Foreign Military Sales
Air Force Does Not Use Controls to Prevent Spare Parts Containing Sensitive Military Technology from Being Released to Foreign Countries Gao ID: GAO-03-939R September 10, 2003From 1990 through 2001, the Department of Defense delivered over $138 billion in defense articles and services to foreign countries through its foreign military sales programs that included spare parts. Some sales occur under blanket order cases, which are requisitions for a specific dollar value and generally cover classes of parts that a country may need rather than a specific item within a class. The management of foreign military sales is especially critical given the need to prevent certain foreign countries from receiving parts that, if released, could be used against U.S. interests. This report stems from audit work performed in connection with our report, Foreign Military Sales: Improved Air Force Controls Could Prevent Unauthorized Shipments of Classified and Controlled Spare Parts to Foreign Countries. In that report, we address issues relating to classified spare parts that are restricted for national security reasons and controlled spare parts that are not classified but contain military technology or applications or are controlled cryptographic parts. During our work for that report, we observed a situation that brought into question Air Force internal controls to prevent unclassified or uncontrolled spare parts that contain sensitive military technology from being released to foreign countries ineligible to receive them. This report focuses on whether the Air Force has internal controls in place to prevent spare parts that contain sensitive military technology from being released to foreign countries ineligible to receive the parts.
The Air Force does not currently have any internal controls in place to prevent the release of spare parts containing sensitive military technology that are ordered under blanket orders and that the Air Force does not want to release to foreign countries ineligible to receive the parts. This has resulted in the inappropriate release of such parts. During our work, we identified an instance that occurred in 1997 in which a requisition for a C-130 refueling kit, which was to be used on U.S. aircraft only, was not reviewed by anyone because there were no controls in place to require that it be reviewed before it was shipped to a foreign country. When we brought this situation to the attention of Air Force Security Assistance Center officials, they said that the Air Force does not have clear guidance for identifying parts containing sensitive military technology that the Air Force does not want shipped to some foreign countries. They acknowledged that releases of similar spare parts to foreign countries ineligible to receive them had occurred and that such releases were a problem. They also acknowledged that as a result of our work the Air Force Audit Agency will review its controls for selling military technology to foreign countries. The Air Force uses its Security Assistance Management Information System to verify in part that countries are eligible to receive classified or controlled parts. However, this control could also be used to identify for foreign military sales case managers review spare parts that contain sensitive military technology and that the Air Force does not want to release to foreign countries ineligible to receive them.
RecommendationsOur 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: Team: Phone:GAO-03-939R, Foreign Military Sales: Air Force Does Not Use Controls to Prevent Spare Parts Containing Sensitive Military Technology from Being Released to Foreign Countries
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September 10, 2003:
The Honorable Tom Harkin:
United States Senate:
Subject: Foreign Military Sales: Air Force Does Not Use Controls to
Prevent Spare Parts Containing Sensitive Military Technology from Being
Released to Foreign Countries:
Dear Senator Harkin:
From 1990 through 2001, the Department of Defense delivered over $138
billion in defense articles and services to foreign countries through
its foreign military sales programs that included spare parts. Some
sales occur under blanket order cases,[Footnote 1] which are
requisitions for a specific dollar value and generally cover classes of
parts that a country may need rather than a specific item within a
class. The management of foreign military sales is especially critical
given the need to prevent certain foreign countries from receiving
parts that, if released, could be used against U.S. interests. This
report stems from audit work performed in connection with our report,
Foreign Military Sales: Improved Air Force Controls Could Prevent
Unauthorized Shipments of Classified and Controlled Spare Parts to
Foreign Countries.[Footnote 2] In that report, we address issues
relating to classified spare parts that are restricted for national
security reasons and controlled spare parts that are not classified but
contain military technology[Footnote 3] or applications or are
controlled cryptographic parts. During our work for that report, we
observed a situation that brought into question Air Force internal
controls to prevent unclassified or uncontrolled spare parts that
contain sensitive military technology from being released to foreign
countries ineligible to receive them. As agreed with your office, this
report focuses on whether the Air Force has internal controls in place
to prevent spare parts that contain sensitive military technology from
being released to foreign countries ineligible to receive the parts.
