Why do most contractors avoid reporting counterfeit part findings? – Part 2

Not long after posting my earlier essay, I observed with great interest a social media posting by a well-respected supply chain professional suggesting that differences in US and UK cultural norms may explain why US organizations seem to be more open about reporting counterfeit part discoveries.

The author describes how a US organization will tend to be viewed in a more favorable light, but a general fear of unfavorable media attention and reputational risk tends to stifle reporting in the UK and, in turn, perpetuates the problem of the UK A&D industry vulnerability. I speculate, however, that the US and UK are more alike than the author suggests. If those in the US who do not report their own discoveries were to be candid, the reasons may well be similar those the author attributes to UK cultural norms.

In my earlier essay, I describe inconsistencies between what many contractors claim to be reasons not to report their discoveries and their actions when these reasons are disarmed. I state that one explanation is that many contractors have not established business practices for reporting outside of their organizations; I speculate the underlying reasons why many have not established these practices may well be fear unfavorable media attention and reputational risk.

I can tell you from experience that one-half decade ago, the reporting of counterfeit part incidents by contractors was not generally viewed as an act of good citizenship. There was a tendency to shoot the messenger rather than to embrace such reporting as a valuable disclosure to benefit the user community at large. Furthermore, there was often a tendency to attribute the problem to the Original Component Manufacturer whose product had been counterfeited.

Fortunately, these misperceptions are changing and the reporting of counterfeit part incidents by contractors is now embraced by the US Congress and by DoD. Reporting is an important tool in the arsenal to combat the problem. Voluntary reporting along with US Government studies has helped the US Government (DoD in particular) and the A&D industry to understand the nature of the problem and reveal valuable information necessary to address it.

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3 thoughts on “Why do most contractors avoid reporting counterfeit part findings? – Part 2

  1. I love it! I’m confident that with accurate timely reporting we as an industry will identify counterfeit advancement more quickly. Reporting should be viewed the way we view credit scores. Isolated incidences are opportunities for improvement. Habitual offenders should be disqualified and avoided possibly prosecuted.

    It is not about assessing blame. It’s about discovery of where we actually are and how we can all improve.

  2. Sarah Skinner says:

    Thanks Henry, I agree with you, but here in the UK we have some way to go before we can equal the achievements in the US (although it seems from the responses to my post that most folks feel the US still has a way to go, it does, but it is leaps and bounds ahead of us at present). There is a core group of us in the UK who have passion about the subject. We are presenting all the time to industry but I keep getting the same response (mainly from large OEMs) “we haven’t seen any problems in our supply chain…where’s the evidence that this is as bad in the UK as it is in the USA” I advise them that one reason is that they probably have not identified the parts as counterfeit is because they do not consider it an option in their FRACAS processes. If they implement new processes I expect they would see a trend. Our supply chains are all the same – we have one global supply chain that we all utilise, the problem is global not isolated. I will keep going with my quest here in the UK maybe a more concentrated approach is required to get our government to fund a study… I need to give this some thought…

    • Re “we haven’t seen any problems in our supply chain…”

      One-half decade ago, I would hear this frequently, but since prominent US Government studies (DoC and GAO) the naysayers have quieted down.

      I offer to you the same answer I would give to US contractors in denial ….
      “The reason you haven’t seen a problem is … You have not looked!

      Perhaps the contractors in the UK and other parts of Europe that do not acknowledge the problem should watch the recording of the 8 November 2011 Senate Armed Services Committee Hearing and analyse the report. If the earlier reports and this hearing won’t serve as a wake up call, then it may take a counterfeit part event discovered by one of their customers and a claim for breech of contract.

      Most all of the contractors you engage with produce products destined for use by the US DoD. These contractors need to be aware that the expectations described in Section 818 of the FY2012 NDAA and the consequences of a counterfeit quality escape apply to those products, regardless of what UK or other European country require.

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