ERAI Recommended Best Practices for Material Control
Suspect/fraudulent/counterfeit parts have no value and pose a serious threat; therefore, these types of parts should be controlled to prevent their re-entry into the supply chain. Organizations should maintain a written material control plan and should include terms and conditions in their purchase order contract that detail how suspect/fraudulent/counterfeit parts will be handled if encountered.
Under no circumstances should suspect/fraudulent/counterfeit parts be returned to the supplier. The supplier should however be given an opportunity to verify the findings with a defined sample size. In accordance with SAE AS6081, the sample size should be "the lesser of ten (10) parts or 50%, of each suspect lot/date code." The parts can be sent to an independent third party laboratory and/or original component manufacturer for evaluation. Once the suspect/fraudulent/counterfeit nature of the parts is confirmed the parts should be placed into quarantine. The quarantined parts should be in an access-restricted, secure location and should be clearly marked. Labeling should be kept intact and should not be covered or altered. ERAI recommends the product be stored for a minimum of 5 years or as required by local laws. Upon the end of the quarantine period, the parts should be scrapped and a certificate of destruction should be kept on file.
For detailed guidance organizations are encouraged to reference SAE Aerospace Standards AS5553-A and/or AS6081.
The Defense Industrial Base Assessment titled Counterfeit Electronics prepared by U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation states that in order to curtail the flow of counterfeit parts into the U.S. defense and industrial supply chains organizations should "ensure physical destruction of all defective, damaged, and substandard parts".1
SAE Aerospace Standard AS5553A requires the control of "nonconforming parts to prevent them from entering the supply chain under fraudulent circumstances by physically identifying and segregating the parts from acceptable non-suspect parts and placing in quarantine".2
"Parts should not be returned to the supplier for refund, replacement, etc., except under controlled conditions which would preclude resale of the suspect fraudulent/counterfeit EEE Parts..."3
SAE Aerospace Standard AS6081 requires Independent Distributors to be "physically segregating the [suspect or confirmed fraudulent/counterfeit] parts from acceptable non-suspect parts and placing in quarantine. Quarantine should consist of physical barriers and controlled access for a minimum of five (5) years or maintained in accordance with Customer statutory and regulatory requirements".4
The National Defense Authorization Act for Fiscal Year 2012 [H.R. 1540 Sec. 818] called for "policies and procedures to eliminate counterfeit electronic parts from the defense supply chain" and that these policies shall include "the reporting and quarantining of counterfeit electronic parts and suspect counterfeit electronic parts".5
U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation
SAE Aerospace Standard AS5553 Revision A. Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition | Requirement 4.1.8 Material Control
SAE Aerospace Standard AS5553 Revision A. Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition | Guidance Appendix F
SAE Aerospace Standard AS6081 Fraudulent/Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition - Distributors | Requirement 4.2.6 Control of Suspect, Fraudulent, or Confirmed Counterfeit Parts
National Defense Authorization Act for Fiscal Year 2012: H.R. 1540 Sec. 818 Detection and Avoidance of Counterfeit Electronic Parts- page.199 (2) Elements (A) (vi) the reporting and quarantining of counterfeit electronic parts and suspect counterfeit electronic parts