Results in Brief:
The Air Force does not currently have any internal controls in place to
prevent the release of spare parts containing sensitive military
technology that are ordered under blanket orders and that the Air Force
does not want to release to foreign countries ineligible to receive the
parts. This has resulted in the inappropriate release of such parts.
During our work, we identified an instance that occurred in 1997 in
which a requisition for a C-130 refueling kit, which was to be used on
U.S. aircraft only, was not reviewed by anyone because there were no
controls in place to require that it be reviewed before it was shipped
to a foreign country. When we brought this situation to the attention
of Air Force Security Assistance Center officials, they said that the
Air Force does not have clear guidance for identifying parts containing
sensitive military technology that the Air Force does not want shipped
to some foreign countries. They acknowledged that releases of similar
spare parts to foreign countries ineligible to receive them had
occurred and that such releases were a problem. They also acknowledged
that as a result of our work the Air Force Audit Agency will review its
controls for selling military technology to foreign countries. The Air
Force uses its Security Assistance Management Information System to
verify in part that countries are eligible to receive classified or
controlled parts. However, this control could also be used to identify
for foreign military sales case managers[Footnote 4] review spare parts
that contain sensitive military technology and that the Air Force does
not want to release to foreign countries ineligible to receive them.
We recommend that the Secretary of the Air Force direct the Deputy
Under Secretary of the Air Force, International Affairs, to (1)
develop, or direct an appropriate source within the Air Force to
develop, criteria for identifying spare parts containing sensitive
military technology that should not be released to foreign countries
and:
(2) establish appropriate edits in the Security Assistance Management
Information System so that requisitions for spare parts containing
sensitive military technology that are identified above are referred to
foreign military sales case managers for review. In commenting on a
draft of this report, the Department of Defense concurred in principle
with our recommendations. The department outlined specific corrective
actions to be taken that respond to our recommendations.
Background:
The transfer of defense items to friendly nations and allies is an
integral component in both U.S. national security and foreign policy.
The U.S. government authorizes the sale or transfer of military
equipment, including spare parts, to foreign countries either through
government-to-government agreements or through direct sales from U.S.
manufacturers. The Arms Export Control Act[Footnote 5] and the Foreign
Assistance Act of 1961,[Footnote 6] as amended, authorize the
Department of Defense's foreign military sales program.
The Department of State sets the overall policy regarding which
countries are eligible to participate in the foreign military sales
program, and the Department of Defense, through the military services,
enters into foreign military sales agreements with individual
countries. The Deputy Under Secretary of the Air Force, International
Affairs, is responsible for the Air Force's foreign military sales
program. The Air Force Security Assistance Center, which is an activity
of the Air Force Materiel Command, administers the program.
Requisitions for spare parts related to significant military equipment
and major defense equipment are processed as defined orders, which
cover specific items and quantities and which provide for security
reviews and item identification. Requisitions can also be processed as
blanket orders, which define a country's eligibility to requisition
spare parts. The center uses an automated management information
system, the Security Assistance Management Information System, to
ensure that only requisitions for spare parts with appropriate waivers
are processed under blanket orders.
The Air Force Does Not Control Requisitions of Parts Containing
Military Technology to Foreign Countries:
The Air Force does not currently have internal controls in place to
prevent the release of spare parts that contain sensitive military
technology ordered under blanket orders from being released to foreign
countries. As a result, the Air Force has released spare parts
containing sensitive military technology to countries ineligible to
receive them.
We found that in 1997 a foreign country used a blanket order to
requisition and obtain a refueling kit used on the C-130 aircraft that
should not have been released. We were told that, at that time, the
refueling kit was to be used for U.S. special operations forces
aircraft only and was not to be released to foreign countries. The
release occurred because there were no controls in place for the
requisition to be reviewed prior to release. The refueling kit is
presently managed by the Air Force's Warner Robins Air Logistics Center
at Robins Air Force Base, Georgia. Air Force officials told us that the
Air Force's Office of Special Investigations at that time was asked to
investigate the release of the refueling kit for the C-130. However, we
were unable to determine the disposition of that investigation.
According to the Air Logistics Center, the kit is no longer considered
sensitive.
While the Security Assistance Management Manual indicates that the
transfer of technology is to be restricted, it does not define a
process or establish criteria whereby parts containing sensitive
technology can be identified. An Air Force Security Assistance Center
official confirmed that the Air Force does not have clear guidance for
identifying spare parts containing sensitive military technology that
the Air Force determines should not be shipped to foreign countries
ineligible to receive them.
