The Way Forward - Hughitt

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The Way Forward Workshop and Exhibition on COUNTERFEIT ELECTRONIC PARTS Awareness, Avoidance, Detection and Mitigation October 1, 2009 Brian Hughitt NASA Office of Safety and Mission Assurance

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Presented at October 1, 2009 Counterfeit Workshop

Transcript of The Way Forward - Hughitt

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The Way Forward

Workshop and Exhibition on COUNTERFEIT ELECTRONIC PARTS

Awareness, Avoidance, Detection and Mitigation

October 1, 2009

Brian HughittNASA Office of Safety and Mission Assurance

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The Way ForwardWhere we wereWhere we are

– Scope/magnitude– Impact– Awareness (conferences, etc.)– Training – Resources– What we are up against – Standards

Where we’re going– New Standards– New Regulations

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Where We Were

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1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

Rep

orts

GIDEP Alerts and Problem Advisories Reporting Suspect Counterfeit Electronic Components

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U.S. Department of Commerce –Preliminary Data (as of March 4, 2009)

3,868

8,139

9,3568,600

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 2006 2007 2008 (est.)

Total Counterfeit Incidents:

Where We Are- Scope / Magnitude -

Counterfeit Incidents by Type

YearNumber

of Incidents

2005 1

2006 29

2007 169

2008 604

U.S. Customs Notifications

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Scope / Magnitude (cont)- 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.

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Scope / Magnitude (cont) - ERAI Data -

From: erai.com Sent: Tuesday, November 18, 2008 1:40 PMTo: Hughitt, Brian (HQ-GD000)Subject: RE: ERAI Notifications

This year we have averaged 50+ new incidents per month. The least number this year was 36 incidents in February. The most incidents occurred in May 2008 with 128 incidents.

With that said, think about this.

ERAI has approximately 800 independent distributor Members alone. There are believed to be around 5,000 legitimate independent distributors worldwide which means only 16% of the independent community belongs to ERAI.

The number of Members that actually share data with ERAI is likely in the neighborhood of 15-20%. (This is an educated guess only) Many Members only use our data but never contribute and most if not all of them have had problems, but they keep their affairs private. Imagine if each of my Members reported every counterfeit or substandard occurrence, now multiply that times the number of global distributors who are not Members. The numbers we have are believed to be just the tip of the iceberg Brian.

We can not underestimate the size of this problem.

ERAI

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Where We Are - Impact –

GIDEP Counterfeit Case Summaries

EE-A-06-01 Test failures at a defense contractor were found to be microcircuits containing many different chips

EE-A-06-03 Supplier of military hardware found suspect counterfeit microcircuits having dual part number markings

EE-A-06-04 Microcircuits that failed product testing were found to have chips from another source

M9-A-07-01 During manufacturing of a military product, suspect counterfeit transistors were functional failures

6E-P-07-01 Memory device supplier confirmed parts marked with their name did not contain their chips

UY7-P-07-01 Microcircuits, that failed electrical testing, were found to contain chips from another manufacturer

NB4-P-07-01 Suspect counterfeit microcircuits, from an unauthorized distributor, found during testing at an aerospace supplier

J5-A-07-01 Independent distributor supplied suspect counterfeit parts (not available from original supplier) to defense plant

J5-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 chips

J5-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 production

UE-A-07-01 Suspect counterfeit microcircuits failed electrical tests; contained chips from another manufacturer

AAN-U-08-052 A government entity reported counterfeit circuit breakers in nuclear power plants

CE9-P-08-02 Military parts manufacturer reported U. S. authorities have recently intercepted many counterfeit parts shipments

UL-P-08-01 Distributor unable to provide test reports on suspect counterfeit microcircuits that failed during factory testing

D4-A-09-01 Military hardware manufacturer found suspect counterfeit programmable devices showed part remarking

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Impact (cont)

23366815

50180

341604

693776

835929

11161261

0 200 400 600 800 1000 1200 1400

Unauthorized Overrun by Contract ManufacturersOther

Notification by Non-US Government AgencyNotification by Other US Government Agencies

