Addressing Counterfeit Parts In The DoD Supply Chain
By: Jacques Gansler, William Lucyshyn, John Paul Rigilano
Counterfeit parts have the potential to cause a serious disruption to Department of Defense (DoD) supply chains, delay ongoing missions, and affect the integrity of weapons systems (Government Accountability Office [GAO], 2010). Incredibly, the number of counterfeit parts in electronic military systems more than doubled between 2005 and 2008, rising from 3,868 incidents to 9,356 incidents (U.S. Department of Commerce, 2010). The range of counterfeited goods is wide, and it is growing. The rise of e-commerce, extended international supply chains, stronger reliance on overseas manufacturing, and, more recently, the global economic recession have significantly contributed to the proliferation of counterfeit goods (“Knock Offs Catch On,” 2010). Almost anything can be counterfeited, including fasteners used on aircraft and materials used in body armor and engine mounts. In some instances, lives may be at stake.
Today, technology development and production are globally dispersed. As a result, the U.S. defense industrial base has undergone a sea change in its composition, becoming increasingly reliant on international sources for its development, production, and provision, particularly at the subsystems and parts levels. Non-U.S. firms are major players within the U.S. defense industrial base, often with major engineering and production subsidiaries in the United States. Both U.S. and non-U.S. defense firms have rapidly and dramatically increased their reliance on foreign suppliers, especially for the acquisition of commodities, circuit boards, semi-conductors, and other electronic parts and components. In fact, virtually all U.S weapons systems manufactured today contain foreign parts. This arrangement has allowed the United States to acquire superior systems, reduce costs, increase the number of units produced, and improve deployment times (Moran, 1990). But it has also heightened supply chain vulnerability.