve these plans. During the design
cycle the customer may also want to understand how product design tools are
used to facilitate the planning effort.
e. Ensure requirements are flowed down to all levels of the supply chain.
f. Ensure sub-tiers understand and comply with the requirements.
5.
Counterfeit Parts Control Plan
Having a counterfeit parts control plan is considered an industry “best practice”.
Since the prevention of counterfeit parts affects multiple functions within your
organization, it is useful to have a single counterfeit parts control plan to
document these cross functional processes. This Counterfeit Parts Control Plan
documents the organization’s risk-based strategy used for identification,
mitigation, disposition, detection, avoidance, and reporting of suspect and/or
confirmed counterfeit goods.
The control plan should include the processes addressing the topics laid forth in
this handbook. Again, the extent of the processes depends on your
organization’s position in the supply chain.
The plan should include the following processes:















Risk Assessment/Customer Requirements/Contract Review
Customer Requirements/Flow Down
Training
Obsolescence
Procurement
Control of External Sources
Traceability
Material and Parts Control
Verification of purchased/returned products
Inspection/Test
Investigation
Handling of Suspect/Confirmed Counterfeit
Reporting
Monitoring counterfeit reporting, information, trends
Internal/External Audits
The plan should identify the roles and responsibilities as relates to each function.
Key functions, again depending on your organization’s size and location within
the supply chain, include:





Contracts
Engineering
Materials Management & Logistics
Quality
Supplier Management & Procurement
A formal requirement for a documented counterfeit parts control plan is in
industry standards such as AS5553, AS6081, AS6496, and IEC TC 62268 series
related to electronic parts. For materiel, AS 6174 requires a Materiel Authenticity
Assurance Plan.
A Control Plan Template is included in Appendix F of this handbook section.
6.
Training
A key strategic element of mitigating the risks posed by counterfeit parts and
materials is through on-going training for all relevant personnel. This training will
increase awareness of the potential of counterfeit parts helping prevent their
introduction into the supply chain.
Relevant personnel are any persons involved in any way with parts/material. This
includes personnel with responsibility for management, design, contracts,
procurement, inspection and testing, and any person who deals with the
parts/materials.
General awareness training is appropriate for all relevant employees. In addition,
detailed training for specific functional roles and responsibilities is appropriate
and may be required by your customer.
Elements of training should include:

General awareness training
o Background information:
 Definition of counterfeit materials and parts
 The origins of counterfeit materials and parts and how they
enter the supply chain
 Vulnerabilities to counterfeit parts (e.g. obsolete and hard-to-find
parts)
 New laws and regulations
 Examples of counterfeit parts or materiel
o Strategies to Eliminate Counterfeit




Avoidance
 Procuring from Authorized Sources
Detection
 Making Sure Counterfeits are Stopped prior to integration
in higher level assembly
Mitigation
 Minimizing Risk and Damage to the project
Disposition
 Decide on Proper Action and Resolution through
Disposition
Additional Training should be considered for the following personnel:










7.
Receiving/Incoming Inspection
Purchasing
Engineering
Program/Project Management
Stock management
Assembly/MRO personnel
Operators
In-process Inspection
Quality Assurance Inspection
Internal Auditors
Obsolescence
Due to diminishing manufacturing source issues, many industries may have
difficulty in continuing to obtain manufactured products designed years ago to
support fielded and new systems. The challenge of avoiding counterfeit parts and
materials occurs when customers are obliged to purchase out of production parts
to support existing products. Choosing materials that are likely to become
obsolete in the lifetime of the product’s production can cause procurement
departments to seek out sources of supply that have higher inherent risks of
providing counterfeit material. To lower these risks designers are encouraged to:
7.1.
Develop Parts/Material Plan
Avoid single sources when possible - Single sources expose the supply
chain to many risks. Fire or natural disasters, war and civil uprisings can
interrupt supply. In addition, the source can go out of business or change
business or change ownership or move the production location to an
unauthorized/illegal location. Any of these events can force procurement
to look at inventories of material that may not be traceable back to the
OCM/OEM, elevating the risk of obtaining counterfeit material.
Determine product/component availability – Even multi sourced
components embodied in the end product can quickly go out of production
at all sources as new technology replaces them or other market factors
force them out of the market. Some analysis of the likelihood of losing the
supply of components needs to be conducted before committing the
design to that component.
Drive common part usage – Using common parts with broad industry
demand provides a higher level of assurance that the parts will not
become obsolete. In addition, if demand is broad it is likely that multiple
sources will exist.
7.2.
Conduct Design Trade Studies
Develop and compare the cost and benefits of various design and part
selection strategies to maximize product life. Some of these strategies
include:
Employ Open Architecture – Design with a preference for using commonly
available parts versus custom. High degrees of customization lead to a
reduced number of suppliers of parts and exposes the organization to
obsolescence risk. It also increases the difficulty of finding suitable
replacements in the event of obsolescence.
Encourage Re-Use - By designing with parts already in use in other
products, increased production volumes will help to sustain the part
sources over the product production lifetime. However, it is necessary to
review the remaining lifecycle of every component to ensure compatibility
with the product production lifetime.
Consider Redesign/Refresh – Planned product redesign or refresh cycles
can allow parts with a more recent technology level with a longer expected
production lifetime to be incorporated in a planned way.
While exploring design considerations to minimize obsolescence impact, it
is recommended that the customer be included in the discussion so that
any customer concerns can be addressed. For example, any redesign
may need to be coordinated with customers to ensure all qualification
testing is performed.
3.
Engage in DMSMS (Diminishing Manufacturing Sources and Material
Shortages) Planning
DMSMS can be due to exhaustion of strategic resources, or economic
factors that decrease the profitability of certain materials. Using material
from these sources will expose the organization to obsolescence risk. For
products with long production lifetimes, obsolescence should be
considered inevitable and included in routine planning for product design
support.
Monitor source of supply - materials and manufacturers. The organization
and Engineering in particular have to be alert to DMSMS. This generally
requires a concerted effort to monitor obsolescence notices and may
include review of lifecycle predictions from third parties such as IHS.
Design rules have to be updated to avoid incorporating materials from
diminishing sources.
Refresh DMSMS plan throughout Program lifecycle – Long after the
design is in production DMSMS can become a problem. The DMSMS plan
should be reviewed on a periodic basis with Procurement and
Engineering. Engineering should be taking every opportunity (such as
design changes undertaken to incorporate enhancements, address
reliability concerns or reduce cost) to remove materials affected by
DMSMS from the bill of material before they become a problem.
Additional guidance may be found in:

STD0016 - Standard for Preparing a DMSMS Management Plan

SD-22 – Diminishing Manufacturing Sources and Material Shortages
(DMSMS), Guidebook of Best Practices for Implementing a Robust
DMSMS Management Program

IEC 62402 – Obsolescence Management
7.4.
Plan for Part Availability throughout the Product Lifecycle
Based on DMSMS Planning / BOM review or obsolescence events,
determine the need for bridge buy (to sustain until a redesign or design
modification can be implemented) / lifetime buys / end of life buys – If
DMSMS is not addressed early enough by design action, these actions
may become the only options available to procurement. These special
buys are likely to be more successful and expose the organization to less
counterfeit risk if they are done early enough to use the authorized
sources.
Determine aftermarket supply – The aftermarket tends to have higher
counterfeit risks because of the ‘Grey Market’ shops that offer parts with
unapproved repairs or ‘new’ parts of suspect origin. Ideally the supply of
new parts to the aftermarket should be through the same source as the
authorized production source. Lifetime buys for sustainment should also
be considered while parts are still available from authorized sources,
If parts are coming from repair sources, they should be working to
Engineering approved repair schemes and Engineering should be
involved in the approval of these repair shops.
If part obsolescence increases the counterfeit risk, it is important to
coordinate with your customer to ensure the needs over the product
lifecycle are met.
8.
Procurement
Procurement activities can help ensure that Counterfeit Product does not enter
the Supply Chain. Procuring parts from trusted sources, proper flow down of
requirements, and risk-based verification activities help lower the risk of
counterfeit parts. As the Contract flows down through each level or ‘tier’ of the
Supply Chain, it must be ensured that the links to the customer, legal, and
regulatory ‘framework’ aren’t lost. The minimum standards and requirements to
be met need to be clearly defined and flowed down.
Before a part/product is procured, risk should be considered. The risk will
determine the level of additional requirements; the greater the risk, the higher the
level of inspection and testing.
Procurement can be divided into three components - Supplier Approval, Source
Selection, and Purchase Order Placement. Supplier Approval is the process of
selecting suppliers to be on the approved supplier list. Source Selection is the
process of selecting a supplier for specific order from the approved supplier list.
Purchase Order Placement is the process for preparing and issuing the purchase
order.
For additional information on this topic, see Section 4 “Buy” in the IAQG SCMH.
1.
Supplier Approval
Supplier risk mitigation is accomplished via the supplier approval process
and is the first line of defense against purchasing counterfeit parts.
Historical data has shown that there is a higher risk of counterfeit parts
when parts are procured from unauthorized or independent distributors.
Procuring parts from original manufacturers and their authorized
distributors provides a much higher likelihood of ensuring genuine
products.
Besides normal “due diligence” in the supplier approval process, there are
additional sources you can use to review potential distributors. Examples
are (see Appendix A
Counterfeit Parts Reporting and Monitoring Agencies for more
information):




