PRESENTATION TITLE    The Counterfeiting Epidemic - How to Avoid Fake Parts                      NASA PM Challenge        ...
PRESENTATION TITLE                     www.nasa.gov
Worldwide Impact   Costs Global Economy over $650 Billion/Year   Accounts for more than 5% of global merchandise trade ...
Counterfeit Electronic Parts    1.   Definitions and Examples    2.   Scope and Magnitude    3.   Product and Mission Impa...
Counterfeiting Consequences       Exploding counterfeit cell phone battery       Recalled circuit breakers       Delays...
What are Counterfeit Parts?    Electronics Manufacturing Industry    •   Substitutes or unauthorized copies    •   A part ...
Counterfeit Electronic Parts                                     Device lead– Parts re-topped &/or remarked      condition...
Counterfeit Part Examples                                         National Semiconductor     New versus                   ...
Counterfeit Part ExamplesPackage Marking         Die Marking   Is Phillips            Is Intel
Counterfeit Part ExamplesNon-gold leads     Gold leads on real device
Counterfeit Part ExamplesX-Ray showing die pattern   X-Ray showing die pattern   of known good part             of counter...
Which Device is Counterfeit?Counterfeit            Known Good Part
Historical Trend          45          40          35                           GIDEP Alerts and Problem Advisories Reporti...
Current Magnitude                 Total Counterfeit Incidents:                 (For 498 Companies Surveyed)10,000         ...
Semiconductor Manufacturer Survey     In June 2006, the Semiconductor Industry Association (SIA) established the     Anti-...
16Sources of Counterfeiting
17
Slide courtesy of
http://www.businessweek.com/magazine/conte  nt/08_41/b4103034193886.htm?chan=top+n  ews_top+news+index+-+temp_top+story
In                                      d   ep                                               en                  B        ...
Sources of Counterfeiting     “Most broker organizations are very small and do not     have established quality control pr...
What We are Up Against                                       Bogus                                    QualificationsMultip...
Product Impact                                 GIDEP Counterfeit Case SummariesEE-A-06-01      Test failures at a defense ...
How Companies Are Uncovering                                 Counterfeits                          Returned as Defective  ...
Product Impact     What “failed parts” mean to NASA            Schedule slippage               Cost Increase         Reduc...
What We are Up Against                           - Bogus Test Reports - 19% of companies  employing testing  contractors h...
What We are Up Against                        - New Blacktopping Techniques-                                   Exemplar To...
What We are Up Against                              - New Etching Techniques-     We of course run a lab and we could see ...
Solutions
Work                  Groups     Training                              Conferences TechnicalCommittees        Help        ...
Quality is free. It is not a gift, but it is free. What  costs money are the unquality things– all the  actions that invol...
The Cost of UnqualityCorrective Action                   Rework                            Scrap                          ...
Cost Impact(actual example)      Cost of      Parts + Test      - $90K                          Reliability  Labor to     ...
What is the AS5553 Standard?              •Government              •Industry  Members     •Industry Associations          ...
SAE International AS5553         Counterfeit Electronic Parts;Avoidance, Detection, Mitigation, and Disposition           ...
SAE G-19 MembersRepresentation from NASA, Aerospace Industry, Military, & Commercial   US Government Members …            ...
SAE AS5553 Requirements                               Counterfeit                              Parts Control              ...
Counterfeit Parts Control Plan:                        … The organization shall develop and                      implement...
Parts Availability:                 … The process shall maximize               availability of authentic, originally      ...
Purchasing Process:             • Determine risk of receiving counterfeit part…             • Actions may include surveys,...
Purchasing InformationPurchasing Verification                   …This documented process shall                 specify con...
In Process Investigation  Shall address the detection, verification, and control of … counterfeit parts.                  ...
Procurement Clauses:                         …The seller shall establish and                       implement test and insp...
Procurement Clauses:                          …The seller shall maintain a method                       of item traceabili...
Procurement Clauses:                    …The seller shall approve, retain, and                 provide copies of Electrica...
Procurement Clauses:                       …The seller shall have a quality                   management system that compl...
