# Counterfeit Parts Risk Assessment (AS5553 / DFARS) > Source: https://netray.co/tools/counterfeit-parts-risk-assessment > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer A 10-question assessment of your counterfeit electronic parts exposure, aligned to AS5553 and DFARS counterfeit prevention requirements, with a risk band and mitigation plan. ## Category aerospace-defense ## Tool **Kind:** assessment **Questions:** #### Do you have a documented counterfeit parts prevention plan (per AS5553, AS6174, or equivalent) appropriate to your products? **Options:** ##### No documented plan **Score:** 0 ##### A policy statement exists but no operational plan **Score:** 1 ##### Documented plan covering purchasing and inspection **Score:** 2 ##### Full plan covering sourcing, verification, control, reporting, and training, reviewed annually **Score:** 3 #### What fraction of your electronic components is purchased from OEMs or franchised/authorized distributors with full supply chain traceability? **Help:** Independent distributor and broker purchases are where the overwhelming majority of counterfeits enter the supply chain. **Options:** ##### Unknown - we buy wherever parts are available **Score:** 0 ##### Mostly authorized, but broker buys happen without special controls **Score:** 1 ##### Authorized sources preferred; broker buys require approval **Score:** 2 ##### Authorized-only by default; any exception requires risk assessment, enhanced testing, and documented approval **Score:** 3 #### When you must buy from independent distributors or brokers, what verification testing is applied? **Options:** ##### None - parts go straight to stock **Score:** 0 ##### Visual inspection of packaging and markings only **Score:** 1 ##### Documented inspection plus supplier test reports **Score:** 2 ##### Risk-based test protocol (e.g., per AS6081/IDEA-STD-1010: marking permanency, decapsulation, X-ray, XRF, electrical test) at a qualified lab **Score:** 3 #### How do you manage component obsolescence, the primary driver of high-risk sourcing? **Options:** ##### Reactively - we discover obsolescence when a buy fails **Score:** 0 ##### Informal monitoring by purchasing **Score:** 1 ##### PCN/EOL notices tracked; lifetime buys made case by case **Score:** 2 ##### Proactive obsolescence program: BOM health monitoring, lifetime buys, and approved alternates before parts go EOL **Score:** 3 #### Can you trace every electronic component in a shipped assembly back to its source and purchase documentation? **Options:** ##### No lot-level traceability **Score:** 0 ##### Traceable to PO but not to specific assemblies **Score:** 1 ##### Lot/date-code traceability in the ERP for most components **Score:** 2 ##### Full forward and backward traceability: any component to its CoC and source, and any suspect lot to every affected assembly **Score:** 3 #### Are incoming inspection personnel trained to detect counterfeit indicators (blacktopping, sanded markings, refinished leads, inconsistent date codes)? **Options:** ##### No counterfeit-specific training **Score:** 0 ##### One person has informal knowledge **Score:** 1 ##### Receiving inspectors trained once, no refresh **Score:** 2 ##### Documented training program with refreshers, reference standards, and inspection aids at receiving **Score:** 3 #### What happens when a suspect counterfeit part is found? **Help:** Under DFARS and AS5553, suspect parts must be contained and must not be returned to the seller, since returned parts re-enter the supply chain. **Options:** ##### No defined process - likely returned to the seller for credit **Score:** 0 ##### Parts rejected and returned; no reporting **Score:** 1 ##### Parts quarantined; customer notified case by case **Score:** 2 ##### Quarantine with no-return policy, customer and GIDEP reporting, and root cause into the CAPA system **Score:** 3 #### Do you report suspect counterfeits to GIDEP and monitor GIDEP alerts against your inventory and BOMs? **Options:** ##### Not a GIDEP participant **Score:** 0 ##### Aware of GIDEP; no active participation **Score:** 1 ##### Monitor alerts occasionally; have not reported **Score:** 2 ##### Active participant: alerts screened against inventory/BOMs systematically, and suspect finds are reported **Score:** 3 #### Are counterfeit prevention requirements flowed down to your subcontractors and contract manufacturers? **Options:** ##### No flowdown **Score:** 0 ##### Generic quality clauses only **Score:** 1 ##### Counterfeit clauses in POs to key suppliers **Score:** 2 ##### Explicit flowdown (sourcing restrictions, test requirements, reporting) with periodic verification or audit **Score:** 3 #### Does your contract review process identify counterfeit-prevention obligations (DFARS 252.246-7007/7008, customer clauses) and their cost impact before bidding? **Options:** ##### Clauses are accepted unread **Score:** 0 ##### Reviewed occasionally on large bids **Score:** 1 ##### Systematically identified; cost impact estimated informally **Score:** 2 ##### Systematically identified with compliance requirements and cost built into quotes and supplier terms **Score:** 3 **Bands:** #### High Exposure - Counterfeits Can Reach Your Products **Min:** 0 **Max:** 39 **Verdict:** Your supply chain has open pathways for counterfeit components to reach shipped hardware, and under DFARS you may bear unlimited rework and replacement cost if they do - counterfeit remediation is expressly unallowable. In aerospace and defense applications this is also a product safety issue. **Recommendations:** - Impose an immediate authorized-source-only default; require senior approval for any broker buy - Quarantine-and-hold any current broker-sourced inventory pending risk review; never return suspect parts to sellers - Draft a counterfeit prevention plan against AS5553 - templates exist and the gap is mostly process, not capital - Train receiving inspectors on the top visual counterfeit indicators within 30 days - Verify which contracts carry DFARS 252.246-7007/7008 so you know your current legal exposure #### Moderate Exposure - Controls Exist, Escapes Possible **Min:** 40 **Max:** 69 **Verdict:** You have real controls at the front door but gaps in testing rigor, traceability depth, or industry reporting mean a determined counterfeit could still get through - and if one does, weak traceability turns a contained event into a fleet-wide investigation. **Recommendations:** - Adopt a risk-based test protocol (AS6081-aligned) for all non-authorized buys, using an accredited lab - Close traceability gaps so any suspect lot can be mapped to every affected assembly within hours - Join GIDEP and screen alerts against inventory and BOMs on a defined cadence - Stand up a proactive obsolescence program - it removes the pressure that forces risky buys - Flow counterfeit requirements down to contract manufacturers and verify by audit #### Managed Risk - Sustain and Verify **Min:** 70 **Max:** 100 **Verdict:** Your counterfeit prevention program is aligned with AS5553 expectations and would stand up well to customer and CB audits. The residual risk is drift - obsolescence pressure, new brokers, and staff turnover erode controls quietly over time. **Recommendations:** - Audit the program annually, including a challenge test of receiving inspection with known reference samples - Track leading indicators: broker-buy frequency, EOL exposure in active BOMs, and GIDEP alert hit rate - Refresh inspector training as counterfeiting techniques evolve (recycled parts, cloned die, refinished packages) - Integrate obsolescence and sourcing risk data into your ERP so buyers see risk at the point of purchase - Use your program maturity as a differentiator in defense and space captures where flowdown is strict ## Content **Intro:** This free counterfeit parts risk assessment helps electronics, aerospace, and defense manufacturers measure their exposure to counterfeit electronic components, aligned to SAE AS5553 and the DFARS counterfeit prevention clauses. Ten questions cover the full defense-in-depth chain: prevention planning, authorized sourcing, verification testing, obsolescence management, traceability, inspection training, containment, GIDEP reporting, flowdown, and contract review. You receive a risk band with specific mitigations. Counterfeit components cause field failures in safety-critical hardware, and under DFARS the cost of rework and replacement is unallowable - meaning one escape can consume the margin of an entire program. **Sections:** #### How the risk model works **Body:** The assessment scores your program across the layered-defense model that AS5553 formalizes: keep counterfeits out (sourcing and obsolescence questions), catch what gets in (testing, training, and traceability questions), and limit the damage when something is found (containment, reporting, and flowdown questions). Each layer is scored 0-3 and the layers are deliberately balanced, because real-world escapes almost always involve failures in at least two layers - a pressured broker buy plus inspection that was not looking for the right indicators, for example. A strong front door with weak traceability still lands you in the moderate band, because the cost of an escape is determined by how fast you can bound it. #### The industry numbers behind the questions **Body:** The weighting of the questions reflects