Tuesday, June 19, 2018
Publication Date: 05/1/2010
Archive >  May 2010 Issue >  Special Features: Components and Distribution > 

Counterfeit Products: Just Say No
It's the real thing — genuine mature aftermarket components from Lansdale.

Once upon a time, you could buy a "genuine" Rolex watch on a New York City street corner for $25 — right next to the pushcart vendor selling Sabrett hot dogs. It looked good, and might even tell time — for a while. When you bought it, you knew for sure it was a fake, and would probably turn your wrist green, but you bought it anyway. The Sabrett hot dog would have been a much better investment.

Buying counterfeit electronic components is another matter entirely. Cheap to begin with, they end up being very costly in terms of failed product, and could even cause catastrophic failures and death in medical, aerospace, and military situations.

Overall, counterfeits have been good for the honest manufacturers and their authorized distributors because the fear of counterfeit product has changed the way we procure parts. For example, many OEMs are putting new requirements in their purchase orders and/or Terms and Conditions which will hopefully avoid counterfeit products. Their Terms and Conditions require the seller to either be the manufacturer listed on the QML/QPL for the product or an authorized distributor or at least to have full traceability for the product.

Engineering Bulletins
Industry groups are also looking at counterfeits and what can be done about them. A few years ago the GEIA G-12 committee produced an Engineering Bulletin on Counterfeit Avoidance. This document advocated the procurement of product from the manufacturer or the authorized/franchised distributor. If this was not possible, it gave instructions for inspection and testing that would help to mitigate the risk of counterfeit product being used in an aerospace system.

Then in 2009, the SAE G-19 committee also wrote a document about counterfeit product. This document, AS5553, was adopted by the DoD in 2009. The intent of this document was to:

  • Maximize the availability of authentic parts.
  • Procure parts from reliable sources.
  • Assure the authenticity and conformance of procured parts.
  • Control parts identified as counterfeit.
  • Report counterfeit parts to other potential users and government investigative authorities.
    The Defense Supply Center Columbus (DSCC) has also taken steps to avoid procuring counterfeit product. In 2009, DSCC implemented the QSLD (Qualified Supplier List for Distributors). This statement comes directly from the DSCC web site:

    "QSLD Program (Qualified Suppliers List of Distributors).

The purpose of the QSLD Program is to establish and maintain a list of pre-qualified sources for certain electronic components that are purchased and managed by the Defense Supply Center, Columbus (DSCC). QSLD products are provided by suppliers that combine accepted commercial practices, quality assurance procedures that are consistent with industry and international quality standards, and tailored when necessary to product-unique requirements that can take the place of provisions traditionally stated in DSCC solicitations."

As part of this change, there is a new clause for 52.209-9028 on DIBBS solicitations for 5961 (semiconductors) and 5962 (microcircuits). Only the manufacturers listed on the QML/QPL for the device or distributors listed on the QSLD are eligible for award.

Prior to the QSLD program, DSCC, as well as other government procurement agencies, interpreted the FAR (Federal Acquisition Regulations) and the DFAR (Defense Federal Acquisition Regulations) as requiring that product be procured from the lowest bidder. Because of years of government purchasing based on this interpretation, there is now concern that government stores of products are riddled with counterfeits. If so, this is a ticking time bomb just waiting to infiltrate our nation's weapons systems, and could have disastrous results. Do we really want our military aviators to take off in what are potentially flying coffins?

Prosecuting Criminal Sources
It was stated in a recent article that DSCC has had less than 10 confirmed receipts of counterfeit electronic items. The question is, what happened to the suppliers of those items? Have they been debarred? Have they been indicted on charges of fraud? Or have they even been investigated? Has there been any notification to warn other users that these sellers are known to sell counterfeit products? If any of this has happened, it has been kept as a deep, dark secret.

The article also stated that DSCC differentiates between "Counterfeit" and "Non-Conforming" parts — including unauthorized product substitutions — and quotes a DSCC spokesman as saying, "We will aggressively go after any supplier that knowingly provides us non-conforming or counterfeit product." What does this mean in practice? Again, if the government is going to stop the sale of these counterfeits or unauthorized substitutions, they need a much more aggressive policy of debarment and criminal prosecution.

So how do we go about disarming this ticking time bomb? How do we verify whether an inventory of millions of parts with thousands of part numbers is actually good product? The first step is to figure out who the product was purchased from. If it was procured from the original component manufacturer, an authorized aftermarket source or an authorized distributor, the odds are extremely high that it is the real deal, so we probably don't need to worry about it. Maybe.

If the product was procured from an independent distributor or broker, then a much more careful examination is required, which can be done by using the guidelines of AS5553 as adopted by the DoD. If the product is found to be counterfeit, then several things must happen:

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