SAE AS5553 Guidance                                 Risk Charts                                 Highest Risk              ...
Organizations Invoking SAE AS5553• NASA Policy Directive• DOD Policy Memorandum• DOD adopts AS5553 August 2009• Other comp...
NASA Policy Directive 8730.2C                 NASA Parts Policy•Applies to:   •NASA Headquarters   •NASA Centers, includin...
Considerations for Implementation         Departments impacted include:   Parts           Quality            ElectronicsEn...
Next Steps – RecommendationsContinued Training and Awareness of Counterfeit Issue   Formation of a counterfeit parts worki...
Resources
Work Groups/Committees/                           Associations•   US Chamber of Commerce Coalition Against Counterfeiting ...
 Fraud Detection Awareness – Roger Moerman , Technical Services Associates & Thomas  Williams, Department of Energy Lega...
Training Opportunities
Training (cont)
Training (cont)
Resources
Resources (cont)
Resources (cont)
Resources (cont)
Resources (cont)                 •   Pre-qualified distributors                 •   Semiconductors and Microcircuits      ...
The Way Forward
Future Standards Development                                                                    SAE ASxxxx,               ...
Supplier Certification                                   3. Test                                   Laboratories           ...
Potential FAR Changes     DEPARTMENT OF DEFENSE     GENERAL SERVICES ADMINISTRATION      NATIONAL AERONAUTICS AND SPACE AD...
NASA Proposed FAR Clause                  Authenticity of Electronic Parts“All procurements for electrical, electronic, or...
NASA Proposed FAR Clause                           GIDEP Participation“The contractor shall participate in the Government-...
Title 18, United States Code     - Proposed Legislation -
SummaryYou should: Know what a counterfeit EEE part is and the magnitude  of the threat Understand why a counterfeit par...
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  1. 1. PRESENTATION TITLE The Counterfeiting Epidemic - How to Avoid Fake Parts NASA PM Challenge February 9th – 10th, 2010 Brian Hughitt Daniel DiMasewww.nasa.gov Used with Permission
  2. 2. PRESENTATION TITLE www.nasa.gov
  3. 3. Worldwide Impact Costs Global Economy over $650 Billion/Year Accounts for more than 5% of global merchandise trade Loss of over 750K U.S. jobs Predicted to grow over $1.2 trillion by end of 2009 Interpol has linked counterfeiting to organized crime and terrorist financing Jeopardizes health & safety of consumers, national security threat, affects brand name & reputation US Department of Commerce
  4. 4. Counterfeit Electronic Parts 1. Definitions and Examples 2. Scope and Magnitude 3. Product and Mission Impact 4. Causes and Sources 5. Solutions - SAE AS5553 - Resources/Tools/Forums - The Way Forward4
  5. 5. Counterfeiting Consequences  Exploding counterfeit cell phone battery  Recalled circuit breakers  Delays and project cost overruns  “Trojan Horse” or backdoor entry  Kill switch
  6. 6. What are Counterfeit Parts? Electronics Manufacturing Industry • Substitutes or unauthorized copies • A part in which the materials used or its performance has changed without notice • A substandard component misrepresented by the supplier Electronics Distributor Industry • Items that are produced or distributed in violation of intellectual property rights, copyrights, or trademark laws • Items that are deliberately altered in such a way as to misrepresent the actual quality of the item with intent to defraud or deceive the purchaser. – Any information omitted or means taken to mislead the purchaser to believe that such items are authentic or lawful US Department of Energy / SAE AS5553 • A copy or substitute without legal right or authority to do so, or one whose material, performance, or characteristics are knowingly misrepresented EIA/G-12 Committee • An item whose identity or pedigree has been deliberately altered or6 misrepresented by its supplier
  7. 7. Counterfeit Electronic Parts Device lead– Parts re-topped &/or remarked condition shows to disguise parts differing from parts were used Marking indicates an those offered by the original Op Amp from ADI… part manufacturer– Defective parts scrapped by … but contains die for a Voltage the original part manufacture Reference from PMI– Previously used parts salvaged from scrapped assemblies Evidence of prior– Devices which have been Part number indicates a marking for a part with CLCC package, but this inferior performance … refurbished, but represented package is a CDP… as new product. Re-topping Remarking … accompanied by bogus test report 7
