Counterfeit Avoidance Accreditation Program (CAAP)

CAAP is a cooperative industry effort to mitigate the risk of introducing counterfeit parts into the supply chain and the cost for compliance throughout the aviation, space, and defense industries.

Counterfeit Electronic Part Detection and Avoidance System (AUG 2016)

The following paragraphs (a) through (e) of this clause do not apply unless the Contractor is subject to the Cost Accounting Standards under 41 U.S.C. chapter 15, as implemented in regulations found at 48 CFR 9903.201-1.

(a)Definitions. As used in this clause -

An authorized after-market manufacturer means an organization that fabricates a part under a contract with or with the express written authority of the original component manufacturer based on the original component manufacturer's designs, formulas, and/or specifications.

Authorized supplier means a supplier, distributor, or an aftermarket manufacturer with a contractual arrangement with, or the express written authority of, the original manufacturer or current design activity to buy, stock, repackage, sell, or distribute the part.

A contract manufacturer is a company that produces goods under contract for another company under that company's label or brand name.

A contractor-approved supplier is a supplier that does not have a contractual agreement with the original component manufacturer for a transaction but has been identified as trustworthy by a contractor or subcontractor.

Counterfeit electronic part means an unlawful or unauthorized reproduction, substitution, or alteration that has been knowingly mismarked, misidentified, or otherwise misrepresented to be an authentic, unmodified electronic part from the original manufacturer or a source with the express written authority of the original manufacturer or current design activity, including an authorized aftermarket manufacturer. Unlawful or unauthorized substitution includes used electronic parts represented as new, or the false identification of grade, serial number, lot number, date code, or performance characteristics.

Electronic part means an integrated circuit, a discrete electronic component (including, but not limited to, a transistor, capacitor, resistor, or diode), or a circuit assembly (section 818(f)(2) of Pub. L. 112-81).

An obsolete electronic part is one that is no longer available from the original manufacturer or an authorized aftermarket manufacturer.

An original component manufacturer is an organization that designs and/or engineers a part and is entitled to any intellectual property rights to that part.

An Original equipment manufacturer is a company that manufactures products it has designed from purchase. Original manufacturer means the original component manufacturer, the original equipment manufacturer, or the contract manufacturer.

Inspection or testing provides reasonable doubt that the electronic part is authentic.

(b)Acceptable counterfeit electronic part detection and avoidance system. The Contractor shall establish and maintain an acceptable counterfeit electronic part detection and avoidance system. Failure to maintain an acceptable counterfeit electronic part detection and avoidance system, as defined in this clause, may result in disapproval of the purchasing system by the Contracting Officer and/or withholding of payments and affect the allowability of costs of counterfeit electronic parts or suspect counterfeit electronic parts and the cost of rework or corrective action that may be required to remedy the use or inclusion of such parts (see DFARS 231.205-71).

(c)System criteria. A counterfeit electronic part detection and avoidance system shall include risk-based policies and procedures that address, at a minimum, the following areas:

(1) The training of personnel.

(2) The inspection and testing of electronic parts, including criteria for acceptance and rejection. Tests and inspections shall be performed following accepted Government- and industry-recognized techniques. Selection of tests and assessments shall be based on minimizing risk to the Government. Determination of risk shall be based on the assessed probability of receiving a counterfeit electronic part, the likelihood that the inspection or test selected will detect a counterfeit electronic part, and the potential negative consequences of a counterfeit electronic part being installed (e.g., human safety, mission success) where such consequences are made known to the Contractor.

(3) Processes to abolish counterfeit parts proliferation.

(4) Risk-based processes that enable tracking of electronic parts from the original manufacturer to product acceptance by the Government, whether the electronic parts are supplied as discrete electronic parts or are contained in assemblies, following paragraph (c) of the clause at 252.246-7008, Sources of Electronic Parts (also see paragraph (c)(2) of this clause).

(5) Use of suppliers per the clause at 252.246-7008.

(6) Reporting and quarantining of counterfeit electronic parts and suspect counterfeit electronic parts. Reporting is required to the Contracting Officer and the Government-Industry Data Exchange Program (GIDEP) when the Contractor becomes aware of or has reason to suspect that any electronic part or end item, component, part, or assembly containing electronic parts
purchased by the DOD, or purchased by a Contractor for delivery to, or on behalf of, the DOD, contains counterfeit electronic parts or suspect counterfeit electronic parts. Counterfeit electronic parts and suspected counterfeit electronic parts shall not be returned to the seller or otherwise returned to the supply chain until the parts are authentic.

(7) Methodologies to identify suspect counterfeit parts and to rapidly determine if a suspect counterfeit part is, in fact, counterfeit.

(8) Design, operate, and maintain systems to detect and avoid counterfeit electronic parts and suspect counterfeit electronic parts. The Contractor may elect to use current Government—or industry-recognized standards to meet this requirement.

(9) Flowdown of counterfeit detection and avoidance requirements, including applicable system criteria provided herein, to subcontractors at all levels in the supply chain that are responsible for buying or selling electronic parts or assemblies containing electronic parts or for performing authentication testing.

(10) Process for continually informing of current counterfeiting information and trends, including detection and avoidance techniques containing inappropriate industry standards, and using such information and techniques to upgrade internal processes continuously.

(11) Process for screening GIDEP reports and other credible sources of counterfeiting information to avoid purchasing or using counterfeit electronic parts.

(12) Control of obsolete electronic parts to maximize the availability and use of authentic, originally designed, and qualified electronic parts throughout the product's life cycle.

(d) Government review and evaluation of the Contractor's policies and procedures will be accomplished as part of the evaluation of the Contractor's purchasing system per 252.244-7001, Contractor Purchasing System Administration - Basic, or Contractor Purchasing System Administration - Alternate I.

(e) The Contractor shall include the substance of this clause, excluding the introductory text and including only paragraphs (a) through (e), in subcontracts, including subcontracts for commercial items, for electronic parts or assemblies containing electronic parts.

[ 79 FR 26108, May 6, 2014, as amended at 81 FR 50649, Aug. 2, 2016]