Defense Technologies: DOD's Critical Technologies Lists Rarely
Inform Export Control and Other Policy Decisions (28-JUL-06,
GAO-06-793).
Major acquisitions in the Department of Defense's (DOD) force
transformation rely on maintaining technological superiority to
ensure U.S. military dominance. Failure to identify and protect
critical technologies makes U.S. military assets vulnerable to
cloning, neutralization, or other action that degrades current
and anticipated capabilities. To help minimize these risks, DOD's
Militarily Critical Technologies Program developed and
periodically updates two lists of technologies--the Militarily
Critical Technologies List (MCTL) and the Developing Science and
Technologies List (DSTL). While the lists are primarily intended
to inform U.S. export control decisions, they can also inform
counterintelligence activities, research plans, and technology
protection programs, making MCTL and DSTL fundamental resources
for security decisions. To ensure these lists are informative,
GAO assessed the Militarily Critical Technologies Program's
process for updating the MCTL and DSTL and determined how the
lists are used to inform export control and DOD policy decisions.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-793
ACCNO: A57626
TITLE: Defense Technologies: DOD's Critical Technologies Lists
Rarely Inform Export Control and Other Policy Decisions
DATE: 07/28/2006
SUBJECT: Critical technologies
Defense industry
Defense procurement
Export regulation
Military intelligence
Military policies
Military research and development
Program evaluation
Program management
Militarily Critical Technologies List
Developing Science and Technologies List
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GAO-06-793
* Results in Brief
* Background
* DOD's Updates of the MCTL and DSTL Produces Lists of Limited
* Validation Process Provides Little Assurance That Lists Are
* MCTL and DSTL Lack Currency
* Agencies Tend to Rely on Information Other than the MCTL and
* MCTL Rarely Informs Export Control or DOD Policy Decisions
* DSTL Is Seldom Used and May Be Eclipsed by More Extensive Ef
* Conclusions
* Recommendations for Executive Action
* Agency Comments and Our Evaluation
* Scope and Methodology
* GAO Contact
* Staff Acknowledgments
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
Report to the Committee on Armed Services, House of Representatives
United States Government Accountability Office
GAO
July 2006
DEFENSE TECHNOLOGIES
DOD's Critical Technologies Lists Rarely Inform Export Control and Other
Policy Decisions
GAO-06-793
Contents
Letter 1
Results in Brief 2
Background 3
DOD's Updates of the MCTL and DSTL Produces Lists of Limited Value 6
Agencies Tend to Rely on Information Other than the MCTL and DSTL to
Support Decisions about Critical Technologies 11
Conclusions 16
Recommendations for Executive Action 16
Agency Comments and Our Evaluation 17
Scope and Methodology 18
Appendix I Agency Comments 20
Appendix II GAO Contact and Staff Acknowledgments 24
Related GAO Products 25
Tables
Table 1: Most Recent Updates by Fiscal Year for MCTL Categories, as of
April 30, 2006 9
Table 2: Most Recent Updates by Fiscal Year for DSTL Categories, as of
April 30, 2006 10
Figures
Figure 1: Comparison of the MCTL and DSTL 5
Figure 2: Categories of Technologies Covered by the MCTL and DSTL 6
Figure 3: Reviewers of Proposed Updates to the MCTL and DSTL 7
Abbreviations
DOD Department of Defense DSTL Developing Science and Technologies List
MCTL Militarily Critical Technologies List
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United States Government Accountability Office
Washington, DC 20548
July 28, 2006 July 28, 2006
The Honorable Duncan L. Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives The
Honorable Duncan L. Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives
Technological advantage is fundamental to U.S. military dominance in
21st-century warfare. Major acquisitions in the Department of Defense's
(DOD) ongoing force transformation-including manned and unmanned aircraft
systems, networkcentric communications systems, and air and ground
weapons-rely on maintaining technological superiority. Failure to identify
and protect critical technologies makes U.S. military assets vulnerable to
cloning, neutralization, or other action that degrades current and
anticipated capabilities. Technological advantage is fundamental to U.S.
military dominance in 21st-century warfare. Major acquisitions in the
Department of Defense's (DOD) ongoing force transformation-including
manned and unmanned aircraft systems, networkcentric communications
systems, and air and ground weapons-rely on maintaining technological
superiority. Failure to identify and protect critical technologies makes
U.S. military assets vulnerable to cloning, neutralization, or other
action that degrades current and anticipated capabilities.
To help minimize these risks, DOD's Militarily Critical Technologies
Program developed and periodically updates two lists of technologies-the
Militarily Critical Technologies List (MCTL) and the Developing Science
and Technologies List (DSTL)-each consisting of 20 sections. These lists
are primarily intended to inform U.S. export control decisions, but can
also help inform counterintelligence activities, research plans, and
technology protection programs. As such, the MCTL and DSTL are considered
fundamental to identifying technologies critical to national security that
can help inform decisions to ensure U.S. technological advantage for the
warfighter. To help minimize these risks, DOD's Militarily Critical
Technologies Program developed and periodically updates two lists of
technologies-the Militarily Critical Technologies List (MCTL) and the
Developing Science and Technologies List (DSTL)-each consisting of 20
sections. These lists are primarily intended to inform U.S. export control
decisions, but can also help inform counterintelligence activities,
research plans, and technology protection programs. As such, the MCTL and
DSTL are considered fundamental to identifying technologies critical to
national security that can help inform decisions to ensure U.S.
technological advantage for the warfighter.
