Flood of fake Chinese parts in US military gear - report

WASHINGTON Tue May 22, 2012 7:33pm EDT

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WASHINGTON May 22 (Reuters) - Fake electronic parts are widespread in key U.S. military systems and threaten national security, with China the top source for bogus gear, a U.S. Senate investigation has concluded.

The year-long probe by the Senate Armed Services Committee found counterfeit electronic parts from China in the Air Force's C-130J cargo plane, in assemblies for Special Operations helicopters and in the Navy's Poseidon surveillance plane, the panel said in its report released on Monday.

The investigation found 1,800 incidents of bogus parts in the Department of Defense supply chain in 2009 and 2010. The total number of suspected fake parts in those cases topped 1 million, it said.

"The failure of a single electronic part can leave a soldier, sailor, airman or Marine vulnerable at the worst possible time," the report said.

"Unfortunately, a flood of counterfeit electronic parts has made it a lot harder to prevent that from happening."

Besides creating national security and safety risks, the fake parts drive up costs. The price tag for replacing a bogus memory device in a Missile Defense Agency missile, for example, was $2.7 million.

The probe found that reporting into a Defense Department program set up to identify fake parts was "severely lacking." Only 271 reports of suspect counterfeit parts were filed with the program in the 2009-2010 period that the Armed Services Committee examined.

China was the source for 70 percent of the more than 100 incidents of bogus equipment the committee traced back through the supply chain, followed by Britain and Canada, the Senate panel concluded.

China has failed to take steps to halt counterfeiting and the Pentagon did not know the scope and impact of fake parts, it said. The defense industry's reliance on unvetted distributors raises risks for national security and for U.S. service personnel, it added.

President Barack Obama signed into law in December a bill designed to stop the importation of counterfeit electronic parts and shore up weaknesses in the military parts system. (Reporting By Ian Simpson; Editing by Paul Simao)

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