Counterfeit Chinese Parts Slipping Into U.S. Military Aircraft: Report

May 22, 2012 — -- Counterfeit electronic parts from China are "flooding" into critical U.S. military systems, including special operations helicopters and surveillance planes, and are putting the nation's troops at risk, according to a new U.S. Senate committee report.

A year-long investigation conducted by the Senate Armed Services Committee found more than one million suspected counterfeit parts made their way into the Department of Defense's supply chain and were bound for use by "critical" military systems, according to the 70-plus-page document released Monday. In addition to Navy helicopters and surveillance planes, the parts were slated to be put into the Air Force's newest cargo planes.

"The failure of a single electronic part can leave a soldier, sailor, airman, or Marine vulnerable at the worst possible time," the report says. "Unfortunately, a flood of counterfeit electronic parts has made it a lot harder to prevent that from happening."

Chinese companies were identified as the "primary source" of the counterfeit goods and the Chinese government was criticized for its alleged disinterest in cracking down on counterfeiting there. The report said that Chinese companies take discarded electronic parts from all over the world, remove any identifying marks, wash and refurbish them, and then resell them as brand-new – a practice that poses a "significant risk" to the performance of U.S. military systems.

But the committee also pointed a finger at the Pentagon and U.S.-based defense contractors that rely on "hundreds of unvetted independent distributors."

According to the document, the investigation "revealed failures by defense contractors and [the Department of Defense] to report counterfeit parts and gaps in DoD's knowledge of the scope and impact of such parts on defense systems."

"Our committee's report makes it abundantly clear that vulnerabilities throughout the defense supply chain allow counterfeit electronic parts to infiltrate critical U.S. military systems, risking our security and the lives of the men and women who protect it," said Senate Armed Services Committee ranking member Sen. John McCain (R.-Arizona). "As directed by last year's Defense Authorization bill, the Department of Defense and its contractors must attack this problem more aggressively, particularly since counterfeiters are becoming better at shielding their dangerous fakes from detection."

DOWNLOAD: Inquiry Into Counterfeit Electronic Parts in the DoD Supply Chain (WARNING: Large PDF)

Pentagon spokesperson George Little said the Defense Department is taking the new report "very seriously," has taken action to address the infiltration of counterfeits and is "constantly evaluating" parts that are already installed in military equipment.

"We're unaware, to date, of any loss of life or catastrophic mission failure that has occurred because of counterfeit parts," Little told reporters. "But that doesn't mean we should stop addressing the issue. We will not stop until we strengthen our efforts to identify, prevent and detect these pieces of equipment from entering our supply chain."

Months after the Senate committee launched its investigation, the Pentagon said in November it was moving to protect against counterfeit parts by modifying policies and improving its internal process as well as working more closely with private companies in the industry. In March, acting undersecretary of acquisitions, Frank Kendall, issued a memo that was "designed to take initial steps to stand up an aggressive and comprehensive anti-counterfeiting program," Little said today.

Representatives for the Chinese government at its embassy in Washington, D.C., and consulate in New York, New York did not immediately respond to request for comment on this report.

ABC News' Luis Martinez contributed to this report.

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