Defense Production Act

Foreign Involvement and Materials Qualification in the Title III Program Gao ID: NSIAD-94-74 March 14, 1994

The U.S. reliance on foreign sources for critical defense materials has been a source of concern for years. In response to these concerns, title III of the Defense Production Act was reactivated in 1985. The purpose of title III is to establish, expand, or maintain domestic production capacity for materials considered essential to national defense. This report discusses (1) the extent and nature of foreign involvement in the title III program, Defense Department (DOD) oversight of such involvement, and its impact of the program's effectiveness and (2) the adequacy of DOD efforts to qualify materials for defense weapon systems.

GAO found that: (1) four of the six title III projects have some foreign involvement; (2) the impact of foreign involvement on the title III program is difficult to assess since most projects are incomplete, and none of the materials produced are actually being used in a weapon system; (3) most of the title III contracts are not classified, which results in reduced requirements for DOD review, oversight, and approval of foreign involvement in these projects; (4) weapon system qualification is difficult due to defense downsizing, budget cuts, and the reduced military threat; and (5) five of the six projects have met the title III material qualification standards, but none of the materials has completed design-allowable testing.

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.

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