well-established supply chain data: **Bullets:** The overwhelming majority of counterfeit incidents trace to parts bought through independent distributors and brokers rather than OEM or franchised channels Obsolescence is the dominant root cause - counterfeiters concentrate on EOL parts because buyers of obsolete components have the fewest alternatives and the most urgency GIDEP receives hundreds of suspect counterfeit reports annually, and reported parts frequently reappear from other sellers, which is why returning suspect stock for credit is prohibited practice Under DFARS 231.205-71, the cost of counterfeit parts and their rework or replacement is unallowable on covered contracts unless strict conditions (including timely GIDEP reporting) are met #### Turning your band into a mitigation plan **Body:** Sequence mitigation by where counterfeits actually enter. If you scored low on sourcing and obsolescence, fix those first - an authorized-only default with a controlled exception path eliminates most exposure at zero capital cost, and a BOM health program removes the urgency that drives risky buys. Testing and training investments come second: a risk-based protocol applied only to non-authorized buys concentrates spend where risk lives, typically a few hundred to a few thousand dollars per suspect lot versus six-figure escape costs. Traceability and reporting are your insurance layer - build them before you need them, because reconstructing lot genealogy during a live suspect-part investigation is exponentially harder than recording it at receiving. Reassess after any surge in EOL notices or new contract manufacturer. #### How Netray hardens your supply chain systems **Body:** Counterfeit prevention runs on data your ERP already touches: approved source lists, lot and date-code capture at receiving, certificate-of-conformance document links, and BOM-to-inventory genealogy. Netray implements these controls natively in Infor SyteLine, LN, and Baan - authorized-source enforcement at PO entry, mandatory lot traceability, quarantine workflows that block suspect stock from allocation, and one-click where-used analysis that maps a suspect lot to every affected order and shipment. Our on-prem AI adds proactive monitoring: BOM obsolescence risk scoring, GIDEP alert screening against your live inventory, and anomaly detection on sourcing patterns, all without your parts data leaving your environment. **Cta:** Take the assessment now and find out whether your supply chain would keep a counterfeit component out of your next shipment. **Faq:** #### We only buy from big-name distributors. Do we still need a counterfeit prevention program? **Answer:** Yes, for three reasons. First, AS9100 clause 8.1.4 and DFARS flowdowns require a documented process regardless of your current sourcing mix. Second, sourcing discipline erodes under schedule pressure - the risky broker buy happens precisely when a line-down situation meets an obsolete part, and without a controlled exception process it happens invisibly. Third, your contract manufacturers and sub-tier suppliers buy components too, and their sourcing is your exposure unless you flow down and verify requirements. #### What testing should we require on broker-sourced parts? **Answer:** Follow a risk-based protocol aligned to AS6081 or IDEA-STD-1010: external visual inspection under magnification, marking permanency (resistance to solvents), X-ray for die and bond-wire consistency, XRF for lead finish composition, decapsulation of samples to verify the die, and electrical testing against the datasheet. The depth should scale with application criticality and lot value - flight or safety hardware justifies the full battery at an accredited lab, while a commercial-grade lot may warrant a subset. Always test before parts enter usable stock. #### Are we required to report suspect counterfeit parts to GIDEP? **Answer:** If you are a contractor covered by DFARS 252.246-7007, reporting suspect counterfeit electronic parts to GIDEP within 60 days is required, and timely reporting is also a condition for cost allowability protections. Beyond the mandate, reporting is how the industry defends itself - GIDEP alerts let other manufacturers screen the same seller and part before their own escape. Coordinate reports with your legal counsel and customer, quarantine the parts, and never return them to the seller. ## Search terms counterfeit parts risk assessment, as5553 compliance, counterfeit electronic parts prevention, dfars 252.246-7007 counterfeit, gidep reporting requirements, obsolescence management electronics, authorized distributor sourcing --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json