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US Military Trying To Weed Out Counterfeit Parts

Soulskill posted more than 2 years ago | from the they-should-form-an-anti-counterfeiting-trade-agreement dept.

The Military 264

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."

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264 comments

11,000 U.S. jobs (0)

Anonymous Coward | more than 2 years ago | (#37995000)

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.

Re:11,000 U.S. jobs (1)

Anonymous Coward | more than 2 years ago | (#37995100)

Because they could have hired 11,000 US workers and they wouldn't have had this problem.
Would have been a hell of a lot more expensive though, so I guess it evens out.

Re:11,000 U.S. jobs (1)

frinkster (149158) | more than 2 years ago | (#37995488)

Because they could have hired 11,000 US workers and they wouldn't have had this problem.

Yes, they could hire 11,000 US workers to test every single part - if Congress would increase the defense budget.

Re:11,000 U.S. jobs (-1)

Anonymous Coward | more than 2 years ago | (#37995672)

Because they could have hired 11,000 US workers and they wouldn't have had this problem.

Yes, they could hire 11,000 US workers to test every single part - if Congress would increase the defense budget.

We could always drop WIC and other welfare programs for all niggers. That would more than pay for it.

US workers are cheap for the government to hire (1)

nido (102070) | more than 2 years ago | (#37995834)

The federal government gets a substantial part of every US worker's salary.

Wikipedia has this example tax computation [wikipedia.org] 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. :)

Maybe? (0)

Anonymous Coward | more than 2 years ago | (#37995002)

They should sprinkle the checks in return?

Why are these parts even coming from China? (5, Insightful)

Nidi62 (1525137) | more than 2 years ago | (#37995008)

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.

Re:Why are these parts even coming from China? (0)

Anonymous Coward | more than 2 years ago | (#37995062)

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.

Because that would build jobs.
N.

Re:Why are these parts even coming from China? (1)

SuricouRaven (1897204) | more than 2 years ago | (#37996220)

Because even with the counterfeit issues, it's still cheaper to manufacture in China where labor is cheap and pollution ignored.

LOL, fucked by "Free Trade" once again! (-1)

Anonymous Coward | more than 2 years ago | (#37995066)

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.

Re:LOL, fucked by "Free Trade" once again! (1)

Anonymous Coward | more than 2 years ago | (#37995132)

Nope, no good has come from "Free Trade" with the US. The US doesn't make ANYTHING, so everyone with a FTA with the US just gets their stuff exported to the US without export tariffs, but there's next to nothing that can be bought from the US without paying duties because the FTA only applies to stuff MADE IN THE USA.

Like holy shit batman, maybe the US should make some fucking products for other countries to buy.

Re:LOL, fucked by "Free Trade" once again! (1)

LordLimecat (1103839) | more than 2 years ago | (#37995478)

The US doesn't make ANYTHING

Ford will be so disappointed to hear that.

Re:LOL, fucked by "Free Trade" once again! (1)

stox (131684) | more than 2 years ago | (#37995544)

Do note that some Fords have so many parts not made in the US that they qualify as foreign cars.

Re:LOL, fucked by "Free Trade" once again! (1)

Truekaiser (724672) | more than 2 years ago | (#37995808)

they don't make the cars. they just assemble the parts which are made elsewhere. very few parts in a 'american' car are actually made here.

Re:LOL, fucked by "Free Trade" once again! (1)

arglebargle_xiv (2212710) | more than 2 years ago | (#37995984)

No good has come from so-called "Free Trade".

Oh, I wouldn't say that. It's helped export a pile of US legislation and policy that no other government would ever voluntarily accept into the countries that wanted the "free trade" agreements. So it has had some positive effect.

.

Re:Why are these parts even coming from China? (2, Insightful)

Anonymous Coward | more than 2 years ago | (#37995114)

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

Re:Why are these parts even coming from China? (3, Insightful)

Unoriginal_Nickname (1248894) | more than 2 years ago | (#37995556)

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.

Re:Why are these parts even coming from China? (0)

Anonymous Coward | more than 2 years ago | (#37995654)

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.

So? there are plenty of first world non-asian semiconductor fabs, its not out of reach by any means: http://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants [wikipedia.org]

and Apple are all fabless.