Anti-Counterfeiting Forum
Electronic Retailers Association International (ERAI).
FAA Unapproved parts list
Government - Industry Data Exchange Program (GIDEP)
These sources have information about entities that supplied counterfeit
parts and materials to aviation, space and defense industry members.
There are also commodity-based and OEM websites that identify
counterfeiting events.
When independent distributors or brokers are the only source of parts (i.e.
product is no longer in production and no stock remains at the OCM/OEM
or authorized/franchised distributors), extra measures must be performed
to ensure the purchase of authentic and approved parts.
The flow chart below illustrates the additional efforts needed if product is
not available from a low risk supplier.
YES
Available from
OCM, Authorized Aftermarket
Manufacturer, or
Franchised
Distributor?
Material
Procurement
Requirement
Investigate use of
alternate product and
their availability from
authorized suppliers
Contact Design
Authority
NO
YES
Execute Design
Activity
Alternate Product
found and available?
YES
NO
Purchase from
OEM or
Franchised
Distributor
NO
Redesign or
procurement risk
mitigation?
Risk
Assessment
Customer Approval
Required?
YES
Customer
Approved?
Redesign
Risk Mitigation
NO
Procurement
Risk Mitigation
Product available
from Unauthorized/
Independent Distributor
or Broker
YES
Use Material
Unauthorized/
Independent
Distributor or Broker
evaluation and
selection
Check external
resources for history
of suspect suppliers
& parts (e.g., GIDEP)
Does usage require
customer approval?
NO
YES
NO
NO
YES
Customer
Approved?
OEM CofC and
Parts traceable
to OEM?
YES
Handling,
Packaging & Storage
history acceptable?
YES
NO
NO
Consider further due
diligence for critical
applications
UNKNOWN
Contact Customer
for Direction
Authenticity
Verification
Suspect
Counterfeit
discovered?
YES
Material
quarantine /
disposition
Case reporting
NO
Purchase from
Broker or
Independent
Distributor
Use Material
Figure 3 – Supplier Selection and Risk Mitigation Process
The top green line illustrates the lowest risk approach of procuring product
through the industry preferred source of the OEM or authorized/franchised
distribution. This path is straight forward in that no special risk mitigation
steps need to be taken. When the decision is to use an authorized
supplier, the parts are processed through the receiving inspection
processes and into inventory.
However, in the case where an OEM or authorized/franchised supplier is
NOT available (red line), for example due to part obsolescence, several
decisions must be made which may include, contacting your customer for
options, performing a risk assessment based on part usage and supply
source, determining if the parts are traceable to the OEM, and last, but
many times the most expensive step, verifying part authenticity. (See
Section 10) Any relief from customer requirements must come from the
proper authority. Needless to say, these processes can be expensive and
take considerable time to complete, time that was not usually accounted
for when developing program schedules.
The total cost and time, including risk mitigation activities must be
considered when selecting and approving sources.
Maintaining a register of specific contractor approved suppliers, including
scope of approval, for independent distribution that have counterfeit
inspection and testing capabilities may help expedite the risk mitigation
process.
8.2.
Source Selection
When selecting a distributor, broker, or supplier, the different risks
associated with their selection should be recognized. As stated above,
there is less risk when procuring from the Original Component
Manufacturer (OCM, Authorized aftermarket manufacturer, etc.) or
authorized/franchised distributor, than when procuring from an
independent distributor or broker. Due to these differing risk factors, these
risks must be evaluated and mitigated to ensure confidence that
counterfeit parts are prevented and/or identified.
Before you purchase from distributors, you need to understand the type of
distributor they are. There are two types of distributors:

“Authorized/Franchised” distributors are authorized by OCM/OEM
(Original Component/Equipment Manufacturer) to market, store and
ship their product(s) as part of a distribution agreement. AS6496 is
an example of requirements for mitigating counterfeit products in
the authorized distribution supply chain.

