Download - MDA Counterfeit Part Lessons Learned - SMTA · 1 Approved for Public Release 13-MDA-7351 (18 June 13) MDA Counterfeit Part Lessons Learned September 17, 2013 Barry Birdsong Division

1Approved for Public Release 13-MDA-7351 (18 June 13)

MDA Counterfeit Part Lessons Learned

September 17, 2013Barry BirdsongDivision Chief

MDA QSP

SMTA 2013

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Ballistic Missile Threat To HomelandAnd Pacific Region

• Growing and Unpredictable

• Threatens regional stability

North Korean Road-mobile ICBM on parade

April 2012

North Korean Taepo Dong-2

April 2012

North Korean SCUD-B

North KoreanNo-Dong Ballistic Missile

Approved for Public Release 13-MDA-7358 (18 June 13)

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Today’s BallisticMissile Defense System

Satellite

Surveillance

Sea-Based

X-Band Radar

Aegis BMD

SPY-1 Radar

Forward-Based RadarEarly Warning

Radar

SENSORSSENSORS

ASCENTASCENTDEFENSE SEGMENTDEFENSE SEGMENT

BMDSBMDSThe Ballistic Missile Defense SystemThe Ballistic Missile Defense System

C2BMCC2BMCCommand, Control, Battle Management and CommunicationsCommand, Control, Battle Management and Communications

NMCCNMCC USSTRATCOMUSSTRATCOM USNORTHCOMUSNORTHCOM USPACOMUSPACOM EUCOMEUCOM CENTCOMCENTCOM

Terminal High

Altitude Area

Defense

Ground-Based

Midcourse

Defense

Aegis Ballistic

Missile DefenseStandard Missile-3

SM-3

DEFENSE SEGMENTDEFENSE SEGMENT

MIDCOURSEMIDCOURSE TERMINALTERMINALDEFENSE SEGMENTDEFENSE SEGMENT

GBI

Sea-Based

Terminal

Patriot Advanced

Capability-3


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What commonalities are present in the MDA counterfeit parts occurrences to date?•The company that bought the parts was not the prime contractor.•The parts were bought from independent distributors.•There were inadequate counterfeit inspection procedures in placeat the time of purchase.•A robust visual inspection and marking permanency test would have raised suspicion and prompted further analysis.

– Additional analysis would’ve confirmed parts were counterfeit•The majority of the issues involved parts with the correct die.•Almost half the issues involved parts still available in production.

MDA Counterfeit Experience


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Company A

This independent distributor lists 817 suppliers on its line card, and can “find parts through our extensive worldwide linked part searcher” . Also as stated, “all our products go through a rigorous testing process to insure 100% functionality.”

Company B

This independent distributor lists 226 suppliers on its line card, is “one of the fastest growing electronic distributors in the United States” , has “unlimited access to over 100 million dollars of electronic component inventory” .

In 2009, both these companies were residential suppliers with DoD customers.

Independent Distributor Examples


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Obsolescence as a Contributing Factor

• Obsolescence of parts drive contractors to buy from Brokers• Average microcircuit life is 24 months on market• 6-8 Month notice of last time buys are issued


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Supplier Selection

• How many Independent Distributors are there in the United States?• ERAI has 765 members (as of 7/18/11)• Approximately 90% are Independent Distributors (~ 700)• Approximately 60% are US-based (~ 430)

• Estimate – there are between 2000 and 3,000 Independent Distributors in the United States• An MDA study in 2010 of 158 OCMs found the top two Authorized Distributors were authorized for just over 60% of the OCMs. The top ten Authorized Distributors covered almost 90% of the selected OCMs.

•NEDA (National Electronic Distributors Association) joined with ECA (Electronic Components Association) to form ECIA (Electronic Component Industry Association). ECIA maintains a listing of authorized distributors, and allows a search of OCM part numbers to get an authorized distributor quote (www.eciaauthorized.com)

•GIDEP and ERAI report data suggests less than 20% of US-based distributors are ERAI members



What’s Being Counterfeited?

Based on ERAI suspect counterfeit part reports from January 2012 through July 2013


Integrated Circuit Breakout



Counterfeit Parts by Quality or Grade



Who is Being Counterfeited?


14 OCMs' make up 50% of the ERAI data, 200 OCMs listed for the remaining 50%.

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MDA Contractor Audits

• Supplier Approval Weaknesses:- Failure to differentiate ‘authorized’ vs ‘approved’.

‘Authorized ’ – the manufacturer authorizes them to sell the prod uct with full support.

‘Approved ’ – the contractor approves them to sell the product.- Lower tier contractors still lacking in assessment procedures

for independent distributors.- Authorized and unauthorized suppliers mixed togethe r on the

same procurement list with no differentiation.• Training Weaknesses:

- Failure to train all affected organizations.- Program Management, Quality Technicians, Procuremen t

- Failure to schedule new hires for training.- Training is specific to only one part of the proble m

- Detection but not avoidance- Avoidance but not detection


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3.7.1 Supplier/Vendor Selection and Surveillance

•No prior significant problems with quality or authenticity, as indicated by searches of available sources (e.g., GIDEP, ERAI, etc.).•Documented supplier selection criterion to block or remove identified high-risk sources.•Procurement practices which ensure purchase from the OCM or an authorized supplier whenever possible (even if purchase from an unauthorized supplier achieves cost savings).•Rigorous Inspection and test procedures (details in the MDA PMAP)•Procedures which address the containment of suspect and confirmed counterfeit parts, and notification of affected customers.

MDA Supplier Requirements


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Summary

• ALWAYS BUY PRODUCT FROM AUTHORIZED SUPPLIERS whenev er possible

• ASSESS YOUR UNAUTHORIZED SUPPLIERS ON-SITE or DON’T BUY

• REQUIRE MINIMUM INSPECTION AND TEST FOR ALL PURCHAS ES FROM UNAUTHORIZED SUPPLIERS

• FLOW DOWN COUNTERFEIT PARTS REQUIREMENTS TO YOUR SUPPLIERS (verify on site)

• USE THIRD PARTY TEST LAB AND ESCROW ACOUNT TO VERIF Y PARTS ARE GOOD BEFORE PAYMENT IS MADE

• SUPPLY CHAIN EDUCATION AND TRAINING IS KEY


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BACK -UP


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What’s Being Counterfeited?

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Active (Semiconductor) Parts

Passive (non-Semiconductor) Parts Most counterfeited electronic parts

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MDA Supply Chain

Tier 1 = Prime Contractor

•MDA has over 650 contractors providing hardware to the BMDS•42% are Tier 4 or lower


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MDA Requires(PMAP Rev B)


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MDA Requires(PMAP Rev B)



Counterfeit Memory Devices by Type
