-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-519 					        				        
  TITLE:     Nonproliferation: Further Improvements Needed in U.S. 
  Efforts to Counter Threats from Man-Portable Air Defense Systems 
  Coverage Follow-up Techniques and When It Will Produce Coverage 
  Measurement Results						 
     DATE:   05/13/2004

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entitled 'Nonproliferation: Further Improvements Needed in U.S. Efforts 
to Counter Threats from Man-Portable Air Defense Systems' which was 
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Report to Congressional Committees: 

May 2004: 

NONPROLIFERATION: 

Further Improvements Needed in U.S. Efforts to Counter Threats from 
Man-Portable Air Defense Systems: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-519]: 

GAO Highlights: 

Highlights of GAO-04-519, a report to congressional committees 

Why GAO Did This Study: 

The proliferation of man-portable air defense systems (MANPADS) has 
been of growing concern to the United States and other governments. The 
United States is pursuing a wide variety of activities internationally 
and domestically to address this threat. GAO was asked to assess 
efforts by (1) the State Department to control global proliferation of 
MANPADS, (2) the Department of Defense (DOD) to monitor end-use of U.S.
-exported Stingers, and (3) the Department of Homeland Security (DHS) 
to develop technical countermeasures to minimize the threat of a 
MANPADS attack.

What GAO Found: 

In 2003, the State Department made important progress in its efforts to 
control the global proliferation of MANPADS. Thirty-two foreign 
governments made multilateral commitments to better control MANPADS and 
prevent their acquisition by terrorists. However, the State 
Departmentï¿½s ability to assess further progress in MANPADS 
nonproliferation is limited because the multilateral forums have no 
mechanisms to monitor membersï¿½ implementation of commitments. In 
addition, the State Department obtained foreign government commitments 
to destroy or better secure MANPADS. 

DOD is required annually to inventory every Stinger missile system sold 
overseas. However, DODï¿½s inventory inspection process has flaws. First, 
DOD records on the number and destination of Stingers sold overseas are 
incomplete, unreliable, and largely in hard-copy form. Because DOD has 
not required DOD agencies responsible for end-use monitoring to retain 
these records, it does not know how many Stingers have been sold 
overseas. Second, DOD officials overseas use inconsistent practices 
when inspecting Stinger inventories because DOD lacks procedures for 
conducting these inspections.

U.S. Stinger Missile System: 

[See PDF for image]

[End of figure]

To develop technical countermeasures to minimize the MANPADS threat to 
aircraft, the DHS initiated a 2-year program to adapt military aircraft 
defense systems to commercial aircraft. However, DHS faces significant 
challenges such as establishing system requirements and setting 
reliable cost estimates. The department adopted GAOï¿½s January 2004 
recommendations to implement a knowledge-based approach to this 
development program. For example, DHS plans to use GAO-recommended 
criteria that ensure product knowledge is attained at key points in 
system development. 

What GAO Recommends: 

The Secretary of State should develop a strategy to work within 
multilateral forums to establish mechanisms for assessing foreign 
governmentsï¿½ implementation of their commitments to reduce MANPADS 
proliferation.

The Secretary of Defense should (1) establish standardized requirements 
for keeping Stinger missile records; (2) create an electronic database 
to consolidate all DOD records for Stinger missile systems sold 
overseas and track the worldwide Stinger inventory; and (3) direct that 
standardized procedures for conducting Stinger inspections be issued.

State and DOD concurred with our recommendations. DHS provided only 
technical comments.

www.gao.gov/cgi-bin/getrpt?GAO-04-519.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Joseph Christoff at (202) 
512-8979 or [email protected].

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

MANPADS Pose a Threat to Commercial Aircraft: 

State Department Has Led Efforts to Control MANPADS but Has Limited 
Ability to Assess Extent of Progress: 

Disposition of U.S. Stinger Missiles Sold Overseas Is Unknown: 

U.S. Is Determining Feasibility of Countermeasures to Protect 
Commercial Aircraft: 

Conclusion: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

GAO Comments: 

Appendix III: Comments from the Department of Homeland Security: 

Appendix IV: Comments from the Department of State: 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Staff Acknowledgments: 

Tables: 

Table 1: Countries That Developed or Produced MANPADS Since the 1950s: 

Table 2: Stinger Missiles Exported by United States to Foreign 
Countries, 1982-2004: 

Figures: 

Figure 1: Components of a Man-Portable Air Defense System: 

Figure 2: U.S. Stinger Missile System: 

Figure 3: MANPADS to be Destroyed in Liberia, 2003: 

Figure 4: Comparison of Knowledge-Based Approach to DHS Program Plan: 

Abbreviations: 

AECA: Arms Export Control Act: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DSCA: Defense Security Cooperation Agency: 

DTRA: Defense Threat Reduction Agency: 

LOA: letter of offer and acceptance: 

MANPADS: man-portable air defense systems: 

OSCE: Organization for Security and Cooperation in Europe: 

SAMM: Security Assistance Management Manual: 

SAO: security assistance organization: 

Letter May 13, 2004: 

The Honorable Duncan Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable John L. Mica: 
Chairman: 
The Honorable Peter A. DeFazio: 
Ranking Minority Member: 
Subcommittee on Aviation: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

As we reported in May 2003,[Footnote 1] the threat of terrorist attacks 
against U.S. personnel, facilities, and interests overseas was great 
because of the number and types of terrorist organizations, the 
lethality of terrorists' tactics, and the ability of terrorists to 
operate worldwide. Among these threats, the proliferation of man-
portable air defense systems (MANPADS) has been of growing concern to 
the United States and other governments. MANPADS are shoulder-launched 
surface-to-air missile systems designed for military use by ground 
forces to defend against air attacks. However, terrorists have acquired 
and used these MANPADS to attack and bring down both military and 
commercial aircraft in areas of conflict.

You asked us to assess (1) the nature and extent of the MANPADS threat, 
(2) the State Department's efforts to control the international 
proliferation of MANPADS, (3) the Department of Defense's (DOD) end-use 
monitoring[Footnote 2] of Stinger missiles, and (4) the Department of 
Homeland Security's (DHS) efforts to develop technical countermeasures 
to minimize the threat of a MANPADS attack. We did not review other 
options for addressing the MANPADS threat, such as law enforcement 
efforts, airport security, or emergency flight training.

To address our objectives, we obtained documents and met with officials 
at the Departments of Defense, State, and Homeland Security, and the 
intelligence agencies. We interviewed foreign government officials and 
met with representatives of the Secretariats of the Wassenaar 
Arrangement[Footnote 3] and of the Organization for Security and 
Cooperation in Europe[Footnote 4] (OSCE) in Vienna. We toured Stinger 
missile storage facilities in Germany and the United Kingdom, observed 
Stinger missile inventory inspections in Turkey, and interviewed U.S. 
DOD security assistance officials in those countries. We also requested 
meetings with officials of the National Security Council to discuss the 
prioritization of terrorist threats, but they refused to meet with us 
or respond to our questions. We performed our work from April 2003 to 
March 2004 in accordance with generally accepted government auditing 
standards. For additional information on our scope and methodology, see 
appendix I.

Results in Brief: 

MANPADS pose a threat to commercial aircraft for several reasons. 
First, MANPADS are widely available. Since the 1950s, 20 countries have 
developed or produced at least 30 different types of MANPADS, with 
between 500,000 and 750,000 weapons believed to be in the worldwide 
inventory today. The U.S. government estimates that a few thousand 
MANPADS are outside government controls. It estimates that thousands 
more under government controls may be vulnerable to theft and possible 
transfer to terrorist groups because they are not subject to stringent 
national export standards nor do they have adequate physical security 
or inventory controls. Second, the characteristics of MANPADS--their 
lethality, portability, ease of use and concealment, and relatively low 
cost (from less than $1,000 to $100,000 each)--make them attractive to 
terrorists for acquisition and use against commercial aircraft. Third, 
MANPADS have been successfully used to attack and bring down aircraft. 
The State Department estimated in 2003 that more than 40 aircraft have 
been struck by MANPADS since the 1970s, causing at least 24 crashes and 
more than 600 deaths worldwide. To date, only one attack occurred 
outside a conflict area, and none has occurred within the United 
States.

In 2003, the U.S. government obtained commitments from foreign 
governments in multilateral forums to better control MANPADS and 
prevent their acquisition by terrorists, but the forums lack mechanisms 
to monitor members' implementation. The State Department led the U.S. 
efforts that obtained commitments in 2003 from the member countries of 
the Group of Eight,[Footnote 5] the Asian Pacific Economic Cooperation 
summit, and the Wassenaar Arrangement to strengthen their export 
controls and security of MANPADS. However, multilateral forum members' 
compliance with their commitments is voluntary, and the forums lack 
mechanisms to verify that members implement their political commitments 
or to analyze participants' reported data on arms transfers. The State 
Department has worked with foreign governments to destroy more than 
8,155 excess MANPADS and improve the security of MANPADS stockpiles. 
The State Department has procedures in place to confirm destruction of 
MANPADS through its bilateral programs.

The disposition of Stinger missiles sold overseas is unknown because 
DOD's Stinger inventory inspection process is flawed. To prevent the 
proliferation of U.S. Stinger missile systems, U.S. law,[Footnote 6] 
sales agreements, and departmental directives have required DOD to 
conduct annual inventory inspections of 100 percent of Stinger missiles 
sold to foreign governments for all but 5 years since it began selling 
the missile systems in 1982. However, DOD has no requirements for DOD 
organizations responsible for end-use monitoring to keep records on the 
number and destinations of these Stingers. As a result, its records are 
neither complete nor reliable. In addition, DOD's Stinger records are 
largely in hard-copy form, and no single office has complete copies of 
these records. We also found discrepancies at DOD offices that maintain 
such records. For example, DOD officials in one country[Footnote 7] 
identified approximately 30 percent more Stinger missiles from their 
2003 inventory inspection than the number on record with the 
responsible DOD office in the United States. Also, DOD officials 
overseas use inconsistent practices to perform Stinger inspections 
because DOD lacks procedures for conducting the inspections. For 
example, DOD officials count Stingers differently. DOD officials in one 
country we visited reported opening the Stinger container cases to 
count the missiles. DOD officials in another country we visited 
reported counting only the Stinger container cases. DOD officials 
planned to issue procedures for conducting inspections to all overseas 
officials with inspection responsibility in December 2003 but, as of 
April 2004, no such guidance had been released.

During 2003, DHS initiated a 2-year system development and 
demonstration program for a counter-MANPADS system.[Footnote 8] We 
reviewed their efforts and have previously reported[Footnote 9] that 
DHS faces significant challenges in adapting a military counter-MANPADS 
system to commercial aircraft, such as establishing system 
requirements, developing technology and design to sufficient maturity, 
and setting reliable cost estimates. Our work on the best practices of 
product developers in government and industry has found that such 
challenges can be successfully overcome by using a knowledge-based 
approach. We recommended that the Secretary of Homeland Security 
implement a knowledge-based approach in its counter-MANPADS development 
program; the Secretary concurred, and DHS plans to use GAO-recommended 
exit criteria that ensures product knowledge is attained at key points 
in system development.

We are recommending that the Secretary of State develop a strategy to 
work within the multilateral forums to establish mechanisms to monitor 
and report on (1) countries' implementation of their commitments to 
reduce MANPADS proliferation and (2) the impact such implementation of 
commitments has on the flow of MANPADS to illicit arms markets. 
Establishing such mechanisms would enable the forums to assess the 
impact of these efforts toward reducing MANPADS proliferation.

In addition, we are recommending that the Secretary of Defense (1) 
establish standardized recordkeeping requirements for maintaining 
Stinger records, (2) establish a centralized electronic database to 
consolidate DOD's Stinger records and to track the worldwide Stinger 
inventory, and (3) issue standardized procedures for conducting Stinger 
inspections.

State and DOD concurred with the recommendations in this report, while 
DHS did not comment on them. State and DHS provided technical comments 
that we incorporated as appropriate.

DOD stated that it would amend its security assistance manual to 
specifically identify recordkeeping standards for end-use monitoring. 
It further said that it is developing a database that would consolidate 
the information noted in our recommendation by October 2004. DOD also 
stated that it is developing checklists and procedures that would 
provide guidance to overseas officials conducting Stinger inventory 
inspections.

Background: 

MANPADS are portable short-range surface-to-air missile systems 
designed for use by one or two soldiers to attack fixed-wing aircraft 
and helicopters during wartime. Basic components include the launch 
tube and missile, gripstock (launcher or firing mechanism), and thermal 
battery. See figure 1 for an illustration of MANPADS components.

