Post by LWPD on Nov 9, 2011 20:00:44 GMT -5
Quite a debacle. Up to 40% of the U.S. Military's supply chain could be made up of counterfeit parts. Stricter procurement policies by DoD that put the onus on contractors to buy American made parts with identifiable sources of production would be a step in the right direction, but far less profitable for said contractors.
Courtesy of Financial Times
US military duped into using counterfeit parts
By Jeremy Lemer
Some of the world’s biggest defence contractors have been duped into installing counterfeit electronics parts, many of them originating in China, into US military systems, according to the Senate armed services committee.
The committee identified Raytheon, L-3, Boeing, and their suppliers, as companies that had unwittingly used suspect parts on equipment such as helicopter night vision systems and aircraft video display units, although none of the cases it highlighted had resulted in serious failures.
At a hearing on Tuesday, Senator Carl Levin, chairman of the committee, singled out China as the main source of suspect parts and threatened to press for increased scrutiny of all Chinese electronics imported into the US.
“The failure of a single electronic part can leave a soldier, sailor, airman or marine vulnerable at the worst possible time. A flood of counterfeit electronic parts has made it a lot harder to have confidence that won’t happen,” Mr Levin said.
“We are going to act,” Mr Levin said, adding that he would push to boost port inspections of electronics shipments from China. “We cannot rely on the Chinese … The Chinese say that they have an effort going on to act against counterfeits and it’s baloney.”
Committee members also urged defence contractors to do more to track down fake parts and said the US needed to “change our acquisition rules to ensure that the cost of replacing suspect counterfeit parts is paid by the contractor, not the taxpayer”.
In written testimony, representatives from Raytheon, Boeing and L-3 said they had developed stringent measures to tackle counterfeit parts, such as special units focused on the issue and lists of approved distributors for key components.
Senate investigators have been examining the issue since March, and their findings echo the conclusions of a series of studies by US government auditors and independent experts: that counterfeit parts, often from China, are a growing problem for military contractors.
“It’s growing much worse,” Thomas Sharpe, vice-president of SMT and Liberty Component Services, a distributor and investigator of electronic parts, told the committee on Tuesday. “The counterfeiters are changing their processes to get in front … So the process is evolving, and it’s getting harder to detect.”
In 2010, a survey of 387 defence suppliers by the Department of Commerce reported that detected incidents of counterfeit parts in the supply chain had jumped from 3,868 incidents in 2005 to 9,356 incidents in 2008.
Other reports have identified a wide array of fake parts, such as nuts on certain aircraft brakes and substandard titanium used in fighter jet engine mounts, that have been sourced from countries ranging from Taiwan to Russia to the US.
In a briefing memo the committee said that counterfeit electronic parts often begin their life as US computer waste that is shipped to China to be recycled. There chips are retooled to make them look newer and to remove serial numbers before being sold back into the supply chain through distributors.
The defence industry is particularly vulnerable to counterfeits because the military regularly uses the same equipment for decades, forcing contractors to rely for spare parts on middlemen who stock obsolete commercial electronic chips rather than original manufacturers.
Courtesy of Financial Times
US military duped into using counterfeit parts
By Jeremy Lemer
Some of the world’s biggest defence contractors have been duped into installing counterfeit electronics parts, many of them originating in China, into US military systems, according to the Senate armed services committee.
The committee identified Raytheon, L-3, Boeing, and their suppliers, as companies that had unwittingly used suspect parts on equipment such as helicopter night vision systems and aircraft video display units, although none of the cases it highlighted had resulted in serious failures.
At a hearing on Tuesday, Senator Carl Levin, chairman of the committee, singled out China as the main source of suspect parts and threatened to press for increased scrutiny of all Chinese electronics imported into the US.
“The failure of a single electronic part can leave a soldier, sailor, airman or marine vulnerable at the worst possible time. A flood of counterfeit electronic parts has made it a lot harder to have confidence that won’t happen,” Mr Levin said.
“We are going to act,” Mr Levin said, adding that he would push to boost port inspections of electronics shipments from China. “We cannot rely on the Chinese … The Chinese say that they have an effort going on to act against counterfeits and it’s baloney.”
Committee members also urged defence contractors to do more to track down fake parts and said the US needed to “change our acquisition rules to ensure that the cost of replacing suspect counterfeit parts is paid by the contractor, not the taxpayer”.
In written testimony, representatives from Raytheon, Boeing and L-3 said they had developed stringent measures to tackle counterfeit parts, such as special units focused on the issue and lists of approved distributors for key components.
Senate investigators have been examining the issue since March, and their findings echo the conclusions of a series of studies by US government auditors and independent experts: that counterfeit parts, often from China, are a growing problem for military contractors.
“It’s growing much worse,” Thomas Sharpe, vice-president of SMT and Liberty Component Services, a distributor and investigator of electronic parts, told the committee on Tuesday. “The counterfeiters are changing their processes to get in front … So the process is evolving, and it’s getting harder to detect.”
In 2010, a survey of 387 defence suppliers by the Department of Commerce reported that detected incidents of counterfeit parts in the supply chain had jumped from 3,868 incidents in 2005 to 9,356 incidents in 2008.
Other reports have identified a wide array of fake parts, such as nuts on certain aircraft brakes and substandard titanium used in fighter jet engine mounts, that have been sourced from countries ranging from Taiwan to Russia to the US.
In a briefing memo the committee said that counterfeit electronic parts often begin their life as US computer waste that is shipped to China to be recycled. There chips are retooled to make them look newer and to remove serial numbers before being sold back into the supply chain through distributors.
The defence industry is particularly vulnerable to counterfeits because the military regularly uses the same equipment for decades, forcing contractors to rely for spare parts on middlemen who stock obsolete commercial electronic chips rather than original manufacturers.
