US Military Trying To Weed Out Counterfeit Parts
An anonymous reader sends this excerpt from an AP report:
"'Sprinkling' sounds like a fairly harmless practice, but in the hands of sophisticated counterfeiters it could deceive a major weapons manufacturer and possibly endanger the lives of U.S. troops. It's a process of mixing authentic electronic parts with fake ones in hopes that the counterfeits will not be detected when companies test the components for multimillion-dollar missile systems, helicopters and aircraft. It was just one of the brazen steps described Tuesday at a Senate Armed Services Committee hearing examining the national security and economic implications of suspect counterfeit electronics — mostly from China — inundating the Pentagon's supply chain. ... The committee's ongoing investigation found about 1,800 cases of suspect counterfeit electronics being sold to the Pentagon. The total number of parts in these cases topped 1 million. By the semiconductor industry's estimates, counterfeiting costs $7.5 billion a year in lost revenue and about 11,000 U.S. jobs."
How exactly is this costing U.S. jobs? I guess that's just the word you toss around these days anytime you want to get people onto your side.
But China really needs to get their shit together when in comes to counterfeiting, piracy, and just general corrupt and unfair policies. I try not to purchase anything made in China anymore, but damn, it's difficult.
They should sprinkle the checks in return?
Why are we even buying critical components such as these from China? If we're wasting millions every year detecting and replacing these counterfeit components, why not use that money and build fabrication plants here instead. That way we know the components are real, and we don't have to rely on an outside source. Also, why isn't the burden of supplying new, real components falling on the contractors hired to provide them? If counterfeit components are found, at the very least the supplier/subcontractor should be blacklisted. Hold contractors accountable for once and this crap will stop happening. As it is, the contractors have no incentive to self-police. They know they will still get the next contract even if they go overbudget, over time, and under-quality because they've been doing it for years with no consequences. Considering our recent budget issues, we need to eliminate wasteful spending. And a lot of it can be found in defense contracting.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
I can attest to this. A former employer tried to buy some parts for some ham radio related products we made. We got 500 of them. ALL of them were completely useless. They LOOKED authentic, but when connected to a known good test fixture, they proved to be utterly useless. We were very fortunate, in that we had purchased them from a legitimate dealer, who refunded our money.
This is a serious problem.
Contrary to what many people think, China doesn't just produce low quality stuff. They'll produce the iPad and the iPhone. They'll make whatever quality level you want to pay them for. They make 99% of the consumer stuff you buy, from the cheap-ass wallmart plastic crap to the highest end consumer electronics and computer parts.
So: the US military could get very high quality stuff for much cheaper than paying Americans to make it, just like Apple outsources the iDevices to China to make, and same for many, many other business entities. There is plenty of precedent for outsourcing your military hardware - many countries outsource it to the USA, in fact. So given China's major advantage in manufacturing, maybe it's time for the US to start outsourcing military production to China.
Then there's no issue about counterfitting. Buy whatever quality you want from the Chinese supplier.
No good has come from so-called "Free Trade". It has fucked over America's economy, it has flooded America with useless foreign-made crap that often don't last more than a week, and now it's causing serious damage to America's defenses. You'd think that Americans would finally smarten up and put an end to this stupidity, but that just doesn't seem to be happening.
Similar problems occur in large shipments of commodity aviation components, like shims, nutplates, etc.
A less than scrupulous outsource supplier could sprinkle 20% of the product yeild with improper components, and if the batch is large enough, never get noticed. This doesn't negate the issues that "bogus parts" cause downstream in the product's lifecycle. Bad shims (made from incorrect, but "similar" materials) can promote dielectrics to form in important assemblages, manifesting all sorts of failures.. all kinds of thing can go wrong because somebody some place didn't want to follow what was in the order to the letter and cut corners somewhere.
In electronics, I could see this being manifest in diodes that are of the wrong class being used where, eg, zener diodes are required for proper operation, or the use of poorly formulated capacitor electrolytes in mission critical noise filters, and failsafes.
The effects would be equally diasterous, and vexing to maintenance and service people. The properly sourced equipment simply shouldn't fail in those ways. The component choices were made for that specific reason.
It does not surprise me that chinese manufacturers are the big sources of this problem. The quality of manufacture and qa process from cheap factories are tied directly to the cost per unit: you get what you pay for.
