Counterfeit Parts Redux

The issue of counterfeit parts in the U.S. supply chain is becoming  more of a “front burner” issue. We told you recently about the formal rulemaking procedures which resulted from several years of investigation, followed by legislation last December, which is now being implemented through various rulemaking proceedings.

The Defense Authorization Act, signed  last December 31, mandates action by individual company suppliers. By way of background, it has been verified that many counterfeit components, mostly electronic (but now others) are being sold in substantial amounts into the U.S. government supply chain. This can lead, in the case of basic chips and other components, to failures, but, with more sophisticated implants, it can lead to loss of control at calculated intervals, or even taking over control of highly sensitive systems.

That this is unacceptable is obvious. The government is taking steps to make its contractors, and their sub-contractors, responsible for verifying that the parts they are selling to the government are authentic and reliable.

Unfortunately, it was recently reported that a U.S. defense company was found not only to have provided counterfeit parts, but apparently its sub-contractor is alleged to  have instructed its own Chinese supplier in how to accomplish the task. While many of these bogus components come from China, Thailand, Vietnam and the Philippines, many other countries and the U.S. itself can be a source. It is increasingly clear that the government can, and will, clamp down on the flow of counterfeit goods. It makes sense for the government to say to contractors: “You bought it, you are responsible for its authenticity.”

A team at the Center for Advanced Life Cycle Engineering (CALCE) at the University of Maryland is frequently asked to investigate counterfeit electronics parts. CALCE has found that the responsibility for counterfeiting most often lies with unauthorized U.S. suppliers (distributors and other mid-tier suppliers), as well as the prime contractors who fail to properly vet their suppliers and ascertain the sources of the parts that they buy.

GSA has a database of about 90,000 risky suppliers that government agencies are required to check against when ordering parts. But it appears that people are simply not using this readily available and simple to use tool. As many commentators on this subject have stated, it’s a matter of awareness, education and training.

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