Oh yeah, there is no way Apple could afford to build its own fab.

Re:Why are these parts even coming from China? (0)

Anonymous Coward | more than 2 years ago | (#37995912)

Oh yeah, there is no way Apple could afford to build its own fab.

All the same they'd be stupid to do that if they have reasons to believe that what they're doing now is better/cheaper/less risky. Did you stop being a fanboy for the 2 seconds it takes to figure that out?

Re:Why are these parts even coming from China? (1)

exomondo (1725132) | more than 2 years ago | (#37995684)

There are a ton of American semiconductor manufacturers which cannot reasonably afford to run their own fabs. ...and Apple

Oh come on, Apple with its nearly $80billion in the bank can't afford it?

Re:Why are these parts even coming from China? (2)

Just Brew It! (636086) | more than 2 years ago | (#37996072)

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

Re:Why are these parts even coming from China? (0)

Khyber (864651) | more than 2 years ago | (#37995920)

"any time you change technologies you literally need to build an entire new facility."

Nope, lots of tech is quite compatible with typical CMOS and SOI processes.

To not plan for such possibilities is utter stupidity.

Oh wait, the American educational system has been getting gutted the past couple of decades. Stupidity is our middle name.

Re:Why are these parts even coming from China? (1)

Unoriginal_Nickname (1248894) | more than 2 years ago | (#37996016)

No. Changes, e.g. in transistor and wafer size, require new equipment almost everywhere. Changes in transistor size (or technology) require higher accuracy and sometimes totally new lithography technologies. Changes in wafer size require new cleaning, dicing and packaging machines. These machines are extremely precise and purpose-built. They are not the kind of thing you can strip down and re-purpose.

Re:Why are these parts even coming from China? (2)

artor3 (1344997) | more than 2 years ago | (#37995786)

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.

Re:Why are these parts even coming from China? (1)

ChatHuant (801522) | more than 2 years ago | (#37996272)

Millions to weed out counterfeit parts, BILLIONS to build a fab

But the factory wouldn't be destroyed after making the set of parts. It will continue producing and making money, thus recouping the initial investment.
 

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.

I don't really understand why it would be so much cheaper. What are the big advantages China or Taiwan offer that makes semiconductor fabs move there? The ones I can think of are the cost of labor, weak enforcement of environmental regulations and government support (via direct subsidization, laxity in enforcing IP or laws/vamal regulations that hurt the international competition). Cheap labor shouldn't be a big percentage of the total - the greatest cost for a semiconductor fab should be in tools, clean room equipment, and all the high precision machinery; this cost should be pretty much similar for the USA and China. Is then government intervention the major factor?

Re:Why are these parts even coming from China? (2, Insightful)

Baloroth (2370816) | more than 2 years ago | (#37995124)

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.

Re:Why are these parts even coming from China? (2)

pookemon (909195) | more than 2 years ago | (#37995212)

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...

Re:Why are these parts even coming from China? (0)

Grishnakh (216268) | more than 2 years ago | (#37995464)

I'm quite sure Chinese-made resistors and capacitors don't have GPS transmitters in them.

Re:Why are these parts even coming from China? (0)

Anonymous Coward | more than 2 years ago | (#37995584)

Or so the Germans would have us believe...

Re:Why are these parts even coming from China? (1)

Anonymous Coward | more than 2 years ago | (#37995518)

Morbo says, "GPS does not work that way."

What you meant to say was, "fluorescing CRT ballast, which is just dirty enough to emit trackable levels of RF in a band that's usually fairly clear"

You don't need GPS to have a sufficient tracking beacon for terminal guidance of long-range ordnance. Also, GPS is not a two-way communication protocol...

Re:Why are these parts even coming from China? (1)

Ethanol-fueled (1125189) | more than 2 years ago | (#37995252)

Most likely, it is a generally unimportant COTS part.

...that a medical device company needs to make sure its life-critical gadgets work.

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

To ensure that our Taiwanese allies fabricated a product that doesn't include exploding power transistors? That these products aren't being sold to the government for the purpose of keeping soldiers alive?!

I work on stuff that hits home to most Americans. In fact, my company got all of our contracts because of Randy "Duke" Cunningham. [wikipedia.org]

I am the ninety-nine percent.