Redefined national security threats, rapid technological advances, and
increasing efforts by adversaries to gain access to U.S. military weapon
system technology heighten the need to identify and protect militarily
critical technologies. Given the importance of the MCTL and DSTL, you
asked us to (1) assess the Militarily Critical Technologies Program's
process for updating the MCTL and DSTL and (2) determine how the lists are
used to inform export control and DOD policy decisions. Redefined national
security threats, rapid technological advances, and increasing efforts by
adversaries to gain access to U.S. military weapon system technology
heighten the need to identify and protect militarily critical
technologies. Given the importance of the MCTL and DSTL, you asked us to
(1) assess the Militarily Critical Technologies Program's process for
updating the MCTL and DSTL and (2) determine how the lists are used to
inform export control and DOD policy decisions.
To assess how the lists are updated, we met with officials from the
Militarily Critical Technologies Program and the Institute for Defense
Analyses-the contractor that develops list updates-and also reviewed
relevant program guidance, directives, and applicable statutory
provisions. Using program guidance, we evaluated how the last five section
updates to To assess how the lists are updated, we met with officials from
the Militarily Critical Technologies Program and the Institute for Defense
Analyses-the contractor that develops list updates-and also reviewed
relevant program guidance, directives, and applicable statutory
provisions. Using program guidance, we evaluated how the last five section
updates to the MCTL and DSTL were conducted. We identified 20 DOD
components responsible for validating updates prior to issuance and
interviewed 19. We compared when sections of the MCTL and DSTL were last
updated over the past 10 years with stated program goals for updating the
lists. We identified intended uses of the MCTL and DSTL through interviews
with program officials and review of program documents and applicable law.
To determine how the lists are used, we interviewed officials from various
DOD organizations within the offices of the Under Secretary of Defense for
Acquisition, Technology, and Logistics and the office of the Under
Secretary of Defense for Policy, military services, several combatant
commands, Defense Intelligence Agency, as well as officials from the
Department of Commerce. In addition, we identified other mechanisms DOD
has used to identify critical technologies and determined how these
efforts are coordinated with the MCTL and DSTL process. We conducted our
work from October 2005 to June 2006 in accordance with generally accepted
government auditing standards.
Results in Brief
The Militarily Critical Technologies Program's updates of the MCTL and
DSTL have generated lists that are of limited value because they are not
appropriately validated and are largely out of date. Tasked by DOD, the
Institute for Defense Analyses developed a process for updating the lists
by creating technology working groups of experts from government,
industry, and academia to identify militarily critical technologies. There
are a number of inherent challenges to the process. For example, expert
participation in the working groups is voluntary, so some experts chose
not to participate or do not participate fully in the process. These
inherent challenges increase the importance for DOD to validate section
updates-a critical check to ensure the lists are complete and accurate.
However, the validation process provides little assurance that the lists
are of value. For example, more than one-third of the reviewers stated
they do not have the technical expertise necessary to validate the
updates. Further, DOD assumes that reviewers concur with the updates if it
receives no comments-yet one-quarter of the reviewers did not review the
lists. At the same time, the lists have not been kept up to date. For
example, 9 of the 20 MCTL sections-including technologies related to
weapons, communications, and biological warfare-have not been updated for
10 years, although a stated program goal calls for these lists to be
completely updated at least every 4 years. The DSTL is similarly out of
date; nearly half of the sections have not been updated in the past 5
years.
The MCTL and DSTL have generally not been used to inform export control
decisions as originally intended as well as DOD policy decisions.
According to DOD and Commerce export control officials, the MCTL is not
used to develop export control proposals or to inform individual export
licensing decisions because the list is too broad and out of date. In
fact, in 1996, the Air Force instructed its personnel not to use the MCTL
because of concerns about its accuracy and reliability. Military officials
involved in anti-tamper decisions associated with weapon system
development agree that the MCTL's usefulness is limited for these reasons.
The DSTL is also seldom used-in part because many of the DOD components we
interviewed were not aware of the list. For those components that were
aware of the DSTL, some found it only marginally useful because, like the
MCTL, it is out of date. Some DOD and military services have developed
efforts to track global technologies similar to the DSTL. However, these
efforts are more expansive, further eclipsing the value of the list. For
example, the Army established international technology centers dedicated
to identifying international cooperative opportunities as well as to
maintain knowledge of foreign research efforts to avoid technological
surprises for the warfighter.
We are recommending that the Secretary of Defense take several actions to
include determining user requirements, reassessing and clarifying the
MCTL's purpose based on those requirements, determining an approach and
implementation plan that meets user needs, and considering the utility of
the DSTL. DOD concurred with our recommendations. However, it does not
plan to take any action beyond what it has already completed or planned to
do. We believe DOD needs to take additional steps to implement our
recommendations.
