Senate Armed Services Committee Chairman Carl Levin (D-Mich) just dropped a couple of very alarming tales during a hearing about counterfeit parts making their way into brand new U.S. military weapons.

Earlier this year, Boeing and the Navy found that the ice detection system on a brand new P-8 Poseidon was defective. The ice detection system is a critical piece of hardware designed to prevent tragedies by alerting pilots to the presence of ice on an aircraft’s control surfaces. Where did this defective part come from? China. A whole batch of a key piece of the ice detection hardware that was sent to the P-8 production line turned out to be used and worn out parts that were badly refurbished and sold to P-8 subcontractor BAE Systems as a new part, according to Levin. Boeing and BAE first became aware of the problem in 2009, he added.

The fake P-8 parts are just one of many examples of how counterfeit parts — often made from 1980s and 1990s-vintage junk computer parts that are sanded down and remarked in China and then sold back to the U.S. as brand new computer chips for advanced weapons systems. One witness at the hearing just described growing counterfiet semiconductors seeping into critical weapons systems as “ticking time bombs.”

Levin also noted that China feels no need to cooperate in his investigation into the problem, saying that the Chinese ambassador to Washington declined to send a representative to the hearing, despite the fact that there’s plenty of evidence that the vast majority of counterfeit weapons parts are coming from China.

This is just the tip of the iceberg of a huge problem that I wrote extensively about at Inside the Air Force in early 2008. Oh, and while the Pentagon and defense industry is working on detecting counterfeit parts, the counterfitters are becoming ever more adept at hiding the fact that their parts are fake.

UPDATE: Levin says he is crafting an amendment to the FY-12 defense authorization bill that would require inspections of all electronic parts coming from China — similar to the way foreign agricultural products are inspected upon entry to the U.S. Levin’s proposed legislation would also mandate tougher verification systems for military parts suppliers.

Click through the jump for pictures of Chinese counterfitting “plants” that are being shown during the hearing and an excerpt from a story I wrote on the problem while at Inside the Air Force years ago.

An unknown number of counterfeit aircraft parts are being fastened into U.S. military weapon systems after infiltrating supply depots, posing new safety risks and potentially driving up maintenance bills by hundreds of millions of dollars annually, according to Pentagon officials. This practice is an unintended consequence of two converging trends: globalization and Defense Department acquisition policies instituted in the 1990s that encourage use of commercial-off-the-shelf technology, according to Robert Ernst, head of aging aircraft studies for the Navy. “This is one of the emerging threats to our supply chain. It’s one of the things we call a disruptive technology,” said Ernst during a March 20 interview. “We’re getting so many changes, because we’re in a global economy, [that] we have to manage things a little bit differently, and it really is turning our acquisition process and supply process on its ear.” Ernst — along with several other military safety officials who wished to remain anonymous — worries that the potential of fake parts in the inventory is so high that some aircraft may contain numerous counterfeit parts, ranging from microprocessors to fasteners. This, they argue, opens the door for disaster since military parts must be able to withstand shock, vibration, electromagnetic and temperature stress levels far greater than their commercial counterparts. “If you get a flood of counterfeits going in, if you have multiple failures on an old weapons system with poor reliability, it doesn’t take a lot of ‘what ifs’ to have a serious reliability — and possibly a safety-impact,” said Ernst. “If I have a part that gets into a weapon system that not only doesn’t work, but fails prematurely or it has adverse impact, then that’s a safety issue and I really get upset,” he added. Ernst estimates that such components are leading to a 5 percent to 15 percent annual decrease in weapon system reliability based on studies by the Aerospace Industrial Association. “I know the Navy spends about $1.4 billion a year on depot level repairables. A 10 percent increase, that’s a big chunk of change,” said Ernst. However, since tiny computer chips and fasteners are incredibly difficult to inspect, the true percentage of counterfeit parts entering U.S. inventories is still unknown. The Pentagon has acknowledged the importance of making sure all aviation parts come from trusted vendors, but has not committed the resources needed to fight the problem effectively, in-part because no one has studied the true size of the problem, argues Ernst. “ We are getting service participation from DLA [Defense Logistics Agency], from OSD [Office of the Secretary of Defense], from the Navy, but we’re still not getting the right level of senior involvement, because I don’t think we’ve defined the problem, ” said Ernst. “ We’ve got some people from OSD but we don’t have [senior leaders] pushing it.”

(Click here to buy the whole article.)

Back in 2008, the problem was largely viewed as being limited to aging aircraft no longer in production that needed parts that are tougher to come by. Now, fake parts are making their way into brand new military equipment like the P-8, the C-27J Spartan and even missiles used by the Missile Defense Agency, according to lawmakers and witnesses speaking at the hearing. The good news is that the problem seems to be getting some serious attention.

Check out parent site, Military.com, later today for more on the hearing.

Here are some of the slides shown by a witness at today’s hearing:

An electronics market in China where counterfeit parts can be sold to brokers:

Here’s a bunch of old American computer parts, called “E-waste”, waiting to be sanded down and sold back to American companies as brand new computer chips and semiconductors for use in critical systems ranging from fighter jet navigation and targeting gear to the braking software on commercial trains.

More E-waste in China waiting to be sanded down and sold as brand new parts:

Counterfeit parts for sale in China:

An example of the coatings that counterfitters put on their parts to make it difficult to tell if they are fake or legit:

An example of how counterfitters sand down metal casings to make their parts appear real and brand new:

Another of the coatings on Chinese-made knock-offs: