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Committee's Investigation Into Counterfeit Electronic Parts in The S. HRG. 112–340 THE COMMITTEE’S INVESTIGATION INTO COUNTERFEIT ELECTRONIC PARTS IN THE DEPARTMENT OF DEFENSE SUPPLY CHAIN HEARING BEFORE THE COMMITTEE ON ARMED SERVICES UNITED STATES SENATE ONE HUNDRED TWELFTH CONGRESS FIRST SESSION NOVEMBER 8, 2011 Printed for the use of the Committee on Armed Services ( Available via the World Wide Web: http://www.fdsys.gov/ U.S. GOVERNMENT PRINTING OFFICE 72–702 PDF WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Aug 31 2005 15:04 Apr 10, 2012 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 Y:\BORAWSKI\DOCS\72702.TXT JUNE PsN: JUNEB COMMITTEE ON ARMED SERVICES CARL LEVIN, Michigan, Chairman JOSEPH I. LIEBERMAN, Connecticut JOHN MCCAIN, Arizona JACK REED, Rhode Island JAMES M. INHOFE, Oklahoma DANIEL K. AKAKA, Hawaii JEFF SESSIONS, Alabama E. BENJAMIN NELSON, Nebraska SAXBY CHAMBLISS, Georgia JIM WEBB, Virginia ROGER F. WICKER, Mississippi CLAIRE MCCASKILL, Missouri SCOTT P. BROWN, Massachusetts MARK UDALL, Colorado ROB PORTMAN, Ohio KAY R. HAGAN, North Carolina KELLY AYOTTE, New Hampshire MARK BEGICH, Alaska SUSAN M. COLLINS, Maine JOE MANCHIN III, West Virginia LINDSEY GRAHAM, South Carolina JEANNE SHAHEEN, New Hampshire JOHN CORNYN, Texas KIRSTEN E. GILLIBRAND, New York DAVID VITTER, Louisiana RICHARD BLUMENTHAL, Connecticut RICHARD D. DEBOBES, Staff Director DAVID M. MORRISS, Minority Staff Director (II) VerDate Aug 31 2005 15:04 Apr 10, 2012 Jkt 000000 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 Y:\BORAWSKI\DOCS\72702.TXT JUNE PsN: JUNEB C O N T E N T S CHRONOLOGICAL LIST OF WITNESSES THE COMMITTEE’S INVESTIGATION INTO COUNTERFEIT ELECTRONIC PARTS IN THE DEPARTMENT OF DEFENSE SUPPLY CHAIN NOVEMBER 8, 2011 Page Sharpe, Thomas R., Vice President, SMT Corporation and Liberty Component Services ................................................................................................................. 15 Hillman, Richard J., Managing Director, Forensic Audits and Investigative Service, Government Accountability Office; Accompanied by Dr. Timothy Persons, Chief Scientist, Center for Science, Technology, and Engineering, Government Accountability Office ...................................................................... 25 Toohey, Brian C., President, Semiconductor Industry Association ..................... 34 O’Reilly, LTG Patrick J., USA, Director, Missile Defense Agency ...................... 72 Kamath, Vivek, Vice President, Supply Chain Operations, Raytheon Com- pany ....................................................................................................................... 83 DeNino, Ralph L., Vice President, Corporate Procurement, L–3 Communica- tions Corporation .................................................................................................. 86 Charles Dabundo, Vice President and P–8 Poseidon Program Manager, Boe- ing Defense, Space and Security ......................................................................... 90 Tab 1 ......................................................................................................................... 129 Tab 2 ......................................................................................................................... 130 Tab 3 ......................................................................................................................... 131 Tab 4 ......................................................................................................................... 133 Tab 5 ......................................................................................................................... 135 Tab 6 ......................................................................................................................... 137 Tab 7 ......................................................................................................................... 138 Tab 8 ......................................................................................................................... 140 Tab 9 ......................................................................................................................... 141 Tab 10 ....................................................................................................................... 145 Tab 11 ....................................................................................................................... 146 Tab 12 ....................................................................................................................... 147 Tab 13 ....................................................................................................................... 151 Tab 14 ....................................................................................................................... 155 Tab 15 ....................................................................................................................... 156 Tab 16 ....................................................................................................................... 159 Tab 17 ....................................................................................................................... 174 Tab 18 ....................................................................................................................... 175 Tab 19 ....................................................................................................................... 176 Tab 20 ....................................................................................................................... 180 Tab 21 ....................................................................................................................... 184 Tab 22 ....................................................................................................................... 185 Tab 23 ....................................................................................................................... 191 Tab 24 ....................................................................................................................... 195 Tab 25 ....................................................................................................................... 196 Tab 26 ....................................................................................................................... 199 Tab 27 ....................................................................................................................... 201 Tab 28 ....................................................................................................................... 202 Tab 29 ....................................................................................................................... 203 Tab 30 ....................................................................................................................... 205 Tab 31 ....................................................................................................................... 209 (III) VerDate Aug 31 2005 15:04 Apr 10, 2012 Jkt 000000 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 Y:\BORAWSKI\DOCS\72702.TXT JUNE PsN: JUNEB VerDate Aug 31 2005 15:04 Apr 10, 2012 Jkt 000000 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 Y:\BORAWSKI\DOCS\72702.TXT JUNE PsN: JUNEB THE COMMITTEE’S INVESTIGATION INTO COUNTERFEIT ELECTRONIC PARTS IN THE DEPARTMENT OF DEFENSE SUPPLY CHAIN TUESDAY, NOVEMBER 8, 2011 U.S. SENATE, COMMITTEE ON ARMED SERVICES, Washington, DC. The committee met, pursuant to notice, at 9:34 a.m. in room SD– G50, Dirksen Senate Office Building, Senator Carl Levin (chair- man) presiding. Committee members present: Senators Levin, Udall, Hagan, Manchin, McCain, Inhofe, Chambliss, Brown, Ayotte, and Collins. Committee staff members present: Richard D. DeBobes, staff di- rector; and Leah C. Brewer, nominations and hearings clerk. Majority staff members present: Joseph M. Bryan, professional staff member; Ilona R. Cohen, counsel; Ozge Guzelsu, counsel; Richard W. Fieldhouse, professional staff member; and Peter K. Le- vine, general counsel. Minority staff members present: David M. Morriss, minority staff director; Daniel A. Lerner, professional staff member; and Bryan D. Parker, minority investigative counsel. Staff assistants present: Kathleen A. Kulenkampff, Brian F. Sebold, and Bradley S. Watson. Committee members’ assistants present: Casey Howard, assist- ant to Senator Udall; Roger Pena, assistant to Senator Hagan; Jo- anne McLaughlin, assistant to Senator Manchin; Jordan Baugh, assistant to Senator Gillibrand; Charles Prosch, assistant to Sen- ator Brown; Brad Bowman and John Easton, assistants to Senator Ayotte; and Ryan Kaldahl, assistant to Senator Collins. OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN Chairman LEVIN. Good morning, everybody. Today’s hearing is a product of the Armed Services Committee’s ongoing investigation into counterfeit electronic parts in the Department of Defense’s (DOD) supply chain. We will probably hold at least one additional hearing to discuss what the Department is doing to keep counter- feit electronic parts out of defense systems. We have three panels of witnesses today, so I expect that the hearing may continue into the afternoon, and I also expect that we will break for lunch. This will all be determined by how long these first two panels take. We also have a vote scheduled, I understand,
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