Philippines

Pursuant to a congressional request, GAO reviewed the grant of U.S. excess defense articles from Subic Bay Naval Base to the Philippines armed forces. GAO found that: (1) the United States complied with an agreement to give the Philippines the first opportunity to acquire any excess defense items by offering $3.5 million of nonlethal excess items, and the Philippines purchased the remaining excess equipment for $600,000; (2) the Navy identified lightweight vehicles as excess based on their condition, the need for them by other Navy activities, and their relative value compared to shipping costs; (3) the Department of Defense retained 60 percent of the vehicles, granted or sold 29 percent of the vehicles to the Philippines, and disposed of 10 percent through the Defense Reutilization and Marketing Office (DRMO); (4) the Navy, the Joint Military Assistance Group (JUSMAG), and DRMO at Subic Bay developed procedures to ensure that excess items were not stolen during the grant process; (5) to facilitate the tracking of granted items, the Philippine armed forces were to provide JUSMAG with a fielding plan showing the designated areas of usage; and (6) the Defense Security Assistance Agency correctly reported the acquisition cost of excess items other than vehicles, but significantly undervalued the acquisition cost of excess vehicles based on Navy-supplied information.