Foreign Military Sales: Air Force Does Not Use Controls to
Prevent Spare Parts Containing Sensitive Military Technology from
Being Released to Foreign Countries (10-SEP-03, GAO-03-939R).
From 1990 through 2001, the Department of Defense delivered over
$138 billion in defense articles and services to foreign
countries through its foreign military sales programs that
included spare parts. Some sales occur under blanket order cases,
which are requisitions for a specific dollar value and generally
cover classes of parts that a country may need rather than a
specific item within a class. The management of foreign military
sales is especially critical given the need to prevent certain
foreign countries from receiving parts that, if released, could
be used against U.S. interests. This report stems from audit work
performed in connection with our report, Foreign Military Sales:
Improved Air Force Controls Could Prevent Unauthorized Shipments
of Classified and Controlled Spare Parts to Foreign Countries. In
that report, we address issues relating to classified spare parts
that are restricted for national security reasons and controlled
spare parts that are not classified but contain military
technology or applications or are controlled cryptographic parts.
During our work for that report, we observed a situation that
brought into question Air Force internal controls to prevent
unclassified or uncontrolled spare parts that contain sensitive
military technology from being released to foreign countries
ineligible to receive them. This report focuses on whether the
Air Force has internal controls in place to prevent spare parts
that contain sensitive military technology from being released to
foreign countries ineligible to receive the parts.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-939R
ACCNO: A08469
TITLE: Foreign Military Sales: Air Force Does Not Use Controls
to Prevent Spare Parts Containing Sensitive Military Technology
from Being Released to Foreign Countries
DATE: 09/10/2003
SUBJECT: Foreign military arms sales
Foreign military sales
Foreign policies
Internal controls
Spare parts
Technology transfer
C-130 Aircraft
Hercules Aircraft
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GAO-03-939R
United States General Accounting Office Washington, DC 20548
September 10, 2003
The Honorable Tom Harkin United States Senate
Subject: Foreign Military Sales: Air Force Does Not Use Controls to
Prevent Spare Parts Containing Sensitive Military Technology from Being
Released to Foreign Countries
Dear Senator Harkin:
From 1990 through 2001, the Department of Defense delivered over $138
billion in defense articles and services to foreign countries through its
foreign military sales programs that included spare parts. Some sales
occur under blanket order cases,1 which are requisitions for a specific
dollar value and generally cover classes of parts that a country may need
rather than a specific item within a class. The management of foreign
military sales is especially critical given the need to prevent certain
foreign countries from receiving parts that, if released, could be used
against U.S. interests. This report stems from audit work performed in
connection with our report, Foreign Military Sales: Improved Air Force
Controls Could Prevent Unauthorized
2
Shipments of Classified and Controlled Spare Parts to Foreign Countries.
In that report, we address issues relating to classified spare parts that
are restricted for national security reasons and controlled spare parts
that are not classified but contain military technology3 or applications
or are controlled cryptographic parts. During our work for that report, we
observed a situation that brought into question Air Force internal
controls to prevent unclassified or uncontrolled spare parts that contain
sensitive military technology from being released to foreign countries
ineligible to receive them. As agreed with your office, this report
focuses on whether the Air Force has internal controls in place to prevent
spare parts that contain sensitive military technology from being released
to foreign countries ineligible to receive the parts.
1 Hereafter referred to as blanket order(s).
2 U.S. General Accounting Office, Foreign Military Sales: Improved Air
Force Controls Could Prevent
Unauthorized Shipments of Classified and Controlled Spare Parts to Foreign
Countries, GAO-03-664
(Washington, D.C.: July 29, 2003).
3 Military technology is technology that would reveal or give insight into
the design and manufacture of
U.S. military systems, which are not possessed by or available from
sources outside of the United
States and, if exported, would permit a significant advance in a military
system of any country.
Results in Brief
The Air Force does not currently have any internal controls in place to
prevent the release of spare parts containing sensitive military
technology that are ordered under blanket orders and that the Air Force
does not want to release to foreign countries ineligible to receive the
parts. This has resulted in the inappropriate release of such parts.
