Document Detail

Title: RS307-1 - Mitigating Threats of Counterfeit Materials in the Capital Projects Industry
Publication Date: 9/1/2014
Product Type: Research Summary
Status: Supporting Product
Pages: 28
Summarizes the research team's investigation into the continuing threat of counterfeit, fraudulent, and suspect items (CFSI) in the construction materials supply chain. Discusses the team's methodology, analysis, and findings on the topic, and introduces the Microsoft® Access template for an internal CFSI database it developed for recording and tracking the presence of counterfeit materials on jobsites. Proposes an industry-wide expansion of the database tool for a more comprehensive response to the CFSI threat to the industry.

NOTE: Actual tool included with IR307-2.
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CII established Research Team (RT) 307, Mitigating Threats of Counterfeit Materials in the Capital Projects Industry, to expand upon the research of RT 264, Product Integrity Concerns in Low-cost Sourcing Countries, which documented the variety, scope, and impact of counterfeiting threats affecting the capital projects industry. Beyond reconfirming and updating the status of the threat of counterfeit, fraudulent, and suspect items (CFSI) to the industry, the primary purpose of the RT 307 research was to help CII member companies and other interested parties mitigate the presence and effects of CFSIs in the capital project supply chain. The research team developed effective mitigation strategies, practices, and methods for addressing CFSIs discovered on projects, and further proposes the CII CFSI Risk Mitigation Framework to help CII member companies reduce their exposure to CFSI. CII member companies can use this framework at a company or business unit level to improve their internal management processes for blocking CFSIs from their capital project supply chains. The framework can also help organizations improve the identification, assessment, mitigation, and communication components of their risk management programs.

To support the framework, the research team developed a catalog of 19 CFSI risk mitigation strategies, a resource that presents each strategy, explains its implementation, and discusses the challenges inherent to mitigating the type of CFSI it addresses. Any organization can modify the catalog to make it an evolving (customized) point of reference on CFSI risks. (See Chapter 4 of this research summary for an overview of the catalog and see Implementation Resource (IR) 307-2 for a detailed discussion of its use.)

RT 307 also studied alternative solutions and the feasibility of mitigating CFSIs at the industry level. As a result, the research team developed a phased approach to implement the research findings. The first phase is to apply the framework at the individual CII membership level. The second phase is to expand this application at the broader level of the entire CII membership and the construction industry. Applying a uniform framework across the entire industry would create alignment on data collection and data evaluation. Such uniformity would provide the basis for developing and implementing a CFSI database to facilitate the timely exchange of accurate data on CFSI at an industry level. (See Research Report 307-11, Mitigating Threats of Counterfeit Materials in the Capital Projects Industry, for details on this phased database approach.)

In the second phase CII would collect the data from CII member companies and channel it to a data exchange program after appropriate review. After collecting the data, CII would analyze it and publish any CFSI trends and patterns detected. Beyond requiring the collaboration of CII members, this phase would also require governance and logistical support from CII. Important motivations for this CII-centered initiative include the following:

  • CII leads anti-CFSI efforts within the construction industry.
  • CII would extend its role as a facilitator of industry collaboration.
  • CII can facilitate the anti-CFSI actions of its membership.
  • CII is at the forefront for reporting trends in the construction industry.
  • As a research organization, CII can avoid some regulatory issues (e.g., anti-trust).
Since establishing such an overarching apparatus would require considerable deliberation, coordination, time, and resources, the research recognizes that it is not immediately actionable. Thus, the team restricted its in-depth discussion of this second phase to RR 307-11.


This research summary is composed of five chapters: an introduction delineating the scope and objectives of the research, as well as the expected output; two subsequent chapters that discuss the research methodology, data analysis, and the key findings; a fourth chapter summarizing the CFSI Framework and implementation model; and, a final chapter of conclusions and recommendations for future CFSI research.