Background
DOD considers maintaining military superiority a key priority and has
established an agencywide policy to treat defense-related technology as a
valuable, limited national security resource that should be invested in
and protected to pursue national security objectives.1 Many DOD
organizations and other federal agencies have a need to know what is
militarily critical to assist in planning program activities related to
technology and to help inform decision making. Within DOD specifically,
knowledge about militarily critical technologies is needed for such
activities as
o consideration of anti-tamper protection of critical
technologies on defense systems,
o counterproliferation programs and activities, and
o research and development planning.
1 DOD Directive 2040.2, January 17, 1984.
Similarly, other federal agencies depend on DOD to identify militarily
critical technologies. For example, the Departments of Commerce and State
rely in part on DOD's input on what is militarily critical to inform
export control decisions. The Federal Bureau of Investigation also needs
to be aware of DOD-identified critical technologies to determine which
technologies need protection from being acquired or exploited by foreign
intelligence collection efforts.
In response to the Export Administration Act of 1979,2 which governs the
exports of items with both military and civilian applications, DOD
established the Militarily Critical Technologies Program in 1980 to
periodically identify and assess technologies that are critical to
retaining dominance for the warfighter. The Militarily Critical
Technologies Program produces a restricted and a public version of both
the MCTL and the DSTL. DOD has contracted with the Institute for Defense
Analyses, a federally funded research and development center, since the
inception of the program to furnish scientific and technical support in
developing and maintaining the lists. The MCTL covers technologies that
are of concern in the near term, while the DSTL covers those in the longer
term. (See fig. 1 for comparison of the lists.) Program oversight is
provided by DOD's Office of International Technology Security.3 Over the
past 5 years, DOD has provided approximately $2 million annually to
support the Militarily Critical Technologies Program.
2 50 U.S.C. app. S: 2401 et seq. Authority granted by the Act expired on
August 20, 2001. Executive Order 13222 continues the export control regime
established under the Act and the Export Administration Regulations.
3 The Office of International Technology Security has been under the
Directorate for Defense Research and Engineering since fiscal year 2004.
In prior years, the office was under the Defense Threat Reduction Agency.
Figure 1: Comparison of the MCTL and DSTL
The lists are divided into 20 technology sections (see fig. 2), and each
section is developed and updated by a technology working group led by a
chair and cochair and composed of experts. Each working group identifies
militarily critical technologies and the parameters at which they are
critical, based on definitions of what is militarily critical established
by the Export Administration Act.4 Each working group is responsible for
one MCTL and one DSTL section covering the same topic, such as aeronautics
technology. The Institute for Defense Analyses has established broad
guidance for the chairperson of the technology working groups to use
regarding the update process. This guidance in part indicates that working
groups should consist of experts from government, industry, and academia
and that they should reach consensus on what is critical.
4 The Export Administration Act established a process for the Secretary of
Defense to identify militarily critical goods and technologies that should
be considered by the Secretary of Commerce for inclusion on the Commerce
Control List. To identify critical technologies, DOD is required to
consider (1) arrays of design and manufacturing know-how; (2) keystone
manufacturing, inspection, and test equipment; (3) goods accompanied by
sophisticated operation, application, or maintenance know-how; and (4)
keystone equipment which would reveal or give insight into the design and
manufacture of a U.S. military system.
Figure 2: Categories of Technologies Covered by the MCTL and DSTL
DOD's Updates of the MCTL and DSTL Produces Lists of Limited Value
In updating the MCTL and DSTL, the technology working groups face several
challenges, including identifying and engaging experts in the process and
interpreting the definition of militarily critical. These challenges
increase the importance of DOD's validation process-a critical check to
ensuring the lists are complete and accurate. However, this process is not
adequate to provide this assurance. At the same time, the lists are
significantly out of date. As a result, the lists are of questionable
value.
Validation Process Provides Little Assurance That Lists Are Complete and
Accurate
Working group chairs face two key challenges in identifying and selecting
experts to participate in the technology working groups that update the
MCTL and DSTL. First, participation in the working groups is voluntary,
and according to several chairs we spoke with, engaging the
experts-including those employed by DOD-can be challenging since some
selected experts participate only informally or are unable to participate
at all because of competing work priorities. Second, according to DOD and
Institute for Defense Analyses officials, it is challenging to determine
the parameter at which a particular technology becomes militarily critical
and is therefore subject to interpretation by the working group. One chair
defines "militarily critical" for the working group, while others rely on
the individual interpretations and judgments of the working group members.
These inherent challenges in the process place greater importance on the
need to validate the lists. To ensure the lists are complete and accurate,
DOD components review and validate the working groups' updates- a process
DOD program officials consider a critical check of the working groups'
efforts. Figure 3 lists the DOD reviewers.
Figure 3: Reviewers of Proposed Updates to the MCTL and DSTL
However, we found a number of weaknesses in this critical check. First,
reviewers are unclear about how to validate proposed updates or what
factors to consider when reviewing proposed updates. For example, one
reviewer indicated that the purpose of the MCTL is to inform decisions on
technologies that may need to be export controlled, but was unsure whether
the review should validate that the technologies in proposed updates need
to be controlled or whether to ensure that parameters of technologies
listed are accurate. Reviewers stated that they are not informed as to
what is added, deleted, or otherwise changed from one update to the next.
