Fake COTS Products

Aug 16
2010

An area that has experienced greater scrutiny since the advent of global terrorism has been the infiltration of fake and stolen COTS products into the supply chain. This initiative by terrorists has had three primary drivers:

  1. An “easy” way to generate large profits from an illicit enterprise in order to fund terrorist activities against US Warfighters and others
  2. The deployment of sub-quality products into the supply plain in order to cause business disruptions and economic harm to US firms
  3. The erosion of the value of brands and in turn the value of Intellectual Property (IP) rights; this can undermine the foundation of Western capitalism…but that is for another blog

The Organization for Economic Cooperation and Development estimates that 5-10% of world trade employs fake or stolen products. This is a serious problem that provides almost a limitless source of funds to terrorists, besides that of illegal drugs.

The Government and/or its contractors pay the following price for the need to secure the COTS product supply chain:

  • Higher insurance costs to mitigate the risks of “being stuck” with fake products or experience the thief of their product
  • Higher costs for the security of goods while in storage
  • Liabilities for branded products that fail and cause harm
  • Higher warranty expenditures for fakes
  • Overhead costs for providing surveillance of employee: espionage, bribery and theft
  • Authentication efforts to be able to validate the source of goods
  • Legal expenses to pursue wrongdoers

As COTS products continue to increase their presence in weapon systems, the above issues will have to be addressed by the Government and its contractors.

The Illegal COTS E-Waste Trade

Jun 15
2010

As DoD employs more COTS electronic components, it will face challenges in the future to dispose of these components when performing technology refresh processes. Assuring where these obsolete components find their final resting place will become an important activity for Product Support management, be it the PM Office, the Life Cycle management Command (LCMC) or contractors. There is currently an effort by the US Government and INTERPOL’s Global E-Waste Crime Group, to track these obsolete products to ensure that they are disposed of properly. Criminal organizations are involved in diverting these products and dumping them into illegal waste sites in underdeveloped nations at a fraction of the cost of disposing of them in a developed nation. End Of Life (EOL) management will require serial number tracking and an audit trail all the way to the final disposal process to mitigate the risk of these obsolete products taking a wrong turn and harming the environment, as well as posing dangers to the workers illegally handling these materials.

info@giuntinicompany.com

Tel: 570-713-4795