Re:Why are these parts even coming from China? (0)

Anonymous Coward | more than 2 years ago | (#37995476)

I work in medical devices, and many of the guys I work with came from the defense industry. The standards we're held to here are way higher than many defense standards. I find that kind of scary.

Re:Why are these parts even coming from China? (4, Interesting)

theVarangian (1948970) | more than 2 years ago | (#37995830)

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 [wikipedia.org]. I read somewhere they even found fake parts on Air-Force One.

there's no money in that (2)

dutchwhizzman (817898) | more than 2 years ago | (#37995998)

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.

Re:Why are these parts even coming from China? (1)

Ruie (30480) | more than 2 years ago | (#37996360)

$2 is really cheap for MIL-SPEC part, it was probably just a surface mount resistor or capacitor that got replaced with a $0.05 non-MIL-SPEC version.

Re:Why are these parts even coming from China? (5, Informative)

Anonymous Coward | more than 2 years ago | (#37995172)

...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."

Re:Why are these parts even coming from China? (1)

geekmux (1040042) | more than 2 years ago | (#37995344)

...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...

Ah, this is not a "knee-jerk comment". It's a comment addressing a problem that screams "fix me" even before the layman finishes reading the article, and I promise you it is the exact same comment coming from the Generals and Admirals in charge of the men and women put at huge risk with bullshit cost-saving decisions like this.

Anything that has been a "well known problem for a long time" probably deserves a hell of a lot more "knee-jerk comments" to get those individuals making these dumb-ass outsourcing decisions to start paying attention as to the REAL effect of financial shaving of the bottom line. Sorry, I can understand decisions like this when building an MP3 player. I cannot even begin to fathom outsourcing a multi-million dollar defense system to a country that has mastered "consumer-grade" electronics.

No, we may not be able to manufacture everything here in the US, but there sure as hell should be a few solid lines drawn across certain critical systems.

Re:Why are these parts even coming from China? (3, Informative)

Grishnakh (216268) | more than 2 years ago | (#37995480)

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.

Re:Why are these parts even coming from China? (0)

Anonymous Coward | more than 2 years ago | (#37996234)

That report seems to have forgotten about Intel. You know, those guys who define the leading edge of mass manufacture semiconductors.
Not all of their fabs are here, but some are.

It's not a Chinese problem, it's industry wide (1)

msobkow (48369) | more than 2 years ago | (#37995198)

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.

Consider the percentage (1)

msobkow (48369) | more than 2 years ago | (#37995260)

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.

Re:Consider the percentage (1)

ColdWetDog (752185) | more than 2 years ago | (#37995290)

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.

OTOH, setting up a US based fab, even if expensive by COTS standards, would be a rounding error in the DOD's budget.

Re:Consider the percentage (1)

CrimsonAvenger (580665) | more than 2 years ago | (#37995642)

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.

1)The US budget for 2012 military spending includes just about $735 billion (including the VA). Which is well short of a trillion dollars.

Note that we don't actually HAVE a budget for 2012, any more than we've had one in any year since 2007.
But the proposed budget is $735 billion, including "Overseas Contingency Operations", which I take as a euphemism for "just in case we need to bomb someone".

2) It's 0.75%, not 0.075%. Why do so many slashdotters seem to have so much trouble with basic arithmetic?

Re:Consider the percentage (1)

msobkow (48369) | more than 2 years ago | (#37995762)

A trillion is 1000 billion. 7.5 / 1000 * 100 ==> 7.5 / 10. 0.75.

Dang. You're right.

It's much worse (1)

Weezul (52464) | more than 2 years ago | (#37995200)

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.

Re:It's much worse (0)

Anonymous Coward | more than 2 years ago | (#37995360)

Even if this were about backdoors instead of failing electronics, and thus about malice instead of negligence, your solution still envisages anyone outside the US government trusting the US government not to put in backdoors. Really, a "secure" component from the US government would come to the market with exactly the same paranoia as a "secure" component from China. There'd be no justification for the higher price.

Re:Why are these parts even coming from China? (4, Insightful)

shutdown -p now (807394) | more than 2 years ago | (#37995262)

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.