  8. 8. Counterfeit Part Examples National Semiconductor New versus does not use Refurbished leads Dual Markings “ : ” in part numbersBlacktop peeling away. Acetone Swipe Missing Serial Number Sand marks evident
  9. 9. Counterfeit Part ExamplesPackage Marking Die Marking Is Phillips Is Intel
  10. 10. Counterfeit Part ExamplesNon-gold leads Gold leads on real device
  11. 11. Counterfeit Part ExamplesX-Ray showing die pattern X-Ray showing die pattern of known good part of counterfeit
  12. 12. Which Device is Counterfeit?Counterfeit Known Good Part
  13. 13. Historical Trend 45 40 35 GIDEP Alerts and Problem Advisories Reporting 30 Suspect Counterfeit Electronic ComponentsReports 25 20 15 10 5 0 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 13 Year
  14. 14. Current Magnitude Total Counterfeit Incidents: (For 498 Companies Surveyed)10,000 9,356 U.S. Customs Notifications 9,000 8,600 8,139 8,000 Number of Year 7,000 Incidents 6,000 2005 1 5,000 3,868 2006 29 4,000 3,000 2007 169 2,000 2008 604 1,000 0 2005 2006 2007 2008 (est.) U.S. Department of Commerce – Preliminary Data (as of March 4, 2009)
  15. 15. Semiconductor Manufacturer Survey In June 2006, the Semiconductor Industry Association (SIA) established the Anti-Counterfeiting Task Force (ACTF) consisting of semiconductor manufacturing company members involved in the investigation of counterfeiting and coordination with law enforcement. Semiconductor Manufacturer disclosures … – Company A: Over 100 part numbers have been counterfeited in last 3 years. – Company B: 19 cases reported involving 97,000 units. – Company C: Since June 2006, there have been 4 seizures of counterfeits of our products by U.S. Customs; units seized ranged from 6000 to 60,000. – Company D: “We estimate that 2-3 percent of purchases of our brand are counterfeit” – Company E: A broker website indicated 40,000 or our devices available, but our company had only made less than 200 units of that device with the specified date code. If all 40K were available it would result in a $34 million loss.15
  16. 16. 16Sources of Counterfeiting
  17. 17. 17
  18. 18. Slide courtesy of
  19. 19. http://www.businessweek.com/magazine/conte nt/08_41/b4103034193886.htm?chan=top+n ews_top+news+index+-+temp_top+story
  20. 20. In d ep en B 0% 10% 20% 30% 40% d en ro A tD ke r ut ho is s riz t rib 30% ed u to Di rs s tri b 20% ut D or s O D D 7% ep C o on In ts tr a iv d 6% ct id M ua an ls uf Preliminary Data, Nov 2008 ac 6%US Department of Commerce tu Pr re im rs In e/ 6% te Su O rn b EM et Co s Ex nt 5% cl ra us ct or U iv s .S e .N So 3% at ur io ce na s lS 3% ec O ur C M ity s Ag 2% Sources of Counterfeiting en ci es O 1% th er D U LA .S .F 0% St ed O at er th e/ al er Lo Ag 0% ca en lG ci ov es er 0% nm en ts 0%
  21. 21. Sources of Counterfeiting “Most broker organizations are very small and do not have established quality control procedures in place. We have more than 10,000 brokers in our database. Of those only 200 have more than 10 employees and quality control procedures for their staff. That leaves us 9,800 to fall victim to. Many brokers are working out of their home. All someone needs is a phone, fax and e- mail address and they are in business.” American Electronic Resource, Inc.21
  22. 22. What We are Up Against Bogus QualificationsMultipleAlias’s
  23. 23. Product Impact GIDEP Counterfeit Case SummariesEE-A-06-01 Test failures at a defense contractor were found to be microcircuits containing many different chipsEE-A-06-03 Supplier of military hardware found suspect counterfeit microcircuits having dual part number markingsEE-A-06-04 Microcircuits that failed product testing were found to have chips from another sourceM9-A-07-01 During manufacturing of a military product, suspect counterfeit transistors were functional failures6E-P-07-01 Memory device supplier confirmed parts marked with their name did not contain their chipsUY7-P-07-01 Microcircuits, that failed electrical testing, were found to contain chips from another manufacturerNB4-P-07-01 Suspect counterfeit microcircuits, from an unauthorized distributor, found during testing at an aerospace supplierJ5-A-07-01 Independent distributor supplied suspect counterfeit parts (not available from original supplier) to defense plantJ5-A-07-02 Microcircuits, supplied by an independent distributor, were suspect counterfeit (device markings not authentic)A2W-A-07-01 