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Counterfeit electronics and military hardware risks American lives

It would be reasonable to expect the United States military contractors building the aircraft our military uses to defend the nation to be absolutely sure electronics they use in the aircraft are legitimate and don't suffer from any security issues. However, a Senate report indicates that this not always the case. The Senate Armed Services Committee issued a report documenting the year-long investigation launched by Democratic Chairman Carl Levin and ranking Republican John McCain into counterfeit Chinese electronics in military aircraft.
The report spans 112 pages shows that 1,800 cases of bogus counterfeit parts were discovered during the investigation. The counterfeit Chinese parts were discovered in the Air Force's largest cargo plane, helicopters used by special ops soldiers, and Navy surveillance aircraft. 
Levin said, "[The report] outlines how this flood of counterfeit parts, overwhelmingly from China, threatens national security, the safety of our troops and American jobs."
“It underscores China’s failure to police the blatant market in counterfeit parts — a failure China should rectify,” he continued.
The Senate report also notes that the Chinese government wouldn't issue visas to Senate committee staff that wanted to travel to Asia as part of the investigation. Defense News reports that one Chinese embassy official said the issue was sensitive and a negative report could damage relations between the United States and China.
While the source of the counterfeit electronics was overwhelmingly determined to be China, the report does say that contractors and other authorities in the United States are partly to blame for failing to detect fake parts and routinely failing to report suspected counterfeit goods.
Among the fake and counterfeit parts the investigation discovered were Electromagnetic Interference Filters that were used in night missions and in the operation of military arms such as the Hellfire missile used on certain Navy helicopters. Counterfeit memory chips were also found in the display systems used by the C-17 Globemaster III and the C-130J military cargo aircraft. Additional counterfeit parts were discovered in refurbished ice detection modules on the Navy P-8A Poseidon used for anti-submarine and anti-surface warfare by the Navy.
The SAS first mentioned the problem of counterfeit electronics and military hardware last year.

Source: Defense News

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RE: Outsourcing
By theapparition on 5/23/2012 12:03:57 PM , Rating: 5
I can explain the situation.

Counterfeit parts fall into a few categories. Used parts, with not history or traceability. Remarked parts, where a slightly different part is remarked to conform, or actual counterfeit parts, where some parts have been made to have extra circuitry to "phone home".

Used parts are seen the most. There are entire cities in China where the industry is buying scrap electronics, and removing all the circuitry to resell. Used parts present many problems since MTBF is based on new parts, so they can fail prematurely or not be as reliable as the new part. Plus without lot traceability, you have no way to track the failures across multiple builds.

Remarked parts are also common, but more dangerous as the internal circuitry isn't exactly the same, so functional issues can arise.

The most sinister, although very rare are the chips that are actually targeted espionage. Spies obtain the parts list for sensitive equipment and reverse engineer actual parts, plus add some extras for espionage.

But to answer your question, the contractors aren't buying these chips to cut corners. They absolutely believe they are buying legitimate parts. So how does this happen?

Most of the time I've seen this, the contractor is dealing with obsolete part issues. With significantly longer design cycles and much longer field life than consumer electronics, it's not uncommon to see ICs go obsolete during a products production. It then becomes a question of finding the parts from alternative sources rather than the mfr, or spending tons of money to redesign the product, and then spending likely 10X that re-qualifying it. Government agents usually authorize buying from distribution and as a last resort.....brokers. Legitimate brokers buy excess inventory from many companies and then sell it at inflated rates.

They are an option you only want to use under the worst circumstances. The problem is, there can be illegitimate brokers, so you have to vet them to make sure you a buying the right parts, and get Certificates of Conformance with them, lot numbers, etc. But sometimes the CofCs get faked, and bad parts get into the legitimate supply chain (eg Badcompany1 buys 1000 of part X. Swaps them out for fake part X and keeps the legitimate CofCs. Sells them with the CofCs to Goodcompany2. Goodcompany2 sells them to Mil contractor with no idea they are bad parts. Badcompany1 shuts down, and reopens as another company and all history is lost.

My company was actually on the other end, where one of our mil customers, to avoid all counterfeit issues, shut down all suppliers except for a few large established ones. It was a pain in the but to get back on their approved vendor list, even though my company doesn't provide any physical products. The mil contractors are taking this very seriously.

RE: Outsourcing
By BurnItDwn on 5/23/2012 2:12:39 PM , Rating: 3
Interesting, thanks for sharing!

RE: Outsourcing
By vortmax2 on 5/23/2012 2:56:04 PM , Rating: 3
This post should be a "6".

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