How DFARS and Defense Prime Contractors Are Enforcing Counterfeit Electronic Parts Mitigation Across the Aerospace & Defense Supply Chain

This whitepaper examines the challenges of sourcing legacy components, outlines DFARS requirements, and explains how major primes embed authentication and verification into supplier agreements.

By Michael Schwarm, Chief Growth Officer, SMT Corp.

March 10th, 2026

All defense contractor terms and conditions referenced herein are sourced from publicly available standard supplier terms obtained via official contractor websites or other open sources.

Introduction

Counterfeit electrical, electronic, and electromechanical (EEE) parts present significant risks to safety, mission assurance, reliability, and regulatory compliance across the aerospace and defense supply chain. To mitigate these risks, counterfeit avoidance and component authentication requirements originate with the U.S. Government and are contractually flowed down through prime contractors, major defense OEMs, and ultimately to lower-tier suppliers. This paper summarizes how these requirements are established, reinforced, and flowed down through applicable entities and contractual frameworks when mission-critical electronic components cannot be sourced from trusted, authorized channels.

Government-Level Requirements (FAR/DFARS)

The foundation for counterfeit parts mitigation is established by the U.S. Department of War through DFARS 252.246-7007, Contractor Counterfeit Electronic Part Detection and Avoidance System, and DFARS 252.246-7008, Sources of Electronic Parts. These clauses require contractors to maintain a risk-based counterfeit detection and avoidance system, ensure personnel training, implement inspection and testing protocols, maintain traceability to original manufacturers, monitor GIDEP alerts, control obsolete parts, and report and quarantine suspect or confirmed counterfeit parts.

Key flowdown requirements include:

  • DFARS 252.246-7007(2) – Requires inspection and testing of electronic parts, including criteria for acceptance and rejection. Tests and inspections must be performed using Government- and industry-recognized techniques and selected to minimize risk to the Government. [Note: In practice, authentication testing methods for electronic components lacking trusted supply chain traceability are defined by SAE AS6171, which establishes risk-based inspection and test methodologies widely recognized by both government agencies and defense prime contractors.]
  • DFARS 252.246-7007(c)(9) – Requires contractors to flow counterfeit detection and avoidance requirements to subcontractors at all levels of the supply chain.
  • DFARS 252.246-7007(e) – Mandates inclusion of the substance of the counterfeit avoidance clause in all subcontracts for electronic parts and assemblies.
  • DFARS 252.246-7008(2)(i) – Requires the use of established counterfeit prevention industry standards and processes such as those adopted by the Department of Defense.

Supporting guidance is also provided through DLA MIL-HDBK-537 Section 4.9.2, which references industry standards used to implement counterfeit mitigation programs, including SAE AS5553, AS6081, and AS6171.  Earlier versions of SAE AS6081 contained authentication testing guidance; however, AS6081 Revision A removed detailed authentication test criteria and instead references SAE AS6171 as the governing standard for electronic component authentication testing. As a result, AS6171 effectively serves as the primary industry standard defining the inspection and test methodologies used to authenticate electronic components when traceability to the original manufacturer cannot be established.

U.S. Defense Prime Contractor Flowdown Requirements

Prime contractors operationalize DFARS counterfeit mitigation requirements by embedding them into corporate terms and conditions, supplier quality manuals, and procurement agreements. These documents establish sourcing hierarchies, counterfeit detection obligations, supplier liability provisions, and mandatory flowdown of counterfeit controls to lower-tier suppliers.

Lockheed Martin

Lockheed Martin enforces counterfeit parts prevention through CorpDoc 1 – Lockheed Martin Terms and Conditions for Purchase Orders, which establishes supplier responsibility for authentic materials, authorized sourcing, and counterfeit risk mitigation aligned with industry standards.  Key counterfeit-related provisions include:

  • Section 7(b) – Counterfeit Work Prohibition. Prohibits the delivery of counterfeit or suspect counterfeit work and requires suppliers to ensure all products delivered are authentic and conform to contractual specifications.
  • Section 7(d) – Counterfeit Mitigation Processes. Requires suppliers to maintain documented counterfeit detection and avoidance processes consistent with recognized industry standards such as SAE AS5553.
  • Section 7(h) – Flowdown Requirements. Requires suppliers to include the substance of the counterfeit work provisions in all subcontracts and purchase orders for electronic parts and assemblies.

RTX (Raytheon & Collins Aerospace)

Arguably the “gold standard” from a counterfeit mitigation requirements flowdown perspective, RTX enforces counterfeit electronic parts mitigation through its Standard Terms and Conditions of Purchase – Product and Aerospace Supplier Quality Requirements (ASQR), which establish supplier obligations for authentic parts sourcing, counterfeit detection, and supply chain reporting.  Key counterfeit-related requirements include:

  • Section 4 – Quality Requirements. Requires suppliers to participate in GIDEP and monitor alerts related to counterfeit parts and product safety issues.
  • Section 6 – Inspection, Acceptance, and Rejection. Establishes supplier accountability for nonconforming material and confirms that inspection or acceptance does not relieve the supplier of responsibility for counterfeit or suspect components.
  • Section 23 – Supplier Representation for Supplying Authentic Parts. Requires suppliers to certify that components provided to RTX are authentic, traceable to the original manufacturer, and not unauthorized copies, modified devices, or otherwise counterfeit. Suspect counterfeit parts must be disclosed and investigated.
  • Raytheon Quality Note GP, Revision 13. Establishes specific requirements for mitigating counterfeit electronic parts risk, including sourcing from authorized manufacturers, authentication testing aligned with SAE AS6171, and submission of detailed inspection and test data prior to shipment.

