Defense Trade: Status of the Department of Defense's Initiatives on
Defense Cooperation (Correspondence, 07/19/2000, GAO/NSIAD-00-190R).

Pursuant to a congressional request, GAO examined the the Department of
Defense's (DOD) initiatives to change export and procurement policies
and procedures that relate to the transfer or sale of defense articles
and services that may have national security implications.

GAO noted that: (1) in 1999, DOD compiled a list of 81 initiatives
designed to facilitate cross-border industrial relationships and address
possible security risks; (2) at the time of this report, 43 of the
initiatives are ongoing, 21 are completed, 17 have been terminated,
placed on hold, duplicated other initiatives, or the status was
uncertain; (3) 47 of the initiatives addressed disclosure of classified
information, export controls, industrial base, and industrial security
procedures and policies; (4) the remaining 34 initiatives focused on
efforts to reinvent the Foreign Military Sales Program; (5) some of the
initiatives were developed to improve the timeliness and effectiveness
of internal business practices while others sought to change export and
procurement policies; and (6) senior officials within the Office of the
Secretary of Defense were responsible for developing the initiatives and
invited high-level officials from the military departments and the
Departments of State and Commerce to participate in their discussions.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-00-190R
     TITLE:  Defense Trade: Status of the Department of Defense's
	     Initiatives on Defense Cooperation
      DATE:  07/19/2000
   SUBJECT:  Foreign governments
	     Defense procurement
	     International cooperation
	     Foreign military sales
	     Military policies
	     Foreign trade policies
	     International trade restriction
	     Procurement regulations

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GAO/NSIAD-00-190R

Defense Trade

United States General Accounting Office Washington, DC 20548

National Security and International Affairs Division

B- 285661 July 19, 2000 The Honorable Benjamin A. Gilman Chairman, Committee
on International Relations House of Representatives

The Honorable Floyd D. Spence Chairman, Committee on Armed Services House of
Representatives

Subject: Defense Trade: Status of the Department of Defense's Initiatives on
Defense Cooperation

Representatives of the U. S. defense industry and foreign customers have
expressed concerns with the policies and procedures that relate to the
transfer or sale of defense articles and services and govern the programs
that comprise U. S. security cooperation. Their concerns are that the
policies and procedures involved are cumbersome and time- consuming and
inhibit businesses from competing in the international marketplace. In
response to these concerns, the Department of Defense began reexamining its
policies and procedures. These policies and procedures affect (1) the
release of classified information to a foreign government or individual, (2)
arms transfers, which include government- to- government transfers as well
as U. S. industry transfers to foreign governments or foreign companies
under contract to a foreign government, (3) U. S. procurement of defense
articles and services from foreign companies, and (4) the controls governing
foreign ownership of U. S. defense companies.

In 1998, the Department commissioned three studies to consider the benefits
and risks that an increasingly global defense industrial base would have on
national security. Enclosure I summarizes these studies along with related
white papers and an interagency report on the export licensing process.

Concerned about the national security implications of a globally integrated
defense industry, you asked us to examine the Department of Defense's
initiatives to change export and procurement policies and procedures. As
agreed with your offices, this report provides information on the
Department's recent initiatives. Specifically, we identify each initiative
and describe its objective and/ or source, participants, and status. We are
providing this information in enclosure II.

B- 285661 GAO/ NSIAD- 00- 190R Defense Trade Page 2

SUMMARY OF THE INITIATIVES

In 1999, the Department of Defense compiled a list of 81 initiatives
designed to facilitate cross- border industrial relationships and address
possible security risks. At the time of this report, 43 of the initiatives
are ongoing, 21 are completed, 17 have been terminated, placed on hold,
duplicated other initiatives, or the status was uncertain. Forty- seven of
the initiatives addressed disclosure of classified information, export
controls, industrial base, and industrial security procedures and policies.
The remaining 34 initiatives focused on efforts to reinvent the Foreign
Military Sales Program. 1 Some of the initiatives were developed to improve
the timeliness and effectiveness of internal business practices while others
sought to change export and procurement policies. Senior officials within
the Office of the Secretary of Defense were responsible for developing the
initiatives and invited highlevel officials from the military departments
and the Departments of State and Commerce to participate in their
discussions.

AGENCY COMMENTS

We provided the Department of Defense with a copy of our matrix showing the
results of our analysis and the Department provided technical comments and
updated the status of some of its initiatives (see encl. III). We have
incorporated those changes where appropriate.

SCOPE AND METHODOLOGY

To identify and track the status of the Department of Defense's initiatives,
we developed a matrix based on information we gathered from 10 offices
within the Office of the Secretary of Defense, 4 defense agencies, the Joint
Chiefs of Staff, the military services, the Office of Management and Budget,
and the Departments of Commerce and State. We examined policy memos,
official correspondence, draft legislation and regulations, agreements,
briefing slides, and studies associated with the initiatives. We discussed
the initiatives with officials identified as responsible for developing each
initiative as well as officials in the implementing offices.

We performed our review from January through June 2000 in accordance with
generally accepted government auditing standards.

---------- As agreed with your offices, unless you publicly announce the
contents of this report earlier, we plan no further distribution of this
report until 30 days after its issue date. At that time, we will send copies
to Representative Sam Gejdenson in his capacity as Ranking Minority Member
of the House International Relations Committee and to Representative Ike
Skelton in his capacity as Ranking Minority Member of the House Armed
Services Committee. We are also sending copies to the Honorable William S.

1 The Foreign Military Sales Program facilitates the purchase of defense
articles and services from the U. S. government by eligible foreign
governments and international organizations.

B- 285661 GAO/ NSIAD- 00- 190R Defense Trade Page 3 Cohen, Secretary of
Defense, and the Honorable Jacob J. Lew, Director, Office of

Management and Budget. Please contact me on (202) 512- 4841 if you or your
staff have questions concerning this report. Another contact and key
contributors to this assignment are listed in enclosure IV.

Katherine V. Schinasi Associate Director, Defense Acquisitions Issues

Enclosure I GAO/ NSIAD- 00- 190R Defense Trade Page 4 DEFENSE REPORTS/ WHITE
PAPERS RELATED TO

SECURITY AND DEFENSE COOPERATION The Three Studies Commissioned in 1998
Final Report of the Defense Science Board Task Force on Globalization and
Security. Office of the Under Secretary of Defense for Acquisition and
Technology. Washington, D. C.: December 1999. This report represents the
conclusions and recommendations of the Defense Science Board Task Force on
Globalization and Security, which was chartered by the Under Secretary of
Defense for Acquisition and Technology. The task force was to study the
impact of globalization on the Department of Defense (DOD) and advise it on
policies, procedures and/ or technologies to maximize the benefits of trends
associated with globalization while mitigating risk. The task force was
composed of a number of current and former government officials, as well as
industry officials and members of academia. It received briefings from
various government, industry, military, and academic experts.