Without instruction or information on the updates, validation of the
changes to the lists may be little more than a reviewer's guess. Two
reviewers were unsure how to interpret "militarily critical" when
reviewing the proposed updates and therefore did not know how to comment.
In addition, no guidance is provided to reviewers on factors to consider
during the validation process.
Second, the reviewers may not have the technical knowledge to validate the
updates. Eight reviewers stated they or their organizations lack the
necessary expertise to determine whether the lists were complete or
accurate. Program officials stated they do not currently have a process to
determine whether they have the proper reviewers or if these reviewers are
adequately validating proposed updates.
Finally, program officials assume concurrence with the lists if reviewers
have not provided feedback within 30 days. According to program officials,
the process is working well because reviewers seldom provide feedback or
comments on proposed MCTL or DSTL updates. However, one-quarter of the
reviewers did not review the lists. Specifically, five reviewers told us
that they receive MCTL and DSTL updates but do not comment on them. In
addition, according to our analysis of the last five updates to the MCTL
and DSTL, eight reviewers have provided comments to at least one update.
MCTL and DSTL Lack Currency
A Militarily Critical Technologies Program goal is to completely update
the MCTL and DSTL at least every 4 years by updating about 5 sections of
each list every year. According to program officials, this goal was set to
keep the lists as current as possible within budget limitations. However,
this goal has not been met. The Institute for Defense Analyses produced
only one update of the MCTL in fiscal year 2004 and four updates in fiscal
year 2005 (see table 1). Furthermore, 9 of 20 MCTL sections have not been
updated since 1996-the last time the MCTL was completely updated.
Table 1: Most Recent Updates by Fiscal Year for MCTL Categories, as of
April 30, 2006
Technology 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Aeronautics
Armament and
energetics
Biological
Biomedicala
Chemical
Directed and
kinetic energy
Electronics
Energy systems
Ground systems
Information
security
Information systems
Lasers and optics
Marine systems
Materials and
processing
Nuclear
Positioning,
navigation, and
time
Processing and
manufacturing
Signature control
Space systems
Weapons effects
Source: DOD.
aThe biomedical section of the MCTL has not yet been created.
The DSTL is also out of date. The institute did not update any sections in
fiscal year 2004 and produced only one update in fiscal year 2005. Over
the past 5 years, only half of the DSTL sections have been updated (see
table 2).
Table 2: Most Recent Updates by Fiscal Year for DSTL Categories, as of
April 30, 2006
Technology 1999 2000 2001 2002 2003 2004 2005 2006
Aeronautics
Armament and energetics
Biological
Biomedical
Chemical
Directed and kinetic energy
Electronics
Energy systems
Ground combat systems
Information security
Information systems
Lasers and optics
Manufacturing and fabrication
Marine systems
Materials and processing
Nucleara
Positioning, navigation, and time
Signature control
Space systems
Weapons effects
Source: DOD.
aThe nuclear section of the DSTL has not yet been created.
Program officials explained that delays were in part the result of
internal disruptions to the program due to frequent changes in senior
leadership, but were unable to provide information on how they monitor or
measure whether goals for updating the lists are being met. Regardless,
program officials stated they are satisfied with how the process for
updating the lists is working and noted that the lists are available on
the Web site for public comment. In 2005, program officials held forums to
obtain feedback from list users and participants in the technology working
groups about the process for updating the lists. In response to user
feedback expressing concern about the process, program officials developed
an action plan that in part called for an independent assessment of the
MCTL and DSTL process for updating the lists, which was not completed.
Instead, a program official began an internal review, concluding that
problems stemmed from funding constraints and a lack of senior DOD
leadership to support the program.
Agencies Tend to Rely on Information Other than the MCTL and DSTL to Support
Decisions about Critical Technologies
While the MCTL was created to help determine items that need to be
controlled, the list has generally not been used to inform export control
and DOD policy decisions. Several DOD components have developed their own
efforts to catalog critical technologies to meet their needs. The DSTL is
also seldom used and may be eclipsed by more extensive DOD efforts.
MCTL Rarely Informs Export Control or DOD Policy Decisions
A number of DOD components, including the armed services, as well as the
Department of Commerce, do not rely on the MCTL to inform export control
or DOD policy decisions. While the MCTL is expected to inform review of
export license applications or export control decisions, the Defense
Technology Security Administration-which represents DOD on export control
decisions-does not use the MCTL for export licensing decisions or to
inform DOD's input to U.S. government export control proposals that are
considered by the multilateral export control regime known as the
Wassenaar Arrangement.5 Instead, the Defense Technology Security
Administration relies on other sources of information, including
technology-specific information from subject matter experts associated
with the Institute for Defense Analyses, who may also participate in MCTL
updates. According to Defense Technology Security Administration
officials, the MCTL is too broad, out of date, and difficult to navigate
to be an effective tool for informing export licensing decisions or export
control proposals.
