Security Assistance

Each year, the United States supplements congressional appropriations for foreign military assistance by furnishing its allies with significant quantity of excess defense articles, including tanks, fighter and cargo aircraft, ammunition, trucks, spare parts, military rations, and clothing. Although most transfers of these excess defense articles are provided free of charge to eligible countries, some are sold at discounted prices. As U.S. forces downsize, more defense articles are becoming excess and available for transfer. This report reviews the implementation of the excess defense article program, including its scope and growth and the type of items transferred; the process used to report transfers to Congress; the accuracy of pricing/valuing procedures; and aspects of program management, including the identification of excess articles.

GAO found that: (1) between 1990 and 1992, DOD notified Congress of proposed EDA transfers totalling $3.5 billion in acquisition value with an estimated current value of $1 billion; (2) most EDA transfer recipients are countries in and around the North Atlantic Treaty Organization's (NATO) southern flank; (3) between 1990 and 1992, the EDA program grew by more than 50 percent; (4) although the current value of EDA transfers increased between 1990 and 1991, the value of EDA decreased in 1992 to $230 million; (5) Congress cannot accurately determine the total acquisition and current values of the EDA program because the services do not adhere to management guidelines, accurately report the aggregate value of EDA programs, and do not track EDA that are leased or transferred; (6) the military services lack incentives to effectively manage the EDA program because they do not receive a direct benefit when EDA are sold or granted; (7) DOD strengthening of EDA valuing practices would provide Congress with more complete information on the total amount of EDA assistance provided to foreign countries; (8) the services have had difficulty identifying EDA because of uncertainties about additional budget reductions and force structure composition; (9) proper identification of EDA would enable the Defense Security Assistance Agency (DSAA) to fulfill EDA requirements more effectively; and (10) although the Department of State has a policy to secure agreements with all EDA recipients whenever possible, several countries are exempted from these agreements.

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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