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Senate panel to probe counterfeit military parts problem

By Larry Shaughnessy, CNN Pentagon Producer

Sen. John McCain and others on the Senate Armed Services Committee will investigate counterfeit parts in military equipment.
Sen. John McCain and others on the Senate Armed Services Committee will investigate counterfeit parts in military equipment.
  • Armed Services Committee to look into counterfeit electronics in military equipment
  • Commerce Dept. study has found the problem posed to the military is serious
  • Study: The most common abuse was the sale of lower-grade microcircuits
  • China is by far the most common source of counterfeit parts, study found

Washington (CNN) -- The risk of counterfeit electronics being used in military equipment has prompted a congressional investigation, the top senators on the Senate Armed Services Committee announced Wednesday.

"The presence of counterfeit electronic parts in the Defense Department's supply chain is a growing problem that government and industry share a common interest in solving," committee Chairman Carl Levin, D-Michigan, and Sen. John McCain, R-Arizona, the ranking member, said in a statement.

The investigation follows a Commerce Department study that found counterfeit parts pose a serious problem for the U.S. military.

The committee hopes the investigation will help "determine the source and extent of this problem and identify possible remedies for it."

The 2010 study by the Commerce Department found the problem of counterfeit parts touched nearly 40% of the DoD's parts supply chain, and was getting worse "rising from 3,868 incidents in 2005 to 9,356 incidents in 2008," the study said.

It also found that part of the problem is the way the government buys parts.

"The rise of counterfeit parts in the supply chain is exacerbated by demonstrated weaknesses in inventory management, procurement procedures, record-keeping, reporting practices, inspection and testing protocols, and communication within and across all industry and government organizations."

One example of the problem mentioned in the Commerce study was microcircuits. Over the span of the four years studied, the most common abuse was selling used microcircuits that were relabeled as higher-grade products.

"China was most frequently identified by original component manufacturers as a source of counterfeits, with Asia as the most predominant regional source," the study said. China was blamed four times more than any other nation for selling counterfeit parts to the DoD.

Two DoD spokespersons, asked for comment, said they were examining the Senate Armed Service's committee announcement and gave no other response.

There was no word on how long the committee's investigation will take.