5 The Wassenaar Arrangement is an agreement among 40 nations to promote
transparency and greater responsibility in transfers of conventional arms
and dual-use goods and technologies.
Officials from the key export control regulatory agencies6 agreed that the
MCTL lacks the specificity and currency needed for export control
decisions. These have been long-standing issues. In 1982, we reported that
the Departments of Commerce and State and private industry were concerned
that the MCTL was not specific enough to be useful as a practical daily
guide for export control decisions.7 Presently, Commerce officials
expressed additional concerns that because of delays in updating sections
of the MCTL, the list contains items that they have already determined
need not be controlled or limited. Further, the chair for the Militarily
Critical Technologies Program's electronics technical working group
acknowledged that microprocessors are included as militarily critical on
the MCTL at parameters no longer controlled on Commerce's control list.
Because of the lack of specificity and lack of currency, Commerce
officials told us that they do not use the MCTL to inform items to
control. Instead, they rely on the judgment of the Defense Technology
Security Administration.
The military services also seldom use the MCTL when reviewing export
license applications. In 1996, the Air Force issued guidance instructing
personnel not to use the MCTL to inform export control and other
decisions. This guidance, which is still in effect today, specifically
prohibits the Air Force's export control specialists, intelligence
analysts, investigators, system security engineers, operations security
officers, and public affairs officers from using the MCTL to inform export
decisions or to determine the importance of military-related technologies.
The guidance further states that because the MCTL is out of date, its
utility is substantially limited and it may only serve as a desk reference
or dictionary to obtain a description of a particular dual-use technology.
While Navy officials responsible for export control decisions stated that
the MCTL occasionally serves as the starting point to inform decisions,
they rely on their own export licensing databases for export control
policy. In addition, a senior Navy official stated that even though
extensive time and effort go into the development and maintenance of the
MCTL, the list does not provide significant value. Navy officials also
noted that the MCTL is out of date and raised concerns regarding its
accuracy. The Army Director of Policy for Security Cooperation, Resources,
and Exports similarly stated the MCTL is inappropriate for being used to
inform export control decisions because the lists are too component- and
material-focused and do not list specific systems.
6 Regulation of the U.S. export control system is primarily divided
between the Departments of State and Commerce. DOD is a reviewer of both
State and Commerce export license applications.
7 GAO, Comptroller General: Export Control Regulation Could Be Reduced
without Affecting National Security, GAO/ID-82-14 (Washington D.C.: May
26, 1982).
As with export control decisions, we found that the MCTL is seldom used to
inform various DOD policy decisions, including those related to
identifying and protecting critical technology on weapon systems,
counterintelligence efforts related to critical technologies, and programs
reporting on the protection of the defense industrial base. For example,
DOD officials stated that they do not directly use the MCTL to inform
decisions related to determining whether to use anti-tamper protections.8
Yet the MCTL is intended to be a primary resource in DOD's process for
identifying critical technologies in defense systems that may require
anti-tamper protections to discourage or delay reverse engineering. While
officials stated that the MCTL is a starting point to select critical
technologies for protection, the MCTL's limitations-including the fact
that it is out of date and does not incorporate previously identified
critical technologies or anti-tamper decisions-led the anti-tamper
executive agent to develop a more comprehensive tool for identifying and
tracking critical technologies that may need anti-tamper protection.
The MCTL is intended to be used as a reference for counterintelligence
initiatives throughout the DOD intelligence community. Counterintelligence
program officials need to know what technologies are critical and which
ones are being targeted through foreign intelligence collection
activities. Some counterintelligence entities, including the Defense
Intelligence Agency and Army Counterintelligence, indicated that the MCTL
informs decisions about technologies that should be examined to ensure
that each military service protects them in a consistent manner, but have
found limitations in using the list. For example, officials from Army
Counterintelligence stated that the MCTL is not current enough to inform
decisions needed to help the military services consistently track and
protect their current technologies. Due to the difficulties in using the
MCTL, the Army has developed a program to identify technologies that are
critical to individual Army acquisition programs. Defense Intelligence
Agency officials stated that the taxonomy of the MCTL technology
categories is useful. However, officials have found that some MCTL
sections must be augmented with more current critical technology
information to help inform decisions. Outside of DOD counterintelligence
activities, Militarily Critical Technologies Program officials stated that
they are entering into an agreement with the Federal Bureau of
Investigation to provide support to the bureau's critical national assets
program.
8 For more information on DOD's anti-tamper program, see GAO, Defense
Acquisitions: DOD Needs to Better Support Program Managers' Implementation
of Anti-Tamper Protection, GAO-04-302 (Washington, D.C.: Mar. 31, 2004).
The MCTL is also intended to inform decisions made by the Committee on
Foreign Investment in the United States, an interagency committee
responsible for reviewing foreign acquisitions of U.S.-based companies to
determine whether the proposed acquisition could pose a threat to national
security.9 DOD, which is a member of the committee, provides input through
its Office of the Deputy Under Secretary of Defense for Industrial Policy
on decisions related to proposed transactions that may involve
technologies critical to DOD interests. According to a DOD official, the
MCTL is not used to inform these decisions. Instead, DOD relies on input
from technical experts in the Directorate for Defense Research and
Engineering, who may use the MCTL as one of their many sources of
information.
