For many years, the Pentagon has been trying to thwart military use of counterfeit electronics and electronic components. The U.S. Senate Armed Services Committee held a meeting Tuesday morning to discuss the proliferation of these fakes into U.S. military agencies. Many such parts have been discovered in a plethora of devices throughout military operations, but most disturbingly, numerous counterfeits have been uncovered at the U.S. Missile Defense Agency.
The exact sources for these parts were not disclosed during the discussion as analysis is still under way. However, in nearly all instances, counterfeit parts were requisitioned from unauthorized sources such as Internet-based vendors. Also, in nearly all instances, the illegitimate parts could have their origins traced to China. Senator Levin points out that Shenzen in China's Guangdong Province is specifically responsible for most of the counterfeits found.
In a prepared statement, Lieutenant General Patrick J. O'Reilly, Director of the United States Missile Defense Agency outlined some of the problems:
"Total counterfeit parts found to date number about 1,300. All of them were procured from Unauthorized Distributors. We estimate the total cost to MDA for the seven instances is about $4 million. Our largest case cost the Agency $3 million to remove counterfeit parts discovered in the mission computer of our production THAAD interceptor"
A panel investigation is also underway to better understand why this. is happening. Some of the preliminary evidence is not encouraging. To test purchases from unauthorized vendors, 13 parts were purchased from seemingly reputable sources that met strict criteria to ensure the parts were authentic. Criteria included sealed packaging, vendor contact information and verifiable part and lot numbers. Only seven of the parts could be analyzed by Tuesday morning, but all seven failed authenticity tests. The parts were either fakes, used but sold as new and/or reworked (ie. refurbished). Despite ordering outside of China, nearly all parts ended up originating from China. Included in those seven parts were two voltage regulators and an operational amplifier, any of which could have caused catastrophic failure for the devices in which they were installed.
In addition to unscrupulous vendors selling questionable parts to defense contractors, Senators also make mention of the "rampant" espionage the U.S. suffers at the hands of China, which we recently discussed here. The magnitude of such intellectual theft is difficult to calculate, but the panel claims that counterfeit electronic components and parts cost the U.S. nearly 7.5 billion dollars and 11,000 American jobs each year.
To date, the Missile Defense Agency reports there has been no indication of mission critical hardware containing these untrusthworthy parts. However, the agency does point out it may just be a matter of time before a "$12 million THAAD interceptor is destroyed by a $2 part." and lives could be at stake of the problem is not solved