Monday, November 07, 2011

Chinese counterfeit parts found on Raytheon, Boeing systems

Dozens of suspected counterfeit parts have been installed on U.S. defense equipment, including systems from Raytheon Co., L-3 Communications Holdings Inc. and Boeing Co.

The Senate Armed Services Committee found counterfeit parts -- usually from China -- on at least seven aircraft, including the Lockheed Martin Corp. C-130J transport plane, according to a staff memo released today.

"Suspect electronic parts from China were installed on military systems and subsystems that were manufactured by Raytheon Co., L-3 Communications and Boeing," said the staff memo released today before a hearing Tuesday.

The committee's investigative staff amassed a database with 1,800 examples of suspect parts. It scrutinized 100, and found that 70 were traced to Chinese firms, according to the memo.

None of the examples were connected to instances of lives lost or dramatic failures causing an aircraft crash, said Sen. Carl Levin, D-Mich., the committee chairman.

The panel is considering ways to tighten rules against the counterfeits, Levin told reporters, including requiring the defense contractors to pay for replacing the parts with genuine items.

"There's a lot of possibilities here," Levin said. "Right now, there is ambiguity in some of the contracts."

Legislation "will force contractors to tell" their subcontractors and their subcontractor's suppliers that they need to make sure that the parts being sold are legitimate, he said.