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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."

28 of 264 comments (clear)

  1. Why are these parts even coming from China? by Nidi62 · · Score: 5, Insightful

    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
    1. Re:Why are these parts even coming from China? by Anonymous Coward · · Score: 2, Insightful

      Millions to weed out counterfeit parts, BILLIONS to build a fab.
      While it's stupid to buy parts from a foreign power that wishes to subjugate us, its still cheaper to do so the build it all here. Hell, I work for a semiconductor company and our stuff is fabbed in Taiwan. Is that China in regards to this conversation?
      catchpa: herpes

    2. Re:Why are these parts even coming from China? by Baloroth · · Score: 2, Insightful

      Most likely, it is a generally unimportant COTS part. Could be resistors, fluorescing CRT panels... w/e. TFA mentions a 12$ million weapon system being ruined by a bad 2$ part. This is, of course, just a guess. In other words, components that wouldn't normally be critical, aren't specific to the part at hand, and shouldn't be expected to fail.

      You wouldn't want the government spending millions to develop a mil-spec version of a standard component that is already (or should be) perfectly reliable and functional (although they often do, and people often make fun of them for it. Right or wrong, IDK). So I imagine instead they just buy that stuff from whoever sells it. In this case, Chinese manufacture doesn't matter, as ideally they wouldn't even know what it was for.

      The above is pure speculation. TFA is quite light on details. I think the idea behind buying from China would be elimination of wasteful spending.

      --
      "None can love freedom heartily, but good men; the rest love not freedom, but license." --John Milton
    3. Re:Why are these parts even coming from China? by Anonymous Coward · · Score: 5, Informative

      ...an uninformed, knee-jerk comment.

      Trusted foundry is not cheap. It is not feasible to manufacture all electronics used by the federal government in the United States. This has been a well known problem for a long time. Here is an excerpt from a 2005 report.

      http://www.acq.osd.mil/dsb/reports/ADA435563.pdf

      "Most leading edge wafer production facilities (foundries), with the exception so far of IBM and possibly Texas Instruments, are controlled and located outside the United States. The driving forces behind the “alienation” of foundry business from the United States to other countries include the lower cost of capital available in developing countries, through foreign nations’ tax, market access requirements, subsidized infrastructure and financing incentives (including ownership), and the worldwide portability of technical skills, equipment and process know-how."

    4. Re:Why are these parts even coming from China? by pookemon · · Score: 2

      Of course if your chinese bought "Fluorescing CRT" panel transmits a GPS signal that can be traced then it's more than just a weapons system being ruined...

      --
      dnuof eruc rof aixelsid
    5. Re:Why are these parts even coming from China? by shutdown+-p+now · · Score: 4, Insightful

      I may be misunderstanding TFA, but my impression is that the parts are not meant to be sourced from China. It's where the counterfeit clones are made.

    6. Re:Why are these parts even coming from China? by Grishnakh · · Score: 3, Informative

      I cannot even begin to fathom outsourcing a multi-million dollar defense system to a country that has mastered "consumer-grade" electronics.

      Because a handful of multi-million dollar defense systems is not a sufficiently large market to build a factory for making resistors, capacitors, and various other commodity parts in a high-cost market like the USA. If you made it a requirement, then that multi-million dollar defense system would now cost a few tens of billions of dollars apiece.

    7. Re:Why are these parts even coming from China? by Unoriginal_Nickname · · Score: 3, Insightful

      Yes, seconding this. People just don't seem to realize the completely insane amount of money it takes. It's also not a one-time payment; any time you change technologies you literally need to build an entire new facility.

      There are a ton of American semiconductor manufacturers which cannot reasonably afford to run their own fabs. Qualcomm, Broadcom, Conexant, Marvell, NVIDIA and Apple are all fabless. Even AMD and Intel outsource some work to TSMC. When Intel, the world's largest semiconductor company, balks at the idea of building enough manufacturing capacity, it should give you an idea about how much it would cost.

    8. Re:Why are these parts even coming from China? by neonv · · Score: 5, Insightful

      I'm an engineer for a major defense contractor. We go through countless hours of testing equipment, electronics, and software to make sure the products work to spec. We test the components that come in from sub-contractors, as well as our own components. We're all nerds at heart, and we take pride in making quality electronics that work better than expected. I resent stereotyping on slashdot that all contractors are greedy and corrupt. I spend many unpaid hours improving products, no charge to the government, and make sure what I do works properly. I don't work because I want money from the government, I do it because I take pride in what I do, and I do a good job. Stop this ridiculous rhetoric to vent your anger at groups of people and focus on the individuals responsible.

