Senators Carper, Brown (Ohio) Urge Administration to Address Counterfeit Parts Infiltrating Department of Defense Supply Chains

WASHINGTON – Today, in a letter sent to the Department of Defense (DOD), Sen. Tom Carper (D-Del.) and Sen. Sherrod Brown (D-Ohio) urged the Administration to address the issue of counterfeit parts infiltrating the DOD supply chain. The senators cited two reports, one from the Department of Commerce ("Defense Industrial Base Assessment: Counterfeit Electronics,") and one from the Government Accountability Office (GAO) ("Defense Supplier Base:  DOD Should Leverage Ongoing Initiatives in Developing Its Program to Mitigate Risk of Counterfeit Parts"), that describe this serious harm to military equipment and missions. 

"Our troops put their lives on the line for us every day and we owe it to them to ensure that the equipment that they depend on to do their job is safe and secure," said Sen. Carper, a veteran and senior member of the Homeland Security and Government Affairs Committee.  "These reports raise troubling questions about the Department of Defense’s, and quite frankly all federal agencies, ability to safeguard government equipment from infiltration with counterfeit parts.  We can, and must, do better.  I look forward to working with my Congressional colleagues and the Administration to fix this serious problem." 

"Counterfeit parts manufactured offshore not only hurt American manufacturing and competitiveness, but in this case, have the potential to put our military at risk and jeopardize our national security missions," said Sen. Brown. "The Department of Defense and the entire Administration must do more to ensure that counterfeit parts are removed from the DOD supply chain and to ensure the integrity of our military operations both here and abroad."

The full text of the letter is included below:
 

August 6, 2010

The Honorable Ashton B. Carter

Under Secretary of Defense for 

  Acquisition, Technology & Logistics

U.S. Department of Defense

1000 Defense Pentagon

Washington, DC  20301

Dear Under Secretary Carter:

We are writing to urge timely action on the issue of counterfeit parts infiltrating Department of Defense (DOD) supply chains.  This problem is a serious concern to all of us, particularly in a time of war. 

As you know, counterfeit parts have the potential to seriously disrupt DOD supply chains, delay missions, and affect the integrity of weapons systems.  A recent Department of Commerce study, "Defense Industrial Base Assessment: Counterfeit Electronics," described many risks of fraud within industry and DOD supply chains.  Department of Commerce Secretary Gary Locke has noted that counterfeiting and piracy take an enormous toll on American industry and workers, costing billions of dollars and thousands of jobs each year. 

In March 2010, the Government Accountability Office (GAO) released a report entitled "Defense Supplier Base:  DOD Should Leverage Ongoing Initiatives in Developing Its Program to Mitigate Risk of Counterfeit Parts." As the GAO report notes, the DOD now relies on a complex network of global suppliers to acquire more than four million different parts at a cost of more than $94 billion. Increasingly, these parts–including counterfeit parts–are manufactured and sourced in foreign nations.  The GAO cited troubling examples of harm to equipment and missions caused by counterfeit parts.

Both the Department of Commerce and GAO report offer little reassurance that the Defense Supplier Base is secure from the risks of counterfeit parts. In fact, both reports note that federal agencies, including those within the DOD, do not have effective policies or specific processes in place for detecting, tracking and preventing the use of counterfeit parts.   In the absence of effective prevention measures including testing, vetting of suppliers, and data collection and analysis, as well as concerted enforcement efforts, the current supply system is not adequately addressing the risks to national security from counterfeit parts. 

Our understanding is that the Department of Defense will establish guidance, including consistent practices for preventing, detecting, reporting, and disposing of counterfeit parts, later this year.  In the interim, we ask that you detail the steps DOD has already taken to address these issues, and provide DOD’s timeline for completing guidance and implementing new procedures. 

Thank you for your attention to this important issue.  Please feel free to contact us, or have your staff contact Chris Slevin of Senator Brown’s office (202-224-2045) and Peter Tyler of Senator Carper’s office (202-224-8707), if you have any questions.

Sincerely,

U.S. Senator Tom Carper

U.S. Senator Sherrod Brown