Industry has responded to the counterfeit parts epidemic in many different ways. Defense and aerospace contractors have spent a lot of time and money reassessing and reexamining their approved vendor lists. Quality departments have rewritten their flow downs. Legal departments have scrambled to redraft terms and conditions. Each company has set about their own course in establishing guidelines and requirements for their procurement departments.
Until recently, there has not been much consensus on what standard industry should follow. The Department of Defense, which has been very slow in offering any sort of direction regarding National Defense Authorization Act §818, did recently offer some guidance when it formally adopted AS6081 (Parts, Electronic, Fraudulent/Counterfeit: Avoidance, Detection, Mitigation, and Disposition ? Distributors Counterfeit Electronic Parts; Avoidance Protocol, Distributors).
For a primer on AS6081 I encourage you to check out an earlier post I wrote titled What Buyers Need to Know About the AS6081 Counterfeit Avoidance Standard
What exactly does adoption of this standard mean?
Well, BAE Technical Director, Engineering Fellow and Blogger Extraordinaire Henry Livingston sought clarification on that very question and the Defense Standardization Office provided the following:
Adoption is analogous to the Good Housekeeping Seal of Approval. It means that a non-government standard has been vetted through some standards offices in DoD and they have found the standard to be suitable to meet general DoD requirements. Also, adoption gives the standard visibility by being included in the DoD online ASSIST database, which is the repository for all standardization documents approved or adopted under the Defense Standardization Program. Adoption also assigns a DoD point of contact to oversee future changes and any questions or issues within the DoD with the standard. If it is ever determined that a DoD-adopted standard does not meet the general requirements, adoption can be withdrawn. No standard in the DoD, whether government or non-government, is automatically mandatory. The only way that any standard becomes mandatory is if it is required by law or regulation, DoD policy, or in a contract. Otherwise, a standard is just a tool waiting to be used. It is up to the program office or buying organization to decide whether to use a standard. Very few standards, whether government or non-government, have been designated as mandatory by law, regulation, or DoD policy on an enterprise-wide level.
So, while adoption of AS6081 is neither law nor regulation, it does have DoDs blessing, which is important as industry looks to develop best practices in an effort to comply with §818. Importantly, the NDAA for Fiscal Year 2014, which passed in the House on June 14, 2013 and is pending consideration by the Senate, includes an amendment to the NDAA for Fiscal Year 2012 which would:
Provide that the costs associated with the use of counterfeit electronic parts, and the subsequent cost of rework or corrective action that may be required to remedy the use or inclusion of such parts, are allowable costs under Department of Defense contracts if the counterfeit electronic parts were procured from an original manufacturer or its authorized dealer, or from a trusted supplier.
There is no definition provided for trusted supplier, and absent the unlikely event that Congress decides to define it, industry can point to the adoption of AS6081 by DoD as a guidepost. Specifically, as you seek to comply with the trusted supplier language it would be incumbent upon your company to seek out suppliers who are AS6081 certified. To date Secure Components is the lone distributor to have gone through a full AS6081 assessment by a certifying body (DNV) and is pending receipt of the formal certification. However, as the standard is more widely adopted additional suppliers committed to providing quality parts and keeping counterfeit parts out of the supply chain will emerge.
The graphic below, which was pulled directly from the AS5553A Standard (Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition) and provides an excellent visual on the different levels of assessment through which you should evaluate your suppliers.
In conclusion, barring explicit instructions from Congress or the DoD, aerospace and defense contractors, original equipment manufacturers, original component manufacturers, maintenance and repair shops and any other business purchasing parts should verify that their suppliers meet the quality thresholds depicted above. Without a clear definition of trusted supplier industry must be proactive in qualifying suppliers. The graphic above provides a good starting point for firms grappling with the question of what is a trusted supplier.