Figure 1: Components of a Man-Portable Air Defense System: 

[See PDF for image]

[End of figure]

Due to growing concern in the late 1990s over the worldwide 
proliferation of MANPADS to non-state actors, the United States led an 
effort to promote improved export control policies for MANPADS, 
primarily in the Wassenaar Arrangement. In December 2000, the 33 
Wassenaar Arrangement participating states[Footnote 10] adopted U.S.-
proposed guidelines for establishing a set of MANPADS export 
controls.[Footnote 11] While multilateral export control regimes are a 
key policy instrument in the overall U.S. strategy to combat the 
proliferation of weapons of mass destruction and conventional weapons, 
they have limitations. The multilateral export control regimes are 
voluntary, nonbinding arrangements among like-minded supplier 
countries. While countries make no legally binding commitments in 
joining them, participating countries undertake a political commitment 
to abide by the goals and principles of the regime. The regimes operate 
on the basis of consensus of all members and decisions on how to 
implement and interpret regime decisions are left to the national 
discretion of each member. None of the regimes identify specific 
countries as targets. Collectively the regimes strive to stop, slow, or 
increase the cost and risk of detection efforts by countries' of 
concern to acquire sensitive technologies and capabilities, including 
MANPADS.

The United States began selling its current MANPADS, the Stinger 
missile system, to U.S. allies and U.S.-approved nations in 1982. 
Because the Stinger missile system is among the most advanced of all 
MANPADS, the United States has placed enhanced controls and 
requirements on its sale and use. (See fig. 2 for a picture of the U.S. 
Stinger missile system.) Under security assistance procedures, DOD 
provides defense articles, services, and training to foreign 
governments and international organizations that have been approved by 
the State Department and determined by the President as supporting U.S. 
national security and foreign policy objectives, according to DOD. In 
comments on a draft of this report, DOD said that each proposed 
transfer of Stinger missiles is thoroughly vetted by many different 
organizations and offices, thus providing DOD a high level of 
confidence that the missiles under security assistance programs do not 
pose a terrorist threat.

Figure 2: U.S. Stinger Missile System: 

[See PDF for image]

[End of figure]

The Stinger missile system is one of only a few weapons 
systems[Footnote 12] that are subject to "enhanced end-use monitoring" 
by DOD. If a Stinger missile system sale is approved through the 
Foreign Military Sales process, State and DOD sign and extend a letter 
of offer and acceptance (LOA) to the customer nation. The LOA serves as 
a contract agreement between the United States and the customer nation 
and requires the customer nation to allow DOD to conduct annual 
inspections to ensure the Stinger systems are being used and stored as 
required under the terms of the sale. Countries that purchase Stinger 
missile systems from the United States are legally bound to cooperate 
with these inspections or risk damaging future military sales and 
cooperative relations with the United States.[Footnote 13]

Notwithstanding U.S. controls over its Stinger missile systems, the 
concern over a potential MANPADS attack against commercial aircraft has 
grown in recent years. According to the U.S. government, terrorists are 
aware of the severe economic consequences that a MANPADS attack could 
wreak on the U.S. economy. In November 2002, terrorists used a MANPADS 
to attack, but miss, a commercial airliner in Mombasa, Kenya--the first 
such attack outside an area of conflict. Following this attack, 
according to DOD officials, the National Security Council created an 
interagency task force to pursue several options to reduce the risk of 
MANPADS attack, including the feasibility of transferring counter-
MANPADS technology from U.S. military aircraft to U.S. commercial 
aircraft. In response to the conference report accompanying the 
Emergency Wartime Supplemental Appropriations Act, 2003,[Footnote 14] 
DHS began to review a variety of technical options for counter-MANPADS 
systems with a goal of selecting a system within 2 years for use on the 
U.S. commercial aircraft fleet. DHS is now working with private 
contractors to develop a counter-MANPADS system.

MANPADS Pose a Threat to Commercial Aircraft: 

MANPADS pose a threat to commercial aircraft for several reasons. 
First, MANPADS are widely available. The U.S. government estimates that 
thousands of MANPADS worldwide are outside government controls. 
Thousands more under government controls may be vulnerable to theft and 
possible transfer to terrorist groups through illicit arms markets 
because they are not subject to stringent national export standards nor 
do they have adequate physical security. Second, MANPADS 
characteristics make them attractive to terrorists. Finally, MANPADS 
have been successfully used to attack and bring down aircraft.

MANPADS Are Widely Available Worldwide: 

Since the 1950s, 20 countries have developed or produced at least 30 
different types of MANPADS, with a total production of more than a 
million missiles. The majority of MANPADS are either located within 
military arsenals; have been expended in live-fire exercises, wars, 
insurgencies, or other conflicts; or have been destroyed, according to 
State Department officials. Estimates of the global inventory of 
MANPADS range from 500,000 to 750,000 weapons, with approximately 1 
percent outside the control of national governments, according to 
intelligence sources. In addition, according to the State Department, 
the numbers of MANPADS in the global inventory are difficult to 
estimate because destruction of MANPADS systems is not always 
publicized and the systems' effective lifetimes depend on how they are 
stored and maintained. Table 1 shows the 20 countries that have 
developed or produced MANPADS since the 1950s.

Table 1: Countries That Developed or Produced MANPADS Since the 1950s: 

Country: 

Bulgaria; 
China; 
Czech Republic; 
Egypt; 
Former Yugoslavia; 
France; 
Germany[A]; 
Greece[A]; 
Netherlands[A]; 
North Korea; 
Pakistan; 
Poland; 
Romania; 
Russia.; 
Sweden; 
Switzerland[A]; 
Turkey[A]; 
Ukraine; 
United Kingdom; 
United States.

Source: DOD.

[A] Under the terms of the European Stinger Project Group, Germany, 
Greece, the Netherlands, and Turkey coproduce Stinger missiles solely 
for the national defense of the party to the agreement and exports to 
third parties are not permitted. Switzerland's coproduction arrangement 
with the United States also had a similar restriction.

[End of table]

During the cold war, the United States, the Soviet Union, and their 
allies provided MANPADS to several client states in surrogate cold war 
conflicts. For example, the U.S. government transferred hundreds of 
Stinger missiles in the mid-1980s to Afghan rebels that were fighting 
Soviet forces in Afghanistan. U.S. intelligence officials stated that a 
number of these weapons may have fallen into the hands of terrorist 
groups. The State Department estimates that at least nine nonstate 
groups, including al Qaeda, have obtained some type of 
MANPADS.[Footnote 15]

Some MANPADS produced during the cold war were surplus to countries' 
defense needs in the 1990s. These MANPADS became widely available on 
the black and gray arms markets where terrorists could acquire them. 
The black arms market consists primarily of weapons that have been 
stolen from government or private holdings, seized by combatant forces, 
supplied by state sponsors to subnational groups, or produced 
illegally. Black market transfers usually involve a small number of 
arms that do not move through official licensing channels and are 
difficult to detect. Gray arms sales can be large and involve sales of 
advanced weapons systems. Such sales generally move through official 
government licensing channels and rely on false documentation or other 
deceptive means to disguise the buyer, supplier, type of weaponry, or 
another component of the transaction. There are known black markets in 
Afghanistan, the Balkans, Iraq, Lebanon, Somalia, Southeast Asia, and 
Yemen, according to the State Department. Gray arms shipments of 
MANPADS to Africa have been delivered mostly to countries that divert 
the weapons to subnational groups.

The new security challenges in Iraq have added to the global stockpile 
of MANPADS available on the black and gray markets. According to 
intelligence sources, thousands of MANPADS may have been provided to 
Iraqi security forces or were stolen during hostilities in Iraq 
immediately following the collapse of the Saddam Hussein regime in 
2003. Therefore, the number of MANPADS outside national controls may 
have doubled.[Footnote 16]

The U.S. government is also concerned that thousands of MANPADS under 
the control of some foreign governments may be vulnerable to theft and 
possible transfer to terrorist groups through the black and gray 
markets. Some countries lack stringent national export standards, which 
increases the likelihood that MANPADS will fall into the hands of 
terrorists, according to the State Department. For example, China, 
Egypt, former Yugoslavia, North Korea, and Pakistan have produced 
MANPADS but are not Wassenaar Arrangement members. In 2000, Wassenaar 
Arrangement members adopted the first multilateral guidelines for 
controlling the export of MANPADS[Footnote 17] and strengthened these 
guidelines in 2003.[Footnote 18]

In addition, the U.S. government is concerned about the physical 
security and inventory controls of MANPADS within certain countries' 
arsenals, where MANPADS are vulnerable to theft and possible transfer 
to terrorist groups. For example, as of September 2003, the U.S. 
government had identified at least 17 countries whose security over 
their MANPADS stockpiles raised concerns. These countries included 
Bosnia and Herzegovina, Liberia, Cambodia, Nicaragua, and 
Serbia.[Footnote 19] Total stockpiles of MANPADS in these 17 countries 
are believed to number in the tens of thousands, according to the State 
Department.

Characteristics of MANPADS Make Them Attractive to Terrorists: 

MANPADS are attractive to terrorists for acquisition and use against 
commercial aircraft because they are lethal, easy to use, transport, 
and conceal, and they are relatively inexpensive.

MANPADS are designed to be lethal. Frequently called heat-seeking 
missiles, most MANPADS models employ sensors that search for and home 
in on the target's infrared signature, often the engine. Newer MANPADS 
can recognize specific aircraft characteristics and reject simple 
countermeasures or distractions, according to a defense manufacturer. 
MANPADS are effective up to approximately 15,000 feet in altitude and 3 
miles in range. Thus, while aircraft generally are safe from MANPADS 
when flying at cruising altitude (30,000 feet), they are most 
vulnerable during take off and landing.

MANPADS systems are relatively easy to use but do require training. An 
individual rests the weapon on his or her shoulder, looks through a 
sight, and pulls a trigger. MANPADS typically have a "fire-and-forget" 
design that does not require the operator to remain in place to help 
guide the missile to its target. MANPADS' small size--about 5 feet long 
and a few inches in diameter and less than 35 pounds--make them easy to 
transport and to conceal. As a result, there have been recorded efforts 
to smuggle them into the United States, including two thwarted 
attempts. In August 2003, the Department of Justice reported that a 
British citizen in New Jersey tried to sell Russian-made MANPADS to 
Federal Bureau of Investigation agents posing as terrorists. Also, on 
November 6, 2002, three men with alleged links to al Qaeda tried to buy 
Stinger MANPADS from U.S. and Hong Kong law enforcement agents in Hong 
Kong, according to a 2003 State Department report.

The costs of MANPADS, while varying significantly, are relatively 
inexpensive. Some estimates range between $5,000 and $30,000 apiece on 
the black market, while others suggest that they have sold for less 
than $1,000 to as much as $100,000 apiece.

MANPADS Have Been Used to Attack Commercial Aircraft: 

In 2003, the State Department estimated that more than 40 aircraft had 
been struck by MANPADS since the 1970s, causing at least 24 crashes and 
more than 600 deaths worldwide. According to a November 2003 
Congressional Research Service report, there have been 35 attempted 
MANPADS attacks on commercial aircraft overseas since 1978, 24 of which 
successfully took down the aircraft.[Footnote 20] Of these 35 attacks, 
6 occurred against large, multiengine jet aircraft, according to the 
State Department. Five of these jet aircraft survived with minor 
damage; one attack was catastrophic. According to State Department 
officials, the number of jet aircraft hit is too small for accurate 
statistical analysis, and it is impossible to predict the outcome of a 
MANPADS attack. To date, only one attack occurred outside a conflict 
area--in Mombasa, Kenya, in November 2002--and none has occurred within 
the United States.

Although there have been no MANPADS attacks within the United States, 
the threat posed by terrorists equipped with MANPADS is of credible 
concern, according to the Deputy Administrator, Transportation Security 
Administration, Department of Homeland Security. He stated that even an 
unsuccessful MANPADS attack on a commercial airliner would have a 
devastating economic and political impact. As of late February 2004, 
there was no credible, specific intelligence about planned MANPADS 
attacks against commercial aircraft in the United States, according to 
DHS officials.

State Department Has Led Efforts to Control MANPADS but Has Limited 
Ability to Assess Extent of Progress: 

The State Department led the U.S. efforts to achieve agreements with 
foreign governments on a U.S. strategy to prevent terrorist acquisition 
of MANPADS through illicit arms markets. The department's efforts 
resulted in agreements from members of several multilateral forums on 
key elements of its strategy. However, the State Department's ability 
to assess progress toward reducing MANPADS proliferation is limited by 
the multilateral forums' lack of mechanisms to monitor countries' 
implementation of their commitments. The department also obtained--
through bilateral diplomatic channels--foreign governments' 
commitments to destroy or secure MANPADS. The State Department has 
procedures in place to confirm destruction of MANPADS through its 
bilateral efforts.

