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Fake Cisco gear suggests procurement failure

Could both the General Services Administration and Cisco be partly for blame for the current scandal over the Defense Department buying fake IT gear?

According to a set of Federal Bureau of Investigation presentation slides now floating around the Internet, part of the reason the bogus equipment ended up in military systems was that the General Services Administration's procurement language allows for two or three levels of subcontractors to be brought in by the winner bidder.

This subcontracting can lead to the bidder purchasing hardware from non-Original Equipment Manufacturers, presumably to save money. The agencies would be none-the-wiser.

Cisco was evidently worth at least a few slides of blame as well, insofar that the company does not sell directly into the government. Rather it leaves the GSA sales to resellers, which can muddy the waters upstream as well. Even the company's Gold/Silver partners sold fake equipment, apparently.

For those who missed the news stories, the FBI uncovered an underground distribution network trafficking over $3.5 million in fake Cisco network routers, switches, network cards, including some sold to the Marine Corps, Air Force, Federal Aviation Administration, even the FBI itself.

There's another angle: The FBI also raised the idea that the phony equipment were not merely cut-rate knock-offs, like those $10 pair of Nike shoes you'd find in the street markets in Seoul. Rather, they could be the products of some state-sponsored effort on the part of the Chinese government--the equipment originally came from that country--to surreptitiously embed secret back doors into military systems.

The evidence proffered was pretty light, but it does point out that the potential downside of buying such forgeries goes way beyond losing reliability in the network.

Posted by Joab Jackson on May 14, 2008 at 9:39 AM

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Reader Comments

Wed, May 14, 2008 Al Black

http://blogs.cisco.com/news/ Cisco Statement on Counterfeit GoodsStatement by Bruce Klein, VP of Federal Sales, and Phil Wright, Director, Brand ProtectionAs you may have read, the FBI has identified a number of unauthorized companies that have sold products with the Cisco trademark to various government agencies and other organizations. This is of major concern to us, and we wanted to take a moment to share the efforts we are taking to ensure only legitimate Cisco products end up in the hands of our loyal customers.Unfortunately, counterfeiting is not a new issue in the IT industry or indeed in any successful global enterprise. Because our customers expect and deserve the highest-level of satisfaction when purchasing Cisco products, we actively monitor the counterfeit market and have longstanding processes in place to address this challenge.As part of our commitment to the integrity and quality of Cisco technology and services, our Brand Protection team leads an aggressive, concerted and company-wide effort to prevent potential damage to our brand and to our customers as a result of counterfeiting. Because counterfeiting is a criminal activity, we work closely with law enforcement agencies worldwide whenever those agencies decide to take action against those who would profit by this illegal conduct. In this instance, Cisco has collaborated with the FBI and other Federal law enforcement, and we appreciate their hard work in this important area. We have participated in many aspects of the investigation, and have proactively briefed high-level individuals at multiple government agencies.So what can you do? We can't stress enough the importance to Cisco customers and channel partners of procuring equipment only from Cisco authorized channels. If you have any questions or concerns I would recommend calling your Cisco representative or authorized reseller immediately.Again, we appreciate the hard work by the FBI in this case as well as the efforts by all law enforcement agencies in cracking down on the counterfeit market. This is a serious issue that we are diligently fighting every day to ensure our customers receive only genuine Cisco products.

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