“Unauthorized” or “Independent” distributors/“Brokers” refer to
distributors that have no formal relationship with the OCM/OEM.
AS6081 is an example of requirements for mitigating counterfeit
products in the independent distribution supply chain.
An “authorized reseller” is not the same as an authorized distributor and
clarification is dependent on the OCM’s formal distribution agreement.
Utilizing Unauthorized/Independent Distributors or Brokers may require
additional verification activity to ensure the product provided is authentic.
Some regulations (e.g. DFARS 252.246-7008) or industry standards
(AS5553) require a formal risk mitigation plan (with defined testing and
acceptance criteria) when procuring parts from “independent sources”, as
defined in those standards.
If the source selected is not already on the approved supplier list, the
supplier approval process should also be performed.
8.3.
PO Placement
Specific requirements may be used to maximize the likelihood of being
provided authentic material. Depending on the risk factors involved, the
purchasing requirements will differ. The Request for Quote (RFQ) and the
Purchase Order should define the product, documentation, traceability,
and testing requirements, including where applicable, the use of approved
sources for materials and/or processes. It should also include any other
customer requirements that need to be flowed down through the supply
chain.
Additional resources on the Purchasing Process and the information to be
flowed down may be obtained via AS6174, AS5553, ARP6328, AS6081,
91XX, IEC/TS 32668 series, DFARS 252.246-7007 or others as
appropriate.
9.
Traceability
Traceability serves several functions in counterfeit part mitigation. The first
function is to track a part from the manufacturer through intermediaries to
minimize the opportunity of procuring or introducing a counterfeit part into the
supply chain.
The next function traceability serves is to be able to track and identify any
suspect or confirmed counterfeit parts that are in-process or in service so that the
parts can be recalled and replaced as necessary. It allows the organization to
quickly quarantine parts in service, replace the affected parts, and return the
products to service. This minimizes both field impact and production impact.
There are trade-offs between the cost of providing the traceability and the cost
avoidance if production or in-service product is affected. Hence the level of
traceability needed may vary depending on application, supply chain
environment, and the risk to the end user. Examples include very detailed part
traceability (e.g. serial number), lot traceability where the part usage can be
identified and limited to a particular production lot or batch of deliverable
hardware, or some other method.
Traceability requirements may be defined in documents such as, but not limited
to, 9100, FAR 52.246-2, FAR 52.246-11, DFARS 252.246-7007, DFARS
252.246-7008, AS5553, AS6174, AS6081 and customer contracts.
The Request for Quote (RFQ or equivalent) and the Purchase Order should
define the traceability requirements as applicable. Aerospace fasteners, for
example, require date and lot code because they can be traced back to the
manufacturer. When purchasing parts from a distributor, knowledge of the
required documentation is essential. A CofC (Certificate of Conformance) may
include traceability information but can be easily counterfeited so reliance on this
document alone is not foolproof.
Unless full product traceability to the OCM/OEM is provided with the part, extra
visual inspection as well as testing will provide an increased level of confidence
that the parts will function as required. This will require a level of communication
between the procurement and engineering organizations to assess the level of
risk and develop an inspection and testing plan appropriate to the level of risk the
part poses in the product.
Upon receipt, traceability documentation should be evaluated in an effort to
identify suspect material. The verification activities shall be appropriate to the
product risk.



Identity: Original manufacturer, part number, date code, lot number, serial
number, batch number, etc.
Pedigree: Origin, ownership history, storage, handling, physical condition,
previous use, etc.
Inspection and test results
Customer contract or legislation may require that traceability records be
maintained. This can be a short period (a few years), but could be as long as the
life of the product, which could be many decades.
10.
Part Authentication
As stated earlier in the Risk Management section (section 3), the best method to
avoid counterfeit parts is to purchase the parts directly from the original
manufacturer. This is not always possible or practical. It is not just the parts that
can be counterfeited. Counterfeiting can also occur in the documentation
attesting to the authenticity of a part. Therefore, your organization should
establish inspection and test criteria as applicable to detect possible counterfeits.
Your organization’s quality manual will already address product verification
activities to assure an externally provided product conforms to its specified
requirements. The applicable quality requirement flow down and the level of
purchased product controls, are determined in accordance with the effect the
purchased product has on subsequent product realization and the end product.
In other words, verification activities are performed based on customer
requirements, source selection risk, component risk, and application criticality.
Likewise, risk determines the most appropriate methods of inspection and test.
Some examples of inspection activities are: review of data deliverables
(certificates of conformity, test results, process control documentation, first article
reports, etc.), independent laboratory tests, product and/or process
audits/assessments, product inspection at a supplier's facility,
inspection/verification of the product and accompanying documentation upon
receipt, and formal delegation of product acceptance to the supplier.
Some examples of test activities include: visual inspection, measurements, nondestructive and destructive testing (e.g. marking permanency, x-ray, destructive
analysis, thermal cycling, etc.).
In many cases, it is not possible to physically inspect every single part. And in
many cases, due to the sophistication of counterfeiting techniques, a visual
inspection may not be sufficient. Therefore, when appropriate, your organization
should have a process to determine the inspection, testing and acceptance
criteria related specifically to counterfeit detection. Note, depending on the risks,
this will likely be above and beyond your normal purchased product verification
defined in your QMS.
Inspection and test should be performed as early in the process as possible.
Inspectors and operators performing inspection at any stage should be familiar
with known counterfeit techniques.
Unfortunately, counterfeiters are constantly improving their counterfeiting
techniques to avoid your detection. So, the detection methods should be
reviewed and when needed, updated to keep up with the ever changing
counterfeiters’ capabilities.
Formal inspection and testing criteria should be considered for the following highrisk situations:







Previous counterfeit reports related to the part, product, or supplier;
Supplier doesn’t have a counterfeit parts control process;
Parts procured from non-OCM/OEM or non-OCM/OEM Authorized
Sources - the “Gray Market”;
Cannot confirm the part as supplied is new or previously unused and that
it has not been comingled in supplier’s new production or stock with used,
refurbished, reclaimed, or returned parts;
Customer Returns (to ensure returned items are the same authentic items
which were originally delivered before accepting returned parts back into
stores);
Anytime a part loses traceability, e.g. excess parts return to inventory,
etc., to ensure authenticity;
When investigating potential counterfeit parts identified in-house.
As previously stated, the organization holding the design authority (specifically
the cognizant engineer from that organization) for the end item, is the only
organization that can determine the level of application risk. If your organization
is not the design authority, then pre-coordination with customers (and the design
authority) is crucial and can be a contract requirement.
If the Customer has not specified requirements for inspection and test methods,
some industry standards (e.g. AS6081*) require a minimum level of testing be
performed.
* Example: AS6081 for EEE independent distributors, the Organization shall
perform or cause to be performed documentation/traceability review, external
visual inspection, 2-dimensional radiological inspection, lead/termination finish
evaluation, and remarking and resurfacing tests. For active devices de-lid/decapsulation physical analysis (DDPA) shall also be performed. The Organization
shall follow commercial counterfeit EEE part inspection and test methodology
unless otherwise specified by the Customer. Examples include but are not limited
to IDEA-STD-1010, CCAP-101, or applicable slash sheets of AS6171.
Locations where the tests are performed should also be considered. For
example, EEE part testing is performed by an IDEA-ICE-3000 certified inspector
or approved test lab. If your organization is the design authority, it is important to
identify any specific test labs required to perform the testing, when developing an
inspection and test plan for your suppliers.
Specific test methods to determine counterfeit parts are too numerous to mention
in this handbook. Some excellent sources of information with photo examples of
counterfeit techniques are:



For Non-EEE Parts, see NAVSEA Memorandum 2013-0537.
For fasteners, see Suspect/Counterfeit Bolt Headmark List
For EEE, Parts see AS6171/2 or IDEA-STD-1010
Appendix C provides an example of increased testing appropriate to increased
risk. Remember, the type and level of testing are based on risk determined in
collaboration with the customer/end-user/design authority.
11.
Determination of Suspect Counterfeit
During the verification process, indicators that a part may be counterfeit may be
identified. Per the definition, a Suspect Counterfeit Part is a part for which there
is objective and credible evidence indicating that it is likely counterfeit. If there is
an indication of suspect counterfeit part(s), the situation will require additional
Inspection/Screening process is to analyze the results in order to prepare a
disposition and final report.
The interpretation of inspection results should be documented in accordance with
the specific test/inspection method(s) used. Analysis may require a forensics
approach. There could be distinct and subtle indications that suggest that an item
is suspect counterfeit. Indications for counterfeiting and quality defects from the
authentic manufacturer and other quality related issues (e.g., poor storage and
handling) can often be confused, leading to false positive or false negative
results. Care should be taken to resolve inconclusive findings and to distinguish
between counterfeit indications and quality indications. The sum total of the
observations from the complete test/inspection sequence is what establishes the
overall conclusion.
One indicator from the parts or packaging may be sufficient if it is conclusive
enough. If there are enough indicators that lead to a conclusion with a
reasonable level of confidence that the parts are more likely suspect counterfeit,
you may want to consult with the authentic manufacturers. There are times when
they are willing to provide pertinent information to the decision making. If the
indicator(s) lead to a conclusion that the parts contain quality issues, then
document the quality issues in the final report and relevant information that led
you to believe the final determination is quality related rather than counterfeit
related.
If parts do not exhibit indicators that lead to a conclusion with a reasonable level
of confidence that the parts are suspect/counterfeit, then the final determination
that the parts passed required testing and that there was no evidence of
counterfeiting based on the testing/inspection performed. (See Appendix E for
test report additional information.)
12.
Handling of Suspect/Confirmed Counterfeit Parts
Your organization’s Quality Management System (QMS) typically addresses the
control of nonconforming material, including the segregation and quarantine of
parts and associated documentation until dispositioned.
Additional areas to address include:

Containment of any related parts or material, including product which may
already have shipped to the customer.


Notification from external sources potentially impacting your product. This
may include reviewing GIDEP Reports and other industry sources related
to suspect/counterfeit parts.
Detailed reporting information on who to notify to ensure customer and
regulatory requirements are met.
Note, for additional information on this topic, see Section 3.3 “Control of NonConformities, Corrective and Preventive Actions” in the IAQG SCMH.
Suspect counterfeit and counterfeit parts should be treated as nonconforming
material and quarantined to prevent use or re-entry into the supply chain until
such parts are inspected and/or tested, and relevant documentation researched
and verified. Only parts confirmed as authentic and meeting customer
requirements can be dispositioned for release and subsequent use.
In the event the part/material is counterfeit, the part and all information relating to
the purchase of the part, including points of contact, company name and address
should be collected and retained in the event it is needed for use in an
investigation. This may include investigations by law enforcement officials.
Counterfeit parts not needed as evidence for an investigation should be
completely destroyed/mutilated to keep the parts from re-entering the supply
chain.
13.
Reporting
The counterfeit parts risk impacts all levels of the supply chain. By working
together, OEMs, distributors, customers, and suppliers become more aware of
the problems and more effectively deal with counterfeits and counterfeiters.
Reporting suspect counterfeit parts helps limit the proliferation and use of
counterfeit parts across the supply chain by:





Alerting others of suspect counterfeit parts by part numbers and types and
by lot or batch numbers if known
Identifying sources of counterfeit parts
Highlighting methods of counterfeiting
Sharing Inspection and testing used for identification and verification.
Helping other players in the supply chain adequately assess risk and
improve quality and reliability

Reducing the resources needed to maintain awareness of counterfeit
issues by establishing a cooperative effort to exchange technical
information
Suppliers should have a process in place on how and where to report suspected
or confirmed counterfeit parts or materials. This process should include who to
contact and what (if any) organizations to report the information to. All
appropriate personnel should be aware of the proper reporting process for
suspect/counterfeit Parts.
All counterfeit / suspect counterfeit parts should be reported internally within the
organization. Ensure the reporting of suspect counterfeit parts across all
appropriate business units and functions, including Legal/Contracts.
Customers should be notified of the discovery of any suspect/counterfeit parts.
This is especially important if the discovery affects product which has already
shipped. Customer requirements may specify the reporting methods and
timeframe.
A best industry practice is to report suspect/counterfeit parts externally to the
appropriate authorities/ law enforcement agencies. It is the responsibility of all
suppliers in the supply chain and benefits the entire aviation, space and defense
industry. There may be national or local laws which require this reporting (See
Appendix B for examples.
Another best practice for external reporting is reporting to centralized
databases/reporting sources which gather information relating to
suspect/counterfeit parts. These industry accessible, centralized databases allow
companies to research parts and suppliers/distributors before purchasing from
them. This may be required by your contract.
Examples of centralized databases are (see Appendix A for more information):




Anti-Counterfeiting Forum
ERAI
FAA Suspect Unapproved Parts
GIDEP
14.
Monitoring information and trends
Recently, Quality Management Systems such as 91XX have included counterfeit
prevention requirements and other Government level requirements and
counterfeit law have been published. Suppliers need to have a method to monitor
counterfeit activity relative to the types of products they procure to reduce the risk
of inputting counterfeit material into the supply chain. These methods can include




Ensuring positive, trusting relationships with your suppliers and
distributors
Searches on the internet
Monitoring of information from reporting sources such as GIDEP, ERAI,
Anti-Counterfeiting Forum.
Membership/participation in societies, industry groups, and forums
A monitoring strategy should be comprised of a constant review for sources who
have provided suspect counterfeit parts and the techniques used. As
counterfeiting methods become more sophisticated, becoming aware of and
updating to the latest detection and avoidance techniques is necessary.
In addition to your existing surveillance process, monitor the relevant
marketplace for potentially counterfeit products. This includes monitoring online
auction sites as well as brick-and-mortar locations where potential counterfeits
are likely to be introduced into the supply chain.
15.
Internal/External Audits
Counterfeit avoidance is included in 91XX and is reviewed as part of QMS audits.
Customers and regulatory authorities may also audit your counterfeit avoidance
systems and practices. Auditing the Counterfeit Avoidance program allows an
organization’s management to know how robust the program is and how wellprepared employees are to look out for and deal with suspect or proven
counterfeit parts. Auditing can also demonstrate that the organization has a
system adequate to the customer’s requirements. Any weaknesses identified
need to be addressed in accordance with the organization’s policies and
procedures.
16.
Accreditation/Certification
There are organizations recognized by customers which perform audits looking
specifically at counterfeit avoidance systems and which issue formal
accreditations/certifications. These include:

Counterfeit Avoidance Accreditation Program (CAAP) administered by PRI

IECQ Counterfeit Avoidance Program (IECQ CAP)
National Quality Assurance, USA (NQA USA)
Benefits of accreditation/certification may include:

