1. COUNTERFEIT PARTS DEFINED RISK FACTORS HISTORY WHAT IS BEING DONE
FAA
DOD
IMPACT
WHO PAYS

2. COUNTERFEIT PARTS Some examples: Type of Unapproved part
What is a counterfeit part?
Some examples:
Type of Unapproved part
Deliberately misrepresented as FAA approved
Imitation, not original or genuine
GCD, FNC, State Secrets, FSI,

3. COUNTERFEIT PARTS What is a counterfeit part? (cont’d)
Approved work that is not airworthy but altered and misrepresented as acceptable
Used components represented as new
Parts from an unapproved manufacturer represented as manufactured by approved source

4. COUNTERFEIT PARTS Unapproved Parts Investigation
Brokers that falsify parts certifications
Repair stations that do unauthorized repairs
Manufacturers that produce unlicensed parts
Workers who sell stolen, surplus, or used parts

5. RISK FACTORS Health and Safety Performance Issues
Questionable Reliability
Lower Life Expectancy
Early Part Failure
High Repair Costs
Catastrophic Failure

6. HISTORY 1,800 Cases of Counterfeiting ~1,000,000 Counterfeit Parts
2011 Senate Armed Services Committee
1,800 Cases of Counterfeiting
~1,000,000 Counterfeit Parts
2016 GAO Report to Congressional Committees on Counterfeit Parts
Fiscal Data Analyzed
$4.7m Parts at cost of $96B

7. WHAT IS BEING DONE? FAA: July 2016 Advisory Circular
- Provide Guidance for SUP
-Supplier Evaluations
-Procurement Process
-Receiving Inspection

8. WHAT IS THE DOD DOING? AUGUST 2016 FINAL RULE
Amend DFAR (Contractor Counterfeit Electronic Part Detection and Avoidance System)
New Clause DFAR (Sources of Electronic Parts)
Mandatory Flow Down Provisions

9. FLOW DOWN Inserted into contract with sub-contractors
If counterfeit work is discovered, seller liable for all direct costs to remove, replace, re-install, and test

10. IMPACT CA Company issued cease and desist – Unapproved FAA Parts
Texas Company, without PAH, over the course of 4 years, sold aircraft galley equipment
CA Company produced and sold unapproved Boeing Bushings for the last 10 years
Texas Company mount UAT with unapproved internal Commercial GPS unit

11. WHO PAYS?
Economic costs
Removal
Replacement
Testing
Loss of Use of Aircraft
Other Consequential Losses

12. SAFETY FACTOR
- Past 10 years FAA records show at least 170 reports involving 17 different commercial air carriers involving unapproved parts in inventory and on aircraft
-2015 Investigation into incident of hard landing in NJ as a result of unairworthy tail rotor driveshaft tube represented as airworthy

13. SAFETY FACTOR
11/ d Cir. Confirmed conviction of maintenance company, owner and mechanic for fraud involving aircraft parts and inspections
Avoid tragedies such as Norwegian Convair airliner crashed at sea in September 1989, killing 52 people, after its tail fell off in flight. An unauthorized part was held responsible

14. GOALS
Mitigate Potential Safety Risk
Minimize Economic Losses