During our work, we identified an instance that occurred in 1997 in which
a requisition for a C-130 refueling kit, which was to be used on U.S.
aircraft only, was not reviewed by anyone because there were no controls
in place to require that it be reviewed before it was shipped to a foreign
country. When we brought this situation to the attention of Air Force
Security Assistance Center officials, they said that the Air Force does
not have clear guidance for identifying parts containing sensitive
military technology that the Air Force does not want shipped to some
foreign countries. They acknowledged that releases of similar spare parts
to foreign countries ineligible to receive them had occurred and that such
releases were a problem. They also acknowledged that as a result of our
work the Air Force Audit Agency will review its controls for selling
military technology to foreign countries. The Air Force uses its Security
Assistance Management Information System to verify in part that countries
are eligible to receive classified or controlled parts. However,
4
this control could also be used to identify for foreign military sales
case managers review spare parts that contain sensitive military
technology and that the Air Force does not want to release to foreign
countries ineligible to receive them.
We recommend that the Secretary of the Air Force direct the Deputy Under
Secretary of the Air Force, International Affairs, to (1) develop, or
direct an appropriate source within the Air Force to develop, criteria for
identifying spare parts containing sensitive military technology that
should not be released to foreign countries and (2) establish appropriate
edits in the Security Assistance Management Information System so that
requisitions for spare parts containing sensitive military technology that
are identified above are referred to foreign military sales case managers
for review. In commenting on a draft of this report, the Department of
Defense concurred in principle with our recommendations. The department
outlined specific corrective actions to be taken that respond to our
recommendations.
Background
The transfer of defense items to friendly nations and allies is an
integral component in both U.S. national security and foreign policy. The
U.S. government authorizes the sale or transfer of military equipment,
including spare parts, to foreign countries either through
government-to-government agreements or through direct sales from U.S.
manufacturers. The Arms Export Control Act5 and the Foreign Assistance Act
of 1961,6 as amended, authorize the Department of Defense's foreign
military sales program.
4 Foreign military sales case managers at the Air Force Security
Assistance Center are responsible for
monitoring a particular type of foreign military sale case, such as a
blanket order.
5 Public Law 90-629.
6 Public Law 87-195.
The Department of State sets the overall policy regarding which countries
are eligible to participate in the foreign military sales program, and the
Department of Defense, through the military services, enters into foreign
military sales agreements with individual countries. The Deputy Under
Secretary of the Air Force, International Affairs, is responsible for the
Air Force's foreign military sales program. The Air Force Security
Assistance Center, which is an activity of the Air Force Materiel Command,
administers the program. Requisitions for spare parts related to
significant military equipment and major defense equipment are processed
as defined orders, which cover specific items and quantities and which
provide for security reviews and item identification. Requisitions can
also be processed as blanket orders, which define a country's eligibility
to requisition spare parts. The center uses an automated management
information system, the Security Assistance Management Information System,
to ensure that only requisitions for spare parts with appropriate waivers
are processed under blanket orders.
The Air Force Does Not Control Requisitions of Parts Containing Military
Technology to Foreign Countries
The Air Force does not currently have internal controls in place to
prevent the release of spare parts that contain sensitive military
technology ordered under blanket orders from being released to foreign
countries. As a result, the Air Force has released spare parts containing
sensitive military technology to countries ineligible to receive them.
We found that in 1997 a foreign country used a blanket order to
requisition and obtain a refueling kit used on the C-130 aircraft that
should not have been released. We were told that, at that time, the
refueling kit was to be used for U.S. special operations forces aircraft
only and was not to be released to foreign countries. The release occurred
because there were no controls in place for the requisition to be reviewed
prior to release. The refueling kit is presently managed by the Air
Force's Warner Robins Air Logistics Center at Robins Air Force Base,
Georgia. Air Force officials told us that the Air Force's Office of
Special Investigations at that time was asked to investigate the release
of the refueling kit for the C-130. However, we were unable to determine
the disposition of that investigation. According to the Air Logistics
Center, the kit is no longer considered sensitive.