I work in the industry and we've had similar problems, even from big name, american outfits. I put the blame on the distributors for that, though. Not sure if it is entirely well founded... as they often have stuff produced in plenty of places, might be difficult to track, with just lot sample testing. I can't see an excuse on military stuff though...
Wouldn't US gov contracts be big enough to cut distributors and go straight to the source? Whatever happened to military grade, every component tested in america, at least, if not made here?
They sure fucking pay for the best...
Hell, for the money they spend they should be able to set up a DoD fab in texas and come out ahead.
Sent from my PDP-11
While the Chinese companies have a lot of the current parts contracts, history is littered with cases of fraud in the big-budget aerospace and military sectors throughout the existence of those industries. The problem does need to be resolved, but the article seems like racist scare-mongering to me considering the history of the issue.
I do not fail; I succeed at finding out what does not work.
China engages in an incredible amount of espionage, both industrial and military. I'd imagine they've already modified chips in hard drives, cpus, or motherboard chipsets to help extract information. Forget military secrets, simply snatching some large bank's HTF code gives you vast options.
We should built fabs here and charge double the price for 'secure' equipment. We'd require that all components used for classified military work were manufactured here, but presumably other companies will jump onboard for select systems.
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Let them fuck over some other country. Their substandard shit is ruining us. They don't give a damn if we spend hundreds/thousands/millions repairing machines that fail due to a $1 counterfeit part they sold us. They don't care if people are injured or killed. They treat their own people like shit so why should they give a damn about us?
Every product sold in this country that contains any Chinese component should be boldly labelled as such, denied UL approval, automotive safety inspections, etc.
When and if they become a democracy and start respecting human rights, we can reopen the doors.
18 U.S.C. 2154: Production of defective war material, war premises, or war utilities:
(a) Whoever, when the United States is at war, or in times of national emergency as declared by the President or by the Congress, with intent to injure, interfere with, or obstruct the United States or any associate nation in preparing for or carrying on the war or defense activities, or, with reason to believe that his act may injure, interfere with, or obstruct the United States or any associate nation in preparing for or carrying on the war or defense activities, willfully makes, constructs, or causes to be made or constructed in a defective manner, or attempts to make, construct, or cause to be made or constructed in a defective manner any war material, war premises or war utilities, or any tool, implement, machine, utensil, or receptacle used or employed in making, producing, manufacturing, or repairing any such war material, war premises or war utilities, shall be fined under this title or imprisoned not more than thirty years, or both.
For some reason, charges aren't being brought under that law. A few CEOs doing 30 years in the Federal pen would put a big dent in the problem.
The US budget for 2012 military spending is well over a trillion dollars. 7.5 billion might be a lot in total dollars, but it's 0.075 percent of the total budget. Not a particularly high rate of fraud in that context.
I do not fail; I succeed at finding out what does not work.
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That is precisely what it is.
"This post is an artistic work of fiction and falsehood. Only a fool would take anything posted here as fact."
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Eleven thousand US jobs are lost to chinese parts being counterfeit by ... someone? Where do the US jobs come into play here? Why is "US jobs this" "US jobs that" being abused for absolutely everything?
It sounds like a little bit of extra US money is being lost. The jobs are already gone -- or are they saying that 11 000 US counterfeiters are out of work due to the Chinese counterfeiting the parts instead?
This is pathetic.
I'd doubt many of the counterfit componets are made in the good ol USA to begin with anyways. Most of our manufacturing plant and industral base has been exported overseas over the past twenty years. This has effects all over our economy, and is directly responsible for the mess you see today (joblessness, the occupy movement, the price of goods going up as transporting them is no longer cheap, etc.)
the death machines might not work! boo...
Unfortunately, we are in a world flooded by cheap Chinese and Indian goods. Unfortunately, when it comes to cheap and quick, I don't think the Chinese or Indian have anything worse than everyone else. Just look at housing in the US. Most of the buildings are shoddly built. Even upper middle class houses fall into this category. I had so many problems with my previous almost new house. Yes, you could have it built by good old blue boys, but I doubt that construction workers really value quality.
Well, since the value of the US dollar is dropping rapidly, it is just fair that when you pay in US$ you get less, so a few counterfeit IC’s in the box should be expected and considered fair play
That is what the UID initiative is all about. Contact your local DCMA and tell them to include it in their contracts!
How about some legislation that says that the U.S. military will only buy from U.S. manufacturers if there is one?
The federal government gets a substantial part of every US worker's salary.