Premises for Policy: Maintaining Military Superiority in the 21 st Century.
Final Report of the Secretary of Defense's Strategic Studies Group IV.
Washington, D. C.: 1999. This report represents the judgments of the seven
military officers who comprised the fourth strategic studies group. The
group was tasked by the Deputy Secretary of Defense to consider the question
of “How can the United States sustain a position of technological and
ultimately military advantage over potential competitors in a global trade
environment?” The study group conducted a series of discussions with
senior administration policymakers, former DOD officials, senior
representatives of the defense industry and other U. S.- based multinational
and global business enterprises, and several Unified Commanders- in- Chief.

Presentation of the Panel on Commercialization in the U. S. Defense
Establishment. Panel on Commercialization. Washington, D. C.: June 1999. The
panel was originally chartered by the Secretary of Defense to examine the
security issues and potential security risks resulting from globalization
and its related trends affecting business and industry, including the
increased number of U. S.- owned defense contractors with overseas
facilities and the increased foreign ownership of U. S.- based suppliers.
The panel decided to focus its presentation on the issues surrounding
commercialization, from a national perspective, and only address
globalization if one of the areas to be studied involved an international
component. Its members included corporate executives from the private
sector, experienced national security professionals, and former Members of
Congress.

White Papers Arms Transfer/ Technology Transfer White Paper. Washington, D.
C.: September 27, 1999. This white paper is the product of several DOD and
industry organizations; it attempts to address some of the problems
identified by representatives of the U. S. defense industry and foreign
customers regarding the U. S. processes for regulating arms transfers,
technology transfer, and disclosures of classified information.

Enclosure I GAO/ NSIAD- 00- 190R Defense Trade Page 5 Pricing, Finance and
U. S. Government Cost Recovery White Paper. Washington, D. C.:

January 26, 1999. This white paper is the product a joint DOD and industry
effort; it attempts to address concerns raised by the U. S. defense industry
and foreign customers regarding the U. S. security cooperation processes for
pricing, financing, and cost recovery.

Process Transparency White Paper. Washington, D. C.: January 26, 1999. This
white paper is the product of a joint DOD and industry effort; it identifies
target areas where increased transparency in the security cooperation
process might be achieved. These areas include improving U. S. government
and industry cooperation, development of Letters of Offer and Acceptance,
and DOD's contracting process.

Inspectors General Report Interagency Review of the Export Licensing
Processes for Dual- use Commodities and Munitions. Offices of the Inspectors
General of the Department of Commerce, the Department of Defense, the
Department of Energy, the Department of State, the Department of Treasury,
and the Central Intelligence Agency, Report No. 99- 187, June 18, 1999. This
report was requested in 1998 by the Chairman of the Senate Committee on
Governmental Affairs. The Inspectors General were requested to review the
export licensing processes for munitions and dual- use commodities. Their
report provides information related to legislative authorities; the
licensing process; the cumulative effect of exports; the information systems
used in the licensing process; guidance, training, and undue pressure; and
monitoring compliance with export license conditions and end- use checks.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 6

SUMMARY OF THE DEPARTMENT OF DEFENSE'S DEFENSE COOPERATION INITIATIVES

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative Foreign disclosure initiatives

1. Prepare white paper on Arms/ Technology Transfer

To address problems raised by industry representatives and foreign customers
regarding

regulating arms transfers, technology transfers, and disclosures of
classified information.

Defense Security Cooperation Agency (co

chair) Deputy Under Secretary

of Defense for Policy (Policy Support) (co- chair)

Defense Threat Reduction Agency

Military services Completed The Deputy Under Secretary of Defense approved

the white paper on September 27, 1999. It included 11 recommendations, all
of which were incorporated

in DOD's list of 81 defense cooperation initiatives. 2. Establish guidelines
for

training in international security and disclosure

To reduce time associated with technology transfer, disclosure, and/ or
export license

processing by providing training programs that do not currently exist.

Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Completed The Deputy Under Secretary of Defense issued a memorandum on
October 22, 1999, relating to

training requirements. 3. Contract for expanded

training courses To reduce time associated with technology

transfer, disclosure, and/ or export license processing by providing
training programs that

do not currently exist. Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Completed As of October 31, 1999, DOD had established a web site and
appointed a course administrator for this

effort. Although DOD considers that the actions taken have implemented the
initiative, we were told

that more funds are needed in fiscal year 2001 to increase the number of
classes for this expanded

training. 4. Include international

security/ disclosure module in program manager courses

To reduce time associated with technology transfer, disclosure, and/ or
export license

processing by providing training programs that do not currently exist.

Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Defense Systems Management College

Ongoing Officials from the Office of the Secretary of Defense met with the
Defense Systems Management College

to discuss including this module in the program manager courses. This
initiative has not been

completed.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 7

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

5. Include international security/ disclosure module in

other Defense Acquisition University courses

To reduce time associated with technology transfer, disclosure, and/ or
export license

processing by providing training programs that do not currently exist.

Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Deputy Under Secretary of Defense- International

and Commercial Programs

Ongoing No action has been taken on this initiative. 6. Initiate review to
decrease

time to approve foreign visits/ access to classified

information Responds to foreign customers' perception that

procedures for visit requests and approval are too stringent and take too
long. (Arms

Transfer/ Technology Transfer White Paper) Deputy Under Secretary

of Defense for Policy (Policy Support)

Ongoing DOD has started these reviews. 7. Direct components to carry

out obligations to create disclosure guidance

To streamline the review for foreign visits and/ or access to classified
information by preparing and

updating documents, which are required by DOD regulations.

Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Completed The Deputy Secretary of Defense issued a memorandum on September
9, 1999, encouraging

compliance with DOD Directive 5200.39 relating to planning documents and
delegation of disclosure

authority letters. 8. Establish system to assure

that delegation of disclosure authority letters are prepared

and recorded To streamline the review for foreign visits and/ or

access to classified information by preparing and updating these letters,
which are required by

DOD regulations. Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Military services Ongoing The Deputy Under Secretary of Defense for Policy

(Policy Support) has requested that the military services provide
information on the number of

delegation of disclosure authority letters. At the time of our review, the
Air Force was the only service to

respond. We were told that the Deputy Under Secretary of Defense for Policy
would provide

additional guidance in this area. 9. Complete country case

studies Terminated Deputy Under Secretary

of Defense for Policy (Policy Support)

Military services Terminated DOD does not identify this action as one of its

defense cooperation initiatives. 10. External education To reduce time
associated with technology

transfer, disclosure, and/ or export license processing by providing
training programs that

do not currently exist. Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Ongoing This initiative represents DOD's outreach activity. Three unified
commands had been briefed at the time

of our review.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 8

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

11. Inform Industry that the Under Secretary of Defense

for Policy will selectively sponsor exceptions to the

National Disclosure Policy To address problems industry faces when it sells

equipment involving classified information, which require exceptions to the
National Disclosure

Policy. Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board recommendation. Defense Threat Reduction

Agency Deputy Under Secretary

of Defense for Policy (Policy Support)

Completed This information was announced at various conferences such as the
Society for International

Affairs. 12. Continue to encourage

National Disclosure Policy Committee members to

vote in a timely manner Responds to Arms Transfer/ Technology Transfer

White Paper recommendation. Deputy Under Secretary

of Defense for Policy (Policy Support)

Completed The National Disclosure Policy Committee Chairman sent a letter
dated October 19, 1999, to committee

members on the subject of timely voting. 13. Establish a set of

disclosure and technology transfer guidelines for

controlled unclassified information

To clarify rules governing the use and transfer of controlled unclassified
and contractor proprietary

information. Responds to Arms Transfer/ Technology Transfer

White Paper. Deputy Under Secretary

of Defense for Policy (Policy Support)

Defense Threat Reduction Agency

Status is uncertain

The DOD organizations identified as participants have not been working on
the initiative.

Automation initiatives

14. Complete replacement of Foreign Visits System

Software To provide standardized DOD- wide information

systems, improve consistency of policy application, facilitate decisions on
information

and technology, and increase processing productivity.

Deputy Under Secretary of Defense for Policy

(Policy Support) Completed In November 1999, the front- end portion of the

Foreign Visit System Software, which embassies use to make foreign visit
requests of DOD, was replaced.

The software was replaced to make sure the system was Y2K compliant and
incorporated user- friendly

improvements. The remainder of the foreign visit system did not require
modification. No additional

actions are anticipated. This initiative was planned and budgeted for as a

required modernization effort prior to DOD's initiatives.

15. Complete replacement of Foreign Disclosure System

Classified Military Information Database

To provide standardized DOD- wide information systems, improve consistency
of policy

application, facilitate decisions on information and technology, and
increase processing

productivity. Deputy Under Secretary

of Defense for Policy (Policy Support)

Completed Modifications were submitted to the developer and replacement of
the database occurred in May 2000.

This initiative was planned and budgeted for as a required modernization
effort prior to DOD's

initiatives. 16. Complete replacement of

Technology Protection System Commodity Control

List Database To provide standardized DOD- wide information

systems, improve consistency of policy application, facilitate decisions on
information

and technology, and increase processing productivity.

Deputy Under Secretary of Defense for Policy

(Policy Support) Ongoing The dual use commodity portion was expected to

undergo testing at the end of June and replacement of the database is
anticipated mid- August 2000.

This initiative was planned and budgeted for as a required modernization
effort prior to DOD's

initiatives.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 9

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

17. Complete replacement of Technology Protection

System Munitions Database

To provide standardized DOD- wide information systems, improve consistency
of policy

application, facilitate decisions on information and technology, and
increase processing

productivity. Deputy Under Secretary

of Defense for Policy (Policy Support)

Ongoing DOD needs to begin testing and assessing user reactions. Replacement
of the database is expected

by mid- August 2000. This initiative was planned and budgeted for as a

required modernization effort prior to DOD's initiatives.

18. Ask State Department for electronic copies of U. S.

government decisions on munitions licenses

To increase processing productivity. Responds to recommendation made in the
June

1999 Interagency Inspector General report. Deputy Under Secretary

of Defense for Policy (Policy Support)

State Department Ongoing The State Department has agreed to provide final

decisions electronically if DOD will reciprocate and provide its positions
electronically.

19. Establish Department of Defense/ State/ Commerce

interagency process to improve interagency

communications To facilitate expedited export license processing;

protect agency sensitive information; reduce repetitive submission of
technical data; provide a

standard user interface for the submission and review of supporting
documentation; and comply

with the Government Paperwork Elimination Act and the Clinger- Cohen Act.

Responds to recommendations made in the June 1999 Interagency Inspector
General report.

Deputy Under Secretary of Defense for Policy

(Policy Support) Defense Threat Reduction

Agency State Department

Commerce Department Ongoing In the short term, DOD plans to obtain a
dedicated

line for processing licenses under both the munitions and commodity control
lists. At the time of our

review, DOD, Commerce, and State had to dial in periodically for updates to
their licensing systems.

DOD is developing plans for the electronic submission of technology
specifications. DOD

officials are waiting on congressional approval of their reprogramming
actions to fund this initiative.

20. Interface between Foreign Disclosure and Technical

Information System and Defense Security

Cooperation Agency's foreign military sales data

To provide foreign military sales data into the Foreign Disclosure and
Technical Information

System. Deputy Under Secretary

of Defense for Policy (Policy Support)

Defense Security Cooperation Agency

Completed According to an official within the Office of Secretary of
Defense, this effort was completed prior to the

identification of DOD's defense cooperation initiatives. Additional
improvements and interfaces

are planned with the new interagency export control system identified under
initiative #22.

21. Put delegation of disclosure authority letters into the

Foreign Disclosure and Technical Information

System To provide visibility of disclosure decisions to

DOD personnel processing export license applications and foreign military
sales cases.

Required by Deputy Secretary of Defense September 9, 1999, memorandum
encouraging

compliance with DOD Directive 5200.39 and discussed at senior- level working
group

meetings. These meetings were chaired by the Principal Deputy Under
Secretary of Defense for

Acquisition, Technology, and Logistics and the Principal Deputy Under
Secretary of Defense for

Policy, as required in the memorandum. Deputy Under Secretary

of Defense for Policy (Policy Support)

Ongoing At the time of our review, the Air Force was the only military
service with delegation of disclosure authority

letters on- line.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 10

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

22. Develop and put into service new computer

system for DOD/ State/ Commerce to

process export licenses To facilitate expedited export license processing;

protect agency sensitive information; reduce repetitive submission of
technical data; provide a

standard user interface for the submission and review of supporting
documentation; comply with

the Government Paperwork Elimination Act and the Clinger- Cohen Act.