Notification by DLANotification by GIDEP

Returned as Excess InventoryAbsence of Original Documentation

Returned as Wrong MerchandiseNotification by OEM

Self-Initiated InvestigationsNotification by US Customs

Customer Suspected Part Was CounterfeitTesting

Notification by OCMMarkings, Appearance, Condition of Parts

Discovered Defective Parts/Poor PerformanceReturned as Defective

How Companies Are Uncovering Counterfeits

U.S. Department of Commerce –Preliminary Data (as of March 4, 2009)

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Where We Are- Awareness -

(Conferences / Symposia / Committees / Work Groups

• 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

(IPT)• 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)

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US Chamber of Commerce Coalition Against Counterfeiting and Piracy (CACP)

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Semiconductor Industry Association (SIA)Anticounterfeiting Task Force (ACTF)

• Goal is to stop counterfeit IC’s from entering the global marketplace through education, awareness and enforcement

• Aligns with the China RECS program

• Aligns with the China QBPC

• Partnered with and trained US Customs in detection of counterfeit IC’s

• Partnered with DoD, NASA, NCIS, FBI criminal investigators

• Actively Seeking cooperative efforts with United States, China and European Union officials.

• Partnered with the DOJ/DHS National IPR Coordinating Center to investigate and prosecute importers of counterfeit semiconductors

• Working with outside counsel to gather and collate industry data for case development and presentation to law enforcement and IPR Ctr

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SMTA International Technical Conference

ET1 Counterfeit Electronics - How to Screen and How to Fight!Monday, October 5 8:00 - 9:30am

Real or Fake? The Counterfeit Chip ConundrumHal Rotchadl, Premier Semiconductor Services

Screening for Counterfeit Electronic ComponentsStephen Schoppe, Glenn Robertson, and Fabian Morales, Process Sciences, Inc.

An Industry United to Fight Counterfeiting: A Counterfeit EEE Parts SolutionDaniel DiMase, Honeywell Technology Solutions Inc. and Phillip Zulueta, Jet Propulsion Laboratory

October 4 - 8, 2009San Diego, CA

Visit http://www.smta.org/smtai/index.cfm for conference details and registration.

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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, Components Technology Institute, Inc.

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)

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Counterfeits and the U.S. Industrial Base – Brad Botwin, U.S. Department of Commerce, Bureau of Industry and Security (BIS)

The Detroit Initiative--A Pro-Active Approach to Detecting and Investigating Counterfeit Military Items – Jay Strauch, Defense Criminal Investigative Service

IDEA - Anti-Counterfeit Efforts: Standards & Certifications – Debra Eggeman, IDEA

Counterfeit Parts Avoidance Training (CPAT) – Kathy Whittington and Carlo Abesamis, JPL

NASA Counterfeit Parts Policy & Technical Assistance – Dan DiMase, Honeywell

Raise the Bar! – Require Detailed Documentation on Component Authenticity & Quality from Independent Distribution – Tom Sharpe, SMT Corporation

Electronic Supply Chain Solutions’ Safe Source Seal Program Combats Counterfeits and Mitigates Risk – Matthew Heaphy III & Ken Rogers, Electronic Supply Chain Solutions

Counterfeit Risk, Independent Distributor Site Visits – Fred Schipp, Missile Defense Agency

Counterfeit Parts Program at L-3, Rick Roelecke, L-3 Communications

Counterfeit Controls of a Franchised Distributor, Bill Nichols, Avnet

Star Quality Program and Counterfeit Parts, Ed Dimmler, PCX, Inc.

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DoD

Trusted Defense Systems Workshop

Evaluation of Verification Methods

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Where We are- Training -

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Training (cont)

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Training (cont)

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Where We are- Resources -

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Resources (cont)

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Resources (cont)

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Resources (cont)

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Honeywell Counterfeit PartsInspection and Audit Services

• Gap analysis of AS5553 processes and procedures.

• Assistance in the creation of a Counterfeit Parts Control Plan.

• Conduct QA Surveys and Surveillance Audits

• Review contractor generated documentation and procedures.