Strengthening Technical expertise

A decrease of customer audits

Demonstration of compliance with requirements

Increased customer satisfaction

More Industry Visibility

Higher Quality – Lower Cost

Process Efficiency

Improvement

More Opportunities Worldwide
Appendix A
Counterfeit Parts Reporting and Monitoring Agencies
NOTE: Any website information provided was accurate at the time of publication
but may have changed since that time.
GIDEP (www.gidep.org) does not charge for their service although, an account is
required and there are restrictions on GIDEP membership. Other limitations also
apply for GIDEP reporting and accessibility. Prior to publishing a GIDEP Alert,
the submitted data is thoroughly reviewed and the offending business is given an
opportunity to rebut. This process may take more time but it assures its accuracy
and the protection of its information.
ERAI’s (www.erai.com) database is a subscription-based product. Anyone can
pay the fee and have access to the data. Some advantages of ERAI are that it
provides a database of aliases for a distributor’s name. This function is useful
with counterfeit part reports that have been discovered against one company.
IDEA (www.idofea.org) is a resource for distributors to find relevant quality
information and to participate in advancing industry ethics, ensure customer
satisfaction, establish standards and promote education. The purpose of IDEA is
to promote the independent distribution industry through a media advocacy
campaign, to improve the quality of products and services through a quality
certification program, educational seminars, and conferences, and to promote the
study, development, and implementation of techniques and methods designed to
improve the business of independent distributors.
The Anti-Counterfeiting Forum (www.anticounterfeitingforum.org.uk) helps to
exchange, develop and disseminate best practice and intelligence to mitigate
against the threat of counterfeits in the electronic and electrical supply chains by:

Working closely with a number of Government and industry bodies and
attending a number of relevant Government / industry forums

Managing the Anti-Counterfeiting Forum website, organising annual
counterfeit awareness seminars and providing presentations and talks at
relevant industry events.
Appendix B
Government Reporting Methods
Here some information on reporting – extracts from the IEC document §4.14:
FAA
Suspected counterfeit component issues can be e-mailed to the Aviation
Safety Hotline office
See webpage http://www.faa.gov/contact/safety_hotline/
EASA
EASA issue Safety Information Bulletins (SIBs) on potential hazards which
may include reporting of counterfeit or fraudulent components
The European Aviation Safety Agency is located at Ottoplatz 1, D-50679
Koeln, Germany, tel
+49 221 8999 000, info@easa.europa.eu and has a webpage
http://easa.europa.eu/home.php .
EASA controls Design Organisation Approvals (DOA), Production
Organisations Approvals (POA) and Maintenance Organisations
Approvals (MOA).
EU counterfeit reporting
Counterfeit reporting within the EU should be reported locally. The Europa
webpage contains forms and details of how to process national and EU
wide applications for IP action by customs authorities
The Europa webpage for the EU Taxations and Customs Union entitled
‘How can right holders protect themselves from counterfeiting and piracy’
provides details and forms for reporting counterfeit activities, see webpage
http://ec.europa.eu/taxation_customs/customs/customs_controls/counterfe
it_piracy/right_holders/index_en.htm
Appendix C
Risk Based Inspection Chart
Highest Level of Testing
Burn-in
Risk
Factors:
Thermal Cycle Testing
Destructive Physical Analysis
Population of Material Tested
Level of Testing
Hermeticity Testing
 Part
classification
 Part type
 Application
 Obsolescence
 Interfaces
100% of ALL
Material Tested
Electrical Testing
% of Parts Tested
from each
Date/Lot Code
X-ray Fluorescence
X-ray
Marking Permanency
Increase
inspection/
testing as risk
increases
Small % of
Population Tested
External Visual Inspection
Lowest Level of Testing
Figure C1 – Risk Based Inspection
The US Defense Logistics Agency publishes a list of commercial laboratories
suitable for Testing Military Electronic Devices https://landandmaritimeapps.dla.mil/Offices/Sourcing_and_Qualification/labsuit.a
spx.
Appendix D
Product Family Risks and Mitigation Strategies
Product Applicability
Risk Types

Obsolescence

Component
Obsolescence
Supplier Control
Sub-Tier Supplier Control
Contract Flowdown
inconsistencies
Supply Chain Traceability
Variation in I&T lab
capability
Product and application
risk
Control of inventory (from
Auth vs Grey market,
scrap, surplus, returned
product)
Mitigation Strategies / Needs
User
Operator





Platform
Integrators










Parts Mgmt Plans, DMS
Plans, Last Time Buys/EOL
Buys
Contract flowdown,
surveillance;
reporting/notification;
GIDEP/ERAI
Disclosure requirements
(whether source is auth/not
auth and whether or not full
mfr’s warranty is provided)
Distributor audits/approvals,
Source Selection Criteria
Verification of Purchased
Product
Inspection and Testing
Requirements
Test Strategies according to
the Risk
Risk Assessment
Product Applicability
Risk Types








System
Integrators

Component Obsolescence
Supplier Control
Sub-Tier Supplier Control
Contract Flowdown
inconsistencies
Supply Chain Traceability
Source Design Part –
supply chain control
Variation in I&T lab
capability
Product and application
risk
Control of inventory (from
Auth .vs. Grey market,
scrap, surplus, returned
product)
Mitigation Strategies / Needs