Responds to

ï¿½

Defense Science Board recommendation and

ï¿½

Department of Commerce Inspector General's recommendation made in the June

1999 Interagency report. Deputy Under Secretary

of Defense for Policy (Policy Support)

Defense Threat Reduction Agency

State Department Commerce Department

Ongoing Discussions between the Departments of Defense, Commerce, and State
continue. DOD has allotted

$30 million in Program Budget Decision Memorandum #289 for this interagency
system;

however, DOD officials state that a cost- benefit analysis was not done to
support the $30 million

budget decision. A cost- benefit analysis is now in progress. In addition,
the State Department has

expressed concerns about this effort and has had limited participation. The
implementation of this

initiative is subject to congressional approval of funding.

23. Expand interfaces between remote sites and the

Security Policy Automation Network

To facilitate expedited export license processing and to reduce repetitive
submission of technical

data. Responds to June 1999 Interagency Inspector

General report. Deputy Under Secretary

of Defense for Policy (Policy Support)

Ongoing This is a proof of concept effort between the Departments of Defense
and Commerce. The

Departments have yet to build the application and database that will
interface with each other and

interface between DOD, the military services, and Commerce. This effort is a
precursor to the

interagency export license system between the Departments of Defense, State,
and Commerce.

24. Convert congressional notification process for

Arms Export Control Act 36( b), (c), and (d)

notifications to paperless format

Discussed at senior- level working group meetings chaired by the Principal
Deputy Under

Secretary of Defense for Acquisition, Technology, and Logistics and the
Principal

Deputy Under Secretary of Defense for Policy. Defense Security

Cooperation Agency Defense Threat Reduction

Agency State Department

On hold According to Defense Security Cooperation Agency officials, no one
was acting on this initiative at the

time of our review.

Export control initiatives

25. Implementation plan to improve effectiveness of

the export licensing review process

To improve the timeliness and quality of the export license review process.

Resulted from backlog of export licenses and was discussed at senior- level
working group

meetings chaired by the Principal Deputy Under Secretary of Defense for
Acquisition,

Technology, and Logistics and the Principal Deputy Under Secretary of
Defense for Policy.

Defense Threat Reduction Agency

Completed The Deputy Secretary of Defense issued a memorandum on October 4,
1999, concerning

internal DOD changes to the licensing process.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 11

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

26. Budget review/ issue papers into DOD budget process

To provide funding for licensing officials and interagency computer system.

Resulted from backlog of export licenses and was discussed at senior- level
working group

meetings chaired by the Principal Deputy Under Secretary of Defense for
Acquisition,

Technology, and Logistics and the Principal Deputy Under Secretary of
Defense for Policy.

Defense Threat Reduction Agency

Completed Program Budget Decision #289, which was issued on December 1,
1999, provided funding for the export

license system and resources for internal DOD changes to the license
process. See initiative #22 for

additional information. 27. Refine DOD and State

Department prescreening guidance

To reduce DOD's export license caseload by providing State with improved
screening

guidance. Discussed at senior- level working group

meetings chaired by the Principal Deputy Under Secretary of Defense for
Acquisition,

Technology, and Logistics and the Principal Deputy Under Secretary of
Defense for Policy.

Defense Threat Reduction Agency

State Department On hold According to Defense Threat Reduction Agency

officials, the screening guidance was provided in the past and the Defense
Threat Reduction Agency has

not identified any irregularities in the State Department's referral
practices. This initiative was on

hold at the time of our review pending completion of initiative #28.

28. Update referral guidance (standard guidance to the

services) within DOD To address and resolve problems with lengthy

export license processing times. Responds to recommendations made in the
June

1999 Interagency Inspector General report. Defense Threat Reduction

Agency Joint Chiefs of Staff

Defense Intelligence Agency

Military services Ongoing Defense Threat Reduction Agency officials asked

DOD components to document what licenses they wanted to see on two
occasions. On the first

occasion, the components preferences were not used because they were too
general. The second request

required highly detailed input. However, the information provided by DOD
components, if applied

literally, would have significantly increased referrals. Consequently,
information in the referral packages

would increase the services/ components workload 300 to 500 percent. One
service told us that the last

request for preferences seemed to have been flawed because it was
constructed in such a way that the

components could only provide input that related to broad categories of
items listed in the United States

Munitions List. Defense Threat Reduction Agency officials are planning to
review this again over the

next year to determine how to refine the referral process.

29. Identify training requirements and funding

options To improve quality of licensing reviews.

Responds to recommendations made in the June 1999 Interagency Inspector
General report.

Defense Threat Reduction Agency

Deputy Under Secretary of Defense for Policy

(Policy Support) Ongoing The Defense Threat Reduction Agency expects that

training program requirements will be identified sometime in the fall of
2000.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 12

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

30. Establish formal DOD training program for export

license review To improve quality of licensing reviews.

Responds to recommendation made in the June 1999 Interagency Inspector
General report.

Defense Threat Reduction Agency

Deputy Under Secretary of Defense for Policy

(Policy Support) Ongoing The Defense Threat Reduction Agency expects that

training program requirements will be identified in the fall of 2000.

31. Prepare, coordinate, and issue guidance to

implement the International Traffic in Arms Regulations

125.4( b)( 1) and (11) To improve the use of these exemptions for

certain technical data. Responds to

ï¿½

Arms Transfer/ Technology Transfer White Paper recommendation and

ï¿½

Defense Science Board Study recommendation.

Defense Threat Reduction Agency

Ongoing The Defense Threat Reduction Agency is in the final stages of
coordinating draft guidance.

32. Expand International Traffic in Arms Regulations arms

export licensing exemptions to other countries- similar

to the historical exemption provided to Canada

To facilitate cooperation with countries that are trusted allies by reducing
burden for obtaining

export licenses, under certain circumstances. Resulted from discussions
between the Deputy

Secretary of Defense, the State Department, and allies and industry.

Defense Threat Reduction Agency

Deputy Under Secretary of Defense for Policy

(Policy Support) State Department

Ongoing A variation of this initiative was incorporated in the
Administration's Defense Trade Security Initiative that

was announced May 24, 2000. Negotiations have begun that could lead to
regulatory change to extend

exemptions to some allied countries such as the United Kingdom and
Australia.