Air Force Security Assistance Center officials acknowledged that
releasing spare parts containing military technology to some foreign
countries is a problem resulting from the lack of adequate controls
over blanket orders and that spare parts containing sensitive military
technology had been released. The official also said that, as a result
of our work and the fact that other parts had been released; the Air
Force Audit Agency may review, within the next year, the Air Force's
policies for selling military technology to foreign countries.
The Air Force uses its Security Assistance Management Information
System to help verify that requisitioning countries are eligible to
requisition and receive spare parts related to significant military
equipment and major defense equipment and is taking actions to correct
problems with the system that we recently reported.[Footnote 7]
However, the Air Force currently does not use the system to control the
release of spare parts containing sensitive military technology. By
establishing appropriate restrictions in the system, the Air Force
could use the system to control the release of spare parts containing
sensitive military technology that it determines should not be shipped
to some foreign countries.
Conclusion:
Because the Air Force has no means to identify spare parts containing
sensitive military technology that it may determine should not be
released to certain foreign countries and it does not have internal
controls in place to prevent the release of the parts, such releases
are occurring. Furthermore, the Air Force does not know the extent of
those releases. This inadequate control environment places the
department at risk of having its sensitive military technology not only
improperly released but also used against national interests.
Recommendations for Executive Action:
We recommend that the Secretary of the Air Force direct the Deputy
Under Secretary of the Air Force, International Affairs, to (1)
develop, or direct an appropriate source within the Air Force to
develop, criteria for identifying spare parts containing sensitive
military technology that should not be released to foreign countries
and:
(2) establish appropriate edits in the Security Assistance Management
Information System so that requisitions for spare parts containing
sensitive military technology that are identified above are referred to
foreign military sales case managers for review.
Agency Comments:
In commenting on a draft of this report, the Department of Defense
concurred in principle with our recommendations. Specifically, the
department commented that the Secretary of the Air Force will direct an
appropriate source to (1) develop criteria for identifying spare parts
containing sensitive technology that should not be released to foreign
countries and (2) establish appropriate edits in the Security
Assistance Management Information System so that requisitions for spare
parts containing sensitive military technology that are identified
above are referred to foreign military sales case managers for review.
These actions respond to our recommendations.
The department's comments are enclosed.
Scope and Methodology:
To determine whether the Air Force has controls in place to prevent the
unintentional release of spare parts containing sensitive military
technology to foreign countries not eligible to receive them, we held
discussions with officials from the Office of the Deputy Under
Secretary of the Air Force, International Affairs; the Air Force
Materiel Command's Security Assistance Center, Wright-Patterson Air
Force Base, Ohio; the Air Force's Warner Robins Air Logistics Center,
Robins Air Force Base, Georgia; and the Air Force Audit Agency. We
discussed the policies, practices, and procedures for releasing spare
parts containing military technology to foreign countries. This review
stems from our prior work[Footnote 8] and was conducted from May 2002
through July 2003 in accordance with generally accepted government
auditing standards.
- - - -:
As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from the issue date. At that time, we will send copies of this report
to the Secretary of Defense; the Secretary of the Air Force; the
Director, Office of Management and Budget; and other interested
congressional committees. In addition, the report will be available at
no charge on the GAO Web site at http://www.gao.gov.
Please contact me on (202) 512-8365 if you or your staff have any
questions concerning this report. Key contributors to this letter were
Lawson Gist, Jr.; Jennifer Thomas; Arthur James, Jr.; Lou Modliszewski;
and Jane Hunt.
Sincerely yours,
William M. Solis, Director:
Defense Capabilities and Management:
Signed by William M. Solis:
Enclosure:
ENCLOSURE:
DEFENSE SECURITY COOPERATION AGENCY:
WASHINGTON, DC 20301-2800:
SEP 09 2003:
In reply refer to: 1-03/012158P2:
Mr. William M. Solis, Director Defense Capabilities and Management U.S.
General Accounting Office:
441 G Street, N.W. Washington, D.C. 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO Draft
report, "Foreign Military Sales: Air Force Does Not Use Controls to
Prevent Spare Parts Containing Sensitive Military Technology from Being
Released to Foreign Countries dated July 2003 (GAO Code 350363/GAO-03-
939R).
