WASHINGTON, D.C. - In the wake of a new study by the Government Accountability Office (GAO) documenting counterfeit parts within Department of Defense (DOD) and the DOD supply chain, U.S. Senators Sherrod Brown (D-OH) and Evan Bayh (D-IN) called on the DOD to take countermeasures to ensure the safety of military personnel and the reliability of weapons systems. The study was conducted at the request of Senators Brown and Bayh, both members of the Senate Committee on Banking, Housing, and Urban Affairs, who were concerned about press reports of widespread counterfeiting activity.
"The GAO report makes it absolutely clear that counterfeit parts can enter the DOD supply chain at any point in what is a complex and increasingly global network of suppliers. Until there is a department-wide system in place to detect these counterfeit parts, we can't even judge the scope of the problem or estimate the full extent of the risks to U.S. service men and women and national security. This problem must be addressed now," Senator Brown, chairman of the Banking Subcommittee on Economic Policy said. "The people committing this fraud should be held accountable for endangering lives and threatening critical missions."
"We already knew that American businesses were losing $250 billion a year because of counterfeiting and piracy, but the disclosure that knockoffs have found their way into our military supply chain in a time of war is the most troubling disclosure yet," said Bayh, who co-wrote and passed legislation last Congress to create a federal Intellectual Property Enforcement Coordinator. "Our new federal IP coordinator has an urgent job before her in executing a strategy to combat this problem and protect the men and women who create American jobs and keep our country safe."
In response to the report, Brown announced he will chair a hearing on counterfeit parts in the defense manufacturing supply chain. The GAO report released today concludes that the DOD does not have policies or specific processes in place for detecting and preventing the use of counterfeit parts. Counterfeit parts have the potential to seriously disrupt DOD supply chains, delay missions, and affect the integrity of weapons systems. In one case, DOD detected brake shoes made with substandard materials, including seaweed. In another case, a supplier re-packaged a circuit from a personal computer and labeled it as a $7,000 military-grade circuit for a missile guidance system. A recent Department of Commerce study on counterfeit electronic parts also found many instances of fraud within industry and DOD supply chains.
The GAO report recommends that DOD leverage existing anticounterfeiting initiatives and practices currently used by industry and by some groups within DOD to establish comprehensive guidance across the department to prevent, detect, report and dispose of counterfeit parts.