33. Expand International Traffic in Arms Regulations

exemptions- consult with Congress and State

Department To facilitate cooperation with countries that are

trusted allies by reducing burden for obtaining export licenses, under
certain circumstances.

Results of discussions between the Deputy Secretary of Defense, the State
Department, and

allies and industry. Defense Threat Reduction

Agency DOD's Office of General

Counsel Principal Deputy Under

Secretary of Defense for Policy

Principal Deputy Under Secretary of Defense for

Acquisition, Technology, and Logistics

State Department Ongoing A variation of this initiative was incorporated in
the

Administration's Defense Trade Security Initiative that was announced May
24, 2000. Draft regulations

have been briefed to Congress, but have not yet been published.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 13

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

34. Amend the Arms Export Control Act section 36( c) to

raise congressional notification thresholds for

exported defense articles and services.

To raise the dollar thresholds for congressional notification of licenses
for exported defense

articles and services. Current thresholds, per DOD, are obsolete.

Discussed at senior- level working group meetings chaired by the Principal
Deputy Under

Secretary of Defense for Acquisition, Technology, and Logistics and
Principal Deputy

Under Secretary of Defense for Policy to make thresholds more realistic.

Defense Threat Reduction Agency

State Department Terminated No action has been taken because the State

Department advised that most notifications to Congress far exceed statutory
dollar thresholds.

Thus, any amendment based on inflation update rationale would not materially
affect the number of

notifications. 35. Review and modify U. S.

Munitions and Commerce Control Lists.

To address problem of backlog in export licensing (e. g., have services only
review what's

necessary). Responds to Arms Transfer/ Technology Transfer

White Paper recommendation. Defense Threat Reduction

Agency DOD's Office of General

Counsel Principal Deputy Under

Secretary of Defense for Acquisition, Technology,

and Logistics Principal Deputy Under

Secretary of Defense for Policy

State Department Ongoing This is part of the Administration's Defense Trade

Security Initiative, which includes plans to review the U. S. Munitions List
every 4 years. Defense Threat

Reduction Agency officials said that reviewing the Commerce Control List is
not part of this initiative.

36. Establish ombudsman for exporters to have avenue

into the licensing system. To assist industry and provide insight into

licensing related to foreign military sales/ direct commercial sales.

Responds to Arms Transfer/ Technology Transfer White Paper recommendation.

Defense Threat Reduction Agency

Defense Security Cooperation Agency

Complete The Defense Threat Reduction Agency established its ombudsman in
the Technology Security

Directorate in May 2000. (Also see initiative #62.)

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 14

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative Defense industrial base initiatives

37. Conclude Declaration of Principles with United

Kingdom (U. K.) To improve the bilateral framework for

cooperation and facilitate a more integrated industrial base.

Results of discussions between the Deputy Secretary of Defense and allies
and industry.

Deputy Under Secretary of Defense- International

and Commercial Programs

Deputy Under Secretary of Defense- Industrial

Affairs Principal Deputy Under

Secretary of Defense for Policy

Director of Defense Procurement- Foreign

Contracting Assistant Secretary of

Defense for Command, Control, Communications,

and Intelligence Defense Threat Reduction

Agency Complete The U. S. Secretary of Defense and U. K. Secretary of

State for Defence signed the Declaration of Principles on February 5, 2000.
Negotiations on the declaration

lasted about 10 months. Defense leaders agreed to establish both policy-
level and working- level groups

of subject matter experts to further develop the principles, with a view
toward establishing and

implementing specific arrangements and agreements. The State Department
declined to participate and

required that the Declaration of Principles with the U. K. not apply to
matters under its jurisdiction. No

follow- up agreement is expected to be legally binding without the State
Department's involvement.

38. Change acquisition restrictions in law

1. To update and clarify domestic source and content requirements of the
Berry

Amendment, section 9005 of the DOD Appropriations Act, 1993 (P. L. 102- 396,
Oct.

6, 1992, as amended) (10 USC 2241 note), which restricted spending
appropriated funds

on items such as food, clothing, certain textile products, specialty metals,
and hand tools

that had not been produced in the U. S. 2. To grant authority to the
Secretary of

Defense to waive domestic source requirements or domestic content

requirements in the procurement of items to promote armaments cooperation.

Responds to Defense Science Board Study. Deputy Under Secretary

of Defense- Industrial Affairs

Director of Defense Procurement- Foreign

Contracting DOD's Office of General

Counsel Terminated These proposals were submitted to the Office of

Management and Budget for coordination. According to an official with the
Office of Management and

Budget, these proposals were not approved. According to DOD, the Department
voluntarily

withdrew these proposals for further coordination and possible
reintroduction in a subsequent legislative

cycle.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 15

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

39. Complete beta version of foreign defense contractor

financial, product, and capabilities database

To look at the capabilities of suppliers and obtain greater visibility over
foreign transactions.

Discussions at senior- level working group meetings chaired by the Principal
Deputy Under

Secretary of Defense for Acquisition, Technology, and Logistics and the
Principal

Deputy Under Secretary of Defense for Policy. Deputy Under Secretary

of Defense- Industrial Affairs

Contractor Ongoing A contract was signed in 1999. The contractor is

developing a typology of about 36 companies that supply major defense
interests.

40. Document DOD utilization of foreign sources

To improve the quality of information on U. S. reliance on foreign sources
and, conversely, on

U. S. supplier content in foreign defense equipment and components.

To address database problems identified in Defense Trade: Weaknesses Exist
in DOD

Foreign Subcontract Data, (GAO/ NSIAD- 99- 8, Nov. 13, 1998).

Deputy Under Secretary of Defense- Industrial

Affairs Director of Defense

Procurement- Foreign Contracting

Commerce Department Ongoing The Department of Commerce surveyed prime

contractors and suppliers for five systems ranging from a small
communications device to a cargo

plane. The Commerce Department is awaiting DOD's response on the survey
results.

41. Start industrial base discussions with other

countries To identify common areas to improve

cooperation. Results of discussions between the Deputy

Secretary of Defense and allies and industry. Deputy Under Secretary

of Defense- International and Commercial

Programs Deputy Under Secretary

of Defense for Policy (Policy Support)

Assistant Secretary of Defense for Command,

Control, Communications, and Intelligence

Ongoing DOD signed a Statement of Principles with Australia on July 17,
2000. We were told that DOD has started

discussions with the Netherlands, France, Germany, and Sweden.