Re:Why are these parts even coming from China? (1)

silas_moeckel (234313) | more than 2 years ago | (#37995388)

The problem with def contractors is they figured out it's cheaper to pay senators than to do quality work.

Re:Why are these parts even coming from China? (1)

jtownatpunk.net (245670) | more than 2 years ago | (#37995436)

Because we no longer have the infrastructure and skills necessary to manufacture the goods we need. Even if cost wasn't a factor, we don't have the ability.

Re:Why are these parts even coming from China? (0)

Grishnakh (216268) | more than 2 years ago | (#37995454)

If you hold the contractors responsible, then the contractors will have to check every single part to make sure it's authentic, a very expensive proposition even for military parts. Of course, if that's the standard set for all contractors, then they'd all have to do it so they wouldn't feel the need to cut corners.

You might ask why they don't just buy the parts from here, but the problem is that America doesn't make electronic parts any more, especially the lower-cost ones like capacitors. Building up that capability would be very expensive, and since the parts are so much cheaper from elsewhere, the American company would only be able to supply the military, which isn't exactly that large a customer in the grand scheme of things.

Personally, I don't really see the problem here. So what if some missiles fizzle out and don't work right? 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.

Re:Why are these parts even coming from China? (1)

Ihmhi (1206036) | more than 2 years ago | (#37995580)

Absolutely agreed.

Look, the defense department spends a shitload of money anyway. I'd really rather not have the Mark I "Lowest Bidder" air-to-air missile fizzle out and slam into a populated area by mistake.

Dammit, if there was ever a need for a law, it's that the government should Buy American like they keep fucking telling us to do.

Re:Why are these parts even coming from China? (5, Insightful)

neonv (803374) | more than 2 years ago | (#37995598)

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.

Re:Why are these parts even coming from China? (0)

Anonymous Coward | more than 2 years ago | (#37996324)

Don't mistake your inability to get paid for some of your time as an inability for your employer to bill for said time.

Re:Why are these parts even coming from China? (1, Informative)

fluffy99 (870997) | more than 2 years ago | (#37995658)

Why are we even buying critical components such as these from China?

In most cases, we are not buying from China. We're buying from otherwise reputable vendors who are seeing these showing up in their supply channels.

The whole milspec thing is part of the problem, because as a system developer in the govt you're only allowed to request a part of certain specs. The buyer goes out and finds a vendor claiming their parts meet the spec and they turns out their counterfeit. I would much prefer specing out a brand name and vendor that I can rely on, but FAR regulations prevent that and instead tell us we need to pay more and use women-owned minority businesses (which usually just means the real owner put the business in his wife's name).

Don't even get me started on the whole DOD supply system like milstrip. You order a nice pair of cutters that are listed as a decent brand name, and they ship you the chinese crap. It's the Military's own supply channel substituting the crappy chinese parts instead. Last time we ordered 3M Super-88 electrical tape from them we got this shitty almost transparent no-name tape that fell off within 2 days.

Re:Why are these parts even coming from China? (1)

tlhIngan (30335) | more than 2 years ago | (#37995876)

Why are we even buying critical components such as these from China?

It actually doesn't matter where the parts originate from. In the 80s, the FAA discovered that counterfeit aviation parts were endemic throughout the entire industry. It even made it in the 747 used as Air Force One! These parts were often "reconditioned" worn out parts, illicitly rebuilt in the US.

And this is an industry where paperwork and traceability is paramount, turning a one-penny screw into a $10 screw. If's so traceable you can probably find the original mine where the ore came from and maybe even who was working the machines.

All it takes is someone to see that there's money to be made and the ability to make fake components to sell profitably. Hell, I'm sure even if the parts were US-sourced, some unscrupulous guy will buy Chinese parts and sell them as US parts.

Re:Why are these parts even coming from China? (1)

Just Brew It! (636086) | more than 2 years ago | (#37996208)

Why are we even buying critical components such as these from China?

There's some pressure to use more COTS (Commercial Off-The-Shelf) components to control costs. Yes, believe it or not the US military is actually starting to worry about cost-effectiveness!

A lot of the "cool shit" is manufactured in China these days, because they have cheap labor and lax-to-nonexistent environmental regulations. While a lot of the cutting edge R&D still occurs in the US, once a technology is commercialized we have a hard time competing on cost; at that point production moves offshore and the domestic plants shut down.