U.S. MANPADS Strategy Moved Forward in Multilateral and Bilateral 
Forums: 

In early 2003, the United States began to implement a strategy to 
reduce the risk of terrorists acquiring MANPADS through illicit arms 
markets. The State Department is leading the U.S. efforts to implement 
the strategy through multilateral forums and bilateral diplomacy. The 
first five points of the strategy focus on export controls and security 
that can be undertaken in multilateral forums; the last element 
addresses the State Department's bilateral approach on MANPADS security 
and destruction. The six points urge foreign governments to: 

* adopt stringent, best-practice export controls on MANPADS;

* extend export controls to essential components of MANPADS;

* develop technical launch control features to prevent unauthorized 
use;

* enact comprehensive laws, regulations, and enforcement mechanisms on 
the production, transfer, and brokering[Footnote 21] of MANPADS;

* exchange information on uncooperative governments and entities and 
ban transfers to nonstate actors; and: 

* enhance stockpile management of MANPADS, including the destruction of 
stocks in excess of national security needs.

Multilateral Agreements Strengthened Commitments on Exports and 
Controls: 

In 2003, the State Department began to obtain commitments from members 
of multilateral forums to (1) limit MANPADS to legitimate governments 
and their agents and (2) ensure that they provide MANPADS with strong 
and effective security and controls. In early 2003, the State 
Department presented its proposal to the members of the Group of Eight 
and the Wassenaar Arrangement.

In June 2003, the Group of Eight members responded to the U.S. proposal 
by adopting an action plan[Footnote 22] that reflected the United 
States' six strategy points. The Group of Eight members committed to 
promote the Wassenaar Arrangement principles on MANPADS to other 
states, share information on their implementation of the adopted action 
plan, and discuss MANPADS issues at their June 2004 summit.

In December 2003, the Wassenaar Arrangement members adopted an enhanced 
set of principles for MANPADS exports.[Footnote 23] The Wassenaar 
Arrangement's principles reflected the key points in the U.S. strategy. 
Members agreed to assess the adequacy and effectiveness of the 
recipient government's physical security arrangements for the transport 
and storage of MANPADS inventories and ensure that any infringement of 
export control legislation related to MANPADS would be subject to 
adequate penalty provisions or criminal sanctions. The Wassenaar 
Arrangement members agreed to exchange information on countries that 
failed to meet security guidelines and on non-state entities attempting 
to acquire MANPADS, promote MANPADS guidelines to non-Wassenaar 
Arrangement members, and add MANPADS to their annual data reports on 
arms transfers.

The State Department promoted the six-point U.S. strategy in three 
additional multilateral forums in 2003, as follows: 

* At the October 2003 Asian Pacific Economic Cooperation summit, the 
U.S. government presented the key elements of the strategy that had 
been adopted by the Group of Eight in June. In the final ministerial 
statement, participants committed to stronger domestic controls on the 
production, stockpiles, transfer, and brokering of MANPADS.

* The participant states of the OSCE also followed the Group of Eight's 
lead and issued two statements on MANPADS in 2003. Both noted the 
potential for OSCE to use its policy document on small arms and light 
weapons[Footnote 24] to prompt additional steps against illicit trade 
in MANPADS. Furthermore, the OSCE Secretariat hosted a workshop in 
January 2004 to share best practices for countering the MANPADS threat; 
the workshop brought together international experts and senior civil 
aviation security and counterterrorism officials from the OSCE states.

* In 2003, U.S. experts led efforts to revise the United Nations 
Register of Conventional Arms,[Footnote 25]creating a new MANPADS 
subcategory. A State Department official said that the MANPADS data 
reported by participating nations will provide greater transparency 
into the volume of trade in MANPADS and eventually might lead to 
greater accountability for transfers to nations and regions of concern.

Forums Lack Mechanisms for Assessing Members' Compliance: 

The multilateral forums lack mechanisms and capability to assess data 
on arms transfers and members' compliance with their commitments to 
reduce MANPADS threats. As a result, each participating country may 
make its own assessment and consult with the forums or other member 
countries on a bilateral basis.

The multilateral forums have no mechanisms to allow them to monitor or 
measure members' implementation of their political commitments. For 
example, the Group of Eight is not a legal entity and has no permanent 
Secretariat. Although the Wassenaar Arrangement has a Secretariat, 
Secretariat officials stated that its infrastructure does not allow for 
the Secretariat to perform analyses of data reported by members. Such 
analyses are left to the individual members to perform and bring before 
the membership for discussion.

Furthermore, the voluntary and nonbinding nature of consensus-based 
multilateral forums means they have no explicit tools to enforce 
members' compliance with their commitments. These forums rely on 
diplomatic pressure to influence compliance or the occasional 
intelligence information from member states to identify activities that 
might be inconsistent with their commitments. Without multilateral 
enforcement mechanisms, the U.S. government has little assurance that 
commitments by member countries to improve their controls over MANPADS 
will have an impact on members' national policies and practices to 
reduce MANPADS proliferation. According to the State Department, the 
U.S. government must rely on other means for such assurance.

Bilateral Programs Focused on Destruction and Security of MANPADS: 

To address the strategy's sixth point, the United States provides 
bilateral assistance to foreign governments to (1) identify and destroy 
MANPADS stocks that are excess to their national security needs, 
loosely secured, or obsolete and (2) assess and improve security of 
storage facilities for MANPADS retained for national defense purposes.

In 2003, State Department officials approached certain countries to 
discuss the disposition of their excess MANPADS stockpiles. In some 
cases, the United States offered technical expertise or funded the 
destruction of MANPADS stockpiles. According to State Department 
officials, by March 2004, the United States had received commitments 
from nine countries--including Bosnia and Herzegovina, Cambodia, 
Liberia, Nicaragua, and Serbia[Footnote 26]--to destroy nearly 10,000 
excess MANPADS stocks; as of May 2004, 8,155 of these MANPADS had been 
destroyed.[Footnote 27] For example, State Department personnel 
discovered some MANPADS in insecure locations in Liberia in 2003; they 
were brought to the attention of U.N. military forces in Liberia, were 
secured, and subsequently destroyed. (Fig. 3 shows the Liberian 
MANPADS.): 

Figure 3: MANPADS to be Destroyed in Liberia, 2003: 

[See PDF for image]:

[End of figure]:

The State Department has provided approximately $200,000 to assist in 
the destruction of 8,155 MANPADS. As part of this effort, U.S. 
officials convinced the government of Bosnia and Herzegovina to destroy 
its entire stockpile of nearly 6,000 MANPADS. Actual destruction was 
performed by the international Stabilization Force,[Footnote 28] 
according to the State Department.

The United States is also providing countries with assessments of the 
security of their MANPADS arsenals. The United States is concerned that 
MANPADS stored in relatively insecure foreign arsenals could be 
vulnerable to theft or illicit transfer to countries of concern or 
nonstate entities. In fiscal year 2003, DOD's Defense Threat Reduction 
Agency (DTRA) conducted arsenal security assessments in six countries: 
Angola, Bosnia and Herzegovina, Cambodia, Ecuador, El Salvador, and 
Nicaragua. DTRA plans to provide assessments to six additional 
countries in fiscal year 2004--one country in Latin America, two in 
Asia, two in Africa, and one in Eastern Europe.[Footnote 29] The 
assessments included reviews of the physical structures and practices 
of security officials, recommendations for infrastructure 
improvements, and orientations for security personnel on U.S. military 
practices for securing arsenals. According to DTRA and State, poorly 
secured arsenals include those that are filled to over capacity, are 
relatively close in proximity to buildings or civilian populations, are 
inadequately maintained, or have poor facility security.

As an outcome of these security assessments, the United States is 
providing financial assistance to some countries that lack fiscal 
resources for U.S.-recommended infrastructure improvements. For 
example, in fiscal year 2003, the United States provided Serbia-
Montenegro with $150,000 for computers, software, training, and alarm 
systems to improve MANPADS inventory processes and security; and in 
fiscal year 2004, the United States will provide Cambodia with $233,000 
for U.S.-recommended upgrades. In addition, the State Department 
provided nearly $400,000 for stockpile management and physical security 
upgrades as part of the MANPADS destruction and threat reduction 
effort, according to State. As part of the president's February 2004 
budget proposal to Congress for fiscal year 2005, the State Department 
requested an additional $6 million above its previous annual $3 million 
program budget for small arms and light weapons destruction, in order 
to expand its bilateral efforts to destroy and secure MANPADS.

Disposition of U.S. Stinger Missiles Sold Overseas Is Unknown: 

To prevent the proliferation of the U.S. Stinger missile system, DOD 
monitors its end use in recipient countries. Although DOD has 
strengthened the requirements for monitoring Stinger missile systems 
after they have been sold to foreign countries, DOD has no requirement 
for DOD organizations responsible for end-use monitoring to keep 
records on the number and destinations of these Stingers. DOD's Stinger 
records are neither complete nor reliable. As a result, DOD cannot 
account for each Stinger sold abroad. In addition, because DOD has no 
procedures for performing Stinger inspections, security assistance 
organization[Footnote 30] (SAO) officials use inconsistent practices in 
conducting Stinger inspections and some are unclear about their 
inspection responsibilities.

DOD Reinstated Inspection Requirement for Stingers: 

The Arms Export Control Act (AECA) charges the President with 
establishing a program that provides for the end-use verification of 
defense articles that are particularly vulnerable to diversion or other 
misuse or defense articles whose diversion or other misuse could have 
significant consequences.[Footnote 31] In June 2003, DOD issued a 
directive[Footnote 32] requiring SAO officials to conduct annual 
inventory inspections of 100 percent of Stinger missile systems sold 
overseas. This directive reinstated the 100 percent inventory 
requirement[Footnote 33] that had been in place since 1982 when DOD 
began selling Stingers to foreign governments. In 1998, DOD had lowered 
the Stinger inspection requirement to 5 percent, stating that the 100 
percent inventory inspections duplicated the 100 percent inspections 
conducted by recipient governments twice a year. In 2003, DOD said that 
the 5 percent inventory requirement was inadequate and reinstated the 
original requirement to inventory 100 percent of Stinger systems.

DOD's inventory requirement applies to Stinger systems (1) sold 
overseas, (2) produced by a U.S.-authorized European consortium of four 
nations led by Germany, and (3) produced by Switzerland under a U.S.-
authorized program. DOD inventory inspections are meant to verify that 
every Stinger system, as identified by serial number, is still under 
the recipient government's possession and control. SAO officials are 
also required to verify the adequacy of physical security at facilities 
storing Stingers. This requirement is stated in the sales agreement--
the LOA--signed by the recipient country. DOD inspections are also 
meant to complement 100 percent inventory inspections that are 
performed by the recipient country. Recipient country officials are 
required by the LOA to allow review by SAOs to ensure that they are 
performing these inventory inspections.

Several DOD agencies and offices are responsible for controls over 
Stinger missile systems. The U.S. Army, which owns the Stinger missile 
system, is responsible for the missiles until they are shipped and 
received overseas by the recipient nation. After that, SAOs are 
responsible for monitoring the end-use of Stinger systems by recipient 
nations until these missiles are disposed of or used. The central 
component of Stinger missile end-use monitoring--missile inventory 
inspection--is performed by SAO officials or, in some cases, by defense 
attachï¿½s at the U.S. embassy. DOD also created the Golden Sentry 
program to monitor the end-use of sensitive weapons systems such as 
Stinger, in response to AECA requirements. DOD's Defense Security 
Cooperation Agency (DSCA) manages this program. DSCA's responsibilities 
include: (1) performing overall management of the Golden Sentry 
program, (2) issuing guidance to keep the Golden Sentry program current 
and updating policies and procedures for end-use monitoring, and (3) 
conducting visits to security assistance organizations and host nations 
to assess compliance with enhanced end-use monitoring procedures.

The Federal Managers' Financial Integrity Act of 1982 requires GAO to 
issue standards for internal control in the federal government. 
According to these standards,[Footnote 34] vulnerable assets such as 
inventories should be periodically counted and compared with control 
records, and exceptions should be examined.

DOD generates the following two primary types of records for its 
Stinger end-use monitoring: 

* First, the Army generates shipping records, which contain serial 
numbers for all Stingers sold overseas. Shipping records accompany 
Stinger missile shipments and pass to the custody of SAOs upon the 
Stinger shipment's arrival in the recipient country. These records 
serve as a baseline of all Stingers provided to the recipient country 
and as Stinger control records, providing SAOs with the serial numbers 
to be used in Stinger inventory inspections.

* Second, SAO officials produce annual inventory records. Inventory 
records are those records and materials that document the results of 
inventory inspections performed by SAOs. At the end of the year, each 
SAO is required to submit an end-of-year report on its Stinger missile 
inventory inspections. This type of inventory record--the end-of-year 
report--is used by DSCA to manage the Stinger missile end-use 
monitoring program.