42. Identify barriers to foreign competition in U. S.

acquisition practices To ascertain how often foreign sources are

excluded from competition and the reasons why. Responds to Defense Science
Board Study

recommendation. Deputy Under Secretary

of Defense- Industrial Affairs

Director of Defense Procurement- Foreign

Contracting Contractor

Ongoing The contractor is reviewing impediments to competition in the
missile sector.

43. Conduct education and outreach activities with

acquisition community and major prime contractors

regarding globalization policies

To sensitize DOD and industry officials on DOD's globalization policies.

Discussions at senior- level working group meetings chaired by the Principal
Deputy Under

Secretary of Defense for Acquisition, Technology, and Logistics and the
Principal

Deputy Under Secretary of Defense for Policy. Deputy Under Secretary

of Defense- Industrial Affairs

Director of Defense Procurement- Foreign

Contracting Ongoing DOD officials have discussed DOD's defense

cooperation policies at various conferences.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 16

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

44. Request industry to codify their input to license

applications To improve the availability of information for

reviewers processing export license applications and to standardize the data
provided on

applications. Responds to Defense Science Board Study

recommendation. Deputy Under Secretary

of Defense- Industrial Affairs

Defense Threat Reduction Agency

Military services State Department

Industry Ongoing Part of the larger automation effort discussed above.

It is a pilot project and information will be obtained from conferences like
the Society for International

Affairs.

Defense industrial security initiatives

45. Negotiate Foreign Ownership, Control, or

Influence reciprocity agreement with the United

Kingdom Discussions at senior- level working group

meetings chaired by the Principal Deputy Under Secretary of Defense for
Acquisition,

Technology, and Logistics and the Principal Deputy Under Secretary of
Defense for Policy.

Assistant Secretary of Defense for Command,

Control, Communications, and Intelligence

Under Secretary of Defense for Policy

Terminated This initiative was dropped. 46. Propose National Industrial

Security Program Operating Manual changes to

eliminate unnecessary special security agreement

requirements for companies owned by entities from

certain countries and to address national interest

determination issues To eliminate unnecessary requirements that do

not enhance national security. Responds to Defense Science Board Study

recommendation. Assistant Secretary of

Defense for Command, Control, Communications,

and Intelligence Ongoing The National Industrial Security Program Operating

Manual is not being changed at this time. The Industrial Security Regulation
is being coordinated

and contains the proposed foreign ownership policy. 47. Revise DOD
instructions to

address national interest determination issues

To eliminate unnecessary requirements that do not enhance national security.

Responds to Defense Science Board Study recommendation.

Assistant Secretary of Defense for Command,

Control, Communications, and Intelligence

Duplicate (See #46)

This initiative is covered in initiative #46.

Foreign Military Sales reinvention initiatives

48. Develop U. S. government and industry cooperation

policy To establish a culture wherein the U. S.

government and U. S. industry work together throughout the program to
provide accurate

information on requirements and pricing based on the customer's stated need.

Responds to Process Transparency White Paper recommendation.

Defense Security Cooperation Agency

Director of Defense Procurement- Foreign

Contracting Military services

Ongoing A policy memo was issued on May 5, 1999. To implement the policy,
the Defense Security

Cooperation Agency has tasked the military services to develop a plan for
interacting with U. S. industry.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 17

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

49. Develop transparency policy for Letters of Offer

and Acceptance (A Letter of Offer and

Acceptance is the authorized document used

by the U. S. government as an offer to sell defense

articles and services to a foreign country or

international organization. The offer becomes a

contract when it is accepted by an authorized

representative of the purchasing country or

international organization and applicable funding is

provided. Letters of Offer and Acceptance identify

what is being sold, its estimated costs, the U. S.

government costs to administer the sale, and

terms and conditions of the transfer.)

To provide foreign customers greater visibility and participation in the
development of Letters of

Offer and Acceptance. Responds to Process Transparency White Paper

recommendation. Defense Security

Cooperation Agency DOD acquisition and

security assistance communities

Industry associations Foreign customers

Ongoing The Director of the Defense Security Cooperation Agency issued a
policy memo on September 13,

1999. 50. Develop policy for foreign

purchaser participation in the contracting process

To encourage appropriate foreign purchaser participation in the contracting
process and

addresses the U. S. government and U. S. industry coordination on
accommodating a

foreign customers' special needs. Responds to Process Transparency White
Paper

recommendation. Defense Security

Cooperation Agency Director of Defense

Procurement- Foreign Contracting

Ongoing The Deputy Secretary of Defense issued a memo on March 23, 1999,
stating DOD's policy on customer

participation. The Office of the Director of Defense Procurement- Foreign
Contracting developed draft

Defense Federal Acquisition Regulation Supplement language (225. 7304), but
the change has not been

implemented. The focus of this initiative is to provide adequate

pricing data on which foreign purchasers can base Letters of Offer and
Acceptance and contract

decisions. The Defense Security Cooperation Agency led an April 26, 2000,
meeting with U. S.

government, industry, and foreign government representatives to lay the
groundwork; a June 29,

2000, meeting was held to further refine procedures.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 18

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

51. Adjust Foreign Military Sales surcharge

(Surcharges are authorized charges included in Letters

of Offer and Acceptance, which are calculated on a

percentage basis, to pay a fair share of overhead and

other costs that have been incurred by the U. S.

government as a result of selling a defense item or

service.) Responds to

ï¿½

Pricing, Finance, and U. S. Government Cost Recovery White Paper
recommendation and

ï¿½

foreign customer complaints and various audit reports (including GAO).

Defense Security Cooperation Agency

DOD Comptroller Military services

Ongoing This effort is looking at adapting the DOD's Planning, Programming,
and Budgeting System to DOD's

Security Cooperation arena operating costs; and exploring development of a
performance based cost

system for management and budget use. With contractor assistance, the
Defense Security

Cooperation Agency will revise its fiscal year 2001 and fiscal year 2002
budget process events and

examine the feasibility of fielding performance based cost systems in the
military departments and the

Defense Security Cooperation Agency. 52. Reimburse U. S.

government for support of direct commercial sales and

foreign military financing/ direct commercial

contracts To increase U. S. government partnering with

U. S. industry in the area of direct commercial sales opportunities.

Responds to Pricing, Finance, and U. S. Government Cost Recovery White Paper

recommendation. Defense Security

Cooperation Agency Ongoing This effort is focused on receiving reimbursement
for

the non- foreign military sales administrative functions that are currently
paid by the administrative fund of

the Foreign Military Sales Program. The Defense Security Cooperation Agency
initiated a legislative

change to section 30 of the Arms Export Control Act to allow for industry
reimbursement of U. S.

government services provided in support of direct commercial sales (22 U. S.
C. 2770). This initiative

has not cleared the interagency coordination process. 53. Allow for not- to-
exceed/ firm

fixed price Letters of Offer and Acceptance

To address foreign purchaser complaints that prices are too high and change
too often.

