The US Senate Armed Services Committee recently released a report detailing the extent of counterfeit electronic parts present in the Department of Defense (DOD) supply chain. It is worse than we thought.
The Committee confirmed that counterfeit parts are making their way into critical defense systems, leaving these systems and our service people vulnerable. The committee uncovered approximately 1,800 cases of suspected counterfeiting over a two year period. These cases involved over a million parts. One Air Force supplier alone (Hong Dark Electronic Trade of Shenzen, China) supplied 84,000 counterfeit parts.
The Committee pointed out several weaknesses in the defense procurement supply chain. Defense contractors have not been reporting to the DOD all instances where counterfeit parts are discovered. Defense contractors are also not undertaking sufficient due diligence to ensure their supply chains are free of counterfeit parts. The recently enacted National Defense Authorization Act of 2012, part of only a small number of US Federal laws, will address these issues. It will require DOD reporting and due diligence actions by defense contractors. It will also impose tough penalties on contractors that supply counterfeit parts to the US military.
China identified as the primary source of counterfeit parts
The Committee confirmed something we already suspected, that companies located in China are the primary source of counterfeit parts. Approximately 70% of the counterfeit parts infiltrating the defense supply chain are believed to come from China. The Committee concluded that the Chinese government has failed to take the necessary steps to stop counterfeiting operations there. China disagrees.
An article appeared in the China Defense News on May 25 that stated, “The U.S. government has found yet another reason to…bash China, this time accusing the country of compromising national security via the manufacture of counterfeit electronic components used by the U.S. military…but bigger questions should be answered first: how did counterfeit parts end up slipping into the U.S. military system in the first place? And for what purpose were the parts originally shipped for?
The U.S. has maintained a military embargo on China for 23 years. Military components and weapons aren’t supposed to be officially traded between the two countries to begin with. Taking this into consideration, the U.S. ought to find out precisely who purchased the parts and how they passed muster before accusing China of wrongdoing.”
Are you alarmed by the increase in counterfeit parts? Are you taking any actions to avoid counterfeit parts? Is China really the culprit? Let me know what you think.
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