Accurate and Complete Subcontract Data Needed To Assess International Agreements on Defense Procurement

In response to a congressional request, GAO reported on improvements needed in the Department of Defense's (DOD) subcontract-level reporting system, a data collection system which requires prime contractors and subcontractors to report foreign-source purchases valued at more than $10,000.

The DOD international acquisitions staff has reported that, at present, one person works on the system as a collateral duty, and at least one full-time person is needed to properly operate the system. Furthermore, the use of computers would reduce the time needed to compile the information and the potential for error. GAO found that: (1) efforts to encourage compliance with the reporting system have not been fully successful; (2) because contractors have not submitted required reports, the validity of the data developed by the system may have been lessened; (3) the international acquisitions staff has not instituted a method for assessing compliance with the system; (4) the system's method for indicating whether a procurement is domestic or foreign-source can result in incomplete information; (5) by excluding contracts for commercial items, the reporting system overstates the U.S. trade surplus because it collects no information on a significant and growing category of procurements; and (6) many firms are not using the reporting form required by the system but are supplying the information through letters.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Allan I. Mendelowitz Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 512-4812