Counterfeit parts on rise

The occurrence of counterfeit electronics throughout the DoD supply chain is soaring. A four-year study found that fake parts are increasingly undermining the military’s ability to maintain equipment.

A survey (.pdf) driven by the Navy found a huge rise in the occurrence of bogus parts, which rose from 3,868 incidents in 2005 to 9,356 incidents in 2008. A full 39 percent of companies and organizations encountered counterfeit electronics. The study of 387 groups included original component manufacturers, distributors and brokers, circuit board assemblers, prime contractors and subcontractors, and DOD agencies.

China was cited as the most frequent source of phony parts, though survey respondents said they often didn’t know where the parts came from. Among the key reasons for the high incidence of fakes is the disparity between the decades-long life cycle of military equipment and the far shorter lifetime for electronic components.

It is typically less expensive to find part substitutions and aftermarket manufacturing for needed electronic parts than re-engineering and redesigning parts, and counterfeits often arise in these aftermarkets. That’s making it more difficult to ensure that military equipment will continue to run without failure caused by unauthorized parts.

A long list of helpful steps that can prevent these parts from going onto military equipment includes using third party escrow services to hold payment during testing and adopting realistic schedules for procuring electronic components. The study also suggested a number of steps the government should take, such as requiring reports of counterfeit parts and creating a government data repository of electronic parts information.

The issue of counterfeiting in electronics is going to be getting more attention unless something miraculous causes a decline. This report could serve as a reminder throughout our industry that representatives need to stay in touch with government officials who will determine what’s to be done to curtail the rise in fake parts.

That will ensure that industry has a say in the steps that will ultimately play a role in the sale of parts for military applications.

Note:

The SAE standard, “AS5553 – Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition,” standardizes the requirements, practices, and methods related to parts management, supplier management, procurement, inspection, test/evaluation, and response strategies when suspected or confirmed counterfeit parts are discovered. The standard was recently adopted by the U.S. Department of Defense.

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