Defense Supplier Base: DOD Should Leverage Ongoing Initiatives in Developing Its Program to Mitigate Risk of Counterfeit Parts
Highlights
Counterfeit parts--generally those whose sources knowingly misrepresent the parts' identity or pedigree--have the potential to seriously disrupt the Department of Defense (DOD) supply chain, delay missions, and affect the integrity of weapon systems. Almost anything is at risk of being counterfeited, from fasteners used on aircraft to electronics used on missile guidance systems. Further, there can be many sources of counterfeit parts as DOD draws from a large network of global suppliers. Based on a congressional request, GAO examined (1) DOD's knowledge of counterfeit parts in its supply chain, (2) DOD processes to detect and prevent counterfeit parts, and (3) commercial initiatives to mitigate the risk of counterfeit parts. GAO's findings are based on an examination of DOD regulations, guidance, and databases used to track deficient parts, as well as a Department of Commerce study on counterfeit parts; interviews with Commerce, DOD, and commercial-sector officials at selected locations; and a review of planned and existing efforts for counterfeit-part mitigation.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | As DOD develops its anticounterfeit program, the Secretary of Defense should leverage existing anticounterfeiting initiatives and practices currently used by DOD components and industry to establish guidance that includes a consistent and clear definition of counterfeit parts and consistent practices for preventing, detecting, reporting, and disposing of counterfeit parts; |
DOD implemented this recommendation by issuing guidance and policy on counterfeit parts. In March 2012, DOD issued a memorandum to the Secretaries of the Military Departments and the Directors of Defense Agencies, "Overarching DOD Counterfeit Prevention Guidance." In April 2013, DOD issued DOD Instruction 4140.67, "DOD Counterfeit Prevention Policy." These documents contain a consistent and clear definition of counterfeit parts.
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| Department of Defense | As DOD develops its anticounterfeit program, the Secretary of Defense should disseminate this guidance to all DOD components and defense contractors. |
DOD implemented this recommendation by issuing guidance and policy. In March 2012,DOD issued a memorandum, "Overarching DOD Counterfeit Prevention Guidance." In April 2013, DOD issued DOD Instruction 4140.67, "DOD Counterfeit Prevention Policy." Both the guidance and policy contain language to facilitate flow down of these anti-counterfeit activities to the defense contractors, through practices and contract clauses. DOD is in the final stages of completing the DFARS amendment for counterfeit parts.
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| Department of Defense | As DOD develops its anticounterfeit program, the Secretary of Defense should analyze the knowledge and data collected to best target and refine counterfeit-part risk-mitigation strategies. |
DOD has developed a plan of action and milestones (POA&M) based on initial analysis of its collective knowledge of counterfeiting practices. The POA&M covers a 4-year period through the end of FY 2014 and includes a process for continuing to share and analyze information on counterfeiting activity across the DOD supply chain to further refine the strategy.
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