| Abstract |
In June 2007, the U.S. Department of the Navy, Naval Air Systems Command (NAVAIR), asked the Bureau of Industry and Security's Office of Technology Evaluation (OTE) to conduct a defense industrial base assessment of counterfeit electronics. NAVAIR suspected that an increasing number of counterfeit/defective electronics was infiltrating the DoD supply chain and affecting weapon system reliability. OTE data revealed that 39% of companies and organizations participating in the survey encountered counterfeit electronics during the four-year study period. Moreover, the frequency of detected counterfeit incidents was escalating rapidly, rising from 3,868 incidents in 2005 to 9,356 incidents in 2008. These counterfeit incidents included multiple versions of DoD qualified parts and components. Today, the DoD procures systems and products from a large network of global suppliers and manages over four million different parts at a cost of over $94 billion (GAO, 2010). As the DoD draws from this increasingly global supplier base, its visibility into these source companies is often limited; quality controls are, at times, insufficient; and chain of custody verification is lacking. As a result, the challenge of assuring the integrity and provenance of parts and components has grown geometrically more complex in this global sourcing environment. When they are installed in systems, counterfeit parts and components can affect the safety, operational readiness, cost, and critical nature of the military mission. Almost any part can be counterfeited, including fasteners used on aircraft, electronics used on missile guidance systems, and materials used in body armor and engine mounts. Counterfeit parts have the potential to cause a serious disruption to DoD supply chains, delay ongoing missions, and even affect the integrity of weapon systems. In this environment, the DoD must step up its war against counterfeit parts, much as private industry has done. |
