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Senate hearings raise awareness of counterfeit threat

Last week’s Senate Armed Services Committee hearings on the growing threat of counterfeit electronic parts in U.S. military systems is doing much to raise awareness of a problem all-too-familiar to electronic components distributors and manufacturers.

Held November 8th, the hearings laid bare the growing problem of counterfeit components in defense systems found in military aircraft and elsewhere and the subsequent danger they pose to military personnel as well as the increased costs to taxpayers.

Sen. Carl Levin (D-Michigan), chairman of the Senate Armed Services Committee, and Sen. John McCain (R-Arizona) both addressed the seriousness of the problem and the need to hold contractors responsible for the bogus parts supplied to build their products.

Military leaders and leading defense contractors testified at the hearings, along with industry expert Tom Sharpe, vice president of SMT Corp., a Connecticut-based independent distributor known as a leader in detecting counterfeit electronic parts. SMT sources and authenticates obsolete electronic components for use by the military and aerospace markets and has developed a niche as an expert in detecting the latest counterfeit methods in use. SMT regularly releases its findings to the Department of Defense and industry, sharing its most recently discovered counterfeit process on November 7th.

Sharpe says the SASC hearings did much to raise awareness of the ongoing threat of counterfeit electronic components and will lead to stricter requirements of open-market suppliers.

“The government is taking a firm stance on counterfeit parts found in the supply chain,” Sharpe says. “They’re making sure defense contractors know that the responsibility [for these parts] is on the defense contractors and their suppliers – which significantly raises the bar on who those suppliers will be.”

A 2009-2010 study by congressional staff found about 1,800 cases of suspected counterfeit electronic parts, totaling about a million individual components. After tracing the supply chain, they found that 70% of the components came through China, where the manufacture of counterfeit parts has become a cottage industry, experts say.

Sharpe says the net result of the hearings will be increased requirements of open-market suppliers regarding testing and authentication of electronic components. He pointed to the ongoing work in developing standards—particularly SAE International’s AS6081 and AS6171—as step in the right direction. AS6081, still under development, identifies counterfeit parts avoidance and supplier protocols for distributors. AS6171, also still being developed, addresses test methods for detecting counterfeit electronic parts.

“These standards will serve to help direct the component purchasers with both strict supplier requirements and also important testing standards and methods for open-market product,” Sharpe says, adding that a contractor’s first step should always be to buy parts from the manufacturer or an authorized distributor.

“I sell to defense and aerospace and my first concern is for the quality of the products my customers make and ultimately the reliability and safety of the people using them,” Sharpe explains. “If the product can come from authorized sources, that’s absolutely where it should come from.”

But because obsolescence forces contractors to turn to the open market, Sharpe says there is a growing need for better testing and authentication procedures. And while the standards ensure that independents are moving in that direction, he says ongoing updates are also necessary to keep up with counterfeiters’ evolving techniques. He points to three of SMT’s most recently discovered counterfeit processes—all of which were previously unknown to the industry.

“That’s a good example of the moving target we face,” he says, noting that two of the last counterfeit processes SMT documented were identified with a Scanning Electron Microscope (SEM), a highly sophisticated and expensive piece of visual inspection equipment. “The idea that a distributor would need [that type of equipment] would have been ridiculous just a few years ago—but it is now a standard inspection step in SMT’s rigorous, industry-leading quality and counterfeit mitigation process.

“This is a great example of the type of expensive, high-tech inspection equipment SMT needs to reliably identify the latest counterfeit processes we are now seeing.”

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