Suspect counterfeit transistors failed electrical tests; found to have many different chipsJ5-A-07-06 Programmable logic devices found to be suspect counterfeit (lot code was after manufacturer discontinued parts)J5-A-07-09 Microcircuits found to be suspect counterfeit as the lot date code was after the manufacturer stopped productionUE-A-07-01 Suspect counterfeit microcircuits failed electrical tests; contained chips from another manufacturerAAN-U-08-052 A government entity reported counterfeit circuit breakers in nuclear power plantsCE9-P-08-02 Military parts manufacturer reported U. S. authorities have recently intercepted many counterfeit parts shipmentsUL-P-08-01 Distributor unable to provide test reports on suspect counterfeit microcircuits that failed during factory testingD4-A-09-01 Military hardware manufacturer found suspect counterfeit programmable devices showed part remarking
  24. 24. How Companies Are Uncovering Counterfeits Returned as Defective 1261 Discovered Defective Parts/Poor Performance 1116 Markings, Appearance, Condition of Parts 929 Notification by OCM 835 Testing 776 Customer Suspected Part Was Counterfeit 693 Notification by US Customs 604 Self-Initiated Investigations 341 Notification by OEM 180 Returned as Wrong Merchandise 50 Absence of Original Documentation 15 Returned as Excess Inventory 8 Notification by GIDEP 6 Notification by DLA 6 Notification by Other US Government Agencies 3 Notification by Non-US Government Agency 3 Other 2Unauthorized Overrun by Contract Manufacturers U.S. Department of Commerce – 0 200 400 600 800 1000 1200 1400 Preliminary Data (as of March 4, 2009)
  25. 25. Product Impact What “failed parts” mean to NASA Schedule slippage Cost Increase Reduced performance Poor reliability Product failure • Personnel Safety • Mission Success • National Interests Decline in mission readiness25
  26. 26. What We are Up Against - Bogus Test Reports - 19% of companies employing testing contractors had problems with U.S.- based firms concerning faulty or forged testing.- The parts were cleared by the testing house, but were later found to be counterfeit by the customer. U.S. Department of Commerce February,26 2009
  27. 27. What We are Up Against - New Blacktopping Techniques- Exemplar Top Surface Suspect Top SurfacePure Acetone / 7 Day Soak- No Affect New Blacktop Material Can Only Be Removed With an X-acto Knife
  28. 28. What We are Up Against - New Etching Techniques- We of course run a lab and we could see that the surface had been etched, how???. This unfortunately is not the first time we have seen this type of damage. IT IS A FORM OF PLASMA ETCH!!! We do not have any detail of how, use your imagination, at any rate these parts have had the marking etched away, this way it saves them from sanding, then blacktopping, and finally remarking. They simply etch and remark Yes these are the same surfaces28
  29. 29. Solutions
  30. 30. Work Groups Training Conferences TechnicalCommittees Help Resources Government Regulations SAE G-19 Standards
  31. 31. Quality is free. It is not a gift, but it is free. What costs money are the unquality things– all the actions that involve not doing things right the first time. Philip B. Crosby
  32. 32. The Cost of UnqualityCorrective Action Rework Scrap Re-TestingTroubleshooting Repair Re-Inspection Corrective Action Reports & Investigation Processing Engineering Labor for manufacturingFailure Analysis Replacement materials Change Proposals replacements Handling and Material for extra Storage for extra inventory transportation for extra inventory inventory
  33. 33. Cost Impact(actual example) Cost of Parts + Test - $90K Reliability Labor to Testing replace •$57K suspect chips •$30,000 Change parts in field •$70KTotal cost: >$250,000
  34. 34. What is the AS5553 Standard? •Government •Industry Members •Industry Associations •Formed September 2007 G-19 •Convened weekly on “fast-track” course Committee •Address aspects of preventing, detecting, responding to and counteracting the threat of counterfeit electronic components (EEE parts) Charter •Develop Standard(s) suitable for use in aeronautic, space, defense, civil and commercial electronic equipment applications to mitigate the risks of counterfeit electronic components Objective Incorporates Succinct Requirements and Guidance: •Counterfeit Electronic Parts Control Plan •Component ManagementAerospace •ProcurementStandard •Test/Evaluation Methods AS5553 •Response strategies when suspect or confirmed counterfeit components are detected.