To apply federal government internal controls standards, DOD would 
maintain reliable shipping records to serve as control records for 
conducting its Stinger inventory inspections. Consequently, DOD would 
establish consistent procedures for comparing these control records 
with Stinger inventories in annual inventory inspections.

DOD's Lack of Recordkeeping Requirements Resulted in Unreliable Stinger 
Control Records: 

DOD lacks reliable control records because there have been no DOD 
requirements for DOD organizations responsible for end-use monitoring 
to keep Stinger shipping records over the years. Without complete and 
accurate Stinger shipping records, SAO officials have no reliable 
control records against which to compare Stinger inventories.

DSCA, Army, and SAO officials said that Stinger shipping records are 
missing or incomplete. According to Army and SAO officials, there is no 
DOD requirement for DOD organizations responsible for end-use 
monitoring to maintain Stinger shipping records. However, without 
complete shipping records, DOD cannot reliably determine how many 
Stingers were sold overseas or their serial numbers. Furthermore, 
Stinger shipping records were missing for two main reasons, as follows: 

* First, the Army, DSCA, and SAO officials stated that most shipping 
records are in hard-copy form, and some were lost or misfiled over the 
years.

* Second, Army and DSCA officials said that there has been great 
pressure in recent years, particularly in the 1990s, to reduce 
paperwork at U.S. missions and offices overseas. Therefore, many older 
Stinger records were likely destroyed during efforts to dispose of 
older paperwork.

In comments on a draft of this report, DOD said that it has 
recordkeeping requirements for implementing agencies and SAOs regarding 
security assistance management. However, we found that these general 
recordkeeping requirements apply to Foreign Military Sales case 
managers, not to DSCA or SAOs, and to financial management purposes, 
not end-use monitoring.[Footnote 35] Furthermore, Army officials said 
that they were unaware of any requirement to maintain Stinger shipping 
records. DOD said that DSCA would amend the Security Assistance 
Management Manual (SAMM) to specifically identify the recordkeeping 
standards for end-use monitoring activities to ensure that the 
requirements are clear.

No single DOD office has maintained copies of all the Stinger shipping 
records. The two main offices that maintain such records--the Army and 
the SAOs--have some of the Stinger shipping records. In addition, DSCA 
has a database containing additional data on defense articles, 
including Stingers, authorized and delivered under the Foreign Military 
Sales program. However, we found discrepancies in the numbers of 
Stingers that different DOD offices show were sold to foreign 
governments. For example, one SAO reported in its 2003 inventory 
inspection of all Stinger missiles in its recipient country[Footnote 
36] that it found approximately 30 percent more Stingers than the 
number that the Army stated had been provided to that country. In a 
second example, a different SAO in 2002 reported the total number of 
Stingers received by the recipient country[Footnote 37] over the years 
as 156 missiles fewer than the number that the Army had on record.

According to data from the U.S. Army, the United States has exported 
7,551 Stinger missiles to 14 countries (plus Taiwan) since 1982 through 
DOD's foreign military sales program (see table 2).[Footnote 38] The 
Army reconstructed its information for us from a combination of its 
remaining original shipping records and limited inventory inspection 
records dating back to 1982. As a result of being constructed from 
incomplete data, some of the numbers in the table likely under-
represent the number of Stingers sold. We determined that Army data are 
not a reliable single source of information on the numbers and 
destinations of Stingers the United States has exported overseas. 
Because of our concerns about the reliability of the Army data, we 
looked at DSCA data on the number of Stinger systems exported by the 
United States since 1982. According to our analysis of the DSCA data, 
the United States has exported 8,331 Stinger missiles to 16 countries 
(plus Taiwan). This data is from DSCA's 1200 Series database, which 
shows the quantities and dates of Stingers delivered to foreign 
governments. DSCA provided us with this data, which we consolidated in 
this table. We performed data reliability checks on the 1200 Series 
database and determined that it was sufficiently reliable for 
comparison against the information provided by the Army. As table 2 
shows, there are significant discrepancies between Army and DSCA data 
on the number of Stinger missiles the U.S. has exported to foreign 
countries. For example, Army data shows the U.S. has not exported any 
Stinger missiles to Egypt. However, DSCA data indicates the U.S. has 
exported 89 Stingers to Egypt.

Table 2: Stinger Missiles Exported by United States to Foreign 
Countries, 1982-2004: 

Recipient country: Bahrain; 
Army missiles: 69; 
DSCA missiles: 139.

Recipient country: Denmark; 
Army missiles: 1140; 
DSCA missiles: 1140.

Recipient country: Egypt; 
Army missiles: 0; 
DSCA missiles: 89.

Recipient country: France; 
Army missiles: 82; 
DSCA missiles: 81.

Recipient country: Germany; 
Army missiles: 9; 
DSCA missiles: 19.

Recipient country: Greece; 
Army missiles: 408; 
DSCA missiles: 500.

Recipient country: Israel; 
Army missiles: 318; 
DSCA missiles: 318.

Recipient country: Italy; 
Army missiles: 611; 
DSCA missiles: 885.

Recipient country: Japan; 
Army missiles: 871; 
DSCA missiles: 1025.

Recipient country: Netherlands; 
Army missiles: 637; 
DSCA missiles: 646.

Recipient country: Pakistan; 
Army missiles: 120; 
DSCA missiles: 120.

Recipient country: Portugal; 
Army missiles: 33; 
DSCA missiles: 45.

Recipient country: Saudi Arabia; 
Army missiles: 601; 
DSCA missiles: 596.

Recipient country: Switzerland; 
Army missiles: 0; 
DSCA missiles: 10.

Recipient country: Taiwan; 
Army missiles: 2295; 
DSCA missiles: 2352.

Recipient country: Turkey; 
Army missiles: 217; 
DSCA missiles: 216.

Recipient country: United Kingdom; 
Army missiles: 140; 
DSCA missiles: 150.

Total missiles delivered: 
Army missiles: 7,551; 
DSCA missiles: 8,331. 

Sources: Department of the Army; GAO analysis of DSCA data.

[End of table]

Because some SAOs lack Stinger shipping records and cannot always get 
complete records from the Army, officials at DSCA and the three SAOs we 
visited said that SAO officials have in some cases relied on foreign 
government records. However, in August 2000, we reported[Footnote 39] 
that relying on the foreign government's records might pose a risk to 
achieving 100 percent accounting of the missiles because the 
reliability of accountability systems varies from country to country. 
We further reported that DSCA had discovered discrepancies in foreign 
governments' Stinger missile inventories after completing its annual 
inventory in December 1999. DSCA officials stated in August 2000 that 
they would investigate these discrepancies. We recommended that DOD 
reconcile discrepancies in foreign governments' Stinger missile 
inventories where discrepancies existed. DSCA said that its 2000 
inventory results showed no discrepancies that warranted corrections. 
However, the 2000 inventory required inspection of only 5 percent of 
Stingers and used unreliable Stinger control records. As of April 2004, 
our specific recommendation had not been implemented.

Some SAO officials stated that they prefer to receive Stinger serial 
number information from DOD. However, because DOD does not have 
complete original shipping records, SAO officials have sometimes had to 
rely on the recipient country or the European Stinger Project Group to 
provide records to perform the inventory inspections. For example, DSCA 
officials said that in 2003 the Japanese government provided the only 
available Stinger records in Japan. At one of the SAOs we visited, the 
latest SAO official arrived in 2003 to find there was no Stinger 
paperwork on record. At another SAO we visited, SAO officials had no 
record of the Stingers purchased from the United States and relied 
solely on the European consortium for serial number records for 
consortium-produced Stingers.

Stinger Inventory Inspections Are Impaired by Inconsistent Practices 
and Incomplete Inventory Records: 

DOD's inventory inspection efforts are impaired because DOD lacks 
procedures for conducting Stinger inspections and requirements for 
keeping inspection records. Without procedures for conducting Stinger 
inspections, DOD security assistance officials overseas use 
inconsistent practices to perform Stinger inventory and physical 
security inspections. In addition, DOD has no requirements for keeping 
records of inventory inspections. As a result, practices for keeping 
inventory inspection records have been left to the discretion of DOD 
officials at SAOs, DSCA, and the Army, and the quality of inventory 
recordkeeping varied widely among the SAOs we visited.

DOD Officials Use Inconsistent Practices to Perform Stinger 
Inspections: 

Officials at the Army and SAOs said that DOD has no procedures for 
performing Stinger inspections. As a result, SAO officials use 
inconsistent practices to perform Stinger inventory and physical 
security inspections. In addition, even though Stinger sales agreements 
require physical security inspections, DSCA has not issued procedures 
for performing physical security inspections at facilities storing 
Stingers. As a result, we found that SAOs use inconsistent practices in 
conducting security inspections, and SAO officials said they are 
unclear about their responsibilities. At three SAOs that we visited, we 
found the following differences in inspection practices: 

* At one SAO, officials said they had inventoried approximately 25 
percent of the recipient country's Stingers in 2003. This inspection 
involved opening the Stinger system container cases to read the serial 
numbers on the missile systems. SAO officials stated that they were 
unsure whether they were required under the new inventory requirements 
to open all of the Stinger system container cases but that this had 
been their practice for a few years. SAO officials said that they 
looked for noticeable security deficiencies, but were unaware that they 
were required to inspect the physical security of the Stinger system 
storage facilities.

* At a second SAO, officials said they had inventoried approximately 75 
percent of the country's Stingers in 2003. This inspection involved 
reading the serial numbers on the Stinger system container cases and 
opening approximately 10 percent of the container cases to read the 
serial numbers on the missile systems. SAO officials said they were 
unsure whether they were required under the new inventory requirements 
to open the Stinger container cases but that this had been their 
practice for several years. SAO officials said they performed a 
physical security inspection of the Stinger storage facilities, 
including inspecting the status of lighting, fencing, locks, keys, and 
guard postings. Officials stated that they inspected these security 
features because the primary SAO inspecting official had previous 
physical security experience.

* At a third SAO, officials said they inventoried 100 percent of the 
Stinger inventory in 2003 by reading the serial numbers on the Stinger 
system container cases. SAO officials said they did not open any of the 
container cases. In addition, SAO officials stated that they did not 
perform any physical security inspection of the Stinger system storage 
facilities because they knew of no requirement to do so.

We reported in August 2000 that DOD had similar problems in the routine 
monitoring of defense articles the United States sold 
overseas.[Footnote 40] At that time, we reported that DOD had not 
effectively implemented the routine monitoring requirement that its 
field personnel observe and report on foreign governments' use of U.S. 
defense articles and services transferred through the Foreign Military 
Sales program, including Stingers. DOD had not issued guidance 
specifying what monitoring was required. As a result, field personnel 
interpreted differently the requirements and activities that they were 
to perform. We recommended that DOD issue additional guidance for the 
routine observation of U.S. defense articles sold overseas. As of April 
2004, our specific recommendation had not been implemented.

The lack of inventory inspection procedures may result in Stingers not 
receiving the level of inspection envisioned by DOD and would impair 
DSCA's ability to collect consistent and useful inventory data 
necessary for managing the Stinger end-use monitoring program. DSCA 
officials said that DSCA planned to issue official procedures for 
performing inventory and physical security inspections at the end of 
2003 but had not done so at the time of this report. Notwithstanding 
the absence of inspection procedures, DSCA officials stated that SAOs 
are required to meet the new 100 percent inspection requirements in 
2004 and report on their inspection results by December 1, 2004. 
According to DSCA officials, in 2003 SAOs performed 100 percent 
inventory inspections of Stinger systems in 11 (or almost 60 percent) 
of the 17 countries (plus Taiwan) that have purchased Stingers.

DOD Lacks Complete and Reliable Records of Inventory Inspections: 

DSCA, Army, and SAO officials said that DOD lacks complete and reliable 
inventory inspection records. Army and SAO officials said the records 
deficiencies occurred because there have been no requirements for 
keeping records of Stinger inventory inspections over the years. In the 
absence of recordkeeping requirements, practices for keeping inventory 
inspection records have been left to the discretion of SAO, DSCA, and 
Army officials.

In the absence of recordkeeping requirements, we found that the 
condition of Stinger inventory inspection records overseas varied 
widely among the three SAOs we visited. For example, one SAO had most 
of its Stinger inventory inspection records from the past 5 years. 
Another SAO had almost no Stinger paperwork in place. Still another had 
a few scattered records with incomplete inventory inspection 
information contained in them.

In addition to the SAOs, we found that DSCA has gaps in its inventory 
inspection records. DSCA has maintained a total of 18 annual inventory 
inspection reports from SAOs over the 22-year history of Stinger sales. 
For 2002--the most recent year for which records were available--DSCA 
had on record inventory inspection reports of 6 of 16 countries (plus 
Taiwan) that received Stingers. Moreover, DSCA has no procedures for 
SAOs to report the results of their Stinger inventories. As a result, 
DSCA said that some SAOs report their Stinger missile inventories using 
missile serial numbers but that others do not.

