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On the battlefield, defective parts can cost soldiers' lives. Reportedly 40 percent of the U.S. supply chain is damaged by counterfeit or defective parts, mostly from China.  (Source: Defense Talk)

Using China-manufactured hardware could also offer a convenient route for espionage on core U.S. systems. The DOD continues to use Chinese parts, though because they're cheap.  (Source: Military Factory)

China is blocking U.S. inspectors from entering Shenzhen, a manufacturing metropolis that is suspected as a source of many of the counterfeit parts.  (Source: Beijing Torch Relay)

Sen. Scott Brown (R-Mass.) says not to wholly blame the Chinese, but to look at our own nation's decisions as well. He states, "It's easy to blame the Chinese for this. Just like it's easy to blame the Chinese for taking our jobs and shutting down American manufacturing plants. But we're letting this happen. And the Department of Defense needs to pay way more attention to its whole supply chain."  (Source: AP Photo)
Fake parts are compromising national security, costing Americans jobs

The U.S. Government Accountability Office (GAO), the audit, evaluation, and investigative arm of the U.S. Congress has been busy investigating reports of fake and/or damaged parts in the U.S. supply chain.  It has released its preliminary findings [press release] and they may come as a shock to some -- though perhaps not so much for others.

I. A Huge Problem

The GAO claims that 40 percent of the U.S. Department of Defense's supply chain is adversely impacted by fake or defective parts.  From missiles, to rifles, to vehicles, problems abound.  The common thread, says the GAO, is that virtually all the suspect parts originated from contractors in China.

The U.S. Immigration and Customs Enforcement (ICE) agency in 2010 seized 19,959 loads of suspected counterfeit parts and materials valued at approximately $1.4B USD.  That's a 39 percent rise from 2009.  ICE also reports dealing with 2,000 intellectual property abuse claims last year, which resulted 365 arrests, 216 indictments and 170 convictions.

The Defense Criminal Investigative Service (DCIS), under the auspice of the Defense Department Inspector, has its hands full as well.  It is currently actively probing 45 reports of counterfeit parts and 200 allegations of substandard or non-conforming parts.

As mentioned, most of these parts come from China.

Particularly troublesome are reports of counterfeit computer chips.  Deputy Defense Secretary Bill Lynn admitted to the magazine Foreign Affairs last year that, "[A]lready, counterfeit hardware has been detected in systems that the DOD has procured."

The report is troubling as it not only endangers national security through failures, but could be a possible route to espionage attempts as well.

The GAO report describes counterfeit seatbelt clasps delivered for Army vehicles, fake computer routers delivered to the Navy, and Air Force microprocessors that were also counterfeit.

The DCIS investigation head James Ives cited an incident in which a Texan in January 2010 was found guilty of selling counterfeit Cisco Systems Inc. (CSCO) "Gigabit Interface Converters" to the Marine Corps for use in Iraq.  Bought from a Hong Kong-based Chinese vendor, the contractor obtained the systems for $25 USD a piece and resold 200 of them to the Marines for $595 a piece -- for a total of $114,000 USD in profit before applicable taxes.

II. Life and Death

In the field of defense small changes can make the difference between life and death.  While the failure of a graphics card or a smart phone due to subpar counterfeit parts might be disappointing, the failure of a jet fighter CPU or a soldier's machine gun could be deadly.

Over the last couple decades U.S. companies have increasingly turned to China to provide for their supply chain.  It's hard to resist -- the Chinese offer cheaper labor, parts, and assembly than anywhere else in the world and their workers are moderately skilled.

However, there are serious problems from a culture of corruption and corner cutting with the Asian giant.  In July 2007 China executed the nation's former top drug regulator after he was found taking bribes to allow counterfeit products that resulted in deaths.  The U.S. has experienced this problem first hand, in recalls of children's toys that were found to contain toxic levels of brain-damaging lead.  

And most recently China's high speed train efforts were derailed when they found contractors to be using substandard materials and dangerous cheap fillers.  As a result, China was forced to slow its world-leading trains to a pace slower than its foreign competitors.

All of these are telltale signs of a bigger problems looming over the Chinese manufacturing agency.  Chinese labor may be cheap.  But it's prone to espionage, defects, counterfeiting, and substandard materials.

Ultimate the U.S. Department of Defense has a budget to maintain, though, and at the end of the day it's made the same decision many U.S. companies have -- take the risk of using Chinese parts.

III. China Refuses to Cooperate with GAO

According to the GAO report, most of the counterfeit parts are coming from Shenzhen, a major manufacturing center in China's sea-facing southern Guangdong province.  