In addition, DOD Industrial Policy officials have created a Defense
Industrial Base Capabilities Study Series,10 which in part identifies
critical technologies and companies that produce them to help inform DOD
input to Committee on Foreign Investment in the United States decisions as
well as other DOD policy decisions. The Defense Industrial Base
Capabilities Study Series was completed in June 2005 and lists over 1,400
critical technologies. The study series notes that it includes examples of
critical technologies that the MCTL should consider incorporating.
However, Militarily Critical Technologies Program officials said that the
series uses a different definition of critical technology and has not
coordinated the MCTL and the series' lists of critical technologies.
9 In 1988, Congress enacted the Exon-Florio amendment to the Defense
Production Act, which authorized the President to investigate the impact
of foreign acquisitions of U.S. companies on national security. The
President delegated the authority to conduct investigations to the
interagency Committee on Foreign Investment in the United States, which is
chaired by the Secretary of the Treasury. For more information on the
committee see, GAO, Defense Trade: Enhancements to the Implementation of
Exon-Florio Could Strengthen the Law's Effectiveness, GAO-05-686
(Washington D.C.: Sept. 28, 2005).
10 The Office of the Deputy Under Secretary of Defense for Industrial
Policy Directorate published five reports under the Defense Industrial
Base Capability Study Series from 2004 through 2005. The studies
identified critical enabling technologies that support Joint Chiefs of
Staff's operational requirements and the industrial base capabilities
needed to meet the requirements.
DSTL Is Seldom Used and May Be Eclipsed by More Extensive Efforts
Many DOD officials we spoke with were either not aware of the DSTL or
seldom used it. For example, officials from the Office of Naval Research
and the Naval Research Labs were unaware of the DSTL. Officials from the
Army's Office of the Deputy Assistant Secretary for Research and
Technology/Chief Scientist, who were aware of the existence of the DSTL,
stated that the DSTL is not useful for informing science and technology
decisions because it is overly broad, its taxonomy does not align with
Army Research and Technology taxonomy, and its assessments are rarely in
consonance with Army Research and Technology subject matter experts.
Furthermore, the Army's Deputy Assistant Secretary for Research and
Technology/Chief Scientist maintains sufficient in-house expertise for all
required program planning activities and does not require the DSTL to
complete mission requirements. In addition, Defense Advanced Research
Projects Agency officials indicated that the DSTL has limited
applicability to the agency's research efforts.
The DSTL is intended to forecast worldwide technology capabilities that
could threaten U.S. technological superiority or surprise warfighters in
theater as well as to assist DOD science and technology planning. However,
the Defense Technology Security Administration has developed a "Top Ten
Technologies" list that identifies emerging technologies. According to
Defense Technology Security Administration officials, the Top Ten list is
designed to help DOD identify paradigm-shifting technologies on or
approaching the horizon to provide a basis for defense proposals on how
these technologies should be controlled and to inform decisions on how
these technologies might benefit the military. In addition, officials who
represent the military services and DOD research and development
components have established more extensive efforts to aid science planning
and track developing and future technologies. For example, both the Army
and the Navy maintain offices and technology centers worldwide to monitor
and assess research efforts of foreign governments and industries to both
inform science and technology planning and identify rapidly evolving or
breakthrough technologies. Army officials explained that the Army's
science and technology research activities, with a fiscal year 2005 annual
budget of approximately $1.7 billion, have more expertise to
comprehensibly track all areas of developing global technology than the
Militarily Critical Technologies Program, which has an average annual
budget of $2 million.
At the same time, the Directorate for Defense Research and Engineering has
developed a Global Technology Knowledge Base, which incorporates the DSTL
along with other information provided by the military services. Like the
DSTL, the Global Technology Knowledge Base is intended to serve as a
broad-based evaluation of foreign technology and an assessment of foreign
technology development efforts to assist in the planning of DOD's science
and technology efforts and offers insight into potential collaboration
opportunities with foreign entities or utilization of foreign
technologies. Although the knowledge base incorporates DSTL information, a
Directorate for Defense Research and Engineering official responsible for
the knowledge base told us that the DSTL's value to the database is
limited because of currency and reliability issues.
Conclusions
DOD has widespread requirements to know what critical technologies are
needed to ensure a technological edge for the warfighter. These
requirements demand that DOD leadership develop a solid framework for
identifying the technologies that will guide critical decisions on what to
control and protect. Relying on militarily critical technology lists that
are of questionable value is risky-especially in an environment of rapid
technological change and redefined national security threats. Without
clear and current information on what items are militarily critical, many
DOD components have developed their own mechanisms for identifying and
tracking critical technologies. While these separate efforts may satisfy
parochial concerns, they do not ensure an effective approach for
identifying and coordinating information on critical technologies needed
to inform decisions on how to protect U.S. security interests.