U.S. Is Determining Feasibility of Countermeasures to Protect 
Commercial Aircraft: 

In response to the conference report accompanying the Emergency Wartime 
Supplemental Appropriations Act, 2003,[Footnote 41] DHS initiated a 2-
year system development and demonstration program in 2003 for a 
counter-MANPADS system. As we reported in January 2004,[Footnote 42] 
DHS faces significant challenges in adapting a military counter-MANPADS 
system to commercial aircraft. Such challenges include establishing 
system requirements, maturing technology and design, and setting 
reliable cost estimates. Our work on the best practices of product 
developers in government and industry has found that such challenges 
can be successfully overcome by using a knowledge-based approach.
[Footnote 43] Using this approach, product developers employ specific 
practices to ensure that a high level of knowledge regarding critical 
facets of the product is achieved at key junctures in development. We 
recommended that the Secretary of Homeland Security fully implement a 
knowledge-based approach in its counter-MANPADS development program; 
the Secretary fully concurred.

Department of Homeland Security Faces Technical Challenges Adapting 
Military Counter-MANPADS Systems to Commercial Aircraft: 

Concerned that the potential for terrorists to use MANPADS against 
commercial airliners has grown in recent years, the U.S. government is 
considering the installation of technical countermeasures on commercial 
aircraft. Members of Congress have also expressed concerns that 
civilians traveling by air must be protected while mitigating the 
potential financial burden for the airlines industry. DHS was tasked 
with researching the potential of adapting countermeasures already used 
by the U.S. military to the commercial fleet. In January 2004, DHS 
awarded the initial contracts for a 2-year program to develop and 
demonstrate a counter-MANPADS system for commercial aircraft. DHS faces 
significant challenges in adapting a military counter-MANPADS system to 
commercial aircraft in the initial phases of its program.

First, DHS is challenged with establishing system requirements to lay 
out the framework and end-state goals for the program. Requirements 
involving new technologies, system maintenance, system integration, and 
system security may involve trade-offs between competing objectives, 
such as performance and cost. This would enable DHS to derive the most 
effective solution at a realistic life cycle cost.

Second, DHS is challenged with developing the technology and design to 
a mature level so that it can be adapted for commercial use. For 
example, it is challenging to reduce the high false alarm rate found in 
missile warning systems used by the military. It also is challenging to 
increase the system's reliability by 10 times from the current 300 
hours expected on military systems to 3,000 hours required for 
commercial viability. Fitting a wide variety of commercial aircraft 
body types even though its design, placement, and integration will 
affect each type of aircraft differently and make all aircraft more 
costly to operate. DHS also is challenged with developing a plan to 
safeguard the new equipment on civilian aircraft in a variety of 
settings at airports both within the United States and abroad. Finally, 
it will be a challenge to develop a missile launch notification system 
that effectively passes warning information in the National Airspace 
System.

Third, DHS is challenged to develop reliable cost estimates regarding 
the procurement, integration, operation, and support of the 
countermeasures system on commercial aircraft. It will be challenging 
to provide a major capital investment to increase the contractors' 
capacity to quickly produce a large number of countermeasure systems. 
(The current military production capacity of four systems per month 
cannot meet the demand for any significant portion of the estimated 
6,800 aircraft in the civilian U.S. fleet.) 

Knowledge-Based Approach Has Been Adopted by Successful Product 
Developers: 

Challenges such as those faced by DHS's counter-MANPADS program can be 
significantly addressed through the use of a knowledge-based approach, 
as demonstrated by our past work[Footnote 44] on the best practices of 
leading product developers in industry and government. This approach 
helps decision makers make informed investment decisions based on 
knowledge they gain at three critical junctures or knowledge points 
during product development, which will reduce risks and increases the 
likelihood of successful outcomes. These three knowledge points are as 
follows: 

* Knowledge Point 1--Needs and resources are matched. This level of 
knowledge is attained when a match is made between a customer's needs 
and the developer's technical, financial, and other resources. 
Achieving a high level of technological maturity at the start of system 
development is a particularly important best practice. This means that 
the technologies needed to meet essential product requirements have 
been demonstrated to work in their intended environment.

* Knowledge Point 2--The product design is stable. This level of 
knowledge is attained when the product's design is shown to meet the 
customer's requirements. A best practice is to achieve design stability 
at the system-level critical design review, usually held midway through 
development. Completion of engineering drawings at the system design 
review provides tangible evidence that the design is stable.

* Knowledge Point 3--Production processes are mature. This level of 
knowledge is attained when it is demonstrated that the product can be 
manufactured within cost, schedule, and quality targets. A best 
practice is to achieve production maturity at the start of production. 
This means that all key manufacturing processes produce output within 
statistically acceptable limits for quality.

A knowledge-based approach also involves the use of controls or exit 
criteria to ensure that the required knowledge has been attained at 
each critical juncture. Using this approach will enable managers to (1) 
conduct activities to capture relevant product development knowledge, 
(2) provide evidence that knowledge was captured, and (3) hold decision 
reviews to determine that appropriate knowledge was captured to allow a 
move to the next phase. If the knowledge attained at each juncture does 
not confirm the business case on which the effort was originally 
justified, the program does not go forward.

Use of a knowledge-based approach has enabled leading organizations to 
deliver high quality products on time and within budget. Efforts that 
have not done so frequently experience poor cost, schedule, and 
performance outcomes. Figure 4 shows a comparison of a knowledge based 
approach with the DHS counter-MANPADS plan.

Figure 4: Comparison of Knowledge-Based Approach to DHS Program Plan: 

[See PDF for image]

[End of figure]

DHS Has Begun to Use a Knowledge-Based Approach: 

DHS included some knowledge-based elements in its original solicitation 
released on October 3, 2003. For example, DHS plans to conduct design 
reviews, require periodic performance assessments from the contractor, 
use an integrated product team to identify and resolve issues, conduct 
systems engineering work in both phases, and require the development of 
a prototype to help identify and resolve specific design and 
manufacturing risks.

During our review, we asked DHS to identify its controls or exit 
criteria for use in determining whether needed knowledge had been 
attained by the end of Phases I and II of its program. In its 
solicitation of October 3, 2003, DHS had required the contractor to 
satisfy certain criteria to receive payment for each milestone, but the 
Phase I exit criteria were not knowledge-based. They did not require 
the contractor to demonstrate that key product knowledge had been 
obtained. Rather, the criteria were based on the contractor providing 
information, such as the Long Lead Items List, at key payment 
milestones. Also, the Phase II exit criteria were not identified and 
were to be proposed by the contractor and subject to negotiation.

When GAO presented DHS officials with recommended exit criteria from 
our past reports, they agreed to integrate them into an updated 
solicitation and use them in monitoring the contractors' progress. For 
example, at Knowledge Point 1, exit criteria include the demonstration 
that critical technologies are mature and system requirements are 
finalized. At Knowledge Point 2, criteria include the completion of 90 
percent of engineering drawings at design review and the demonstration 
that a prototype's design meets requirements. At Knowledge Point 3, 
criteria include the demonstration that manufacturing processes are 
under statistical control. The use of this knowledge-based approach, 
including the use of exit criteria should help ensure that DHS's key 
decisions in developing and demonstrating a counter-MANPADS system are 
based on sufficient information.

Conclusion: 

The first MANPADS attack on a commercial aircraft outside of a conflict 
area in 2002 highlights a growing potential for terrorists to use these 
easily transportable weapons against commercial aircraft worldwide. 
Beginning in 2003, U.S. multilateral and bilateral diplomatic efforts 
to reduce this threat of MANPADS increased foreign governments' 
commitments to reduce MANPADS proliferation. If adequately implemented, 
these commitments could significantly improve multilateral controls 
over MANPADS exports, decrease excess stockpiles of MANPADS, and 
enhance security over government stocks of these weapons. However, 
obtaining foreign governments' commitments was only the first step 
toward reducing this proliferation; without mechanisms to monitor forum 
members' compliance with their commitments, assessing progress toward 
reducing MANPADS proliferation is difficult. Although the United States 
has afforded a high priority to securing and monitoring its exports of 
Stinger missile systems overseas, DOD's end-use monitoring system has 
serious deficiencies that undercut this purpose. DOD lacks reliable 
information on the Stinger weapons it has sold to foreign governments 
over 20 years because it has established no requirements for DOD 
organizations responsible for end-use monitoring to generate and 
maintain records on the numbers of Stingers shipped and inventoried 
each year and no procedures for consistently carrying out these 
inventories. As a result, DOD lacks the ability to periodically account 
for Stinger missile systems, compare the results against credible 
control records, and examine discovered exceptions.

Recommendations for Executive Action: 

Since multilateral forums lack mechanisms to monitor countries' 
implementation of their commitments to improve export controls over 
MANPADS, there are few means to assess the extent to which these 
commitments are helping to reduce worldwide MANPADS proliferation. 
Therefore, we recommend that the Secretary of State develop a strategy 
for working within these forums to establish mechanisms to monitor and 
report on (1) countries' implementation of their commitments and (2) 
the impact such implementation of commitments has on the flow of 
MANPADS to black and gray markets.

Inadequate recordkeeping prevents DOD from knowing the disposition of 
its Stinger missile systems sold overseas. Therefore, we recommend that 
the Secretary of Defense establish standardized recordkeeping 
requirements for all U.S. organizations responsible for maintaining 
records on Stinger systems sold overseas.

DOD's records on its Stinger missile system sales overseas are 
incomplete, unreliable, and difficult to find and retrieve. In 
addition, its records are divided among multiple organizations 
worldwide, and the quality and extent of the records varied widely 
among three security assistance organizations we visited. Therefore, we 
recommend that the Secretary of Defense establish a centralized 
electronic database to (1) consolidate the records of the U.S. Army, 
DSCA, and U.S. security assistance organizations in countries with 
Stinger missile systems to establish a baseline of the worldwide 
Stinger inventory and (2) track the inventory worldwide.

Because DOD lacks Stinger inspection procedures, DOD officials overseas 
use inconsistent practices to perform Stinger inspections. Therefore, 
we recommend that the Secretary of Defense direct DSCA to issue 
standardized inventory and physical security inspection procedures for 
U.S. security assistance organization officials.

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Secretaries of Defense, 
Homeland Security, and State for their review and comment. We received 
written responses from each that are reprinted in appendixes II, III, 
and IV. Homeland Security and State also provided us with technical 
comments, which we incorporated as appropriate.

DOD stated that it would amend its security assistance manual to 
specifically identify record-keeping standards for end-use monitoring. 
DOD also said that it is developing a database that would consolidate 
the types of information noted in our recommendation. Finally, DOD 
stated that DSCA and the Combatant Commands[Footnote 45] are developing 
checklists and procedures that would provide guidance to SAOs 
conducting Stinger inventory inspections.

DHS, as a result of implementing our previous recommendation to adopt a 
knowledge-based approach, commented that its counter-MANPADS program 
has in place milestones with entrance and exit criteria that must be 
completed by the contractors before they can advance to the next stage. 
These milestones include the System Requirements Review, Interim Design 
Review, Preliminary Design Review, and the Critical Design Review. 
Entrance and exit criteria for the Systems Requirements Review include 
the completion of a Systems Concept and Concept of Operations, a 
System-level Requirements Analysis, and a Configuration Control 
Document.

The State Department concurred with our recommendations to the 
Secretary of State, commended the report, and agreed that addressing 
how participating governments implement the MANPADS policy undertakings 
made in December 2003 is a key next step. Consequently, the U.S. 
government and other Wassenaar states are examining implementation 
during 2004 and will continue to do so in future years, according to 
the department. The State Department also provided technical comments 
that we incorporated as appropriate.

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to appropriate congressional committees and to the Secretaries of 
Defense, Homeland Security, and State. We also will make copies 
available to others upon request. In addition, the report will be 
available at no charge on the GAO Web site at 
[Hyperlink, http://www.gao.gov].

If you or your staff has any questions concerning this report, please 
contact me at (202) 512-8979 or at [Hyperlink, [email protected]]. A 
GAO contact and staff acknowledgments are listed in appendix V.

Signed by: 

Joseph A. Christoff:
Director, International Affairs and Trade: 

[End of section]

Appendixes: 

Appendix I: Scope and Methodology: 

To assess the nature and extent of the man-portable air defense systems 
MANPADS threat, we met with officials at the Departments of Defense, 
State, and Homeland Security, and at the intelligence agencies. We also 
met with foreign government officials in Austria, Germany, and the 
United Kingdom, and exchanged correspondence with government officials 
in France. In addition, we met with representatives of the Secretariats 
of the Wassenaar Arrangement and of the Organization for Security and 
Cooperation in Europe in Vienna. In addition, we reviewed U.S. 
documents, including classified and unclassified State Department 
cables, reports, and briefing slides presented to multinational forums, 
and testimony before congressional committees. We also requested to 
meet with officials of the National Security Council to discuss 
prioritization of terrorist threats, but they declined to meet with us 
or respond to our questions.