L3Harris

L3Harris integrates counterfeit mitigation requirements into its LGL-50.F1 General Terms and Conditions and Procurement Quality Requirements H-1999Q, which establish supplier obligations for authentic parts sourcing, traceability, and counterfeit detection.  Key counterfeit-related requirements include:

  • LGL-50.F1 Article 5(c) – Counterfeit Parts Prevention Program. Requires suppliers to maintain a counterfeit parts prevention program aligned with recognized industry standards such as SAE AS5553.
  • LGL-50.F1 Article 6(e) – Counterfeit Reporting and Corrective Action. Requires suppliers to report suspect or confirmed counterfeit parts, implement corrective actions, and assume liability for resulting impacts.
  • H-1999Q Procurement Quality Requirements – Non-Franchised Distributor Controls. Prohibits sourcing from non-franchised distributors without prior written approval and requires components lacking OEM traceability to undergo authentication testing in accordance with SAE AS6171.

Northrop Grumman

Northrop Grumman implements counterfeit electronic parts mitigation through CTM-P-ST-001 U.S. Government Firm Fixed Price Order Terms and Conditions, which incorporate DFARS counterfeit avoidance clauses and establish supplier accountability for material authenticity and traceability.  Key counterfeit-related requirements include:

  • Clause 41(a) – Material Authenticity and Counterfeit Avoidance. Requires suppliers to establish and maintain a material authenticity process aligned with DFARS counterfeit detection and avoidance requirements.
  • Clause 41(c) – Reporting and Liability. Requires immediate notification of suspect or confirmed counterfeit parts and holds suppliers responsible for all costs associated with removal, replacement, testing, and corrective actions.
  • Clause 41(d) – Mandatory Flowdown. Requires counterfeit avoidance provisions to be flowed down to all lower-tier suppliers to ensure DFARS-compliant controls throughout the supply chain.

General Dynamics Mission Systems

General Dynamics Mission Systems enforces counterfeit risk mitigation through its SCM-TMP-001 General Provisions for Firm Fixed Price Commercial Purchase Orders, which establish supplier responsibility for product authenticity, conformity, and compliance with applicable regulatory and customer requirements.  Key counterfeit-related provisions include:

  • Article 5.0 – Inspection and Acceptance. Establishes inspection rights for GDMS and its customers and confirms that inspection or acceptance does not relieve the supplier of responsibility for latent defects or nonconforming material.
  • Article 10.2 – Subcontractor Flowdown. Requires suppliers to flow all applicable contractual and regulatory requirements to lower-tier suppliers.
  • Article 14.1 – Compliance with Laws and Regulations. Requires suppliers to comply with all applicable federal regulations, including DFARS counterfeit avoidance requirements when associated with defense programs.

Boeing Defense, Space & Security

Boeing Defense, Space & Security enforces counterfeit electronic parts mitigation through Supplier Quality Clause Q132 – Counterfeit Parts Prevention and Boeing specification D950-11160-1 Counterfeit Electronic Parts Avoidance (CEPA). These requirements establish supplier responsibility for ensuring electronic components are authentic, traceable, and sourced through authorized channels whenever possible.  Key counterfeit-related provisions include:

  • Supplier Quality Clause Q132 – Counterfeit Parts Prevention. Requires suppliers to ensure electronic components are new, authentic, and procured from the Original Component Manufacturer (OCM), Original Equipment Manufacturer (OEM), or authorized distributors whenever possible.
  • Supplier Quality Clause Q132 – Procurement from Independent Distributors. Permits sourcing from independent distributors only when authorized sources are unavailable and requires documented counterfeit detection processes including inspection, testing, and traceability review.
  • Specification D950-11160-1 – Counterfeit Electronic Parts Avoidance (CEPA) System. Requires suppliers to maintain a counterfeit detection and avoidance program including supplier qualification, traceability verification, training, inspection and authentication testing, and monitoring of counterfeit alerts.
  • Specification D950-11160-1 – Counterfeit Reporting and Containment. Requires suppliers to quarantine suspect counterfeit components, notify Boeing immediately, and implement corrective actions including replacement of affected material and mitigation of supply chain impacts.

Common Industry Best Practices for Counterfeit Risk Mitigation

Across Department of War regulations and the supplier requirements of major defense primes—including Lockheed Martin, RTX, Northrop Grumman, L3Harris, General Dynamics, and Boeing—there is strong alignment on the core controls required to prevent counterfeit electronic parts from entering mission-critical systems. While each contractor implements these requirements through its own contractual frameworks, the underlying principles are consistent and reflect established industry standards such as SAE AS5553, AS6081, and AS6171.

Taken together, these requirements establish a set of widely recognized best practices for managing counterfeit electronic component risk across the aerospace and defense supply chain:

  1. Prioritize authorized sourcing channels. Electronic components should be procured directly from the Original Component Manufacturer (OCM/OEM) or authorized distributors whenever possible to ensure full traceability and authenticity.
  2. Maintain documented counterfeit detection and avoidance systems. Contractors and suppliers must implement risk-based counterfeit mitigation programs aligned with recognized standards such as SAE AS5553, and DFARS 252.246-7007, including supplier qualification, traceability verification, and counterfeit monitoring processes.
  3. Implement rigorous inspection and authentication testing for untraceable parts. When components must be sourced from independent distributors, unvetted suppliers, or the open market, suppliers are expected to perform inspection and authentication testing using industry-recognized methods such as those defined in SAE AS6171. SAE AS6171 structures authentication testing using escalating Material Risk Levels (MRLs), which define the scope and rigor of inspection and testing activities based on the level of supply chain risk. Across many aerospace and defense programs, MRL 2 is widely treated as the minimum authentication testing level when electronic components are sourced outside authorized distribution channels or lack verified manufacturer traceability.
  4. Monitor obsolescence and supply chain risk. Suppliers are expected to proactively manage component lifecycle risks and monitor obsolescence conditions that may increase reliance on independent distributors or elevate counterfeit risk.
  5. Participate in industry reporting systems. Contractors are required to monitor and report counterfeit activity through systems such as GIDEP (Government-Industry Data Exchange Program) or ERAI to support industry-wide awareness and risk mitigation.
  6. Quarantine and report suspect counterfeit parts immediately. Suspect or confirmed counterfeit components must be isolated from production, reported to the applicable prime contractor, and investigated to determine the source and potential impact.
  7. Flow down counterfeit prevention requirements to all subcontractors. Counterfeit mitigation obligations must be incorporated into subcontracts and purchase orders to ensure consistent supply chain controls across all tiers of suppliers.
  8. Ensure supplier accountability and remediation. Suppliers remain responsible for replacement, corrective actions, and associated costs when counterfeit or suspect components are identified in delivered material.

Together, these practices establish a multi-layered defense against counterfeit electronic components, combining traceable sourcing, authentication testing, supplier oversight, and industry reporting. This framework ensures that even when components must be sourced outside original manufacturer channels, appropriate controls are in place to verify authenticity and protect the integrity of aerospace and defense systems.

Supporting Compliance When Open Market Sourcing Is Required

While government regulations and prime contractor flowdown requirements consistently prioritize sourcing electronic components from original manufacturers and authorized distributors, the reality of the aerospace and defense supply chain is that obsolescence, allocation shortages, lifecycle discontinuations, and urgent operational demands often require companies to source components from the open market or independent distributors. In these situations, authentication testing in accordance with SAE AS6171—typically performed at a minimum of Moderate Risk Level 2—is widely used to mitigate counterfeit risk and demonstrate compliance with prime contractor counterfeit avoidance requirements.

Organizations that must procure components without full traceability to the original manufacturer therefore require partners capable of both rapid sourcing and rigorous authentication testing to ensure compliance with Department of War regulations and prime contractor quality requirements.

SMT Corp. supports defense contractors by enabling the rapid sourcing and authentication of electronic components obtained from the open market and third-party distributors when original manufacturer traceability is unavailable, incomplete, or the source is otherwise unvetted. SMT is widely recognized as one of the most accredited electronic component authentication companies in the world and specializes in detecting counterfeit, cloned, and tampered electronic parts before they enter mission-critical aerospace and defense systems.

Key capabilities include:

  • Accreditation to SAE AS6171 Moderate Risk Level 2 and High-Risk Level 2, enabling advanced authentication testing of electronic components sourced from independent distributors and the open market. Moderate Risk Level 2 represents the level of authentication testing most commonly required by defense prime contractors when electronic components must be procured without full manufacturer traceability.
  • Defense Logistics Agency (DLA) authorization for sourcing and authentication of untraceable electronic parts.
  • Deep expertise in identifying cloned, remarked, recycled, and otherwise counterfeit electronic components.
  • A global network of trusted brokers and distributors supporting rapid sourcing of obsolete and hard-to-find components.
  • Proven ability to support customer compliance with DoD DFARS 252.246-7007 and DFARS 252.246-7008, as well as the counterfeit mitigation flowdown requirements imposed by major defense prime contractors.

Today, major defense contractors across the United States, Canada, the United Kingdom, Europe, and Israel rely on SMT to protect their supply chains from counterfeit and non-conforming electronic components. With laboratories in both the United States and the United Kingdom, SMT supports defense programs across the Americas, UK/Europe, and Israel—helping ensure that critical aerospace and defense systems are supplied with authentic, compliant electronic components even when sourcing must extend beyond traditional authorized distribution channels.

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