    9. Re:Why are these parts even coming from China? by artor3 · · Score: 2

      But once you build the fab, you have a fab. It makes money. It's an asset.

      When you spend millions weeding out counterfeit parts in a given year, you're in the exact same spot next year. In fact, you're even worse off, because every year we spend manufacturing things overseas makes it that much harder to ever bring the jobs back home.

      Put another way, the net present value of a fab is likely higher than the NPV of searching for counterfeits. But since when did corporate America ever care about long term benefits? Short term profits and padding your own bank account are all that matter. And in the short term, fabs are expensive.

    10. Re:Why are these parts even coming from China? by theVarangian · · Score: 4, Interesting

      Most likely, it is a generally unimportant COTS part. Could be resistors, fluorescing CRT panels... w/e. TFA mentions a 12$ million weapon system being ruined by a bad 2$ part.

      This is not a new problem. About 10 years ago a Luftwaffe mechanic changing bolts on the propeller assembly (IIRC) of a bunch of heavy transport planes became suspicious when the nuts he was handed were a different color than usual. He reported it and the things turned out to be made of mild steel; his meticulous nature prevented a really ugly accident. Some people weren't that lucky. I read somewhere they even found fake parts on Air-Force One.

    11. Re:Why are these parts even coming from China? by Just+Brew+It! · · Score: 2

      Apple has billions in the bank because they have all their stuff built in China...

    12. Re:Why are these parts even coming from China? by PaladinAlpha · · Score: 2

      Maybe if we didn't spend all our money murdering foreigners in their own countries, and worked on improving ourselves instead, we wouldn't have all these problems. If you're in the military and are worried these substandard parts are endangering your life, then stop being an oppressor, stop being a parasite on the economy, and get the hell out.

      You're right; everyone should leave the military, and we should stand defenseless, and of course everyone will be so amazed at our adherence to principles that they won't come in for the harvest. Perhaps our military has been too proactive of late -- but, then again, perhaps it hasn't. It's hard to say for certain, and certainly not cause for knee-jerk nonsense.

      Listen. Pacifism only works when you defend it. Pacifism without defense isn't pacifism -- it's denial.

    13. Re:Why are these parts even coming from China? by Relayman · · Score: 2

      But then we run into "too big to ban." When a big defense contractor violates the law, the federal government can't ban them because they may be the sole supplier of some big defense program. So they slap them on the wrist and let them go on bidding.

      --
      If I used a sig over again, would anyone notice?
  2. Bogus parts by Anonymous Coward · · Score: 3, Interesting

    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.

  3. why not outsource all of it? by Anonymous Coward · · Score: 3, Informative

    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.

    1. Re:why not outsource all of it? by ColdWetDog · · Score: 2

      You don't outsource when you can't control quality. Especially in important things like aircraft and weapon systems.

      Boeing tried that approach with the 787 - took them 5 years to recover. Up front cost for a lot of these things is only a small portion of the total investment. Yes, China can make things at very high quality levels. The issue is can you be comfortable that they are doing that (and not ripping off your IP which is another issue).

      One thing I would have liked to know is exactly WHAT counterfeit items were found? Bad bolts? Counterfeit components? Whole boards?

      --
      Faster! Faster! Faster would be better!
    2. Re:why not outsource all of it? by camperdave · · Score: 2

      Maybe they can hire Chinese soldiers too. Why pay brave young Americans to die on foreign sands in a vain attempt to protect oil conglomerates, when there are billions of Chinese who will do it for a fraction of the cost?

      --
      When our name is on the back of your car, we're behind you all the way!
  4. similar in aerospace by wierd_w · · Score: 5, Informative

    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.

  5. Jail time. Lots of jail time. by Animats · · Score: 4, Insightful

    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.

    1. Re:Jail time. Lots of jail time. by gman003 · · Score: 2

      Check Proclamation 7463 (signed 2011-09-14, extended annually throughout Bush's and Obama's terms). There's also Executive Order 12947 (signed 1995-24-01 by Clinton), and two more signed in 1979-10-14 and 1995-03-15 that I couldn't (be assed to) find more specifics on.

      We're under at least four "limited" states of emergency right now. With the exception of Israel (which has been under a state of emergency since 1948), we've been under an uninterrupted state of emergency longer than any other country.

  6. Re:oh bs by Anonymous Coward · · Score: 2, Interesting

    Just wondering, have you bought a house in China to compare your American one to? Have you seen the quality of construction work that passes for "acceptable" around here? There was a news article the other day about a bridge where the construction workers used stones instead of cement and that one construction worker admitted "“I wouldn’t dare ride [any trains that go over this bridge] once its opened."

    I have lived outside Shanghai for 3 years and the way they cut corners in this country is mind-blowing in its thoroughness. Remember the melamine-tainted milk from a few years back that killed all those babies? What about the toys containing lead made for export? Did you know that 10% of oil used in restaurants in China is carcinogenic because it's been recycled using harsh chemicals? In my opinion, the Chinese as a whole are far less concerned about "doing the right thing" than people are in America are. The culture just doesn't see a problem with screwing other people over, if you can get away with it. Doesn't stop at manufacturing, either--people litter shamelessly, don't stop at red lights, and extortion is considered a viable business strategy. Call me racist if it makes you feel better, but I've seen too much to pretend that Chinese culture isn't shit. I didn't come to this country with such notions, but I certainly will leave with them.

    "To be rich is glorious." - Deng Xiaoping

    Articles that mention the stuff I said:
    http://www.chinasmack.com/2011/pictures/corner-cutting-exposed-in-jilin-railway-bridge-project.html
    http://en.wikipedia.org/wiki/2008_Chinese_milk_scandal
    http://www.nytimes.com/2011/09/16/world/asia/china-recycled-cooking-oil-poses-risk.html

  7. Re:Eliminate all Chinese imports by Dewin · · Score: 2

    In China, if your $180 camcorder breaks due to a burst electrolytic capacitor, you can take it to the corner electronics repair shop and pay somebody $10 to open it up, unsolder the bad capacitor, solder in a new one, and send you home with a working camcorder. In America, $10 wouldn't even pay the postage to ship it to a repair center, let alone the $100-200 or more you'd have to pay for the actual repair labor.

    I have a TV that, due to some rough handling in a move, had one of the jacks for component input break off. It still worked if you could manage to get a cord to stay in just right (I think we had a solution involving tape, cardboard and clay), but otherwise was very fickle.

    Presumably, somebody skilled in electronics could get a $2 jack and with 10-20 minutes or so solder a replacement into place. Instead, a TV repair shop wanted $75 just to diagnose the problem much less start fixing it.

    I kept the TV (and did not end up getting it repaired), but the fact that someone here in the US would be more likely to spend $500+ on a new TV and just throw away the old one "because it's broken" is stupid, and I'd love to go to some shop around the corner and get it fixed for $10.

    --
    Of course nobody reads the FAQ! If people read the FAQ, the Questions wouldn't be so Frequently Asked.
  8. there's no money in that by dutchwhizzman · · Score: 2

    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?
  9. Re:LOL, fucked by "Free Trade" once again! by WindBourne · · Score: 2

    amazing that you got modded up. America remains one of the largest, if not still the largest (not likely) manufacturer going. USA manufacturers loads. In fact, if you disregard trade with China and oil, we have a positive trade balance with the entire rest of the world. And if you just ignore China, America has a slight trade deficit. Our issue is China. We have a massive trade deficit with China because they are cheating at all aspects. Sadly, many American companies have moved there and now pay congressmen to fight enforcement of our FTA with China and WTO.

    And oddly, with the situation in Europe, China is hard at work trying to get EU to be just as foolish as America has been in return for a few euros. Thankfully, EU is fighting that.

    --
    I prefer the "u" in honour as it seems to be missing these days.
  10. You missed a big one by ThatsNotPudding · · Score: 2

    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).

  11. It's cultural by BenEnglishAtHome · · Score: 3, Interesting

    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.

    1. Re:It's cultural by Pope · · Score: 3, Insightful

      Yeah, American companies never do anything dishonest or illegal to boost profits!

      --
      It doesn't mean much now, it's built for the future.