To assess the U.S. government efforts to control the worldwide 
proliferation of MANPADS, we reviewed documents and interviewed 
officials in State Department's Nonproliferation Bureau Office of 
Export Control and Conventional Arms Nonproliferation Policy, Office of 
Export Control Cooperation, Office of Policy, Public Affairs and 
Congressional Relations; the State Department's Political and Military 
Affairs Bureau Office of Weapons Removal and Abatement (whose MANPADS 
officials formerly were in the Office of Plans, Policy and Analysis 
until September 2003); and the State Department's Arms Control Bureau 
Office of Conventional Arms Control; as well as the Department of 
Defense's (DOD) Defense Threat Reduction Agency On-site Inspection 
Directorate Interagency Liaison for Europe. To assess the reliability 
of the data provided by the State Department on MANPADS destroyed, 
committed to be destroyed, and U.S. funds expended on the destruction 
and infrastructure improvements to foreign arsenals, we reviewed 
numerous State Department cables, reviewed contractor documentation for 
some MANPADS destruction, and interviewed State officials regarding 
their data collection methods. We determined the State data was 
sufficiently reliable for our reporting purposes. We also obtained and 
reviewed documents and interviewed representatives of the Wassenaar 
Arrangement and the Organization of Security and Cooperation in Europe 
(OSCE) in Vienna, as well as State officials at the U.S. Mission to the 
OSCE and the U.S. Embassy in Vienna. To obtain views of other countries 
on the impact of these multilateral forums on MANPADS proliferation, we 
reviewed foreign government documents and interviewed government 
officials of Austria, France, Germany, and the United Kingdom.

To assess DOD's end-use monitoring of the U.S.-exported Stinger 
missile, we reviewed documents and interviewed officials at DOD's 
Defense Security Cooperation Agency (DSCA), the U.S. Army, and State. 
We also reviewed documents and met with officials at the U.S. European 
Command in Stuttgart, Germany; the Office of Defense Cooperation in 
Bonn, Germany; the U.S. Embassy in Berlin, Germany; the Office of 
Defense Cooperation in Ankara, Turkey; and the Office of Defense 
Cooperation in London, United Kingdom. In addition, we toured Stinger 
missile storage facilities in Germany and the United Kingdom and 
observed Stinger missile inventory inspections in Turkey. We also had 
telephone discussions with representatives of the Raytheon Corporation, 
the company that produces Stinger missiles for the U.S. Army. To assess 
the reliability of DOD's data on the number and destinations of Stinger 
missiles sold overseas, we reviewed documents and interviewed officials 
at the Army and DSCA. As DOD relies on data provided by the Army to 
track Stingers sold overseas, we assessed those data. In addition, we 
also compared the Army's data to data compiled by DSCA, which DOD does 
not use to track Stingers overseas. Based on prior GAO work, and a 
reasonableness check of the DSCA data, we determined that the DSCA data 
were sufficiently reliable for the purposes of establishing overseas 
Stinger sales, and could therefore serve as a check on the Army data 
that are used by DOD. We learned that the Army generated their data 
from Stinger shipping records, which include the Stinger serial 
numbers, and from Stinger inventory inspection records going back to 
1982. During our interviews, questions arose about the completeness of 
the Army data; when we compared the Army data with the data compiled by 
DSCA, we found that Army records were indeed incomplete. As a result, 
we determined that the Army data were not sufficiently reliable for the 
purposes of tracking overseas Stinger missile sales.

To assess the Department of Homeland Security's efforts to develop 
technical countermeasures to minimize the threat of a MANPADS attack, 
we compared DHS's plan for its counter-MANPADS system development and 
demonstration program plan against the best practices of commercial and 
military acquisitions identified in our past reports. We focused on 
whether DHS will have sufficient information to make knowledge-based 
decisions at each milestone. To determine what military countermeasures 
are available for adaptation to commercial aircraft and what their 
performance capabilities, cost, and schedule ramifications might be, we 
met with DOD, Air Force, Army, and Navy officials, and analyzed 
relevant documentation, including studies and test reports. We 
interviewed representatives from Northrop Grumman, Boeing, BAE Systems, 
Raytheon Corporation, and Sanders Design International regarding 
countermeasure systems currently in production or development. We also 
met with representatives from the airline industry, air transportation 
association, and RAND. We conducted our work from April 2003 through 
March 2004 in accordance with generally accepted government auditing 
standards.

[End of section]

Appendix II: Comments from the Department of Defense: 

DEFENSE SECURITY COOPERATION AGENCY:
WASHINGTON, DC 20301-2800:

MAY 0 2004:

In reply refer to: 1-04/006190-P3:

Mr. Joseph A. Christoff:

Director, International Affairs and Trade 
U.S. General Accounting Office:

441 G Street, N. W. 
Washington, DC 20548:

Dear Mr. Joseph A. Christoff,

This is the Department of Defense (DoD) response to the GAO Draft 
report, "Nonproliferation: Further Improvements Needed in U.S. Efforts 
to Counter Threats from Man-Portable Air Defense," dated 16 April 2004 
(GAO-04-519).

DoD has reviewed the draft report and agrees with the recommendations 
that we improve record-keeping and inventory procedures. Our specific 
comments concurring with these recommendations are provided below. 
Although we concur with the recommendations, there are several areas 
within the draft report where corrections are needed for technical 
accuracy. For example, the report does not recognize the policy 
guidance we have already issued regarding End-Use Monitoring (EUM) 
requirements for Stinger missiles or the implementing directives that 
have been issued by the Combatant Command visited by the GAO. Our 
comments regarding these technical discrepancies are also included in 
this memorandum.

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
establish standardized record-keeping requirements for all U.S. 
organizations responsible for maintaining records on Stinger systems 
sold overseas. (p. 34/GAO Draft Report):

DoD RESPONSE: Concur. DoD 5105.38-M, "Security Assistance Management 
Manual (SAMM)" and DoD 7000.14-R, "Financial Management Regulation," 
Volume 15, specify record-keeping requirements for implementing 
agencies and security assistance organizations (SAOs). To make sure 
these requirements are clear, DSCA will amend the SAMM to specifically 
identify the record-keeping standards for End-Use Monitoring (EUM) 
activities.

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense 
establish a centralized electronic database to 1) consolidate the 
records of the U.S. Army, DSCA, and U.S. security assistance 
organizations in countries with Stinger missile systems to establish a 
baseline of the worldwide Stinger inventory and 2) track the inventory 
worldwide. (p. 34/GAO Draft Report):

DoD RESPONSE: Concur. DSCA is developing an automated EUM tool that 
will be incorporated into the Security Cooperation Information Portal 
(SCIP) and will consolidate the data recommended by the GAO report. 
Deployment of this tool is tentatively planned for October 2004. It 
will include the following:

* It will give the security assistance community (e.g., DSCA, 
implementing agencies, Combatant Commands, security assistance 
organizations and host nations) access to input and view data regarding 
deliveries and inventory information/controls for Communication 
Security (C4ISR) articles, STINGER, Advanced Medium Range Air-to-Air 
Missile (AMRAAM), Tube-Launched, Optically-Tracked, Wire-Guided (TOW 
II-B) missiles, JAVELIN missiles, Night Vision Devices (NVD), cruise 
missiles, unmanned aerial vehicles, and articles and services provided 
under grant assistance programs.

* It will allow for entry of serial numbers, notes, inspection 
histories, technical details, delivery data, current inventory data, 
Presidential Determination dates, and other similar data required to 
successfully track and monitor defense articles and services.

* It will be secure and compartmentalized by country and Combatant 
Command ensuring that only users with a need-to-know may access 
specific data. Some users (e.g., DSCA and implementing agencies) will 
have access to all data.

* It will provide a method to track, extract, and report on all data.

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense 
direct the Defense Security Cooperation Agency to issue standardized 
inventory and physical security inspection procedures for U.S. security 
assistance organization officials. (p. 34/GAO Draft Report):

DoD RESPONSE: Concur. DSCA has developed checklists for use by EUM 
Tiger Teams evaluating each of the articles listed as Enhanced EUM 
articles which includes Stinger missiles. In October 2003, DSCA 
provided the Combatant Commands draft copies of these checklists. The 
checklists are currently being staffed by DSCA to the implementing 
agencies for comments and recommendations prior to publication and 
dissemination. These checklists will help ensure that EUM Tiger Team 
members are reviewing items completely and consistently. It will also 
help the SAOs to understand what the Tiger Teams will be assessing. In 
addition to these checklists, each Combatant Command with Stinger 
Missiles is developing their own EUM standard operating procedures. 
These procedures will include checklists and other more detailed 
guidance for the SAOs.

General Comments:

The purpose of this GAO report was "... to assess (1) the nature and 
extent of the MANPADS threat, (2) the Department of State's efforts to 
control the international proliferation of MANPADS, (3) the Department 
of Defense's end-use monitoring of Stinger missiles, and (4) the 
Department of Homeland Security's efforts to develop technical 
countermeasures." (p. 1) The recommendations directed toward the 
Department of Defense and the focus of our technical comments below 
pertain to number 3 - our end-use monitoring (EUM) program.

The audit reviewed EUM inventory procedures and discussed at length 
record-keeping practices. These are valid topics and the report cited 
some areas where we need to improve. We are committed to our EUM 
program and will implement the GAO recommendations to enhance the 
targeted areas. While the GAO report highlighted some issues, it did 
not address many aspects of our total EUM program. There are several 
pieces to our overall export control program that must all be 
considered in any evaluation of its effectiveness.

There are several procedures we have in place to ensure that our weapon 
system technologies are protected and proliferation and terrorist risks 
are mitigated. In fact, our monitoring process begins before a transfer 
ever takes place. Our processes are extensive and cover a range of 
activities that occur before, during, and after a transfer. We check 
vigorously (1) who we sell to, and (2) what they do with it.

Under security assistance procedures, the Department of Defense only 
provides defense articles, services and training to foreign governments 
and international organizations that have been approved by the 
Department of State and determined by the President as supporting our 
national security and foreign policy objectives. Each country we sell 
Stinger missiles to must in fact be "eligible" - as determined by the 
Department of State and the President on a country-by-country basis. 
Each proposed transfer is thoroughly vetted by many different 
organizations and offices to ensure releasability, disclosure, and 
other concerns are addressed. Foreign customers' requests for Stinger 
missiles are coordinated closely with the Combatant Commands and the 
U.S. country team. The U.S. country team must assess several aspects of 
the transfer to include political impacts in the region as well as the 
ability of the host nation and the security assistance organization in-
country to properly perform end-use monitoring on the missiles. Formal 
Congressional Notification is required prior to offers of Stinger 
missiles that meet required dollar thresholds. Bottom line: The foreign 
customers to whom we provide Stinger missiles are trusted partners. Our 
vetting and review processes give us a high level of confidence that 
the missiles provided under security assistance programs do not pose a 
terrorist threat. The draft report (p. 2) points out that "... 20 
countries have produced at least 30 different types of MANPADS, with 
between 500,000 and 750,000 weapons believed to be in the worldwide 
inventory today." These missiles, transferred by other countries, pose 
the more significant threat.

As indicated in the audit, our EUM program includes inventory and 
inspection requirements to be performed by the recipient nation as well 
as our USG security assistance organizations. We recognize the resource 
burden on our security assistance organizations (SAOs) and are working 
with the Defense Threat Reduction Agency (DTRA) to supplement their 
inventory activities. The DTRA personnel are well-versed in inspection 
procedures and should help us ensure inventories are completed 
accurately, consistently, and in a more timely manner.

Specific Comments:

1. Title/Highlight Page. "Because DoD has not required DoD agencies to 
retain these records, it does not know how many Stingers have been sold 
overseas."

Page 21. "DoD lacks reliable control records because there have been no 
DoD requirements for keeping Stinger shipping records over the years."

DoD Comment: DoD agencies are required to retain security assistance-
related records - which would include Stinger shipping records. These 
requirements have been in-place for many years and are found in DoD 
5105.38-M, "Security Assistance Management Manual (SAMM)," 3 October 
2003, Chapters 6 and 8, and DoD 7000.14-R, "Financial Management 
Regulation," Volume 15, Chapter 6, January 2002. With the current 
emphasis we are placing on EUM we recognize that more specificity about 
tracking and retaining EUM records would be helpful. The EUM 
functionality currently in-work for the Security Cooperation 
Information Portal (SCIP) should allow us to consolidate existing 
records and make it easier to track these records. As stated in our 
response to Recommendation #1, we will amend the SAMM to make sure the 
record-keeping standards for End-Use Monitoring (EUM) activities are 
more clear.

