	Suspect Counterfeit Electronic Parts Can Be Found on Internet Purchasing Platforms

As shown in figure 1, each of the 16 parts we purchased was either  suspect counterfeit or bogus. Specifically, all 12 of the parts we received  after requesting authentic part numbers (either with valid or invalid date  codes) were suspect counterfeit, according to SMT Corp. In addition,  vendors provided us with 4 bogus parts after we requested invalid part  numbers, which demonstrates their willingness to sell parts that do not  technically exist. The following sections detail our findings for each of the  three categories of parts we purchased. Under our selection methodology, the 16 parts we purchased were  provided by 13 vendors in China. After submitting requests for quotes on  both platforms, we received responses from 396 vendors, of which 334  were located in China; 25 in the United States; and 37 in other countries,  including the United Kingdom and Japan. We selected the first of any vendor among those  offering the lowest prices that provided enough information to purchase a   As such, 3 vendors each supplied 2  given part, generally within 2 weeks.parts and 10 vendors each supplied 1 part. All seven of the obsolete or rare parts that SMT Corp. tested were  suspected counterfeits. Each part failed multiple component  authentication analyses, including visual, chemical, X-ray, and  microscopic testing. The parts received from both vendors failed the same authentication  analyses. Category 2: Authentic Part Numbers with Postproduction Date Codes

Similarly, all five of the parts we received and tested after requesting  legitimate part numbers but specifying postproduction date codes were  also suspected counterfeit, according to SMT Corp. By fulfilling our  requests, the four vendors that provided these parts represented them as  several years newer than the date the parts were last manufactured, as  verified by the part manufacturers. Delidding revealed die that  were consistent with the authentic part, but the date code showed  evidence of re-marking to make them appear as if they had come from a  homogenous lot. Category 3: Bogus Part Numbers

We received offers from 40 vendors in China to supply parts using invalid  part numbers, and we purchased four parts from four vendors to  determine whether they would in fact supply bogus parts. None of the invalid part numbers were listed in DLA’s  Federal Logistics Information System and, according to selected  manufacturers, none are associated with parts that have ever been  manufactured. As such, we did not send the parts to SMT Corp. for  authentication analysis. In furtherance of our investigation to determine the willingness of firms to  provide us bogus parts, we created a totally fictitious part number that  was not based on an actual part number and requested quotations over  one Internet platform. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report. Appendix I: Details of Authentication Analysis Tests

This appendix provides details on each of the tests that constitute the  authentication analysis SMT Corp. conducted for the parts we purchased. This test is not  performed on all parts. This is usually performed on a two-piece  sample from the evidence lot.
Why GAO Did This Study

Counterfeit partsgenerally the misrepresentation of parts identity or pedigreecan seriously disrupt the Department of Defense (DOD) supply chain, harm weapon systems integrity, and endanger troops lives. In a November testimony (GAO-12-213T), GAO summarized preliminary observations from its investigation into the purchase and authenticity testing of selected, military-grade electronic parts that may enter the DOD supply chain. As requested, this report presents GAOs final findings on this issue. The results are based on a nongeneralizable sample and cannot be used to make inferences about the extent to which parts are being counterfeited. GAO created a fictitious company and gained membership to two Internet platforms providing access to vendors selling military-grade electronic parts. GAO requested quotes from numerous vendors to purchase a total of 16 parts from three categories: (1) authentic part numbers for obsolete and rare parts; (2) authentic part numbers with postproduction date codes (date code after the last date the part was manufactured); and (3) bogus, or fictitious, part numbers that are not associated with any authentic parts. To determine whether the parts received were counterfeit, GAO contracted with a qualified, independent testing lab for full component authentication analysis of the first two categories of parts, but not the third (bogus) category. Part numbers have been altered for reporting purposes. GAO is not making recommendations in this report.

What GAO Found

Suspect counterfeit and boguspart numbers that are not associated with any authentic partsmilitary-grade electronic parts can be found on Internet purchasing platforms, as none of the 16 parts vendors provided to GAO were legitimate. Suspect counterfeit, which applies to the first two categories of parts that were tested, is the strongest term used by an independent testing lab, signifying a potential violation of intellectual property rights, copyrights, or trademark laws, or misrepresentation to defraud or deceive. After submitting requests for quotes on both platforms, GAO received responses from 396 vendors, of which 334 were located in China; 25 in the United States; and 37 in other countries, including the United Kingdom and Japan. Of the 16 parts purchased, vendors usually responded within a day. GAO selected the first of any vendor among those offering the lowest prices that provided enough information to purchase a given part, generally within 2 weeks. Under GAOs selection methodology, all 16 parts were provided by vendors in China.
Specifically, all 12 of the parts received after GAO requested rare part numbers or postproduction date codes were suspect counterfeit, according to the testing lab. Multiple authentication tests, ranging from inspection with electron microscopes to X-ray analysis, revealed that the parts had been re-marked to display the part numbers and manufacturer logos of authentic parts. Other features were found to be deficient from military standards, such as the metallic composition of certain pieces. For the parts requested using postproduction date codes, the vendors also altered date markings to represent the parts as newer than when they were last manufactured, as verified by the parts makers. Finally, after submitting requests for bogus parts using invalid part numbers, GAO purchased four parts from four vendors, which shows their willingness to supply parts that do not technically exist.