Some may recognize Shenzhen as the home of Hon Hai Precision Industry Co Ltd. (2317) subsidiary Foxconn's massive "city" plant where over 200,000 employees toil assembling products for Apple Inc. (AAPL) and other manufacturers.  The plant gained international attention last year after a string of suicides [1][2][3] highlighted poor working conditions at the company's Chinese plant [1][2].

The GAO has sent inspectors to investigate in Shenzhen.  However, they've met a roadblock -- the Chinese government learned of this plan and moved to block the investigators' effort to gain visas.  The Chinese government demanded the U.S. inspectors postpone their trip.

U.S. Senator Scott Brown (R-Mass.), a member of the Senate Armed Services Committee and former National Guard Member, blasted the decision in an interview [video] with CNN.  But he puts most of the blame on the American government and the DOD for allowing this behavior.

He states, "It's easy to blame the Chinese for this. Just like it's easy to blame the Chinese for taking our jobs and shutting down American manufacturing plants. But we're letting this happen. And the Department of Defense needs to pay way more attention to its whole supply chain."

He says that the cost cutting not only costs "America's jobs", but also "national security", as well.

"If we're using American taxpayer dollars to buy these goods, you better make sure they're American made, you better make sure they're safe, you better make sure you're doing this right," he opines, "If not, you're not contracting with us any more."

Unfortunately Sen. Brown's rhetoric seems far from the DOD's real world daily actions.


Comments     Threshold


This article is over a month old, voting and posting comments is disabled

I do like...
By DigitalFreak on 6/17/2011 2:20:21 PM , Rating: 5
I do like the fact that Chinese factory owners can be put to death for knowingly adding hazardous chemicals to food, etc.




RE: I do like...
By Motoman on 6/17/2011 2:44:55 PM , Rating: 5
Well, to be fair, any Chinese citizen can be put to death for...well, whatever.


RE: I do like...
By The0ne on 6/17/11, Rating: 0
RE: I do like...
By MrBlastman on 6/17/2011 3:30:15 PM , Rating: 5
The scary thing is that same US citizen could be put to death themselves for "letting" their bike get stolen if they crossed the wrong government official while there. The rule of law is broken in that country. That is what is extra alarming.


RE: I do like...
By nafhan on 6/17/2011 3:41:18 PM , Rating: 2
And race is definitely the motivation behind all that. Good thing you pointed it out...

Has anyone else read about the problems with lead poisoning that have been going on lately in China? Potentially hundreds of thousands of kids with lead poisoning - that's much sadder than the inconvenience to our defense supply chain.


RE: I do like...
By The0ne on 6/17/11, Rating: 0
RE: I do like...
By YashBudini on 6/17/2011 7:33:07 PM , Rating: 2
quote:
Has anyone else read about the problems with lead poisoning that have been going on lately in China? Potentially hundreds of thousands of kids with lead poisoning - that's much sadder than the inconvenience to our defense supply chain.

The government is delaying any law enforcement until such toy companies are too big to fail. They they will give them money for larger bonuses at zero interest.


RE: I do like...
By YashBudini on 6/17/2011 7:27:55 PM , Rating: 2
quote:
The downside is it's all because of government control and through fear.

Am I glad I live in a country that doesn't do that.

</looking over my shoulder>


RE: I do like...
By Justin Case on 6/17/2011 5:00:54 PM , Rating: 2
quote:
any Chinese citizen can be put to death for...well, whatever.

Any American citizen (or Chinese citizen, for that matter) can be taken to Guantanamo, tortured and killed for less than "whatever".

The Chinese legal system isn't random. The crimes for which the death penalty can be applied are well defined, and stealing a bike isn't one of them.


RE: I do like...
By Reclaimer77 on 6/17/2011 5:12:50 PM , Rating: 2
quote:
Any American citizen (or Chinese citizen, for that matter) can be taken to Guantanamo, tortured and killed for less than "whatever".


Excepted that's never happened. Ever. But whatever...


RE: I do like...
By idiot77 on 6/17/2011 5:17:12 PM , Rating: 2
http://www.mcclatchydc.com/2011/02/03/108050/suspe...

He was elliptical'ed to death. Have you ever done one of those? Such torture....


RE: I do like...
By foolsgambit11 on 6/17/2011 6:01:16 PM , Rating: 2
I think Reclaimer was referring to the 'American' part of the statement. Americans are held in America (although cases like Al-Marri's suggest they can be held indefinitely without charge here, too). To be clear, I'm not a fan of indefinite detention for anybody, US citizen or not.

As for the recent GTMO death, it's only a matter of time before you have somebody drop dead of a heart attack when many of the senior terrorist leaders are, well, seniors. They haven't been getting any younger in the past 9 years, and the 4000 calorie diet they're offered certainly doesn't help. When about 1 in 1000 people die of a heart attack per year in the US (not taking into account age brackets), it stands to reason that 1 in 170 middle-aged men would die of a heart attack over 10 years. Frankly, I'm surprised only 2 people have died in GTMO of natural causes so far.


RE: I do like...
By ekv on 6/18/2011 12:08:35 AM , Rating: 2
quote:
in the past 9 years, and the 4000 calorie diet they're offered certainly doesn't help
Where do you get the "4000 calories" number?

If that's true it is literally brilliant in a practical sense. Nobody wants those guys. You can't outright kill or poison them. And only the NY Times would see a conspiracy plot in feeding prisoners filet mignon and ice cream. Actually, if you could do a McDonalds Super-Size for every meal -- nah, that'd be too obvious 8)

Seriously though, just keep them at or over 200 grams of meat protein per day. That'd do the job. [Though not the Japanese, um, re-processed meat, which is kind of disgusting].


RE: I do like...
By foolsgambit11 on 6/20/2011 8:51:44 PM , Rating: 2
The diet has varied considerably over the years, from almost entirely vegetarian MREs to a culturally sensitive smorgasbord, with some reports suggesting that at times, detainees were given as much as 6800 calories per day. Of course, what was given to them to eat and what they eat are two different things, and I believe the number currently is a much more reasonable 2400 calories, or somewhere around that. Additionally, some detainees will temporarily be put on high-calorie diets if they are underweight, like after a hunger strike. So yes, picking one number like 4000 may be simplistic.

And I'm not implying a sinister plot, only that lots of food is on offer - it's still the detainees' choice whether they eat it or not.


RE: I do like...
By Justin Case on 6/17/2011 5:26:12 PM , Rating: 2
Are you employed by the CIA? If not, somehow I doubt you have any idea of what goes on inside Guantanamo or in our other concentration camps spread across the Middle East and Eastern Europe.

What you get is the "official version". As someone who has served in a couple of wars, I can assure you the official version rarely bears any resemblance to what actually happened.

It's amazing how many people accidentally cut off their heads while shaving. Especially since they didn't even have a razor...


RE: I do like...
By idiot77 on 6/17/2011 5:36:46 PM , Rating: 1
Awwww come on, I had to search for like a whole minute to come up with that joke.

You and your "truthiness", bah!


RE: I do like...
By ebakke on 6/17/2011 6:20:12 PM , Rating: 3
quote:
Are you employed by the CIA? If not, somehow I doubt you have any idea of what goes on inside Guantanamo or in our other concentration camps spread across the Middle East and Eastern Europe.
So I gotta ask... are you employed by the CIA?


RE: I do like...
By guffwd13 on 6/17/2011 6:51:45 PM , Rating: 3
quote:
So I gotta ask... are you employed by the CIA?


He was arguing you can't just say "anyone" can go to Guantanamo for "whatever" because unless you actually are privy to that information. He wasn't claiming to be privy, he's just saying he knows enough to not trust official reports just because they're official.


RE: I do like...
By YashBudini on 6/17/2011 7:22:09 PM , Rating: 2
quote:
It's amazing how many people accidentally cut off their heads while shaving. Especially since they didn't even have a razor...

I recall an episode of Law & Order where the detective said the mobster's death was ruled a suicide. Yeah, he shot himself in the head 5 times.


RE: I do like...
By FITCamaro on 6/18/2011 1:49:51 PM , Rating: 1
I guess its good to know that you know more than the media does. Or any other official.

Please. In a day when what someone has for lunch doesn't stay secret, if people were being killed in Gitmo, we'd know about it.

And I'd cheer every death.


RE: I do like...
By YashBudini on 6/18/2011 5:48:22 PM , Rating: 2
quote:
In a day when what someone has for lunch doesn't stay secret, if people were being killed in Gitmo, we'd know about it.


quote:
Hi Curly. Killed anyone today?

Billy Crystal as Mitch Robbins.

quote:
The day ain't over yet....

Jack Palance as Curly.

http://www.imdb.com/title/tt0101587/quotes


RE: I do like...
By Skywalker123 on 6/18/11, Rating: 0
RE: I do like...
By YashBudini on 6/19/2011 12:39:06 AM , Rating: 2
I think he simply wants to use them as buns for his Japenese sh!t sandwich.


RE: I do like...
By Divide Overflow on 6/19/2011 2:50:30 PM , Rating: 2
quote:
Excepted that's never happened. Ever. But whatever...

Don't try to confuse them with facts, it gets in the way of their attempts at hysteria.


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