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China fake parts 'used in US military equipment'

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Nicko

Tue May 22 2012, 02:39PM

Registered Member #1334 Joined: Tue Feb 19 2008, 04:37PM
Location: Nr. London, UK
Posts: 615

Vast numbers of counterfeit Chinese electronic parts are being used in US military equipment, a key Senate committee has reported.

A year-long probe found 1,800 cases of fake parts in US military aircraft, the Senate Armed Services Committee said.

More than 70% of an estimated one million suspect parts were traced back to China, the report said.

It blamed weaknesses in the US supply chain, and China's failure to curb the counterfeit market.

The failure of a key part could pose safety and national security risks and lead to higher costs for the Pentagon, the committee said.

US servicemen rely on a variety of "small, incredibly sophisticated electronic components" found in night vision systems, radios and GPS devices and the failure of a single part could put a soldier at risk, the report said.

It highlighted suspect counterfeit parts in SH-60B helicopters used by the Navy, in C-130J and C-27J cargo planes and in the Navy's P-8A Poseidon plane.

After China, the UK and Canada were found to be the next-largest source countries for fake parts.

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Rather than acknowledging the problem and moving aggressively to shut down counterfeiters, the Chinese government has tried to avoid scrutinyâ€

Report on counterfeit electronic parts
US Senate Armed Services Committee
'Avoiding scrutiny'
The committee criticised China for failing to shut down counterfeit manufacturers and said that committee staff wanting to travel to China for the investigation had not been granted visas.

"Counterfeit electronic parts are sold openly in public markets in China," the report said.

"Rather than acknowledging the problem and moving aggressively to shut down counterfeiters, the Chinese government has tried to avoid scrutiny," it added.

But the report said that use of Department of Defense programmes such as the Government-Industry Data Exchange Program (GIDEP), designed to log suspected fake parts, were "woefully lacking".

Between 2009 and 2010 the GIDEP only received 217 reports relating to suspected fake counterfeit components, the majority of which were filed by just six companies, it said. Only 13 reports came from government agencies.

The report also said that in some cases the US defence department had reimbursed contractors for the costs they incurred as a result of their failure to spot fake components in their own supply chain - giving companies no incentive to weed out counterfeits themselves.

But it praised the National Defense Authorization Act, signed into law on 31 December 2011 by President Barack Obama, which aims to stop counterfeit parts from entering the country and would cut down on sourcing components from unknown suppliers.

The report's focus on China comes as the US is beginning the task of "pivoting" its defence strategy towards the Asia-Pacific region.

The Pentagon is also preparing to absorb about $450bn (Â£285bn) of cuts over the next decade.

But it could face cutbacks of a further $500bn if mandatory across-the-board spending cuts come into effect at the end of 2012, after Congress failed to reach a deficit reduction plan last year.

Pinky's Brain

Tue May 22 2012, 03:20PM

Registered Member #2901 Joined: Thu Jun 03 2010, 01:25PM
Location:
Posts: 837

US military is such a huge customer ... why don't they just ram a centralised barcode based tracking system down everyone's throat?

Neet Studio

Tue May 22 2012, 04:02PM

Registered Member #4037 Joined: Fri Jul 29 2011, 03:13PM
Location:
Posts: 86

For electronics at components level, the defense industry is small potatoes compared to consumer electronics, computer or automotive. This was one of the trends that most the vendors moved away from making/supporting mil specs/QML parts a long time ago. To the manufacturers, the defense customers are like high maintenance girl friends that are simply not worth the trouble no matter how attractive they are. Some like Xilinx still does. There are a few places that would qualify chips to crazy specs or silicons dies and package them.

>The report also said that in some cases the US defence department had reimbursed contractors for the costs they incurred as a result of their failure to spot fake components in their own supply chain

This IMHO is the biggest problem. Make the contractors 100% responsible for their products they delivered. All of a sudden, they would be buying from the manufacturers directly or only from their authorized distributors and do their home work on incoming inspection, screening and qual'ing their parts on their own.