Resources (cont)

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Resources (cont)Defense Supply Center Columbus

Qualified Suppliers List of Distributors

• 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 storage

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Resources (cont)- DoD Trusted Foundry Program

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What We are Up Against - Bogus Test Reports -

25 companies, 19% of those 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.

This is an area that deserves further analysis.

U.S. Department of Commerce –Preliminary Data (as of March 4, 2009)

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Bogus Test Reports (cont)

COURTSGuilty plea in plot to dupe NASA

BY JAY [email protected] Pompano Beach businessman pleaded

guilty to a scheme to sell inferior aircraft parts to NASA for the space shuttle program, authorities said Friday.

Russ B. Cohen, 48, agreed to the conspiracy plea at the end of a two-week federal trial in Fort Lauderdale. His sentencing is set for April 20 before U.S. District Judge James Cohn.

Cohen and his co-conspirators duped NASA into buying substandard metals for its orbiter fleet and ground-support equipment by falsifying test reports on the materials, according to the U.S. attorney's office.

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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 surfaces

What We are Up Against- Innovative / Hi-Tech Re-Marking -

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The S and large Cl peaks indicate use of acids, the Ti & Fe hint at some tool work , the contaminants, (Na, Cl, & K) suggest human handling.

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From: Tom Sharpe [mailto:[email protected]] Sent: Sunday, August 09, 2009 7:10 PMSubject: New Blacktopping material threat is a QC Game-Changer

We at SMT first became aware of a new black-topping & lead-coating material when it first arrived from a US broker in our QC inspection area in early April of this year. The blacktop material was unlike anything we had ever seen before. The parts were surrendered to ICE in May.

1) Visual Appearance – the surface textures and visual appearance of the counterfeit blacktop compound is almost identical to a known good Xilinx that was just purchased from an AFD.2) Resistance to Solvents – pure Acetone has zero affect on the blacktop compound.3) Resistance to heat – very high heat resistance to open flame - similar to known good part.4) X-ray Fluorescence (XRF) – very similar readings in analytical mode although Bismuth was found in amounts 4-6 times higher in the blacktopped part (Bismuth is highly resistant to solvents and heat. Although it has many other uses it is commonly used in semiconductors and paints.) 5) Energy Dispersive Spectroscopy (EDS) – the element makeup (mapping) of the blacktop compound surface is basically identical to the surface of the known part.

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Exemplar Top Surface

Suspect Top Surface

Pure Acetone / 7 Day Soak- No Affect New Blacktop Material Can Only Be Removed With an X-acto Knife

What We are Up Against- Innovative / Hi-Tech Re-Marking -

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To: Barry Birdsong, Brian HughittFrom: Fred Schipp, MDA-Quality and Safety, Parts and Materials Advisory Group Subj: Independent Distributor Site Visits, Trip Report, June 1 through 4, 2009Date: July 2, 2009

Areas Needing Improvement

This trip confirmed to me that there is too much contractor buying of franchised product through non-franchised sources. This is most likely due to:

1. Purchasing practices which limit the number of suppliers .

2. Wanting the lowest possible price (independents do not need to provide warranty support).

3. Not wanting to go through the effort of locating the franchised sources themselves.

4. Fulfilling government-required quotas for working with small disadvantaged businesses.

Apparently many aerospace contractors do not know what tests are performed by their independent distributors, or don’t require all that much testing. Most contractors do not perform independent distributor site assessments.

There is no standardized process within the independent distributor “tiers”. Some distributors do not inform their supplier that product is for defense/aerospace programs.

Too much suspected counterfeit product is not confirmed to be counterfeit, and is subsequently returned to the supplier.

I started this trip by trying not to give preference to large facility versus house, or in-house decap/x-ray versus external labs. However, it’s difficult not to move toward large facilities with in-house test capability. The advantages include:

1. Money to develop and support proprietary search routines.

2. Clout to make additional demands of their suppliers.

3. Priority for testing of product.

4. Ability to x-ray and decap franchised product for future comparison.37

What We are Up Against

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Where We Are- Standards -

Standards

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Standards (cont)

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- Standards (cont) -

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Counterfeit Parts Control

Plan

Purchasing

Parts Availability

Verification of Purchased

Product

In Process Investigation

Purchasing Information

Material Control

Reporting

Appendixes for Guidance

SAE AS5553 Requirements

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ADOPTION NOTICE

SAE-AS5553, “Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and

Disposition," was adopted on 31 August 2009 for use by the Department of Defense (DoD).