The US doesn't have a monopoly on bleeding edge R&D either; other countries are coming up with innovative ideas with potential military applications too!

The company I currently work for makes stuff for the US military. While final assembly is necessarily carried out in the US, some of the components are indeed sourced from China (and Israel, actually). The customer isn't thrilled with this, but accepts it because there aren't any alternatives that don't involve jacking the cost of the finished product up by close to an order of magnitude.

Bogus parts (3, Interesting)

Anonymous Coward | more than 2 years ago | (#37995028)

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.

why not outsource all of it? (3, Informative)

Anonymous Coward | more than 2 years ago | (#37995030)

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.

Re:why not outsource all of it? (2)

ColdWetDog (752185) | more than 2 years ago | (#37995076)

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?

Re:why not outsource all of it? (1)

wisnoskij (1206448) | more than 2 years ago | (#37995232)

So the US military is having a problem with the quality of their outsourced hardware and your solution is more outsourcing...

Re:why not outsource all of it? (2)

camperdave (969942) | more than 2 years ago | (#37995374)

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?

Re:why not outsource all of it? (1)

shutdown -p now (807394) | more than 2 years ago | (#37995278)

So given China's major advantage in manufacturing, maybe it's time for the US to start outsourcing military production to China.

Come to think of it, why outsource just production? Why not the entire military? China has plenty manpower to spare, and it's cheap, too - so they can compensate for any technological deficiencies. Just think about it - why waste a $100K smart bomb, where an infantry platoon can do the same, while costing orders of magnitude less - and it's reusable, too!

~

Re:why not outsource all of it? (1)

geekmux (1040042) | more than 2 years ago | (#37995406)

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.

I seriously hope you're not trying to equate iDevices to defense weapon systems when it comes to reliability and longevity. Sure, Apple makes a decent product, but it's still consumer-grade hardware. I expect my Macbook to perhaps hold up a little longer than the average laptop, but I don't expect any consumer-grade device to last longer than 5 or maybe 10 years, and that's not even taking into account the issues related to RoHS manufacturing. Not exactly the same quality standards needed for our defense systems. Not even close.

And your own comments are exactly why we should NOT be outsourcing to China...if they do in fact make "99%" of consumer-grade electronics we buy in the US, then their workforce and quality programs haven't exactly been "stressed" to the levels absolutely necessary when building military-grade hardware.

Re:why not outsource all of it? (1)

Anonymous Coward | more than 2 years ago | (#37995680)

"I seriously hope you're not trying to equate iDevices to defense weapon systems when it comes to reliability and longevity. "

I seriously hope you don't believe the iDevices are the only thing China can make.

They produce most of their own military hardware, including some excellent, world class missiles and phased array radars. They'll make whatever you ask them for to mil-spec, and the US taxpayer would get a far better value for the money. The same military could be had much cheaper, which the usa NEEDS right now because its crippling debt is the single biggest national threat, not a bunch of middle eastern people with oil.

Re:why not outsource all of it? (1)

izomiac (815208) | more than 2 years ago | (#37995678)

Hmm... I can just picture it now. China starts going on again about how Taiwan isn't a sovereign nation, so the US dispatches a carrier fleet to the Taiwan Strait and tries to fire a warning shot at an interloping Chinese warship. The missile blows up inside the missile launcher. So, do we blame that on shoddy Chinese workmanship, or did it do exactly what was intended?

IOW, other countries are fine with buying weaponry from the US as they're our allies and, beyond that, wouldn't stand a chance of winning a war against us so it's a moot point if the weaponry is designed to be loyal to its manufacturer. The US doesn't have that kind of relationship with China. Heck, we already have enough issues with them stealing military technology as-is.

Re:why not outsource all of it? (1)

fluffy99 (870997) | more than 2 years ago | (#37995692)

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.

Totally irrelevant when there's a middleman such as an electronics components vendor involved who is either intentionally substituting or unaware of the parts quality. Apple provides most of the parts to the Chinese assembly factories and watches them very, very closely. You simply can't do that through middlemen.

Re:why not outsource all of it? (1)

Vskye (9079) | more than 2 years ago | (#37996068)

Really? I find it hard to believe that someone even gave you a +1 as Anonymous, yet alone even agree with you.