Wikipedia has this example tax computation for someone making $40,000/year... About 16% of this worker's wages are paid to the government. If you double the Social Security and Medicare portions (to account for the part the employer pays), this rises to 21%.
So the effective cost for the government to hire U.S. workers is substantially less than it is for the private sector.
Yes, they could hire 11,000 US workers to manufacture every single part, and save money overall.
There, fixed that for you. :)
Learn the rules so you know how to break them properly.
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Your assumption makes no sense. Why would you "sprinkle" 10% of cheap parts to be replaced with even cheaper equivalents. You gain a few dollars and risk getting caught. There are plenty of high spec parts that can be replaced with slightly lower spec parts that cost hundreds or even thousands of dollars less per item in the lower quality.
I was promised a flying car. Where is my flying car?
I'm reading about money and "US Jobs" in the summary, but for some reason, lost lives due to malfunctioning equipment doesn't seem to be a problem. Sure, it's about weapons, so you'd expect lives to be lost, or it wouldn't be much of a weapon, but what if it's the "good guys" that get killed or deserve a life long government funding of their handicapped existence? If that's not important, you can buy much more inferior weapons, and replace the weapons capabilities with lots of US jobs in the military. That way, you'd spend less on weapons and more people in the US would be employed. Sure, if you're the US government, you should be concerned about US jobs, but at what cost?
I was promised a flying car. Where is my flying car?
Looks like the middleman/parasite is being left out of the loop for military procurement, and now his panties is in a knot.
Better make a stink about "counterfeit" parts to try to get back the revenue stream.
This would make a good movie plot.
This makes me really wonder about generic medicine supply chains. They affect all of us -- especially as insurers pressure us to use more generics. Their supply chains are much worse than name brands, there's just as much incentive by the importers to ignore any potential problems, the FDA's regulations are easily circumvented with bribes...
Don't you find it funny that in the age of "Quality Assurance", six sigma and various other schemes that less actual product testing to ensure a product complies with a standard is going on? Some idiots extracted buzzwords from good manufacturing practices and then pretended the buzzwords were enough and scrapped the good manufacturing practices.
There's also a lot of rubber stamp certification going on. One blatant example I saw was some guys doing a test with a magnet to find cracks in a welded pipe (MPI) - and the bastards ran the magnet under the pipe to leave scratches to make it look like the test had been done properly but did not crouch down to look under the pipe and actually do the test. In that case they missed some major defects that could be seen easily without even doing the test. If you don't have enough guys to keep the contractors honest you get ripped off.
It's diplomaticly convenient to pretend that there isn't a war but it doesn't fool anyone. So, why did you join the weasels on this or are you merely pointing out that without a formal declaration laws like the one quoted above are difficult to enforce?
Historically such sabotage has gone unpunished in times of declared war. The most blatant example I can think of was the Liberty ships where the 1930s guidelines from Lloyds, ASTM (think it was ASM back then) and the not so distant lesson of the Titanic were ignored in favour of cost-cutting and using sub standard materials to build cargo ships that were sold at a wartime premium. Many of those ships sank due to cracking in cold weather and hundreds of them had major cracks that required taking them out of service for long periods of time. Now people like to pretend that the builders back then didn't know any better so didn't know to use a test devised in 1905, but books written on the subject in the 1950s are scathing in their criticism and imply that war profiteering was a major factor. The Titanic had that excuse but after that it was about cutting corners and increasing profit at the cost of a nation.
This isn't even just a problem of cheap suppliers. We source some industrial process gear from reputable a reputable American company. None the less every so often we get a shipment with a couple of parts failing Positive Material Identification. Hastelloy, Inconell, and many other exotic alloys all pretty much look the same to the naked eye so this could be down to accident, but none the less it's not just sourcing components from China that could be a potential problem.
They just don't do quality control like they used to.
I'm unclear on how this could "cost 11,000 US Jobs" if the parts are being made overseas anyway?
There is a War brewing between East and West, and this is how China is going to win. By handing over the responsibility of manufacturing weapons to the lowest-bidding multinational outsourcing corporation, we've practically handed ourselves over to our enemies (and China *is* and enemy whether you want to admit it or not).
Is the US government who send them on unjust, illegal wars, based on lies and propaganda for their own selfish gain!
Practically zero environmental requirements. As long as the slav^H^H^H^H workers and local residents don't die in noticeable numbers, you can do whatever you like (apart from paying the requisite local government bribes).
We let the enemy manufacture our military parts?