Proposed changes by DoD activities must be submitted to the DoD Adopting Activity: The

Naval Air Systems Command (Commander, Naval Air Warfare Center Aircraft Division,

Code 4L8000B120-3, Highway 547, Lakehurst, NJ 08733-5100). Copies of this document may

be purchased from the Society of Automotive Engineers, 400 Commonwealth Drive,

Warrendale, PA 15096-0001 or www.sae.org.

Custodians: Adopting activity:

Army – CR Navy - AS

Navy - AS

Air Force - 85 (Project 5961-2009-053)

DLA – CC

NOTE: The activities listed above were interested in this document as of the date of this

document. Since organizations and responsibilities can change, you should verify the

currency of the information above using the ASSIST Online database at

http://assist.daps.dla.mil.44

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- Standards -

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- Standards -

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Authentication Service Providers

SIA is working with the SEMI International Traceability Committee on standards that would encourage the use of authentication service providers.Under this system, manufacturers would put an encrypted “license plate” on labels attached to each box or tube of chips. Any potential purchaser (broker, distributor, final customer) could use the internet to ask if others had asked about a box’s “license plate” number

SEMI T20 System Architecture for Preventing/Detecting Semiconductor Counterfeit Products. Defines a mechanism authenticate a product within the supply chain.

SEMI XX Specification for Object Labeling to Authenticate Semiconductors and Related Products In An Open Market. To be appended to SEMI T20 as a subordinate standard. (see more below)

SEMI YY Guide for Qualifications of Authentication Service Bodies for Detecting and Preventing Counterfeiting Of Semiconductors and Related Products. To be appended to SEMI T20 as a subordinate standard. (see more below)

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11/4/2009 Event, Venue information 4711/4/2009 47

Authentication Service Provider Model(3 click animation)

1. Manufacturer asks for encrypted number

2. Secure serverprovides number

3. Product ships toplaces unknown

4. Buyer validates numberbefore using it

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The Way Forward- Standards Development -

SAE ASxxxx, Counterfeit Electronic Parts Avoidance-Distributors

SAE ASxxxx, Counterfeit Electronic Parts Control Plan Audits

•Buyers•Distributors

SAE Asxxxx, Requirements for Counterfeit Electronic Parts Control Plan Certification/Registration

SAE ASxxxx, Authentication Testing of Electronic Parts

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The Way Forward- Accreditation/Certification -

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1. Buyers

2. Distributors

3. Test Laboratories

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The Way Forward - Federal Acquisition Regulation (FAR) Changes -

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DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATIONNATIONAL 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.

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NASA Proposed FAR Clause- Authenticity of Electronic Parts Procured as Discrete Units -

“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 offeror's ability to assure authenticity of EEE parts includes the offeror's 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.”

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“The contractor shall participate in the Government-Industry Data Exchange Program (GIDEP) in accordance with the requirements of the GIDEP Operations Manual (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 NASA Advisories to determine if they affect the contractors products produced for NASA. For GIDEP ALERTS, GIDEP SAFE-ALERTS, GIDEP Problem Advisories, GIDEP Agency Action Notices, and NASA Advisories that are determined to affect the program, the contractor shall take action to eliminate or mitigate any negative effect to an acceptable level. The contractor shall generate the appropriate failure experience data report(s) (GIDEP ALERT, GIDEP SAFE-ALERT, GIDEP Problem Advisory) in accordance with the requirements of GIDEP S0300-BT-PRO-010 and S0300-BU-GYD-010 whenever failed or nonconforming items, available to other buyers, are discovered during the course of the contract.”

- Federal Acquisition Regulation (FAR) Changes –GIDEP Participation

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Title 18, United States Code- Proposed Legislation -

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Customs and Border Protection

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Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.

William A. Foster