While the Security Assistance Management Manual indicates that the
transfer of technology is to be restricted, it does not define a process
or establish criteria whereby parts containing sensitive technology can be
identified. An Air Force Security Assistance Center official confirmed
that the Air Force does not have clear guidance for identifying spare
parts containing sensitive military technology that the Air Force
determines should not be shipped to foreign countries ineligible to
receive them.
Air Force Security Assistance Center officials acknowledged that releasing
spare parts containing military technology to some foreign countries is a
problem resulting from the lack of adequate controls over blanket orders
and that spare parts containing sensitive military technology had been
released. The official also said that, as a result of our work and the
fact that other parts had been released; the Air
Force Audit Agency may review, within the next year, the Air Force's
policies for selling military technology to foreign countries.
The Air Force uses its Security Assistance Management Information System
to help verify that requisitioning countries are eligible to requisition
and receive spare parts related to significant military equipment and
major defense equipment and is taking actions to correct problems with the
system that we recently reported.7 However, the Air Force currently does
not use the system to control the release of spare parts containing
sensitive military technology. By establishing appropriate restrictions in
the system, the Air Force could use the system to control the release of
spare parts containing sensitive military technology that it determines
should not be shipped to some foreign countries.
Conclusion
Because the Air Force has no means to identify spare parts containing
sensitive military technology that it may determine should not be released
to certain foreign countries and it does not have internal controls in
place to prevent the release of the parts, such releases are occurring.
Furthermore, the Air Force does not know the extent of those releases.
This inadequate control environment places the department at risk of
having its sensitive military technology not only improperly released but
also used against national interests.
Recommendations for Executive Action
We recommend that the Secretary of the Air Force direct the Deputy Under
Secretary of the Air Force, International Affairs, to (1) develop, or
direct an appropriate source within the Air Force to develop, criteria for
identifying spare parts containing sensitive military technology that
should not be released to foreign countries and (2) establish appropriate
edits in the Security Assistance Management Information System so that
requisitions for spare parts containing sensitive military technology that
are identified above are referred to foreign military sales case managers
for review.
Agency Comments
In commenting on a draft of this report, the Department of Defense
concurred in principle with our recommendations. Specifically, the
department commented that the Secretary of the Air Force will direct an
appropriate source to (1) develop criteria for identifying spare parts
containing sensitive technology that should not be released to foreign
countries and (2) establish appropriate edits in the Security Assistance
Management Information System so that requisitions for spare parts
containing sensitive military technology that are identified above are
referred to foreign military sales case managers for review. These actions
respond to our recommendations.
The department's comments are enclosed.
7 GAO-03-664.
Scope and Methodology
To determine whether the Air Force has controls in place to prevent the
unintentional release of spare parts containing sensitive military
technology to foreign countries not eligible to receive them, we held
discussions with officials from the Office of the Deputy Under Secretary
of the Air Force, International Affairs; the Air Force Materiel Command's
Security Assistance Center, Wright-Patterson Air Force Base, Ohio; the Air
Force's Warner Robins Air Logistics Center, Robins Air Force Base,
Georgia; and the Air Force Audit Agency. We discussed the policies,
practices, and procedures for releasing spare parts containing military
technology to foreign countries. This review stems from our prior work8
and was conducted from May 2002 through July 2003 in accordance with
generally accepted government auditing standards.
As arranged with your office, unless you publicly announce its contents
earlier, we
plan no further distribution of this report until 30 days from the issue
date. At that
time, we will send copies of this report to the Secretary of Defense; the
Secretary of
the Air Force; the Director, Office of Management and Budget; and other
interested
congressional committees. In addition, the report will be available at no
charge on
the GAO Web site at http://www.gao.gov.
Please contact me on (202) 512-8365 if you or your staff have any
questions
concerning this report. Key contributors to this letter were Lawson Gist,
Jr.; Jennifer
Thomas; Arthur James, Jr.; Lou Modliszewski; and Jane Hunt.
Sincerely yours,
William M. Solis, Director
Defense Capabilities and Management
Enclosure
8 GAO-03-664.
ENCLOSURE
(350363)
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