Recommendations for Executive Action
Given the need of numerous programs to know what is militarily critical,
we recommend that the Secretary of Defense direct the Director for Defense
Research and Engineering to determine users' requirements and on the basis
of those requirements, reassess and clearly define the MCTL's purpose. If
the purpose deviates from its original intent to inform export control
decisions, DOD should seek necessary legislative relief.
To ensure that users' requirements are met, we recommend that the
Secretary of Defense direct the Director for Defense Research and
Engineering, in conjunction with the Under Secretary of Defense for
Acquisition, Technology, and Logistics, to
o examine existing efforts within the department to catalog
critical technologies and determine best practices for identifying
technologies;
o using these best practices, develop an approach that best meets
user requirements in a timely manner;
o on the basis of the new approach, identify duplicative efforts,
if any; ensure the efficient use of resources; and determine what
level of funding is appropriate;
o develop an implementation plan for the approach, including
timelines for execution and implementing guidance or directives;
and
o establish an oversight mechanism to ensure that user needs are
met.
Given the more expansive existing efforts in DOD to track global science
and technology efforts, we also recommend that the Secretary of Defense
direct the Director for Defense Research and Engineering to determine the
utility of continuing to maintain the DSTL.
Agency Comments and Our Evaluation
We provided a draft of this report to DOD and Commerce. DOD concurred with
our recommendations. However, it does not plan to take any action beyond
what it had already completed or planned to do. DOD asserts that the
International Technology Security's 2005 action plan, developed prior to
our review, addresses most of our seven recommendations. DOD also
maintains that the MCTL is the only list that assesses technologies from
an export control viewpoint.
DOD's comments do not recognize that identifying militarily critical
technologies serves multiple interests and that many DOD organizations and
other federal agencies have a need to know what is militarily critical.
Our findings show that shortcomings in the program have led to products
that are not adequately validated as well as too broad and out of date to
satisfy users' needs. DOD's action plan, which in part discussed steps to
meet users' requirements, was limited. For example, DOD, in the
development of the plan, did not include Defense Technology Security
Administration or the Department of Commerce--two key agencies that
program products are intended to inform for export control decisions.
Further, DOD does not see the possibilities of how examining efforts in
the department to catalogue critical technologies and determine best
practices could benefit the program. By leveraging knowledge and potential
best practices from other efforts, DOD would have an opportunity to take a
strategic approach to identify and coordinate information on critical
technologies that satisfy users' needs. Therefore, DOD will need to take
additional steps to implement our recommendations.
DOD's letter is reprinted in appendix I. We incorporated DOD technical
comments as appropriate. Commerce did not provide formal comments but
submitted one technical comment, which we addressed.
Scope and Methodology
To assess how the lists are updated, we met with officials from the
Militarily Critical Technologies Program and the Institute for Defense
Analyses and reviewed relevant program documents, task orders, guidance,
directives, and applicable statutory provisions. Using program guidance
and documents, we evaluated how the last five updates to the MCTL and DSTL
were conducted. Specifically, we reviewed program information on the
number and types of experts used to conduct the updates. We interviewed
technology working group chairs responsible for 10 MCTL and DSTL sections
to determine how experts are engaged in the process for identifying
critical technologies as well as how the definition of "militarily
critical" is applied to specific technology areas. We identified 20 DOD
components responsible for validating updates prior to issuance. We
interviewed officials from 19 of the 20 components and determined how they
reviewed and validated the updates. We also compared MCTL and DSTL updates
over the past 10 years with program-stated goals for updating the lists.
To determine how the lists are used, we first identified the uses of the
MCTL and DSTL through interviews with program officials and review of
program documents and applicable statutory provisions. We discussed uses
of the lists with officials from the Office of Industrial Policy, Defense
Technology Security Administration, military services, Executive Agent for
Anti-tamper, Defense Intelligence Agency, Defense Security Service,
Missile Defense Agency, Defense Security Cooperation Agency, Defense
Threat Reduction Agency, Joint Chiefs of Staff, Joint Forces Command,
Special Operations Command, Strategic Command, and Transportation Command,
Defense Directorate for Research and Engineering's Office of International
Programs and Science and Technology, Defense Logistics Agency, Pentagon
Force Protection Agency, Defense Contract Management Agency, Office of
Special Operations and Low Intensity Conflict, Defense Advanced Research
Projects Agency, as well as officials from the Departments of Commerce and
Homeland Security. In addition, through interviews with some of these
organizations and review of documents they provided, we identified other
mechanisms DOD has used to identify critical technologies and determined
how these efforts are coordinated with the MCTL and DSTL update process.
We are sending copies of this report to interested congressional
committees, as well as the Secretaries of Defense, Commerce, and Homeland
Security; the Director, Office of Management and Budget; and the Assistant
to the President for National Security Affairs. In addition, this report
will be made available at no charge on the GAO Web site at
http://www.gao.gov.
Please contact me at (202) 512-4841 or [email protected] if you or
your staff have any questions concerning this report. Contact points for
our Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix II.