And for thoughts on the entire thing my sig says it all.
"If any question why we died, Tell them because our fathers lied."
The reason why someone would risk their reputation for a small increase in profit is cultural. The Chinese have no misgivings about ripping off their customers. Whatever they can get away with, they will.
Go to the Consumer Electronics Show sometime and talk to the people there. You'll hear horror stories over and over that all follow the same pattern - "The minute we turned our backs, the Chinese contractor started substituting whatever cheap-ass parts they could find."
It's cultural. They believe if they *can* rip you off and get away with it, then that's the right thing to do. Anyone who does business with them who doesn't have their own people in the factory, doing QC and generally being suspicious, is taking way too much risk.
The generals who approved the decisions to purchase critical parts from overseas should be fired. For incompetence. Period. End of story.
Please do not read this sig. Thank you.
Those lost revenue predictions are usually based on the strange notion that the demand is the same for both cheap copy parts and original parts at vastly higher prices. It isn't.
Heavy is the head that wears the tinfoil hat.
Regulations make our job creators sad unicorns.
/teabaggers
Trusted foundry is not cheap. It is not feasible to manufacture all electronics used by the federal government in the United States.
Then it fucking needs to be made feasible. And here's how to do it.
1) Build new trusted chip plants here in the US which specifically only make parts for national defense and possibly also commercial aviation, medical equipment and space/satellite equipment.
2) The EPA, OSHA, and any other alphabet soup federal agencies are declared to have zero jurisdiction of any kind whatsoever over these plants.
3) Pay for these plants with import taxes levied on all imported chips and consumer devices containing imported chips. Consumer electronics are too damn cheap as it is, which fosters a throw-away mentality (there are genuine environmental problems due to this now). Consumer electronics need to be driven back to where they are considered durable, long term usage things again. Tough cookies if they cost more. You'll appreciate them better if you really had to work hard to earn enough to buy them then. Also, consumer electronics need to be designed to be serviceable and upgradeable, not disposable. This will help foster the revival and growth of a new generation of a consumer electronics service industry in the US like we once had in decades past.
4) Build these plants in 'right to work' states, so the unions can't fuck things up like they did the auto and heavy equipment industries.
I work for a large distributor of electronic components and I see this problem occur frequently. It always happens when the customer chooses to buy their parts from a broker or some other unauthorized disty. Most of the time they do this because either A) none of the major distys have that part in stock and the lead times are too long, or more often B) the part in question has been obsoleted and they can't get them from the usual channel. Mil/Aero and medical design customers especially tend to fall victim to this because their designs have extremely long life cycles compared to products designed in other industries. The testing and qualification phase takes forever for these products so obviously the manufacturers want to keep them on sale as long as possible. A typical IC may have a lifespan of about 10 years before the supplier issues an EOL notice, perhaps giving the customer one additional year to place a last-time, lifetime buy on those parts. Once they're gone, they're gone for good and for whatever reason these customer designs never seem to get updated/redesigned with new parts (lack of resources at the company or maybe the design was done over a decade ago and the files are missing, whatever). The next thing you know, the customer tries to find parts on the grey market. The stuff that's out there is frightening. The parts look perfect but they aren't; they could be empty packages with no die inside or perhaps they were scraped off an old PCB and re-silkscreened on the top with new date codes. Mil / Aero designs almost always specify Industrial temperature grade parts, too; certainly the bogus stuff hasn't been screened/tested for that range.
I saw one customer do this recently and they got burned to the tune of about $250K after buying parts from a broker. They were told something like, "Oh, these parts were originally sold to Company X but were returned unused." Yeah, right.
How about a USB cable to connect a cell phone to a computer that had no metallic conductors in it? Just rubber insulation with the correct connectors on the ends. Granted this was from eBay, but we finally figured out what it was. A wireless cable. It can't be that hard to make an IC package with no chip in it.
Sorry, but gray text on gray background is making my eyes bleed.
You are missing the big picture, and the logical outcome of this outsourcing. Eventually, the actual troops themselves will be outsourced to China. When the sh** eventually hits the fan, we will have low-quality troops already in every major Chinese city. Victory will be ours, if the conflict starts on a weekday. What could go wrong with a plan this good?
Badump-Tish
Be sure to tip your waiter and try the veal.
Tragic, but perhaps less tragic than what could happen if some of the US military systems malfunction: http://en.wikipedia.org/wiki/Partnair_Flight_394