The Aviationist recently interviewed Stewart Thompson, a retired Naval Criminal Investigative Service (NCIS) agent, about his experience fighting the proliferation of counterfeit and critical fraudulent parts in the U.S. military.
They asked him to describe the methods that counterfeit integrated circuits (ICs) have been introduced into the Department of Defence (DOD) supply chain, this is what he said:
“Investigations revealed that electronic waste (e-waste) that is shipped from the United States to China is often returned to the U.S. in the form of counterfeit parts. For example, circuit boards are heated over flames or with soldering irons to remove the electrical components, which are then washed in rivers or left out in the rain and humidity. The ICs are then sanded and remarked, often with military-grade markings, to make them appear as new, so they can be sold at a premium price.
“The electrical components are then exported from China to waiting distributors in the U.S., which sell them to other distributors or to DOD prime contractors. Another method is for distributors to harvest the dies from semiconductors by drilling and de-caping the case and removing the guts. The die is then shipped to Thailand with remarking/encasement instructions and then returned to the DOD distributor in a “like new” condition for resale. In another instance, a contractor ground down markings of genuine lower speed computer processors and remarked the components to make them appear as though they operated at a higher speed to conform with contract specifications.”
They also asked, what are the steps Congress and industry can take to mitigate the threat of non-conforming/counterfeit parts in the DOD supply chain?
“The latest bill, The America COMPETES Act of 2022, contains language to stop the flow of e-waste to China and other countries that are known to counterfeit electronics; however, the House and the Senate have been unable to agree on common language in the conference committee. In addition, NASA and the DOD have adopted Society of Automotive Engineers (SAE) AS5553(A) and other aerospace standards, which standardize practices to detect, mitigate, avoid, procure and report counterfeit electronic components.
“Would it be possible for Congress to build on the semiconductor counterfeit legislative language to require purchases of critical safety items, such as mechanical components, to be traceable to the OCM or Original Equipment Manufacturer (OEM)? It seems reasonable for Congress to mandate that DOD maintain traceability documentation for CSI fasteners, O-rings, and electrical connectors, showing evidence of manufacturing and quality certifications from the authorized manufacturer through all intermediate levels to delivery to DOD. In addition, a requirement for the Defense Contract Management Agency (DCMA) to conduct physical product inspection of CSIs, at least randomly of CSI distributors/manufacturers, is something Congress might consider legislating.”
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