>"Counterfeit electronic parts are sold openly in public markets in China," the report said.
Don't go buying from the open market for your military parts. :P

On the other hand, stolen US defense designs are safe as there is no way China can build a reliable copy with those counterfeits parts over there!

Platinum

Tue May 22 2012, 06:53PM

Registered Member #3926 Joined: Fri Jun 03 2011, 08:32PM
Location: UK.
Posts: 525

Yay MIC.

Sulaiman

Wed May 23 2012, 08:06AM

Registered Member #162 Joined: Mon Feb 13 2006, 10:25AM
Location: United Kingdom
Posts: 3140

I think that suppliers should be punished rather than reimbursed for using fake parts.
High volume manufacturers can buy direct from manufacturers,
Low volume manufacturers can buy from reputable sources,
Military manufacturers make profit on research, design, maintenance etc.
there is no excuse for 'penny pinching' other than greed.

I noticed that there is no mention of the fake parts failing!
In the '70s I worked in the ignition department of Lucas, THE uk car parts manufacturer.
One of our salesmen found fake Lucas contact breakers in 'the east'
- they looked and were packaged almost identical to our originals.
He gave them to us for testing in our 'torture chamber' so that he could show how bad they were ... they outlasted our originals!
I do not condone fakes being sold as originals, just an interesting story.

Proud Mary

Wed May 23 2012, 12:25PM

Registered Member #543 Joined: Tue Feb 20 2007, 04:26PM
Location: UK
Posts: 4992

In the electronics and software industries, the word 'fake' is often used to denote unlicensed (but identical) products, or products resulting from extra-contractual manufacture.

For example, a company has a license to manufacture one million units of a certain component, but actually manufactures two million, using identical raw materials, processes, and personnel. The first million are handed over to the corporation that has awarded the license, and the second million is sold into the grey market.

Steve Conner

Wed May 23 2012, 12:45PM

Registered Member #30 Joined: Fri Feb 03 2006, 10:52AM
Location: Glasgow, Scotland
Posts: 6706

Yes, and more likely than not, the second million are the ones that failed a few of the acceptance tests but "sort of work".

The big players in the semiconductor industry are supposed to destroy below-spec parts to stop them from falling into the hands of counterfeiters, but I have no idea what smaller contractors do.

PS: It doesn't take much to outlast a Lucas contact breaker!

Nicko

Wed May 23 2012, 01:25PM

Registered Member #1334 Joined: Tue Feb 19 2008, 04:37PM
Location: Nr. London, UK
Posts: 615

Proud Mary wrote ...

In the electronics and software industries, the word 'fake' is often used to denote unlicensed (but identical) products, or products resulting from extra-contractual manufacture.

For example, a company has a license to manufacture one million units of a certain component, but actually manufactures two million, using identical raw materials, processes, and personnel. The first million are handed over to the corporation that has awarded the license, and the second million is sold into the grey market.

Fakes, as in REAL fakes, are a major problem in the audio market

This is not "over production" - its downright forgery and causes real problems. I admit that, unlike parts for planes, an audio amp blowing up is not going (or is unlikely) to cause death & destruction, but is more than just a bit annoying...

teravolt

Wed May 23 2012, 06:52PM

Registered Member #195 Joined: Fri Feb 17 2006, 08:27PM
Location: Berkeley, ca.
Posts: 1111

pretty soon we will be able to call US government equipment knock-offs

Neet Studio

Wed May 23 2012, 11:48PM

Registered Member #4037 Joined: Fri Jul 29 2011, 03:13PM
Location:
Posts: 86

Wait until they fake a US defense contractor and start selling fake American military hardware as finished products.

Old news (full article here

While the theft of intellectual property and the copying of products has been a problem in southeast Asia for some time, Japanâ€™s NEC has received the back-handed compliment of having an entire NEC company counterfeited, according to a report in the International Herald Tribune.
The existence of the false NEC, which operated mainly in China but seemed to have been controlled by entities in Japan and Taiwan, came to light after two years of investigations, the report said.

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