Middle
River Aircraft Systems Position on Product Substitution
What
is Product Substitution?
Why
is Product Substitution a Concern?
What
is Included in Product Substitution?
Keys
to Avoiding Product Substitution?
What
is Product Substitution?
The term
'Product Substitution' generally refers to attempts by contractors
to deliver to the Government goods or services which do not conform
to contract requirements, without informing the Government of the
deficiency, while seeking reimbursement based on alleged delivery
of conforming products or services.” Products for Government
applications must conform to Government Customer Requirements Products
for Commercial and Industrial applications must conform to FAA
and Commercial and Industrial Customer Requirements.
Potential
for Occurrence:
- Inadequate
or Improper Flowdown of Requirements from Contract
- Engineering
Errors
- System/Procedure
Inadequacies
- Manufacturing/Quality
Planning Errors
- Noncompliance
to Systems/Procedures/Planning
- Not
Meeting Drawing/Specification Requirements
Product
Substitution occurs when goods or services not strictly meeting contractual
requirements are delivered to the customer without approval and there
was prior knowledge that requirements were violated. Contract Requirements
are defined in the contract itself and in drawings and specifications
(Government/Customer and MRAS). This guideline applies equally to
military and commercial contract requirements.
Why
is product substitution a concern?
- Safety
- Risk
to National Defense
- Waste
of Resources
- Unfair
Competition
Key
Points to Remember:
Most commercial/industrial
and all of our Government contracts contain strict regulations for
the design, manufacture and testing of product and/or delivery of
services. Consequently, design elements, specifications and production
and testing procedures must be performed exactly as they are specified
in contracts.
Any deviations
from a Government contract must have the prior written approval of
an authorized Government representative.
Any deviations
from commercial or industrial contracts must have the prior approval
of designated customer and/or regulatory agency representatives. Delivery
of unauthorized or unapproved goods or services whether substandard,
just as good as, or better than contractually required where there
is knowledge of the condition, constitutes Product Substitution.
What
is included in Product Substitution:
- Identifying
repair as rework to circumvent need for government approval.
- Knowingly
supplying non U.S. made parts when contract requires US made
parts.
- Furnishing
specially worked material for testing in order to bias test results.
- Salting
shipments with defective/nonconforming parts.
- Obtaining
approval for a product deviation/nonconformance from an unauthorized
Government Representative.
- Knowingly
using an unapproved sampling plan to make product acceptance
decisions.
- Using
materials and components other than those specified in contract
without customer approval.
- Unauthorized
use of a material (weld wire, raw material, etc.) that is different
than that required by drawing or specification.
- Failing
to perform a test as specified in a contract or an engineering
drawing or falsely certifying that a required test or process
was performed satisfactorily.
- Falsifying
documentation (example: altering lab reports to reflect satisfactory
conditions).
- Supplying
defective/nonconforming parts without proper authorization.
- Knowingly
using an improperly calibrated gage to make product acceptance
decisions.
- Delivering
hardware and software known to be non-conforming to approved
parts list, product definition, drawings or specifications.
- Delivering
drawings, electronic files or software known to be nonconforming
to contract format requirements.
- Accepting
and delivering hardware that meets “design intent” but
does not meet drawing/specification requirements.
- Knowingly
supplying used rather than new parts when contract does not allow.
Keys
to Avoiding Product Substitution:
Follow
the Requirements - Adhere to documented policies, procedures, work
station planning and instructions.
Get Help
- Obtain clarification of ambiguous requirements either on engineering
drawings, in specifications or in policies, procedures or work station
planning.
Obtain
Customer Approval - Obtain advanced customer authorization or regulation
agency concurrence for any desired deviation from a contractual and/or
engineering requirement.
If you
think that something may be a case of Product Substitution: Ask questions;
Raise the Issue; Talk with your Manager, Functional Expert from Quality,
Manufacturing, Sourcing, Engineering, or other applicable organization.
Product
Substitution is a Serious Issue
- It
affects the integrity of our product.
- It
can affect our relationships with our customers.
- It
can get us into serious trouble including lawsuits and criminal
prosecutions.
If something
seems improper, ask questions. If it’s legitimate, then there
should be a valid explanation and no one should resent you asking
about it. If you are not satisfied with the answer, keep asking
questions until you are, or report it.
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