If a $120 million F-35 falls from the sky, it might not be an enemy missile that brings it down but a tiny electronic component worth a couple bucks that was soldered in China over a backyard grill.
Military radios, helicopter sensors and weapons are all at equal risk of falling victim to counterfeit semiconductors that have made it into the Defense Department supply chain. The F-35 alone has more than 2,000 of the electronic components.
The depth and wealth of the global black market for counterfeit goods is difficult to quantify, but the International Chamber of Commerce estimated that by the end of the year it would be worth $1.4 trillion, or roughly the gross domestic product of Spain.
Many of those electronic components are manufactured outside the auspices of regulation and often with substandard materials. Such a lucrative market has inspired counterfeiters to pour billions of dollars into manufacturing infrastructure to build fake parts that are ever more difficult to detect.
Applied DNA Sciences, a Stony Brook, N.Y.-based biotechnology firm, worked for several years with the Defense Logistics Agency to devise a method of detecting counterfeit goods within the military’s supply pipeline. Using engineered plant DNA called SigNature, the company came up with a marking system that is virtually “uncopyable,” CEO James Hayward said.
“It’s an amoral industry, and it’s not one without victims,” Hayward said of counterfeiting. One of those victims is the Defense Department. The Pentagon does not always have control over where chosen suppliers source their materials and products.
“Organized crime now plays a role. The counterfeit economy — and that really is the right word to describe it because of how large it is — has resulted from a perfect storm of the Internet age and the rise of rapid manufacturing and global trade, along with a passive legal system,” he said.
In 2011, the Senate Armed Services Committee identified nearly 2,000 cases of counterfeit electronic components within the Defense Department’s supply chain, comprising about 1 million specific parts. The revelation was a major source of anxiety for military officials who will need to maintain old equipment with dwindling resources.
“Our military has to keep products working for a long time, way past the life of the original components,” Hayward said. “If you buy directly from authorized distributors, you wouldn’t be exposed to this risk, but the military doesn’t always have that option.”
The Pentagon’s supply chain is so complex that it is impossible to keep an eye on all sources, nodes and shipping lanes. Fake versions of both legacy components and new technologies are routinely smuggled into the mix of electronics coming from China to U.S. defense contractors, Hayward said. Many times counterfeit parts will be shipped alongside legitimate versions to mask their provenance.
There are two primary sources of the fake chips, the most prevalent of which is substandard copies made from recycled electronics that are sent from the United States to China, remanufactured and sold back in the other direction.
New chips are also made from scratch in billion-dollar fabrication facilities in Asia, but with substandard materials and often not to military specification. Without the overhead of marketing or product development, these illicit operations can justify massive investment in manufacturing capacity, Hayward said. The potential payout is higher and the risk substantially less than making and selling illegal narcotics, he said.
Recognizing the threat presented by a glut of fake and faulty parts holding their weapons systems together, the government ratcheted up the pressure on defense contractors to regulate their own suppliers. In the 2012 National Defense Authorization Act, Congress declared that prime defense contractors would be held responsible for ensuring the authenticity and quality of their components.
“It is an onerous responsibility to say the least, but it is one way of grasping the problem,” Hayward said.
The Defense Logistics Agency then began requiring a DNA mark on a certain class of components that were at highest risk of being counterfeited.
“Marking with DNA provides an incredible opportunity to prove originality and provide a clear provenance when a product is born,” Hayward said. “We have what we believe is the only uncopyable mark in the industry.”
Once applied to a surface, the DNA can be immediately identified under an ultraviolet lamp. Forensic lab testing — called critical identification — can reveal detailed information about where the items were manufactured, by whom and whether the mark is genuine. The mark cannot be altered or washed off. Any products without the DNA mark specific to that production lot can be immediately identified, Hayward said.
DLA orchestrated a red-team challenge where Battelle Laboratories engineers were given an extended period to come up with a way to either fake a DNA mark or spoof the scanners. Within a matter of hours, the company was able to thwart every effort Battelle put forth, Hayward said.
DNA degrades over time unless kept under environmental conditions similar to those fictionalized in the movie “Jurassic Park.” Sealed inside hardened amber, the movie’s dinosaur DNA was preserved for millions of years. ADS mimics those conditions to produce a DNA mark that will not degrade and cannot be removed once applied.
The process also borrows from real-world paleontology, especially technologies used to map the genome of frozen woolly mammoths, Hayward said.
Plant genomes are engineered into SigNature DNA strands, of which the company can make an infinite number in infinitely unique patterns.
The technology also has wide-ranging potential applications in law enforcement. Already in the United Kingdom, DNA marking is used to identify cash from ATM thefts and bank robberies.
When an ATM is disturbed, a solution containing SigNature DNA that is specific to that machine is sprayed on the cash inside. If recovered by police, the money can be traced to a specific heist. Of 150 cases of ATM theft in the U.K. involving DNA marks, about half have gone to trial, and all of those resulted in convictions, Hayward said.
Japanese fish houses are using a similar method to ensure the provenance of extremely expensive tuna and other fish to guarantee what is advertised on the menu is genuine The fish’s DNA can be combined with the ink used to print the label and include information like who caught it and at what market it was purchased.