Concerns Regarding the National Security Agency Secure Telephone Program

In response to a congressional request, GAO identified the major issues regarding the National Security Agency secure telephones program.

Current plans are to replace the STU-II, the secure telephones now in use, with lower cost STU-III telephones. The government has already awarded development contracts for the telephones and plans to award production contracts in March 1986, at a total cost of about $82 million. In addition to having applicability to national security information, the secure telephones will also have a commercial market, which should result in a reduction in its unit price. GAO found that: (1) the need for additional acquisition of STU-II's is questionable because final delivery is scheduled to begin only 2 or 3 months before the planned installation cut-off date, which is 6 months before the scheduled delivery of the first STU-III's; (2) criteria are needed for determining the number of new phones that will be needed, particularly for third priority use, which is to protect unclassified but sensitive national security-related information; and (3) telephones purchased directly by defense contractors on a reimbursable basis might cost more than if they were provided to the contractors as government furnished equipment.