The Department reviewed the draft report and concurs in principle with
the recommendation that the Secretary of the Air Force instruct the
Deputy Under Secretary of the Air Force, International Affairs, to
require the appropriate officials within the Air Force to take
corrective measures that ensure adequate controls are in place to
prevent future unauthorized shipments of unclassified and/or
uncontrolled spare parts to foreign countries.
Comments addressing the GAO draft report recommendation are included in
the enclosure.
The Department appreciates the opportunity to comment on the draft
report. My point of contact on this matter is Ms. Kathy Robinson. She
maybe contacted by email: kathy robinson@dsca.mil or by telephone at
(703) 601-4368.
Sincerely,
Tome H. Walters, Jr.
Lieutenant General, USAF
Director:
Signed by Tome H. Walters, Jr.:
Attachment As stated:
GAO DRAFT REPORT - DATED JULY 25, 2003 GAO CODE 350363/GAO-03-939R:
"FOREIGN MILITARY SALES: AIR FORCE DOES NOT USE CONTROLS TO PREVENT
SPARE PARTS CONTAINING SENSITIVE MILITARY TECHNOLOGY FROM BEING
RELEASED TO FOREIGN COUNTRIES":
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATION:
RECOMMENDATION: The GAO recommended that the Secretary of the Air Force
direct the Deputy Under Secretary of the Air Force, International
Affairs, to 1) develop or direct an appropriate source within the Air
Force to develop criteria for identifying spare parts containing
sensitive military technology that should not be released to foreign
countries, and 2) establish appropriate edits in the Security
Assistance Management Information System (SAMIS) so that requisitions
for spare parts containing sensitive military technology that are
identified above are referred to country case managers for review.
(Page 4/GAO Draft Report):
DOD RESPONSE: Concur. The Secretary of the Air Force (SecAF) will
direct an appropriate source to (1) develop criteria for identifying
spare parts containing sensitive technology that should not be released
to foreign countries and (2) establish appropriate edits in the
Security Assistance Management Information System (SAMIS) so that
requisitions for spare parts containing sensitive military technology
that are identified above are referred to case country managers of
review.
The SecAF is the proper authority to ensure the right organization can
accomplish this tasking. We have taken corrective measures to ensure
adequate controls are in place to ensure only authorized assets are
released to the FMS customer. Air Force Security Assistance Center
(AFSAC) has recently implemented explicit asset release/documentation
procedures for items identified for review from edits in the SAMIS.
AFSAC has also established a center-level foreign disclosure office to
better educate our workforce on appropriate controls, and to review the
transfer of sensitive items to our foreign customers. The AFMC/DRX
Technology Working Group, in cooperation with the technology transfer
disclosure elements within AFMC and AFSAC, could provide advice and
assist in further developing appropriate measures to ensure only
authorized assets are released to FMS customers.
Military Department FMS case execution legacy systems (e.g., SAMIS) are
currently in a "brown-out" state, and Defense Security Cooperation
Agency (DSCA) approval is required for major changes/improvements while
the Case Execution Management Information System (CEMIS) is being
designed. CEMIS requirements were identified by DSCA and the Military
Departments, and contain numerous requisition validation edits that
will reject unauthorized orders from further processing, thus
precluding these types of occurrences in the future. Anticipate CEMIS
will be ready for initial deployment in FY 07-08 timeframe.
(350363):
FOOTNOTES
[1] Hereafter referred to as blanket order(s).
[2] U.S. General Accounting Office, Foreign Military Sales: Improved
Air Force Controls Could Prevent Unauthorized Shipments of Classified
and Controlled Spare Parts to Foreign Countries, GAO-03-664
(Washington, D.C.: July 29, 2003).
[3] Military technology is technology that would reveal or give insight
into the design and manufacture of U.S. military systems, which are not
possessed by or available from sources outside of the United States
and, if exported, would permit a significant advance in a military
system of any country.
[4] Foreign military sales case managers at the Air Force Security
Assistance Center are responsible for monitoring a particular type of
foreign military sale case, such as a blanket order.
[5] Public Law 90-629.
[6] Public Law 87-195.
[7] GAO-03-664.
[8] GAO-03-664.