Parts Mgmt Plans, DMS
Plans, Last Time
Buys/EOL/bridge Buys
Contract flowdown,
surveillance;
reporting/notification;
GIDEP/ERAI
Disclosure requirements
(whether source is auth/not
auth and whether or not full
mfr’s warranty is provided)
Distributor audits/approvals,
Source Selection Criteria;
I&T Lab selection criteria
Planning for adequate lead
times
Verification of Purchased
Product
Inspection and Testing
Requirements
Test Strategies according to
the Risk
Risk Assessment
BOM/Alternate Parts ListingMultiple Replacement Parts
for designs
Inventory Control Method
Product Applicability
Risk Types








Component
Obsolescence
Supplier Control
Sub-Tier Supplier Control
Contract Flowdown
inconsistencies
Supply Chain Traceability
Variation in I&T lab
capability
Single source design
Control of inventory (from
Auth vs Grey market,
scrap, surplus, returned
product)
Mitigation Strategies / Needs





Sub-Systems











Components
(OCM)





Authorized
Distributors

Component
Obsolescence
Supply Chain Traceability
Supplier Control –
Distributors
Inventory Control –
Warranty Returns
Single source design

Supply Chain Traceability
Supplier Control –
Distributors
Lack of clear definition of
Authorized and how to
determine scope of
authorization of a
distributor
Variation in I&T lab
capability



Parts Mgmt Plans, DMS
Plans, Last Time
Buys/EOL/bridge Buys
Contract flowdown,
surveillance;
reporting/notification;
GIDEP/ERAI
Disclosure requirements
(whether source is auth/not
auth and whether or not full
mfr’s warranty is provided)
Distributor audits/approvals,
Source Selection Criteria;
I&T Lab selection criteria
Planning for adequate lead
times
Verification of Purchased
Product
Inspection and Testing
Requirements
Test Strategies according to
the Risk
GIDEP/ERAI
Risk Assessment
System Redesign
BOM/Alternate Parts ListingMultiple Replacement Parts
for designs
Inventory Control Method
Distributor audits/approvals,
Source Selection Criteria; I&T
Lab selection criteria
Inventory Control method –
Verification of Returned
Part(s); Control of Excess
parts
BOM/Alternate Parts ListingMultiple Replacement Parts
for designs




Distributor audits/approvals,
Source Selection Criteria; I&T
Lab selection criteria
Supply Chain
Inspection and Testing
ERAI Reporting databases
Inventory Control

Customer Notification
Product Applicability
Risk Types


NonAuthorized
Distributors /
Brokers


Supply Chain Traceability
Supplier Control –
Distributors
Lack of clear definition of
Authorized and how to
determine scope of
authorization of a
distributor
Variation in I&T lab
capability
Mitigation Strategies / Needs





Distributor audits/approvals,
Source Selection Criteria; I&T
Lab selection criteria
Inspection and Testing
ERAI Reporting databases
Inventory Control
Customer Notification
Appendix E
Test Report Information
The Test Report generated should document how the Test/inspection Plan was
implemented. The Report should document the criteria and the analysis and
interpretation of results that yielded any test conclusions regarding the authenticity of
the components under test. The Test Report should contain the following elements:

Identifying information - Part name, part number, manufacturer, lot size, lot date
code, report number, Test Laboratory Certification identification if used, customer
name, date of analysis.

Test document name - Testing Requirements, if additional testing is added during
the process, identify the tests and/or test document.

Results - Indicate if the parts are “acceptable” or “not acceptable” on the basis of
counterfeit risk. When there is evidence that the parts being examined are
suspected of having been counterfeited using methods that are not detectable by the
Test Sequence in the SOW or PO, it shall be documented in the test report.

The name, signature or stamp (electronic or ink) of the individual(s) who performed
each specific Test Method, and the name, signature or stamp of the individual(s)
authorized to accept and/or approve the test results.
Appendix F
Counterfeit Part Control Plan Template
1. Scope
1. Purpose
Control Plan is Addendum to QMS
Establishes baseline; customer requirements supersede these requirements.
2. Application
1. Applicable Documents
1. 9100 Quality Management Systems - Requirements for Aviation, Space, and
Defense Organizations
2. Other Documents
2. Terms and Definitions
1.
Authorized Distributor
2.
Franchised Distributor
3.
Independent Distributor
4.
Counterfeit Part
5.
Suspect Counterfeit Part
3. Requirements
1.
Training
2.
Customer Contract Review
3.
Obsolescence Part Availability)
4.
Procurement
5.
1.
Supplier Approval
2.
Source Selection
3.
PO Placement
Traceability
6.
Verification of Purchased Product
7.
Investigation
8.
Handling of Suspect/Confirmed Counterfeit Product
9.
Reporting
10.
Monitoring counterfeit reporting, information, trends
11.
Internal Auditing
12.
Control of External Sources
5. Roles and Responsibilities
(This may be a separate section or defined within each section in 4)
1.
Contracts
2.
Engineering
3.
Materials Management & Logistics
4.
Quality
5.
Supplier Management & Procurement