  35. 35. SAE International AS5553 Counterfeit Electronic Parts;Avoidance, Detection, Mitigation, and Disposition …increasing volume of counterfeit electronic parts … posing significant performance, reliability, and safety risks.
  36. 36. SAE G-19 MembersRepresentation from NASA, Aerospace Industry, Military, & Commercial US Government Members … Industry Members … • DSCC • Arrow Zeus Electronics • GIDEP • BAE Systems • MDA • Boeing • NASA • General Dynamics • US AF / NRO (Aerospace Corp.) • Jabil Circuits • US Army - AMRDEC • Lockheed Martin • US Navy - NAVAIR • Maxim Integrated Products • US Navy - NSWC • Northrop Grumman • US Navy - NCIS • Orbital Sciences • US Customs and Border Protection • QP Semiconductor • Raytheon Participating Industry Associations … • Aerospace Industries Association (AIA) • Best Manufacturing Practices Center of Excellence (BMPCOE) • ERAI, Inc. • Government Electronics & Information Technology Association (GEIA) • Independent Distributors of Electronics Association (IDEA)
  37. 37. SAE AS5553 Requirements Counterfeit Parts Control Plan Parts Availability Verification Purchasing of Purchased Product Purchasing Reporting Information In Process Material AppendixesInvestigation Control for Guidance
  38. 38. Counterfeit Parts Control Plan: … The organization shall develop and implement a counterfeit electronic parts control plan that documents its processes used for risk mitigation, disposition, and reporting of counterfeit parts…
  39. 39. Parts Availability: … The process shall maximize availability of authentic, originally designed … parts throughout the product’s life cycle, including management of part obsolescence…
  40. 40. Purchasing Process: • Determine risk of receiving counterfeit part… • Actions may include surveys, audits, review…Source of • Specify a preference to procure directly from OCMs… Supply • Maintain a register of approved suppliers • Guidance on source selection and approval processApproved • Assure sources of supply are maintaining processes for counterfeit risk mitigationSuppliers • Mitigate the risks of procuring counterfeit parts from sources other than OCMs… • Specify supply chain traceability to the OCM… Risk • Specify flow down of applicable requirements to contractors and sub-contractors…Mitigation
  41. 41. Purchasing InformationPurchasing Verification …This documented process shall specify contract/purchase order quality requirements … …The documented process shall assure detection of counterfeit parts prior to formal product acceptance…
  42. 42. In Process Investigation Shall address the detection, verification, and control of … counterfeit parts. Material ControlShall control … nonconforming parts Shall control counterfeit parts to from entering supply chain preclude their use … Reporting Shall assure that all occurrences of counterfeit parts are reported…
  43. 43. Procurement Clauses: …The seller shall establish and implement test and inspection activities necessary to assure the authenticity …
  44. 44. Procurement Clauses: …The seller shall maintain a method of item traceability that ensures tracking of the supply chain back to the manufacturer …
  45. 45. Procurement Clauses: …The seller shall approve, retain, and provide copies of Electrical, Electronic, and Electromechanical (EEE) part Manufacturer Certificate of Conformance (CoC).…
  46. 46. Procurement Clauses: …The seller shall have a quality management system that complies with Society of Automotive Engineers (SAE), AS9120 Quality Management Systems
  47. 47. SAE AS5553 Guidance Risk Charts Highest Risk In Business < LifeSupplier with 1X Visual Small % 1 Year Dependent GIDEP/ERAI Inspection _ & Unknown _ Alerts _ _ Financials _ _ _ _ _Source of _ Test / Inspect Level of Test Supplier Product & _ Supply _ Population & Inspection Assessment _ Application _ _ _ _ _ _ _ Supplier _ 100% Audited & OCM Life Test Approved Non-Critical Lowest Risk
