1. Purpose and Scope

This procedure establishes our counterfeit parts prevention system for Commercial Off-The-Shelf (COTS) electronic, electrical, electromechanical, and mechanical components procured for integration into systems delivered to customers. As a software and solutions provider, we do not manufacture parts but procure finished components from qualified suppliers for use in our integrated solutions.

2. Definitions

Counterfeit Part: An unauthorized copy, imitation, substitute, or modified part knowingly misrepresented as a specified genuine part of an original manufacturer.

Suspect Counterfeit Part: A part for which credible evidence provides reasonable doubt of authenticity.

OCM: Original Component Manufacturer – the original designer and manufacturer of the part.

Authorized Distributor: A distributor with contractual authority from the OCM to sell their products.

Independent Distributor: A distributor without authorization from the OCM.

3. Procurement Controls

3.1 Supplier Preference Hierarchy

Parts shall be procured in the following order:

  1. Original Component Manufacturer (OCM) – direct purchase
  2. Original Equipment Manufacturer (OEM) – authorized source
  3. Authorized/Franchised Distributor – with valid OCM authorization
  4. Independent Distributors – only when options 1-3 unavailable, requires Quality Manager approval and enhanced inspection

3.2 Approved Supplier List

  • We maintain an Approved Supplier List (ASL) of qualified suppliers
  • Suppliers are evaluated for: quality system certification (ISO 9001, AS9100, AS9120), counterfeit prevention practices, traceability capabilities, and performance history
  • Purchasing from non-approved sources requires documented justification and Quality Manager approval
  • Annual supplier performance reviews conducted

3.3 Purchase Order Requirements

All purchase orders include:

  • Complete part identification
  • Certificate of Conformance requirement
  • Traceability documentation
  • Counterfeit parts prohibition clause
  • Original manufacturer packaging

4. Supplier Requirements

Suppliers must:

  • Provide full traceability to OCM or authorized distributor
  • Supply manufacturer’s Certificate of Conformance
  • Maintain counterfeit prevention systems
  • Report obsolescence issues and suspected counterfeits immediately
  • Provide authorization letters from OCM (for distributors)

5. Inspection and Testing

5.1 Receiving Inspection (All Parts)

Visual Inspection:

  • Package condition and integrity
  • Part marking quality and consistency
  • Physical damage or evidence of rework
  • Date code authenticity
  • Label quality and accuracy

Documentation Review:

  • Certificate of Conformance validation
  • Traceability documentation completeness
  • Supplier authorization verification
  • Part number correlation

6. Counterfeit Detection and Reporting

6.1 Counterfeit Indicators

Personnel are trained to identify:

  • Inconsistent or poor quality markings
  • Evidence of remarking or blacktopping
  • Incorrect fonts or logos
  • Missing or altered documentation
  • Inconsistent packaging
  • Parts appearing refurbished or used
  • Below-market pricing

6.2 Response Procedure

Upon detection or suspicion:

  1. Immediate quarantine – clearly mark and segregate
  2. Document – complete Suspect Counterfeit Report with detailed observations
  3. Notify Quality Manager within 24 hours
  4. Customer notification within 48 hours if parts were delivered
  5. Supplier notification within 72 hours
  6. Root cause analysis to prevent recurrence

Suspect parts shall not be returned to stock, used in products, or returned to suppliers without Quality Manager approval.

7. Traceability and Records

7.1 Traceability System

  • Complete traceability maintained from supplier receipt through customer delivery
  • Electronic tracking system links parts to purchase orders, inspection records, and customer shipments
  • Parts tracked by manufacturer date/lot codes and internal receiving lot numbers
  • Forward and backward traceability capability maintained

7.2 Record Retention

We retain:

  • Purchase orders and supplier documentation
  • Certificates of Conformance and authorization letters
  • Inspection and test records
  • Counterfeit reports and investigations
  • Training records

8. Training

All personnel involved in procurement, receiving, quality control, and integration receive:

  • Initial training within 30 days of hire
  • Annual refresher training
  • Training on: counterfeit identification, this procedure, documentation requirements, reporting procedures, current counterfeit trends

9. Continuous Improvement

The counterfeit prevention system is reviewed annually and when significant incidents occur, regulatory requirements change, or industry standards are updated.

Metrics Monitored:

  • Suspect counterfeit parts detected
  • Source of counterfeit parts
  • Supplier performance
  • Inspection effectiveness