SMT007 Magazine

SMT-Apr2014

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70 SMT Magazine • April 2014 the impact of utilizing such suppliers, in De- cember of 2011, the National Defense Authori- zation Act (NDAA), Section 818 was signed into law. This law requires defense contractors and subcontractors to: "Establish qualification requirements…pur- suant to which the Department may identify trusted suppliers that have appropriate policies and procedures in place to detect and avoid counterfeit electronic parts and suspect coun- terfeit electronic parts [1] ." Additionally, in situations where OEMs, OCMs, and authorized distributors are unable to supply needed parts, NDAA Section 818 au- thorizes, "department contractors and subcon- tractors to identify and use additional trusted suppliers, provided that— (i) The standards and processes for identifying such trusted suppliers comply with established industry standards; (ii) The contractor or subcontractor assumes responsibility for the authenticity of parts provided by such suppliers as provided in paragraph (2); and (iii) The selection of such trusted suppliers is subject to review and audit by appropriate Department officials [2] ." After Section 818 was signed into law in December of 2011, many contractors and sub- contractors questioned whether independent distributors still had a place in the aerospace in- dustry. With the passing of this new law which required the use of trusted suppliers, could inde- pendent distributors still be used? If they were, how would a firm be able to contend that the independent distributor could safely be consid- ered a trusted supplier? While this law is a step in the right direction with regard to counterfeit mitigation, it contains a serious ambiguity: the term "trusted supplier" is left undefined. This failure to define it cre- ated confusion, which is one of the last things that the industry needs at the moment. In order to better interpret the term, one can consult a number of industry resources, such as the SAE International AS6081, AS5553-A and ARP6178 Recommended Practice documents. Addition- ally, the Defense Logistics Agency's Qualified Testing Suppliers List (QTSL) contains suppliers who have been audited and approved by the DLA to sell microcircuits directly to them, in which components are only available from an "other than authorized" source of supply. There is no doubt the term trusted supplier needs to be better defined—an industry-wide standard definition would be the ideal. Howev- er, as such a definition has not yet been provid- ed by any regulatory organization. Procurement professionals must use the available resources to develop an understanding of who is a trusted supplier. This is very important, as failure to use a trusted supplier can result in serious liability. Both the AS5553-A and AS6081 Counterfeit Avoidance Standards have been promulgated on an international level and adopted by the DoD. AS5553-A pertains specifically to manu- facturers who engage independent distributors to procure components that are not available from the original manufacturer or their autho- rized distributor. AS6081 pertains to the man- ner and process by which independent distribu- tors go about procuring parts from other than authorized sources. A manufacturer who is certified to AS5553- A has developed and demonstrated a counter- feit avoidance plan which has been subject to rigorous review by an independent certifying body. An independent distributor who is certi- fied to AS6081 has similarly demonstrated an adoption of and adherence to the robust coun- terfeit avoidance standard. AS6081 includes a standardized table, detailing the sample size and degree of authenticity testing required for components procured from other than autho- rized sources. Since AS5553-A and AS6081 have been adopted by the DoD, it stands to reason that manufacturers who rely on contractors who are certified to AS5553-A and distributors who are certified to AS6081 have met the trusted suppli- ers threshold. Importantly, Section B.1.3.2 of AS5553- A states that "using the results of audits per- formed by other private sector or Government organizations is an acceptable alternative to sec- ond- or third-party auditing provided the audit- krAMer on coMPonenTS prOTECTiNG YOUr SUpplY ChaiN FrOM COUNTErFEiTS aND liaBiliTY continues

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