Ann Calvaresi-Barr Director Acquisition and Sourcing Management
Appendix I: Agency Comments
Appendix II: GAO Contact and Staff Acknowledgments
GAO Contact
Ann Calvaresi-Barr (202) 512-4841 or [email protected]
Staff Acknowledgments
In addition to the contact named above, Anne-Marie Lasowski, Assistant
Director; Noah Bleicher; Andrew Edelson; W. William Russell IV; Karen
Sloan; Hai Tran; and Joseph Zamoyta made key contributions to this report.
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Industrial Security: DOD Cannot Ensure Its Oversight of Contractors under
Foreign Influence Is Sufficient. GAO-05-681 . Washington D.C.: July 15,
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Defense Trade: Arms Export Control Vulnerabilities and Inefficiencies in
the Post-9/11 Security Environment. GAO-05-468R . Washington, D.C.: April
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Defense Trade: Arms Export Control System in the Post-9/11Environment.
GAO-05-234 . Washington, D.C.: February 16, 2005.
Defense Acquisitions: DOD Needs to Better Support Program Managers'
Implementation of Anti-Tamper Protection. GAO-04-302 . Washington, D.C.:
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Nonproliferation: Strategy Needed to Strengthen Multilateral Export
Control Regimes. GAO-03-43 . Washington, D.C.: October 25, 2002.
Export Controls: Processes for Determining Proper Control of
Defense-Related Items Need Improvement. GAO-02-996 . Washington, D.C.:
September 20, 2002.
Defense Trade: Mitigating National Security Concerns under Exon-Florio
Could Be Improved. GAO-02-736 . Washington, D.C.: September 12, 2002.
Export Controls: Department of Commerce Controls over Transfers of
Technology to Foreign Nationals Need Improvement. GAO-02-972 . Washington,
D.C.: September 6, 2002.
Export Controls: More Thorough Analysis Needed to Justify Changes in High
Performance Computer Controls. GAO-02-892 . Washington, D.C.: August 2,
2002.
Export Controls: Issues to Consider in Authorizing a New Export
Administration Act. GAO-02-468T . Washington, D.C.: February 28, 2002.
Export Controls: Clarification of Jurisdiction for Missile Technology
Items Needed. GAO-02-120 . Washington, D.C.: October 9, 2001.
(120486)
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Highlights of GAO-06-793 , a report to the Committee on Armed Services,
House of Representatives
July 2006
DEFENSE TECHNOLOGIES
DOD's Critical Technologies Lists Rarely Inform Export Control and Other
Policy Decisions
Major acquisitions in the Department of Defense's (DOD) force
transformation rely on maintaining technological superiority to ensure
U.S. military dominance. Failure to identify and protect critical
technologies makes U.S. military assets vulnerable to cloning,
neutralization, or other action that degrades current and anticipated
capabilities.
To help minimize these risks, DOD's Militarily Critical Technologies
Program developed and periodically updates two lists of technologies-the
Militarily Critical Technologies List (MCTL) and the Developing Science
and Technologies List (DSTL). While the lists are primarily intended to
inform U.S. export control decisions, they can also inform
counterintelligence activities, research plans, and technology protection
programs, making MCTL and DSTL fundamental resources for security
decisions.
To ensure these lists are informative, GAO assessed the Militarily
Critical Technologies Program's process for updating the MCTL and DSTL and
determined how the lists are used to inform export control and DOD policy
decisions.
What GAO RecommendsGAO is recommending that DOD take several actions to
better ensure that efforts to identify critical technologies meet user
requirements. DOD concurred with our recommendations.
The Militarily Critical Technologies Program's process for updating the
MCTL and DSTL has generated lists that are of questionable value. To
update the lists, working groups of experts from government, industry, and
academia identify militarily critical technologies. However, participation
in the working groups is voluntary, and some experts choose not to
participate or do not participate fully. Validation of the updates-a
critical check to ensure the lists are complete and accurate-also provides
little assurance that the lists are of value. More than one-third of the
reviewers acknowledged they do not have the technical expertise necessary
to validate the updates, and one-quarter did not review the lists. The
lists are also out of date. Although a stated program goal calls for all
20 sections of the lists to be completely updated at least every 4 years,
about half of the sections on the MCTL-including technologies related to
weapons, communications, and biological warfare-have not been updated for
10 years. The DSTL is also out of date; almost half of the sections have
not been updated in the past 5 years.
With the limited value of the MCTL and DSTL, agencies tend to rely on
other information sources to inform export control and DOD policy
decisions. According to DOD and Department of Commerce export control
officials, the MCTL is too broad, difficult to use, and out of date to
inform export control proposals or export licensing decisions. Concerned
about the MCTL's accuracy and reliability, the Air Force instructed its
personnel not to use the MCTL. The DSTL is also seldom used-in part
because some DOD components were not aware of the list. For those
components that were aware of the DSTL, some found it only marginally
useful because it too is out of date. Several DOD components have
developed their own efforts to track global technologies. For example, the
Army established international technology centers dedicated to identifying
international cooperative opportunities as well as to maintain knowledge
of foreign research efforts to avoid technological surprises for the
warfighter.
Most Recent Updates by Fiscal Year for MCTL and DSTL Sections as of April
30, 2006
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