High risk defense suppliers soar, report finds

PARIS – The number of high risk suppliers to the U.S. government agencies, defense contractors and subcontractors, as well as all military and commercial electronics application markets increased by 63 percent from 2002 to 2011, according to market research firm IHS iSuppli.

In 2011, IHS observed that a total of 9,539 suppliers were reported either for known involvement in high-risk, fraudulent and suspect counterfeit part transactions, or for conduct identified by the government as grounds to debar, suspend or otherwise exclude from contract participation. There were 5,849 in 2002.

In all, IHS reported that 78,217 high risk suppliers to U.S. government had been identified during the period from 2002 to 2011.


Vicki Knauf, parts logistics expert at IHS, declared: “It’s abundantly clear that supplier risk is real, extensive and growing. It’s a federal acquisition requirement to screen for debarred, suspended or otherwise excluded parties. The Department of Defense, as well as its contractors and subcontractors, must comply with new regulations for the use of trusted suppliers and authorized sources."

"A key component of developing a secure supply chain includes the use of Trusted Suppliers. Pinpointing probabilities of risk, blacklisting and vetting high-risk suppliers are crucial to developing a resilient supply chain that fends off devious behavior," Knauf concluded.

See related links:

Combating fake chips by controlling supply chain

Chip counterfeiting case exposes defense supply chain flaw

Counterfeit chip reports maintain record pace

Counterfeit parts putting military at risk

IHS projects rise in counterfeit chips

Industry considers counterfeit risk analysis tool

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