  48. 48. Organizations Invoking SAE AS5553• NASA Policy Directive• DOD Policy Memorandum• DOD adopts AS5553 August 2009• Other companies with plans: • BAE Systems • Orbital Sciences Corp. • Lockheed This is no longer a choice, but a requirement
  49. 49. NASA Policy Directive 8730.2C NASA Parts Policy•Applies to: •NASA Headquarters •NASA Centers, including Components Facilities •NASA programs and projects •Flow down to NASA contractors, subcontractors, and grantees•Refers to AS5553 for guidance•Effective date: November 3, 2008. Compliance is Mandatory
  50. 50. Considerations for Implementation Departments impacted include: Parts Quality ElectronicsEngineering Assurance Manufacturing Receiving In-Process ProcurementInspection Inspection Legal & Supply ChainProduction Contracting Management Organization
  51. 51. Next Steps – RecommendationsContinued Training and Awareness of Counterfeit Issue Formation of a counterfeit parts working groupCreate cross function team of impacted departments Changes to internal policies and procedures Creation of a Counterfeit Parts Control Plan
  52. 52. Resources
  53. 53. Work Groups/Committees/ Associations• US Chamber of Commerce Coalition Against Counterfeiting and Piracy (CACP)• Semiconductor Industry Association (SIA) Anticounterfeiting Task Force (ACTF)• SAE G-19 Counterfeit Electronic Parts Technical Committee• Center for Advanced Lifecycle Engineering (CALCE)• Surface Mount Technology Association (SMTA)• TechAmerica G-12 Counterfeit Task Group• Aerospace Industries Association (AIA) Counterfeit Parts Integrated Process Team• International Microelectronics and Packaging Society (IMAPS)• Components Technology Institute (CTI)• NASA Quality Leadership Forum (QLF)• Independent Distributors of Electronics Association (IDEA)• ERAI• SEMI• DoD trusted Defense Systems Workshop• DoD Trusted Foundry Program• Defense Logistics Agency (DLA) Counterfeit Parts Integrated Process Team (IPT)
  54. 54.  Fraud Detection Awareness – Roger Moerman , Technical Services Associates & Thomas Williams, Department of Energy Legal Issues Surrounding Fraud – Monica Aquino-Thieman, NASA Office of General Counsel Suspected Unapproved Parts Program – Beverly Sharkey, Federal Aviation Administration (FAA) EEE Parts Quality Concerns – Counterfeiting, Lead-Free Solder, Tin Whiskers – Phil Zueleta, JPL ERAI Role in Prevention of Counterfeit Parts – Mark Snider, ERAI Counterfeit Parts Standard – Phil Zueleta, JPL Using a Supplier for Protection of Counterfeit Parts – Robb Hammond, AERI Counterfeit Components Avoidance – Leon Hamiter, CTI Counterfeit Electrical, Electronic, and Electromechanical (EEE) Parts Panel – Michael Sampson, Goddard Space Flight Center (GSFC); John O’Boyle, QP Semiconductor, Inc.; Henry Livingston, BAE SYSTEMS; David Meshel, Aerospace Corporation; Charlie Whitmeyer, Orbital Sciences Corporation; Debra Eggeman, Independent Distributors of Electronics Association (IDEA)
  55. 55. Training Opportunities
  56. 56. Training (cont)
  57. 57. Training (cont)
  58. 58. Resources
  59. 59. Resources (cont)
  60. 60. Resources (cont)
  61. 61. Resources (cont)
  62. 62. Resources (cont) • Pre-qualified distributors • Semiconductors and Microcircuits • Distributors with demonstrated quality assurance practices • Qualification based on JESD31 QMS requirements, e.g.: – Traceability – Certificate of Compliance – Handling and storage62
  63. 63. The Way Forward
  64. 64. Future Standards Development SAE ASxxxx, Authentication Testing of SAE Asxxxx, Electronic Parts Requirements for Counterfeit Electronic Parts SAE ASxxxx, Control Plan Counterfeit Electronic Certification/Registr Parts Control Plan ation Audits • BuyersSAE AS6081, • DistributorsCounterfeitElectronic PartsAvoidance-Distributors64
  65. 65. Supplier Certification 3. Test Laboratories 2. Distributors 1. Buyers65
