The Adequacy of the National Security Council Study for Setting National Defense Stockpile Goals

GAO testified on its evaluation of the National Security Council's (NSC) stockpile study and discussed participating agencies' comments on the study. GAO noted that the NSC study recommended a stockpile of $700 million, a drastic reduction from the previous goal of $16.1 billion. GAO found that: (1) NSC used supply- and demand-related assumptions in its study that were very sensitive to change; (2) NSC developed foreign source reliability ratings so different from the Federal Emergency Management Agency's (FEMA) 1982 ratings that substituting the FEMA ratings for the NSC rating could increase the NSC base stockpile goal estimate by almost $2 billion; and (3) since NSC used the less demanding mobilization scenario in its study, it may need to increase its assumed defense material requirements by 50 percent. GAO also found that key participating agencies expressed concerns about the study and its recommendations, including: (1) the assumptions NSC used; (2) the way NSC coordinated the study; and (3) the way NSC obtained presidential approval of the study results. GAO also noted that the study did not fairly present the nature or content of participants' input. GAO concluded that FEMA or the Department of Defense should determine stockpile goals by: (1) involving agencies with the necessary experience and expertise; (2) analyzing a reasonable range of assumptions; (3) providing the sensitivity analyses that Administration decisionmakers and Congress may require in performing their oversight roles; and (4) using consistent assumptions and planning factors.