US Military fab / manufacturing needs to stay in the US and actually employee people in the US.

similar in aerospace (5, Informative)

wierd_w (1375923) | more than 2 years ago | (#37995092)

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.

Re:similar in aerospace (0)

Anonymous Coward | more than 2 years ago | (#37995670)

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.

Ha. Back during the tech bubble, I worked for a large fiber optic component manufacturer. For some markets, such as underwater cables, all components & subcomponents had to be made in North America.

Re:similar in aerospace (1)

Required Snark (1702878) | more than 2 years ago | (#37995866)

I have a friend who used to work in quality control for the defense industry, and he told me that this kind of thing has been going on a long time. Sometimes you could tell just by looking at the packaging that the parts were not what they were supposed to be. Still, it was very hard to get vendors taken off the approved list. I'm not going to name names, but some of these were large firms that you may have heard of.

Perhaps it has become even worse in the last few years since he was involved. Or perhaps they are paying more attention since so much stuff now comes from Asia?

Re:similar in aerospace (1)

Anonymous Coward | more than 2 years ago | (#37996382)

I had a conversation with a PR guy at one of the major network vendors. They're seriously considering bringing their marketing shirts manufacturing back to the US, because out of 6 suppliers from China, every single one of them tried to cheat them on their orders eventually. They'd order 1000 unit lot of 10 ounce shirts, and there'd always be a sprinkling of 8 ounce shirts from the the 2nd or 3rd run on. A few cents skimped here and there adds up. The vendor said that the cost of doing quality assurance for these suppliers was such that it was getting close to the cost of a local manufacturer who would do the QA properly themselves. When caught, the manufacturers would always treat it like a game and offer a discount on the next lot.

It's not a big deal if the quality of a t-shirt isn't quite up to scratch, but it seems this attitude is prevalent in the country of manufacturer.

Pretty common (1)

mirix (1649853) | more than 2 years ago | (#37995104)

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.

Re:Pretty common (1)

JWSmythe (446288) | more than 2 years ago | (#37995444)

    That's not the way the government works.

    The government buys from a GSA approved vendor. That vendor buys from whoever they damned well please.

    Way way back in the day, I knew someone who worked in a gov't office. They had a token ring network. I happened to be there, and diagnosed the problem (bad network card). Don't worry, it wasn't a classified network of any sort. :) I wasn't suppose to diagnose anything, but they appreciated the help. They tried to get permission for me to install a network card. Just a single card in a single workstation. I even had a replacement card with me, that would give them at cost.

    They sent the request up the chain. It came back down "denied'". It was instead contracted out to an approved vendor about 100 miles away. They paid about 10x as much for the card, and something like $100/hr labor (including drive time).

    Where did the approved vendor get the network card? Probably the same place I did. It was identical. Do they have any knowledge of where it came from? Hell no.

    So, why can't the government have it's own trained techs on staff, ready to do the work? Because it's "cheaper" to outsource it to 3rd parties. Oddly enough, they pay more to the 3rd party vendors for the labor, than they would to keep a staff in-house. Why does it happen? Because 3rd party vendors are also significant donors to political campaigns.

    So when the 3rd party vendor buys a part from a distributor, who buys it from the manufacturer, is there ever a clear chain of custody? Hell no. The government is a large enough customer to buy everything, directly from manufacturers. For quite a bit of it, it would be cost effective for them to license and manufacture their own units.

    I don't know how anyone can be surprised that substandard part are the norm, regardless of who the end user is. It's not cost effective for anyone to build the *better* part. If they do, it will cost more, and they won't sell.
   

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Eliminate all Chinese imports (0)

Alien Being (18488) | more than 2 years ago | (#37995250)

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.

Re:Eliminate all Chinese imports (1)

Grishnakh (216268) | more than 2 years ago | (#37995508)

When and if they become a democracy and start respecting human rights, we can reopen the doors.

So where do we get stuff then? Obviously, we can't buy anything American-made, since they don't respect human rights either.