2. Title/Highlight Page. "DoD officials overseas use inconsistent 
practices when inspecting Stinger inventories because DoD lacks 
procedures for conducting these inspections."

Page 26. "The lack of inventory inspection procedures may result in 
Stingers not receiving the level of inspection envisioned by DoD and 
would impair DSCA's ability to collect consistent and useful inventory 
data necessary for managing the Stinger end-use monitoring program."

DoD Comment: DoD has provided procedures for conducting Stinger 
inventories and inspections---both with regard to inspecting record-
keeping as well as inventory procedures. Procedures for Stinger 
inventories were provided in DSCA Policy Memorandum 03-10, dated 4 June 
2003. Specifically, the policy required that "Except for missiles 
deployed to hostile areas, the SAO will physically inventory 100 
percent of in-country Stinger missiles, grip stocks and other essential 
components annually. The inventory must include review of the 
recipient's records of monthly two-man verifications as required by the 
Stinger/MANPADS LOA or other arms transfer document note. Unless 
problems indicate the necessity for such action, the manufacture sealed 
missile and weapon round containers should not be opened during the 
inventory." DSCA Policy Memorandum 04-11, dated 2 April 2004, included 
a draft Stinger missile inventory checklist. This checklist provides 
detailed guidance on facility and security requirements as well as 
specific inspection standards to be used by EUM Tiger Teams. The 
checklist also provides signs to look for to identify any tampering 
that may have been done to the missile. These memoranda were 
incorporated in the SAMM, Chapters 5 and 8. Additionally, the Combatant 
Commands' EUM directives and Standard Operating Procedures should 
provide more detailed guidance for these inventories. For example, 
EUCOM Directive Number 90-5, Annex A, "Stinger/MANPADS Procedures/ 
Requirements," reiterates guidance in the DSCA policy memoranda and 
includes a detailed checklist to verify SAO inspection actions are 
complete. PACOM and CENTCOM, the other Combatant Commands with 
countries who have purchased Stinger missiles under Foreign Military 
Sales (FMS), have issued similar guidance. DSCA recognizes that even 
more information may be needed and is adding pictures to our checklists 
to help ensure these inventories are consistent across the Combatant 
Commands.

3. Page 22. "Army and DSCA officials said that there had been great 
pressure in recent years, particularly in the 1990's, to reduce 
paperwork at U.S. missions and offices overseas. Therefore, many older 
Stinger records were likely destroyed during efforts to dispose of 
older paperwork."

DoD Comment: This statement should not be attributed to DSCA officials.

4. Page 24. "However, in August 2000, we reported that relying on 
foreign government's records might pose a risk to achieving 100-percent 
accounting of the missiles because the reliability of accountability 
systems varies from country to country. We further reported that DSCA 
had discovered discrepancies in foreign governments' Stinger missile 
inventories after completing its annual inventory in December 1999. 
DSCA officials stated in August 2000 that it would investigate these 
discrepancies. We recommended that DoD reconcile discrepancies in 
foreign governments' Stinger missile inventories, where discrepancies 
existed. However, as of April 2004, our specific recommendation has not 
been implemented."

DoD Comment: DSCA agrees that foreign governments' records should not 
substitute for mandatory USG inventories. As agreed to in our response 
to the August 2000 audit, DSCA monitored the CY2000 inventory results, 
and found no discrepancies in the reports that warranted corrections. 
In addition, in December 2002, DSCA published DSCA Policy Memorandum 
02-43 that requires the SAO to "establish inventory and reporting 
procedures with the host nation for all Enhanced EUM items." 
Additionally, in June 2003, DSCA published DSCA Policy Memorandum 03-10 
requiring 100% accountability of Stinger missiles by the SAO. The 
requirements in these memoranda have been incorporated into the SAMM.

5. Page 24. "However, because DoD does not have complete original 
shipping records, SAO officials have sometimes had to rely on the 
recipient country or the European Stinger Project Group to provide 
records to perform the inventory inspections. For example, DSCA 
officials said that in 2003 the Japanese government provided the only 
available Stinger records in Japan. At one of the SAOs we visited, the 
latest SAO official arrived in 2003 to find there was no Stinger 
paperwork on record. At another SAO we visited, SAO officials had no 
record of the Stingers purchased from the United States."

DoD Comment: DSCA agrees that in some instances the SAOs are overly-
dependent on host nation records. We are addressing this problem 
through our policy guidance, the EUM SCIP functionality, and our 
Familiarization Visits. However, the reference above to the Japan 
inventories is not correct. In fact, in response to the DSCA Policy 
Memorandum 03-10, in 2003, Mutual Defense Assistance Office (MDAO)-
Japan (the USG SAO-equivalent office in Japan) conducted a 100% 
inventory of the Japanese Self Defense Forces' Stingers and provided 
corresponding serial numbers to DSCA.

6. Page 26. "We reported in August 2000 that DoD had similar problems 
in the routine monitoring of defense articles the United States sold 
overseas. At that time, we reported that DoD had not effectively 
implemented the requirement for routine monitoring that its field 
personnel observe and report on foreign governments' use of U.S. 
defense articles and services transferred through the Foreign Military 
Sales program, including Stingers.

DoD had not issued guidance specifying what monitoring was required. As 
a result, field personnel interpreted differently the requirements and 
activities that they were to perform. We recommended that DoD issue 
additional guidance for the routine observation of U.S. defense 
articles sold overseas. As of April, our specific recommendation had 
not been implemented."

DoD Comment: DSCA Policy Memoranda 02-43 (4 December 2002), provides 
guidance to the SAOs regarding their EUM responsibilities. Included in 
this policy is the requirement to conduct Routine EUM visits in 
compliance with existing guidance in pamphlet "End-Use Monitoring of 
Defense Articles & Services." While we are focusing most of our efforts 
on the Enhanced items, we also expect the security assistance community 
to conduct Routine EUM in conjunction with other assigned duties. This 
expectation has been communicated through the policy memorandum cited 
above and during Familiarization and Tiger Team visits as well as other 
out-reach programs (e.g., security assistance conferences).

7. Page 27. "In addition to the SAOs, we found that DSCA has gaps in 
its inventory inspection records. DSCA has maintained a total of 18 
annual inventory inspection reports from SAOs over the 22-year history 
of Stinger sales. For 2002 - the most recent year for which records 
were available - DSCA had on record 6 of 18 countries' inventory 
inspection reports. Moreover, DSCA has no procedures for SAOs to report 
the results of their Stinger inventories to DSCA. As a result, DSCA 
said that some SAOs report their Stinger missile inventories to DSCA 
using missile serial number but that others do not."

DoD Comment: DSCA provided specific reports that were requested by the 
GAO for Turkey, the U.K., Pakistan, Greece, and Germany. With regard to 
procedures for SAOs to report results of Stinger inventories---DSCA 
Policy memorandum 03-10 mandates that the Combatant Commands 
consolidate and provide Stinger inventory reports to DSCA by 1 December 
of each year.

The Department of Defense appreciates the opportunity to comment on the 
draft report. My point of contact on this matter is Mr. Leon Yates. He 
may be contacted by e-mail: [email protected] or by telephone at 
(703) 601-3865.

Sincerely,

Signed by: 

TOME H. WALTERS, JR. 
LIEUTENANT GENERAL, USAF 
DIRECTOR: 

The following are GAO's comments on the Department of Defense letter 
dated May 7, 2004.

GAO Comments: 

1. We incorporated DOD's comments on how it vets and reviews each 
proposed transfer of Stinger missiles to foreign governments to present 
a description of the review that occurs prior to delivery and 
monitoring of Stingers. According to DOD, it provides defense articles, 
services, and training to foreign governments and international 
organizations that have been approved by State and determined by the 
President as supporting U.S. national security and foreign policy 
objectives. DOD said that each proposed transfer of Stinger missiles is 
thoroughly vetted by many different organizations and offices, thus 
providing DOD a high level of confidence that the missiles under 
security assistance programs do not pose a terrorist threat. However, 
these procedures do not negate the need for rigorous and comprehensive 
end-use monitoring of Stingers after their delivery to recipients.

2. In its comments, DOD stated that it has recordkeeping requirements 
for implementing agencies and security assistance organizations 
regarding security assistance management.[Footnote 46] However, the DOD 
recordkeeping requirements to which DOD referred apply specifically to 
(1) case managers of Foreign Military Sales transfers, not to 
organizations responsible for end-use monitoring and to (2) Stinger 
missiles sold through Foreign Military Sales, not those produced by 
European countries under license agreement with the United States 
(roughly two-thirds of Stingers produced worldwide). DOD said that it 
would amend the appropriate security assistance manual to specifically 
identify the recordkeeping standards for end-use monitoring activities 
to ensure that the requirements are clear.

3. DOD said it has provided procedures for conducting Stinger 
inventories and inspections, regarding inspection recordkeeping and 
inventory procedures. The document that DOD cited, DSCA Policy 
Memorandum 03-10, dated June 4, 2003, establishes a requirement for 
conducting a 100 percent annual Stinger inventory, but does not provide 
detailed procedures for the SAOs on how such inventories are to be 
conducted. The checklists noted in DSCA Policy Memorandum 04-11, dated 
April 2, 2004, (1) are directed to teams evaluating SAO inspections, 
not to the SAOs themselves, (2) were provided as draft copies to 
Combatant Commands only in October 2003, and (3) are currently out for 
comment and recommendations prior to publication and dissemination, 
according to DOD. Thus, these checklists had no impact on any of the 
inventories or other data that we reviewed. Furthermore, DOD's comments 
about Combatant Commands' directives are contradictory: DOD states that 
the Combatant Commands are both developing these procedures and have 
already issued them. 

4. DOD stated we should not attribute to DSCA officials the point that 
there had been great pressure in recent years to reduce paperwork at 
U.S. missions and offices overseas. However, a DSCA official made this 
statement. 

5. DOD said that the 2000 inventory results showed no discrepancies 
that warranted corrections. However, the 2000 inventory required 
inspection of only 5 percent of Stingers and used unreliable Stinger 
control records. As of April 2004, our specific recommendation had not 
been implemented. 

6. DOD stated that our finding that in 2003 the Japanese government 
provided the only available Stinger records in Japan is incorrect. DOD 
stated that the relevant U. S. office in Japan conducted a 100 percent 
inventory of Stingers in-country and provided corresponding serial 
numbers to DSCA. However, we asked DOD for documentary evidence to show 
that this inventory did not rely on foreign government Stinger records, 
but DOD provided none. 

7. DOD said that it implemented our 2000 recommendation through 
issuance of DSCA Policy Memorandum 02-43, dated December 4, 2002, which 
established SAO responsibilities for end-use monitoring. This guidance 
instructed SAOs to conduct routine end use monitoring with host 
nations, using a December 1996 pamphlet, End-Use Monitoring of Defense 
Articles & Services, incorporated into Appendix 5 of a June 2001 
document, The Management of Security Assistance, to be found at a 
listed Web site. We reviewed these documents and found them 
insufficient to address our 2000 recommendation. For example, the 2002 
DSCA Policy Memorandum lists a requirement to conduct routine end-use 
monitoring, but does not provide procedures or detailed guidance for 
doing so. 

8. We said that DSCA has gaps in its inventory inspection records and 
that DSCA has no procedures for SAOs to report the results of their 
Stinger inventories. DOD commented that DSCA provided specific reports 
that we requested and that DSCA Policy Memorandum 03-10 mandates that 
the Combatant Commands consolidate and provide Stinger inventory 
reports to DSCA by December 1 of each year. First, DSCA did not dispute 
our finding that DSCA has maintained a total of 18 annual inventory 
inspection reports from SAOs over the 22-year history of Stinger sales 
or that for 2002, DSCA had on record inventory inspection reports for 6 
of 16 countries (plus Taiwan). Second, DSCA did not provide only those 
reports it mentioned in response to our specific request. On September 
16, 2003, we requested from DSCA all inventory inspection records 
related to Stingers, including records for those countries that we 
planned to visit. On October 17, 2003,DSCA provided requested records 
for multiple countries, including 4 countries that we did not plan to 
visit; it did not provide the requested records for the United Kingdom, 
which we did plan to visit. 

[End of section]

Appendix III: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security 
Science and Technology Directorate 
Washington, DC 20528:

Homeland Security:

May 5, 2004:

Mr. Norman J. Rabkin 
Managing Director 
Homeland Security and Justice 
U.S. General Accounting Office 
Washington, DC 20548:

Dear Mr. Rabkin:

Thank you for the opportunity to review the draft report, 
Nonproliferation: Further Improvements Needed in U. S. Efforts to 
Counter Threats from Man-Portable Air Defense Systems.

