An Early Adopter Uses SigNature® DNA To Secure DoD Supply-Chain and Rack Up ROI

By Bob MacDowell
Applied DNA Sciences, Inc.

The electronic component industry remains infested with counterfeit components. Short life cycles for components used in long-term military projects force OEMs to wade out into the murky waters of the ‘open market’ to procure obsolete parts. Shifting demands cannot always be predicted by the authorized channels, leading to unacceptable lead times, exacerbating the supply challenge.

Congressional lawmakers are focused on the surge of counterfeit parts flooding the Department of Defense (DoD), as dramatically confirmed in hearings before the Senate Armed Services Committee. Numerous recent articles have also uncovered counterfeit high-reliability electronic components in weapons systems, aircraft, and other life-dependent military supply.

As one immediate course of action, on November 15, 2012, the DoD procurement arm, Defense Logistics Agency (DLA), issued a directive that all 5962 microcircuits provided by contractors must be marked with botanically-derived SigNature DNA from Applied DNA Sciences (APDN). The “SigNature DNA Provenance Mark”™, would be unique to each trusted supplier. By placing a forensic DNA “fingerprint” on each part, suppliers to DLA would now be held accountable for what they ship.

We present here the experience of Foothill Ranch, California distributor Forward Components Engineering (FCE) in adopting SigNature DNA and complying with the DLA mandate. 

After a thorough quality control and risk assessment, Forward was assigned a unique SigNature DNA Provenance mark, which was initially to be stored at a DLA-suitable commercial test laboratory. This mark is applied to an electronic component and travels with it throughout the supply chain to DLA. The Provenance mark also assures that the distributor possesses full pedigree traceability, or test method paperwork verifying the part, in accordance with the widely accepted anti-counterfeiting standard known as SAE AS6081.

FCE owner, Scott Wilkosz, was disappointed in 2012 when the west coast firm bid on dozens of DLA issued 5962 quotes, but received only a pair of awards for the calendar year, totaling $32,000 in revenue. As a trusted source, Forward had full original component manufacturer (OCM) traceability paperwork for all its bids, but still was not winning awards.

In January 2013, after contracting with APDN and becoming DNA Compliant, Forward continued bidding on 5962 quotes. The first DNA-marked purchase requisition they were awarded was a 3,000-piece order totaling just over $300,000. In the month to follow, the aerospace and defense industry distributor was awarded sixteen more DNA-mark purchase requisitions, bringing their total revenue to $555,000 — a substantial increase in business in the span of just two months.

Having just received a large award in need of SigNature DNA, Forward’s goal was a quick turn-around — and so they turned to APDN ‘third party marker’ SMT Corp of Sandy Hook, CT. An integral part of the original DoD eighteen-month pilot for DNA marking, SMT Corp securely stored Forward’s DNA mark in their ISO17025 certified, DLA-approved laboratory. In adherence to APDN’s quality control requirement SD-5962, Forward issued proof of traceability before the parts received a DNA mark. (In the event the components did not have OCM traceability paperwork, the parts would have had to undergo inspection and test methods in accordance with SAE AS6081.)

SMT Corp was able to provide a value-add service for a fellow distributor by promptly DNA marking and shipping the 5962 parts, with FCE’s unique DNA marker on it, back to their Foothills dock. As part of quality control, a dummy chip was also DNA-marked at SMT Corp and sent to APDN’s Stony Brook, NY laboratory for forensic DNA analysis. A Certificate of DNA Analysis was then sent to Forward, where the document will be attached to the OCM traceability paperwork and filed for future audits. Scott shipped the DNA-marked parts on time to DLA, where they were promptly received in. These DNA marked 5962 components are now able to circulate throughout the DoD supply-chain and be forensically authenticated at any time by swabbing the DNA mark and shipping the swab to an APDN approved laboratory. Due to DLA directive 52.211-9074, all future 5962 components entering the DoD supply-chain will go through the same process; ensuring parts have OCM traceability or have undergone hi-reliability inspection and testing methods.

As a supplier on DLA’s Qualified Suppliers List of Distributors (QSLD), Forward also applied for in-house marking approval and training. This will involve an on-site audit by APDN confirming the facility controls on security and logistics; including, video surveillance of the locked area where the DNA ink will be stored — as well as a review of other receiving, inspection and distribution quality controls. Upon passing the audit, FCE personnel would then receive on-site training for DNA-marking application and forensic analysis swabbing.

DLA stated in an article “DLA is initially targeting microelectronics, but the technology is used with other commodities commercially and has broad implications for other DLA products and equipment at risk for counterfeiting.”

Forward Components also plans to broaden their scope of business by offering DNA-marked parts to new and existing customers in the military and aerospace industries. As an early adopter of SigNature DNA marking, their business strategy is to continue capitalizing by gaining additional market share, along with new and increased revenue streams, all while contributing to the emergence of a robust and forensically secure supply-chain.

Bob MacDowell, Director, Government and Military Programs

Bob MacDowell joins the APDN team with 15 years of hands-on sales experience in the electronic components industry. Bob’s industry-specific knowledge and established relationships have been key in helping to implement DNA marking into the OEM and distributor marketplace. His immediate focus has been to help APDN align with industry partners to facilitate the ease of logistics of DNA-marking and adopt internationally accepted IC counterfeit mitigation standards to ensure strict QC protocol. Mr. MacDowell’s future goal is to create a secure B2B e-commerce supply-chain platform for military, hi-rel and even commercial-based OCM, OEM and CEM customers to procure DNA-marked electronic components and other DNA-marked commodities.
If you are interested in joining the growing list of SigNature DNA Compliant manufacturers and distributors, please contact Bob for a QC application and quotation.
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