Re:Eliminate all Chinese imports (1)

Anonymous Coward | more than 2 years ago | (#37995668)

The problem is, you're oversimplifying just a wee bit. All "UL" approves is a product's likelihood of causing a fire. UL has nothing to do with long (or short) term reliability. Fuses aren't sexy, but 99.99999% of the time, they're more than good enough to keep a shoddy product from actually burning down a house. And that's all UL cares about.

Ditto for auto safety inspections. Low-quality Chinese parts are more likely to result in an expensive repair job than an actual life-threatening accident. A plastic cam that breaks & causes something to overheat might turn into a $1,200 repair job, but it's unlikely to cause an actual accident.

One problem that leads to the tacit acceptance of low-quality parts in China's own domestic market is the low price of labor. When a zipper breaks in China, you pay somebody 80 cents to spend 20 minutes fixing the broken tooth. In America, you end up throwing the whole thing away, because it would cost more to pay someone to spend time performing the repair than to just buy a new one. 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. As labor prices in China slowly approach parity with the US and Japan, much of the problem will solve itself because China's own domestic industry will come to view substandard components as unacceptable.

Re:Eliminate all Chinese imports (2)

Dewin (989206) | more than 2 years ago | (#37995838)

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.

Jail time. Lots of jail time. (4, Insightful)

Animats (122034) | more than 2 years ago | (#37995258)

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.

Re:Jail time. Lots of jail time. (1, Insightful)

ColdWetDog (752185) | more than 2 years ago | (#37995312)

But we aren't at 'war' (except for drugs and cancer). Maybe Michelle Bachman constitutes a National Emergency but I'm not sure that's what the framers of law had in mind.

Re:Jail time. Lots of jail time. (0)

Anonymous Coward | more than 2 years ago | (#37995386)

Don't forget the War on Poverty and the War on Terror. I think there may be a War on Illiteracy, as well.

Re:Jail time. Lots of jail time. (2)

gman003 (1693318) | more than 2 years ago | (#37995552)

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.

Re:Jail time. Lots of jail time. (0)

Anonymous Coward | more than 2 years ago | (#37995554)

If we aren't at war, then why are our troops all over the place? Indeed, why do we even have a huge army, when a standing army in peacetime is expressly forbidden by the constitution? (only a standing navy is expressly authorized, I would presume because of the long lead time on building capital vessels and training crews, and because a navy is necessary to protect merchant vessels from piracy)

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NHL jerseys (-1, Offtopic)

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Re:NHL jerseys (0)

ELCouz (1338259) | more than 2 years ago | (#37995880)

Holy Jesus sweet irony !!! ... spamming for counterfeit NHL Jerseys probably made in China, in a counterfeit story! Spammers are getting dumber and dumber!

11 000 US jobs.. (0)

Anonymous Coward | more than 2 years ago | (#37995432)

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.

When everything goes to china.... (0)

Anonymous Coward | more than 2 years ago | (#37995462)

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.)

oh no. (0)

Anonymous Coward | more than 2 years ago | (#37995496)

the death machines might not work! boo...

oh bs (1)

deodiaus2 (980169) | more than 2 years ago | (#37995504)

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.

Re:oh bs (2, Interesting)

Anonymous Coward | more than 2 years ago | (#37995832)

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 [chinasmack.com]
http://en.wikipedia.org/wiki/2008_Chinese_milk_scandal [wikipedia.org]
http://www.nytimes.com/2011/09/16/world/asia/china-recycled-cooking-oil-poses-risk.html [nytimes.com]

Yes but.... (1)

InspectorGadget1964 (2439148) | more than 2 years ago | (#37995608)

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

UID (1)

Anonymous Coward | more than 2 years ago | (#37995708)

That is what the UID initiative is all about. Contact your local DCMA and tell them to include it in their contracts!

Easy Solution (0)

Anonymous Coward | more than 2 years ago | (#37995726)

How about some legislation that says that the U.S. military will only buy from U.S. manufacturers if there is one?

US jobs more important than US lives? (1)

dutchwhizzman (817898) | more than 2 years ago | (#37996006)

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?

oooOOO (0)

Anonymous Coward | more than 2 years ago | (#37996038)

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.

All your system belong to us (0)

Anonymous Coward | more than 2 years ago | (#37996308)

This would make a good movie plot.

Military vs. Civilian Supply Chains (0)

Anonymous Coward | more than 2 years ago | (#37996362)

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...

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