Responds to Pricing, Finance, and U. S. Government Cost Recovery White Paper

recommendation. Defense Security

Cooperation Agency Ongoing The Defense Security Cooperation Agency drafted

and coordinated a new policy statement that cites when use of not- to-
exceed/ firm fixed price is

appropriate and what procedures should be followed. The new policy statement
was issued on June 15,

2000. 54. Allow for alternative form of

surcharge Responds to Pricing, Finance, and U. S.

Government Cost Recovery White Paper recommendation.

Defense Security Cooperation Agency

DOD Comptroller Military services

Ongoing As described in initiative #51, the Defense Security Cooperation
Agency is revising its budget process

and examining the feasibility of a performance- based cost collection
system. After completion of those

projects, the Defense Security Cooperation Agency will decide whether to
proceed with this initiative.

55. Change policy to allow provision of Letters of Offer

and Acceptance price breakouts

Responds to Pricing, Finance, and U. S. Government Cost Recovery White Paper

recommendation. Defense Security

Cooperation Agency Complete The Defense Security Cooperation Agency

Comptroller issued a related policy memo on February 11, 1999, on release of
logistic support

charges and contract administration services financial data. The Director of
the Defense Security

Cooperation Agency issued a policy memo on September 13, 1999.

This effort also relates to initiative #49, on providing transparency in
Letters of Offer and Acceptance to

foreign purchasers.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 19

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

56. Explore different methodologies/ sources for

Letters of Offer and Acceptance financial

management Respond to Pricing, Finance, and U. S.

Government Cost Recovery White Paper recommendations to explore the use of

commercial practices and outsourcing of the accounting and financial
management services

currently provided by the Defense Finance and Accounting Service.

Defense Security Cooperation Agency

Defense Finance and Accounting Service

DOD Comptroller Department of Treasury

Office of Management and Budget

Ongoing The Defense Security Cooperation Agency is working with the Office
of Management and Budget, the

Department of Treasury, the Defense Finance and Accounting Service, and the
DOD Comptroller to try

and incorporate some commercial financing practices into its foreign
military sales practices

.

57. Review application of Defense Working Capital

Fund to Foreign Military Sales Program

To address foreign purchaser complaints that pricing of items in the Defense
Working Capital

Fund stock frequently changes. Responds to Pricing, Finance, and U. S.

Government Cost Recovery White Paper recommendation.

Defense Security Cooperation Agency

DOD Comptroller Ongoing Cursory review indicates that price instability was
not

the problem it was thought to be since 87 percent of all parts buys and
shipments take place in the same

fiscal year, thereby yielding no change in prices. The Defense Security
Cooperation Agency is continuing

to look at the Defense Working Capital Fund 's application to the Foreign
Military Sales Program.

58. Review administrative fee collection practices

Responds to Pricing, Finance, and U. S. Government Cost Recovery White Paper

recommendation. Defense Security

Cooperation Agency Ongoing Under initiative #51, the Defense Security

Cooperation Agency is changing its budget process and examining the
feasibility of collecting additional

information. After these efforts, the Defense Security Cooperation Agency
will decide whether to proceed

with this initiative. 59. Develop and approve Arms

Transfer/ Technology Transfer White Paper

To address problems raised by industry representatives and foreign customers
regarding

regulating arms transfers, technology transfers, and disclosures of
classified information.

Defense Security Cooperation Agency (co

chair) Deputy Under Secretary

of Defense for Policy (Policy Support) (co- chair)

Defense Threat Reduction Agency

Military services Duplicate

(See #1) This effort is covered in initiative #1.

60. Establish Arms Transfer Policy Review Group

To form a group that establishes policy or resolves arms transfer issues
when normal

transfer coordination and decision- making processes are unable to reach
consensus on a

DOD position. Deputy Secretary of

Defense Complete The Deputy Secretary of Defense issued a

memorandum on November 18, 1999.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 20

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

61. Devise method for industry to advise the Arms Transfer

Policy Review Group of contentious issues early in

the process Responds to Arms Transfer/ Technology Transfer

White Paper recommendation. Arms Transfer Policy

Review Group Deputy Under Secretary

of Defense for Policy (Policy Support)

Defense Security Cooperation Agency

Ongoing According to a Defense Security Cooperation Agency official, no
action was taken because a dispute

resolution committee within DOD already exists. DOD has an export licensing
committee, which is

chaired by a Defense Threat Reduction Agency official, and is the first
level mechanism for resolving

issues. If the export licensing committee cannot resolve an issue, then the
issue may be brought to

the Arms Transfer Policy Review Group. For non export licensing and non-
technology transfer issues,

industry may contact the Director of the Defense Security Cooperation
Agency-- the Arms Transfer

Policy Review Group's Executive Secretariat. The Defense Security
Cooperation Agency will forward

the industry concern to the appropriate DOD forum for consideration.

62. Appoint ombudsman to coordinate Foreign Military

Sales and Foreign Military Sales/ Direct Commercial

Sales issues Responds to Arms Transfer/ Technology Transfer

White Paper recommendation. Defense Security

Cooperation Agency Complete The Defense Security Cooperation Agency's

ombudsman was appointed in December 1999. (Also see initiative #36.)

63. Engage Arms Transfer Policy Review Group to

champion DOD/ industry problems with State

Department Responds to Arms Transfer/ Technology Transfer

White Paper recommendation. Arms Transfer Policy

Review Group Deputy Under Secretary

of Defense for Policy (Policy Support)

Defense Security Cooperation Agency

Ongoing DOD has held some discussions with the State Department to resolve
various issues. The Arms

Transfer Policy Review Group engages the State Department on a case- by-
case basis when deemed

necessary. 64. Develop white paper on

metrics and process reengineering

Result of efforts by a U. S. government integrated process team and the
Defense Policy Advisory

Committee on Trade to examine ways of streamlining the security cooperation
process.