  66. 66. Potential FAR Changes DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 2, 4, 12, 39, 52 [FAR Case 2008-019; Docket 2008-XXXX; Sequence X]RIN: 9000-XXXX Federal Acquisition Regulation; FAR Case 2008-019; Authentic Information Technology Products AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Advance notice of proposed rulemaking; public meeting. SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) are seeking comments from both Government and industry on whether the Federal Acquisition Regulation should be revised to include a requirement that contractors selling information technology (IT) products (including computer hardware and software) represent that such products are authentic. Additionally, the Councils are seeking comments on whether contractors who are resellers or distributors of computer hardware and software should represent to the Government that they are authorized by the original equipment manufacturer (OEM) to sell the information technology products to the Government. Finally, the Councils invite comments on (1) whether the measures contemplated above should be extended to other items purchased by the Government, and (2) whether the rule should apply when information technology is a component of a system or assembled product. 66
  67. 67. NASA Proposed FAR Clause Authenticity of Electronic Parts“All procurements for electrical, electronic, or electromechanical (EEE) parts that will be used in critical applications shall evaluate the risk of obtaining counterfeit parts and shall utilize an appropriate acquisition strategy to manage that risk. That strategy may include direct procurement of parts from OEMs or authorized suppliers; Government performed or approved tests and inspections to assure the authenticity of parts; and/ or an evaluation factor or criterion that assesses each non-authorized offeror’s ability and practices to assure authenticity of parts. A non-authorized offerors ability to assure authenticity of EEE parts includes the offerors clear representation and demonstration that parts originate from an OEM and are not counterfeit. Representation is fulfilled in a supplier certificate of conformance, and demonstration is fulfilled by a copy of one or more of the following: 1) the OEM’s original certificate of conformance, 2) records providing unbroken supply chain traceability to the OEM, 3) test and inspection records demonstrating authenticity of the parts.” 67
  68. 68. NASA Proposed FAR Clause GIDEP Participation“The contractor shall participate in the Government-Industry Data ExchangeProgram (GIDEP) in accordance with the requirements of the GIDEP OperationsManual (GIDEP S0300-BT-PRO-101) and the GIDEP Requirements Guide (S0300-BU-GYD-010). The contractor shall review all GIDEP ALERTS, GIDEP SAFE-ALERTS, GIDEP Problem Advisories, GIDEP Agency Action Notices, and NASAAdvisories to determine if they affect the contractors products produced for NASA.For GIDEP ALERTS, GIDEP SAFE-ALERTS, GIDEP Problem Advisories, GIDEPAgency Action Notices, and NASA Advisories that are determined to affect theprogram, the contractor shall take action to eliminate or mitigate any negative effectto an acceptable level. The contractor shall generate the appropriate failureexperience data report(s) (GIDEP ALERT, GIDEP SAFE-ALERT, GIDEP ProblemAdvisory) in accordance with the requirements of GIDEP S0300-BT-PRO-010 andS0300-BU-GYD-010 whenever failed or nonconforming items, available to otherbuyers, are discovered during the course of the contract.”
  69. 69. Title 18, United States Code - Proposed Legislation -
  70. 70. SummaryYou should: Know what a counterfeit EEE part is and the magnitude of the threat Understand why a counterfeit parts control plan is necessary Be familiar with SAE AS5553 standard for EEE parts Be familiar with NASA Policy Directive 8730.2C, NASA Parts Policy Understand the next steps for implementation
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