oversight

Foreign Military Sales: Air Force Does Not Use Controls to Prevent Spare Parts Containing Sensitive Military Technology from Being Released to Foreign Countries

Published by the Government Accountability Office on 2003-09-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office
Washington, DC 20548




          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,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.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 technology3 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.



          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. 



                                                                      GAO-03-939R Foreign Military Sales
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 managers4
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 Act5 and the Foreign Assistance Act of
     6
1961, as amended, authorize the Department of Defense’s foreign military sales
program.



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. 



Page 2                                                       GAO-03-939R Foreign Military Sales
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



Page 3                                             GAO-03-939R Foreign Military Sales
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.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.



7
    GAO-03-664.


Page 4                                             GAO-03-939R Foreign Military Sales
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
                            8
stems from our prior work 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 


Enclosure 





8
    GAO-03-664.


Page 5                                             GAO-03-939R Foreign Military Sales
ENCLOSURE 





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Page 7     GAO-03-939R Foreign Military Sales
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