Defense Security Cooperation Agency

Ongoing The draft white paper has been released for comment. The white paper
has been retitled; its new

title is “Reinvention Strategy Paper.” The Defense Security
Cooperation Agency official stated that the

white paper is expected to be released by August 2000.

65. Include metrics development and

implementation in reinvention project

To comply with the Government Performance and Results Act, as well as to
develop a

methodology for measuring how well the agency is doing business internally
and externally.

Defense Security Cooperation Agency

Defense Finance and Accounting Service

Defense Logistics Agency Military services

Ongoing The Defense Security Cooperation Agency's metrics effort began in
1998. The effort has since been

expanded to include the military services and defense agencies associated
with security cooperation. The

Defense Security Cooperation Agency conducts quarterly reviews of all these
metrics.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 21

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

66. Organize Defense Security Cooperation Reform Day

To facilitate communication with industry and foreign customers.

Results of an internal Defense Security Cooperation Agency initiative.

Defense Security Cooperation Agency

Complete This is an annual event. This year's event was entitled
“Security Cooperation Day: Perspective is

Everything” and was held on July 10- 12, 2000. 67. Organize command

conferences To facilitate communication with industry and

foreign customers. Results of an internal Defense Security

Cooperation Agency initiative. Defense Security

Cooperation Agency Complete These conferences are held annually.

68. Add reinvention section to website

To facilitate communication with industry and foreign customers.

Results of an internal Defense Security Cooperation Agency initiative.

Defense Security Cooperation Agency

Complete The Defense Security Cooperation Agency has added a reinvention
section on its website at

http:// www. dsca. osd. mil. 69. Broadcast reinvention

information via Security Assistance Network

To facilitate communication with industry and foreign customers.

Results of an internal Defense Security Cooperation Agency initiative.

Defense Security Cooperation Agency

Complete Reinvention information is sent out via the security assistance
network. This action is a part of daily

business practice and is independent of this initiative. 70. Develop public
affairs plan To facilitate communication with industry and

foreign customers. Results of an internal Defense Security

Cooperation Agency initiative. Defense Security

Cooperation Agency Ongoing Public affairs efforts are carried out day- to-
day. No

written plan has been developed. 71. Attend Foreign Military

Sales Procurement Group Quarterly Meetings

(Includes Attaches from countries with which the

U. S. has Memorandum of Understanding and other

foreign military sales customers)

To facilitate communication with industry and foreign customers.

Results of an internal Defense Security Cooperation Agency initiative.

Defense Security Cooperation Agency

Director of Defense Procurement

Complete These meetings are an ongoing effort to reach out to foreign
military sales customers.

72. Continue to obtain industry input on Foreign Military

Sales Program's reinvention efforts

To facilitate communication with industry and foreign customers.

Results of an internal Defense Security Cooperation Agency initiative.

Defense Security Cooperation Agency

Director of Defense Procurement- Foreign

Contracting Ongoing The Defense Security Cooperation Agency has

obtained industry input for all white papers and sent out email to
contractors soliciting their opinion on

proposed changes. It also sought industry's input on initiative #50.

73. Develop project plan for phase I of the Defense

Security Cooperation Agency's reinvention

project To facilitate the Defense Security Cooperation

Agency's management of reinvention. Result of Defense Security Cooperation
Agency

management decision. Defense Security

Cooperation Agency Contractor

Complete The contractor developed a project plan for phase I. The project
plan was complete in December 1999.

Lack of credible reports associated with this plan resulted in discontinuing
the contractor effort and

refocusing the reinvention effort as outlined in the Reinvention Strategy
White Paper.

ENCLOSURE II

GAO/ NSIAD- 00- 190R D Page 22

Initiative Objective( s) and/ or source( s) citing the initiative

Participants Current status

Actions taken to implement initiative

74. Integrate white paper actions with overall

reinvention project To facilitate the Defense Security Cooperation

Agency's management of reinvention. Result of Defense Security Cooperation
Agency

management decision. Defense Security

Cooperation Agency Contractor

Discontinued a

75. Develop overall reinvention project plan

To facilitate the Defense Security Cooperation Agency's management of
reinvention.

Result of Defense Security Cooperation Agency management decision.

Defense Security Cooperation Agency

Contractor Discontinued

a 76. Initiate/ develop models that

document existing process To facilitate the Defense Security Cooperation

Agency's management of reinvention. Result of Defense Security Cooperation
Agency

management decision. Defense Security

Cooperation Agency Contractor

Discontinued a

77. Develop information briefing package

To facilitate the Defense Security Cooperation Agency's management of
reinvention.

Result of Defense Security Cooperation Agency management decision.

Defense Security Cooperation Agency

Contractor Discontinued

a 78. Develop performance

measures/ metrics To facilitate the Defense Security Cooperation

Agency's management of reinvention. Result of Defense Security Cooperation
Agency

management decision. Defense Security

Cooperation Agency Contractor

Discontinued a

79. Initiate/ develop models of planned or prospective

process To facilitate the Defense Security Cooperation

Agency's management of reinvention. Result of Defense Security Cooperation
Agency

management decision. Defense Security

Cooperation Agency Contractor

Discontinued a

80. Review Defense Security Cooperation Agency and

Defense Finance and Accounting Service

interface To facilitate the Defense Security Cooperation

Agency's management of reinvention. Result of Defense Security Cooperation
Agency

management decision. Defense Security

Cooperation Agency Contractor

Discontinued a

81. Review Foreign Military Sales Program's process

for managing sales To facilitate the Defense Security Cooperation

Agency's management of reinvention. Result of Defense Security Cooperation
Agency

management decision. Defense Security

Cooperation Agency Contractor

Discontinued a

a Not applicable. The Defense Security Cooperation Agency's approach to
reinvention has changed. Initiatives #74- 81 were related to objectives for
a contractor to

accomplish. The agency is pursuing reinvention efforts in- house rather than
outsourcing this effort. Initiatives # 74- 81 are no longer in effect.

Enclosure III Page 23 GAO/ NSIAD- 00- 190R Defense Trade

ENCLOSURE IV

GAO/ NSIAD- 00- 190R Defense Page 23

GAO CONTACTS AND STAFF ACKNOWLEDGMENTS

GAO Contact Thomas J. Denomme, 202- 512- 4287

Acknowledgments Anne- Marie Lasowski, Marion Gatling, Lillian Slodkowski,
and John Van Schaik also made significant contributions to this report.

(707469)
*** End of document ***