Overall, the report looks fine. However, we recommend that the last 
sentence of the second paragraph on page 29 be changed from "Finally, 
it will be a challenge to develop a corresponding air traffic control 
missile launch detection system" to "Finally, it will be a challenge to 
develop a missile launch notification system that effectively passes 
warning information in the National Airspace System." Additionally, it 
might be useful to note that the program has in place a number of 
milestones, complete with entrance and exit criteria that must be 
completed by the contractors before they can advance to the next stage. 
Some examples of these milestones include the System Requirements 
Review, Interim Design Review, Preliminary Design Review, and the 
Critical Design Review. Examples of entrance and exit criteria for the 
System Requirements Review include such things as the completion of a 
System Concept and Concept of Operations, a System-level Requirements 
Analysis, and a Configuration Control Document."

Please let us know if you have questions regarding our recommendations. 
The point of contact for this action is Mr. Thomas Krones 202 402 5861 
[email protected].

Signed for: 

Anna F. Dixon:

Director, Bankcard Programs and GAO/OIG Liaison: 

[End of section]

Appendix IV: Comments from the Department of State: 

United States Department of State 
Assistant Secretary and Chief Financial Officer:
Washington, D. C. 20520:

Ms. Jacqueline Williams-Bridgers 
Managing Director:
International Affairs and Trade 
General Accounting Office 
441 G Street, N.W. 
Washington, D.C. 20548-0001:

MAY 6 2004:

Dear Ms. Williams-Bridgers:

We appreciate the opportunity to review your draft report, 
"NONPROLIFERATION: Further Improvements Needed in U.S. Efforts to 
Counter Threats from Man-portable Air Defense System," GAO Job Code 
320187.

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report.

If you have any questions concerning this response, please contact 
Ronald Parson, Econ Commercial Officer, Bureau of Nonproliferation, at 
(202) 647-0397.

Sincerely,

Signed by: 

Christopher B. Burnham: 

cc: GAO - Patrick Hickey 
NP - Susan Burk 
State/OIG - Mark Duda 
State/H - Paul Kelly:

Department of State Comments on GAO Draft Report NONPROLIFERATION: 
Further Improvements Needed in U.S. Efforts to Counter Threats from 
Man-Portable Air Defense Systems (GAO-04-519, GAO Job Code 320187):

The State Department commends the General Accounting Office for its 
report on Man-Portable Air Defense Systems (MANPADS). These weapons are 
indeed a deadly threat to civil as well as military aviation, and have 
the potential for causing great economic dislocation through disruption 
of air travel. For this reason, the Administration has pursued an 
aggressive diplomatic bilateral and multilateral strategy to address 
the threat posed by these weapons. In a variety of fora, during 2003 
all but a few of the producers/exporters of MANPADS have made strong 
commitments with respect to export controls, security for stockpiles at 
home and when exported, and the importance of eliminating excess or 
obsolete MANPADS. Russia, China, France, and the UK all made such 
statements in the G-8 and or APEC. A number of other governments joined 
those statements and elaborated on them in the Wassenaar decision.

We note the GAO's recommendation that the State Department develop a 
strategy to work in multilateral fora "to establish mechanisms for 
assessing foreign governments' implementation of their commitments to 
reduce MANPADS proliferation," and acknowledge that these multilateral 
political fora - the G-8, APEC, and the Wassenaar Arrangement - lack 
formal mechanisms to monitor members' implementation of commitments. We 
share the GAO view that addressing how participating governments 
implement the policy undertakings made in December 2003 is a key next 
step. It is for this reason that the United States and other Wassenaar 
states are examining implementation during 2004, and will continue to 
do so in future years.

However, as GAO acknowledges, the G-8 and APEC are not organizations 
but multilateral processes for coordinating national policies. Although 
more formally structured, with an organizing document and a (very 
small) secretariat, the Wassenaar Arrangement too is a policy 
coordinating forum, albeit one specifically focused on export controls 
for munitions and related dual-use technologies. Examination of how 
participating states are implementing the policies discussed and agreed 
upon will be conducted in this context.	We believe these fora provide 
the best opportunity for sustained high level attention and speedy and 
flexible responses to the threats posed by MANPADS.

[End of section]

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David Maurer (202) 512-9627: 

Staff Acknowledgments: 

In addition to the individual named above, Jeffrey D. Phillips, Sharron 
Candon, J. Addison Ricks, M. Elizabeth Guran, Lynn Cothern, Bob Levin, 
Jim Morrison, Terry Parker, Michael Aiken, and Ernie Jackson, made key 
contributions to this report.

(320187): 

FOOTNOTES

[1] U.S. General Accounting Office, Combating Terrorism: Interagency 
Framework and Agency Programs to Address the Overseas Threat, GAO-03-
165 (Washington, D.C.: May 23, 2003).

[2] End-use monitoring refers to the procedures used to verify that 
foreign governments are using and controlling U.S. defense articles and 
services in accordance with U.S. terms and conditions of the transfer. 
Verification measures range from contacting the appropriate foreign 
government representative for information to physical inspection by DOD 
personnel of U.S. security assistance organizations. Physical 
inspections by DOD personnel are required for Stinger missiles sold to 
foreign governments.

[3] The Wassenaar Arrangement is a multilateral export control regime 
that aims to contribute to international security and stability by 
promoting greater responsibility and transparency in arms and sensitive 
dual-use (having both civilian and military uses) goods and technology 
transfers.

[4] The OSCE is the largest regional security organization in the world 
and is active in early warning, conflict prevention, crisis management, 
and post-conflict rehabilitation.

[5] The heads of state of the Group of Eight nations (Canada, France, 
Germany, Italy, Japan, Russia, the United Kingdom, and the United 
States) meet at an annual summit to discuss the major international 
economic and political issues of the day.

[6] Section 150 of P.L. 104-164 (22 U.S.C. 2785).

[7] The name of the country and the exact number of Stingers reported 
is classified information.

[8] A "counter-MANPADS system" refers to a technical system installed 
on civilian aircraft to defend against attack by MANPADS.

[9] U.S. General Accounting Office, The Department of Homeland Security 
Needs to Fully Adopt a Knowledge-based Approach to Its Counter-MANPADS 
Development Program, GAO-04-341R (Washington, D.C.: Jan. 30, 2004).

[10] States participating in the Wassenaar Arrangement include 
Argentina, Australia, Austria, Belgium, Bulgaria, Canada, 
Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, 
Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, 
Poland, Portugal, Republic of Korea, Romania, Russian Federation, 
Slovakia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, 
and the United States.

[11] "Elements for Export Controls of Man-Portable Air Defense Systems 
(MANPADS)" was adopted at the December 2000 Wassenaar Arrangement 
Plenary. 

[12] Other systems include AIM-9X missiles, AMRAAM (AIM-120) missiles, 
Javelin missiles, TOW II-B missiles, night vision devices, and 
communication security articles. In addition, DOD provides enhanced 
end-use monitoring of some military assistance and financing programs, 
pursuant to Section 505 of the Foreign Assistance Act.

[13] In addition, Germany, Greece, the Netherlands, and Turkey created 
a consortium called the European Stinger Project Group, which has a 
licensed agreement with the United States to coproduce Stinger missiles 
for its members' use. The memorandum of understanding that supports 
this agreement prescribes the same end-use monitoring requirements for 
consortium-produced Stingers as for those sold directly by the United 
States. Switzerland also had a similar coproduction arrangement with 
the United States, which expired in 2000 and prescribed the same end-
use monitoring requirements.

[14] P.L. 108-11.

[15] U.S. Department of State. Briefing slides. Fifth International 
Conference on Export Controls (Budapest, Hungary: September 2003). 

[16] Actual numbers of MANPADS estimated by intelligence sources to be 
on the black or gray markets are classified.

[17] "Elements for Export Controls of Man-Portable Air Defense Systems 
(MANPADS)" was adopted at the December 2000 Wassenaar Arrangement 
Plenary. 

[18] The Wassenaar Arrangement December 2003 Plenary revised the 
"Elements for Export Controls of Man-Portable Air Defense Systems 
(MANPADS)." http://www.wassenaar.org/2003Plenary/MANPADS_2003.htm

[19] Names of the other 12 countries and estimated numbers of MANPADS 
in their stockpiles are classified.

[20] Congressional Research Service, The Library of Congress, Homeland 
Security: Protecting Airliners from Terrorist Missiles RL31741 
(Washington, D.C.: Nov. 3, 2003).

[21] The term "brokering" refers to activities of negotiating or 
arranging contracts, selling, trading, or arranging the transfer of 
arms and related military equipment from one third-party country to 
another third-party country.

[22] "Enhance Transport Security and Control of Man-Portable Air 
Defense Systems (MANPADS): A G8 Action Plan" was adopted at the June 
2003 Group of Eight summit. http://www.g8.fr/evian/english/navigation/
2003_g8_summit/summit_documents.html

[23] The Wassenaar Arrangement December 2003 Plenary revised the 
"Elements for Export Controls of Man-Portable Air Defense Systems 
(MANPADS)." http://www.wassenaar.org/2003Plenary/MANPADS_2003.htm

[24] "OSCE Document on Small Arms and Light Weapons," adopted November 
24, 2000, sets out norms, principles, and measures to address the 
uncontrolled spread of small arms that has contributed to armed 
conflicts.

[25] The U.N. Register of Conventional Arms includes data provided 
voluntarily by member states on international arms transfers and 
information on military holdings, procurement through national 
production, and relevant policies. 

[26] The identities of the other four countries are classified. 

[27] All known national stocks of MANPADS in Bosnia and Herzegovina, 
Cambodia, and Liberia have been destroyed, and Nicaragua has begun to 
destroy its MANPADS stocks, according to the State Department.

[28] The international Stabilization Force is a NATO-led, multinational 
military force working in Bosnia-Herzegovina.

[29] The identities of these countries are classified.

[30] A security assistance organization (SAO) is a DOD office located 
in a foreign country with assigned responsibilities for carrying out 
security assistance functions. It facilitates U.S. arms sales to and 
defense cooperation with foreign nations. These offices also maintain 
officials that monitor the end use of sensitive weapons systems that 
DOD has sold overseas.

[31] 1996 Amendment to the AECA, Section 150 of P.L. 104-164 (22 U.S.C. 
2785).

[32] DOD Directive I-03/004943; Security Assistance Management Manual 
(SAMM) Change E-45.

[33] SAMM paragraphs 70105.L.9.C and D.

[34] U.S. General Accounting Office, Internal Control Management and 
Evaluation Tool, GAO-01-1008G (Washington, D.C.: Aug. 1, 2001).

[35] DOD 5105.38-M, "Security Assistance Management Manual" and DOD 
7000-14-R, "Financial Management Regulation," Volume 15. According to 
the SAMM, the case manager integrates efforts for the successful 
performance of a Foreign Military Sales case including logistics and 
financial management and closure. The implementing agency--for 
Stingers, the Army--assigns a case manager to each LOA or Foreign 
Military Sales case before the case is implemented.

[36] The name of the country and the exact number of Stingers reported 
is classified information.

[37] The name of this country and the exact number of these Stingers 
reported are also classified.

[38] According to U.S. Army data, an additional 13,135 Stingers were 
produced overseas for use by five countries under the terms of 
coproduction agreements with the United States.

[39] U.S. General Accounting Office, Foreign Military Sales: Changes 
Needed to Correct Weaknesses in End-Use Monitoring Program, GAO-00-208 
(Washington, D.C.: Aug. 24, 2000).

[40] Routine monitoring is the day-to-day observing and reporting, 
while performing other duties, by SAO officials on foreign governments' 
use of defense articles and services transferred through DOD's Foreign 
Military Sales program. 

[41] P.L. 108-11.

[42] GAO-04-341R.

[43] In the last several years, we have undertaken a body of work on 
how leading developers in industry and government use a knowledge-based 
approach to product development that reduces risks and increases the 
likelihood of successful outcomes. This best practices model enables 
decision makers to be reasonably certain that key questions about their 
products were fully answered at three critical junctures or knowledge 
points during development. Decision makers can thus make better-
informed investment decisions about product development.

[44] U.S. General Accounting Office, Best Practices: Highlights of the 
Knowledge-Based Approach Used to Improve Weapon Acquisition, GAO-04-
392SP (Washington, D.C.: Jan. 1, 2004); Best Practices: Using A 
Knowledge-Based Approach To Improve Weapon Acquisition, GAO-04-
386SP (Washington, D.C.: Jan. 1, 2004); Best Practices: Capturing 
Design and Manufacturing Knowledge Early Improves Acquisition Outcomes, 
GAO-02-701 (Washington, D.C.: July 15, 2002).

[45] A Combatant Command has operational control of U.S. combat forces 
from two or more military departments and is normally organized on a 
geographical basis.

[46] DOD 5105.38-M, "Security Assistance Management Manual" and DOD 
7000-14-R, "Financial Management Regulation," Volume 15.

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