Senate Inquiry Finds Widespread Counterfeit Components

 - June 1, 2012, 2:00 PM
A U.S. Senate Armed Services Committee inquiry into counterfeit electronic parts found multiple examples on the Navy’s P-8A Poseidon, one of several aircraft and weapons systems with suspect components. (Photo: Boeing)

An investigation by the U.S. Senate Armed Services Committee found “overwhelming evidence” that counterfeit electronic parts, mostly from China, are making their way into critical systems used in U.S. military aircraft and other weapons systems. The committee faulted both the Department of Defense (DOD) and contractors for either failing to detect, adequately test or report bogus parts.

The investigation into DOD supply chain transactions in 2009 and 2010 revealed 1,800 cases of suspect counterfeit electronic parts representing more than one million individual parts. The committee tracked 100 of those cases back through the supply chain and traced 70 percent of the suspect parts to China. The next two largest source countries were the UK and Canada, which in some instances served as resale points for counterfeit parts from China. The findings “point to China as the dominant source of counterfeit electronic parts,” the committee said.

Suspect counterfeit parts were found on SH-60B, AH-64 and CH-46 helicopters and C-17, C-130J, C-27J and P-8A fixed-wing aircraft.

The Navy’s Boeing 737-based P-8A Poseidon antisubmarine warfare aircraft, now in low-rate initial production, was found to have multiple suspect parts. In one example, Boeing identified a problem in December 2009 when an ice-detection module failed on the flight line. The suspect part, a field-programmable gate array (FPGA) or integrated circuit, originally manufactured by Xilinx but no longer in production, “had literally fallen out of its socket and was found rattling around inside the module,” according to the investigation report.

Investigators found that module supplier BAE Systems had acquired the FPGAs from Tandex Test Labs of California, which purchased them from distributor Abacus Technologies of Florida. Abacus purchased the devices from an affiliate of A Access Electronics (Hong Kong) and wired payments to a bank in Shenzhen, China. They were later found to be “reworked” from the original devices.

Boeing first notified the Navy of the suspect counterfeit part in August 2011 and eventually replaced the part in P-8As. Seven ice-detection modules with suspect FPGAs were installed on commercial 737s, whose operators subsequently were notified. Still, other suspect electronic components were contained in equipment provided by Honeywell and Rockwell Collins for the P-8A.

A DOD program, the Government-Industry Data Exchange Program (Gidep), serves as a forum for the two parties to share information about non-conforming products and materials. But the committee found that only 271 reports of suspect counterfeit parts were submitted to Gidep in 2009 and 2010, the period in which it identified the 1,800 cases.