Contractors Must “Eliminate and Abolish” Counterfeits per NDAA Section 818

fakeEvery industry has an association of professionals that come together to master mind solutions and protect the interests of its members.

The ERAI provides independent distributors and the marketplace it supports with educational opportunities and ethical guidance for electronic distributors who solve supply chain issues for customers.

On January 3, 2013, President Obama signed into law the $633 billion 2013 National Defense Authorization Act (“NDAA” or “Act”) (H.R. 4310).  Within the 2013 NDAA are directives to protect the nations critical systems and networks from counterfeit electronic parts and to stop parts that may contain hidden codes designed to corrupt machines and networks.

Carl Levin, US Senator from Michigan’s website noted that 1800 incidents of chinese counterfeit parts were discovered in the Air Force’s largest cargo plane, in a Navy surveillance plane and in assemblies intended for Special Operations helicopters.

The Senate Armed Services Committee report dating back to May, 2012 stated that the U.S. Air Force says that a single electronic parts supplier, Hong Dark Electronic Trade of Shenzhen, China, supplied approximately 84,000 suspect counterfeit electronic parts into the DOD supply chain.  Parts from Hong Dark made it into Traffic Alert and Collision Avoidance Systems (TCAS) intended for the C-5AMP, C-12, and the Global Hawk.  In addition, parts from Hong Dark made it into assemblies intended for the P-3, the Special Operations Force A/MH-6M, and other military equipment, like the Excalibur (an extended range artillery projectile), the Navy Integrated Submarine Imaging System, and the Army Stryker Mobile Gun.

I pause and ask myself why the DOD would purchase parts for critical systems without confirming the pedigree and source of product?

Regardless, the focus is now on mandating suppliers eliminate and abolish counterfeits.  Our company and the ethical colleagues in my industry have been working on eliminating and abolishing counterfeits since we opened our doors for business. In fact, when our intellectual property and electronic manufacturing moved to China, counterfeiting became a predictable by-product. A visit to China or your local China Town will reveal a veritable trove of counterfeit products. Although China is not the only place on the planet that originates counterfeits, I recently read an article about the wealthy women of China purchasing luxury goods outside of China because of their countries reputation for bogus products.  With fake Chanel, Louis Vuitton’s, and Hermes Birkin’s, you can’t blame them for “eliminating and abolishing” their purchase of fake purses!

Here is a recent article about the five most insane examples of counterfeiting and it includes U.S. Military Hardware, cigarettes, entire companies like Apple, Ikea and NEC, prehistoric fossils, and fake I.D.’s for underage U.S. children.

There are necessary steps that must be taken to screen suppliers and electronic parts.

Inland Empire Components, Inc. has made a significant investment in ongoing training, communication with suppliers and customers and a robust screening process that escalates to full testing of parts depending on customers needs.

If you choose to read further about contractors responsibilities as mandated by the U.S. Government, I’ve provided the link and some of the language below.

You can find the reference to NDAA and Section 818 regarding counterfeit mandates here.

Buried on page 199 of the 565 page document is the mandate to improve contractor systems for detection and avoidance of counterfeit electronic parts. Below is a copy of the section addressing the need to abolish counterfeits.

(1) IN GENERAL.—Not later than 270 days after the date
of the enactment of this Act, the Secretary of Defense shall
implement a program to enhance contractor detection and
avoidance of counterfeit electronic parts.
(2) ELEMENTS.—The program implemented pursuant to
paragraph (1) shall—
(A) require covered contractors that supply electronic
parts or systems that contain electronic parts to establish
policies and procedures to eliminate counterfeit electronic
parts from the defense supply chain, which policies and
procedures shall address—
(i) the training of personnel;
(ii) the inspection and testing of electronic parts;
(iii) processes to abolish counterfeit parts proliferation;
(iv) mechanisms to enable traceability of parts;
(v) use of trusted suppliers;
(vi) the reporting and quarantining of counterfeit
electronic parts and suspect counterfeit electronic
(vii) methodologies to identify suspect counterfeit
parts and to rapidly determine if a suspect counterfeit
part is, in fact, counterfeit;
(viii) the design, operation, and maintenance of
systems to detect and avoid counterfeit electronic parts
and suspect counterfeit electronic parts; and
(ix) the flow down of counterfeit avoidance and
detection requirements to subcontractors; and
(B) establish processes for the review and approval
of contractor systems for the detection and avoidance of
counterfeit electronic parts and suspect counterfeit electronic
parts, which processes shall be comparable to the
processes established for contractor business systems under
section 893 of the Ike Skelton National Defense Authorization
Act for Fiscal Year 2011 (Public Law 111–383; 124
Stat. 4311; 10 U.S.C. 2302 note).

Inland Empire Components, Inc. provides customers with safe electronic purchasing supply chain solutions.

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