Commerce Department Undertakes Study of Counterfeit Electronics

WASHINGTON, D.C. – At the request of the U.S. Navy, Naval Air Systems Command (NAVAIR), the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), will assess the scope and impact of counterfeit electronics on U.S. supply chain integrity, defense readiness, and industrial capabilities.  Military and related industrial supply chains are vulnerable to counterfeit electronics which, if undetected, can cause the malfunction and failure of defense systems and critical civilian infrastructure.

“U.S. defense industrial supply chain visibility, security, and reliability are critical to our nation’s national security enterprise,” said Under Secretary of Commerce Mario Mancuso.  “This study will allow defense and industrial planners to better understand the scope and magnitude of counterfeit electronics and identify actionable solutions for policy makers.”

The assessment will focus on:

• Quantifying the number of reported counterfeits;
• Documenting industry and government business practices, including procurement processes, that contribute to counterfeit product infiltration and;
• Identifying best practices to prevent counterfeit electronics from penetrating critical supply chains.

A publicly available report with recommendations will be developed from five separate assessments of buyers and sellers in the electronics supply chain, including original component manufacturers, circuit board assemblers, electronic component distributors and brokers and defense prime contractors and subcontractors.  The assessments also will examine the Department of Defense depots, arsenals and procurement operations.

BACKGROUND

BIS is granted authority under the Defense Production Act of 1950, as amended and Executive Order 12656 to survey and assess the financial health and economic competitiveness of U.S. industries that support defense capabilities and requirements.

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