United States Government Accountability Office

GAO Report to the Chairman, Subcommittee 

on National Security, Emerging 

Threats, and International Relations, 

Committee on Government Reform, 

House of Representatives 

JOINT STRIKE 

FIGHTER 

Management of the 

Technology Transfer 

Process 

March 2006 

 

GAO-06-364 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2006

JOINT STRIKE FIGHTER 

Management of the Technology Transfer 

Highlights of GAO-06-364, a report to the Process 

Chairman, Subcommittee on National 

Security, Emerging Threats, and 

International Relations, Committee on 

Government Reform, House of 

Representatives 

The Joint Strike Fighter (JSF) 

program is the Department of 

Defense’s (DOD) largest

international cooperative effort to

develop and produce a major 

weapon system. Due to the breadth 

of international participation, the

number of export authorizations 

needed to share information with 

partner governments, solicit bids

from suppliers, and execute 

contracts is expected to far exceed 

past transfers of advanced military 

technology. 

In July 2003, GAO reported that

managing these transfers and 

partner expectations while 

avoiding delays has been a key 

challenge and recommended that 

industrial planning tools be

developed and used to anticipate 

time frames for national disclosure

and technology transfer decisions. 

This report examines DOD’s 

response to this recommendation

and identifies the practices DOD is

using to expedite license 

processing and avoid program 

delays. 

Agencies have taken four key actions to expedite the processing of licenses 

for transferring technology to partner countries and foreign suppliers. Each 

of these practices is intended to anticipate time frames needed for the 

processing of licenses or avoid delays to the JSF program schedule. 

• In response to GAO’s 2003 recommendation, the JSF Program Office 

instructed the prime contractor to develop an international industrial 

plan that identifies the type of license needed to transfer certain 

technologies to foreign industry. The contractor’s plan provides 

mechanisms for anticipating “need” dates for submitting license

applications and for identifying and addressing potential issues related 

to the releasability of classified information, technologies, or systems. In 

addition to the contractor’s plan, DOD has developed guidance calling 

for industrial planning tools in all programs with significant international 

involvement. 

• Agencies involved in the JSF program are expediting the processing of 

license applications by dedicating staff to the JSF licensing process,

providing consultation to applicants on draft licenses, administering a 

prescreening process for the transfer of low technology and nonsensitive 

items, and allowing addendums to be attached to license applications. 

• The JSF prime contractor and agency officials have used options 

available to them under the International Traffic in Arms Regulations, 

such as Global Project Authorization (GPA) and an exemption used in 

obtaining foreign contractor bids and proposals, to help facilitate the 

export control process and avoid program delays. While GPA is designed 

to approve exports within 5 days, its use has been limited. 

• Due to the early involvement of international partners in the design 

phase of the program, decisions related to the releasability of classified 

information, technologies, or systems to partner countries have been 

addressed as they arise throughout the development of the system. 

Joint Strike Fighter 

Source: JSF Program Office.

www.gao.gov/cgi-bin/getrpt?GAO-06-364.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Ann CalvaresiBarr (202) 512-4841 or 

calvaresibarra@gao.gov. 
Contents 

Letter 1

Results in Brief 2

Background 3

Actions Taken to Expedite License Processing and Avoid Program 

Delays 7

Agency Comments 14 

Appendix I GAO Contact and Staff Acknowledgments 16 

Related GAO Products 17 

Table 

Table 1: Joint Strike Fighter Partner Financial Contributions and 

Estimated Aircraft Purchases 4 

Abbreviations 

AECA Arms Export Control Act 

DDTC Directorate of Defense Trade Controls 

DOD Department of Defense 

DTSA Defense Technology Security Administration 

FAR Federal Acquisition Regulation 

GPA Global Project Authorization 

ITAR International Traffic in Arms Regulations 

JSF Joint Strike Fighter 

MOU memorandum of understanding 

NDPC National Disclosure Policy Committee 

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Page i GAO-06-364 Joint Strike Fighter
United States Government Accountability Office

Washington, DC 20548 

March 14, 2006 

The Honorable Christopher Shays 

Chairman, Subcommittee on National Security, 

Emerging Threats, and International Relations 

Committee on Government Reform 

House of Representatives 

Dear Mr. Chairman: 

The Joint Strike Fighter (JSF) program is the Department of Defense’s 

(DOD) largest experiment to collaboratively develop and produce a major 

weapon system with international partners to date with an estimated cost 

of over $250 billion for the development and production phases of the 

program. It is a joint program among the Air Force, Navy, Marine Corps, 

and eight international partners for developing and producing a nextgeneration fighter aircraft to replace aging inventories. Due to the degree

of international participation at both the government and industry levels, a

large number of export authorizations are necessary to share project 

information with governments, solicit bids from partner suppliers, and 

execute contracts. The transfer of technologies necessary to achieve 

aircraft commonality goals in the JSF program is expected to far exceed 

past transfers of advanced military technology. A key challenge for the 

program has been managing the technology transfer process and partner 

expectations while avoiding delays to the program. 

In July 2003, we reported that due to the early involvement of international 

partners in developing the system, the JSF program has had to mitigate a 

particular set of challenges related to technology transfers. We 

recommended that the JSF program ensure that industrial-planning tools 

are developed and used to anticipate time frames for national disclosure 

and technology transfer decisions.1

 Subsequently, you asked us to examine 

issues raised in our 2003 work related to technology transfer and the JSF 

program and describe the status of DOD planning efforts designed to 

address technology transfer and export control requirements among the 

 1

GAO, Joint Strike Fighter Acquisition: Cooperative Program Needs Greater Oversight to

Ensure Goals Are Met, GAO-03-775 (Washington, D.C.: July 21, 2003) and GAO, Joint Strike 

Fighter Acquisition: Managing Competing Pressures Is Critical to Achieving Program

Goals, GAO-03-1012T (Washington, D.C.: July 21, 2003). 

Page 1 GAO-06-364 Joint Strike Fighter
U.S. government, JSF prime contractors, foreign partners, and foreign 

industry. Specifically, we identified the practices DOD is using to expedite

license processing and avoid program delays. 

In carrying out our work, we reviewed the prime contractor’s newly 

developed international industrial plan and compared it to a prior GAO 

recommendation. To determine the manner in which U.S. export control 

processes are being applied in the JSF program, we interviewed and 

gathered data from export control and JSF officials from DOD, the 

Department of State, and the prime contractor. The international partners

did not discuss issues related to technology transfer with us due to the 

status of current negotiations on a memorandum of understanding for the 

production phase of the program. The partners generally expressed the 

opinion that comments by them during negotiations would not be 

appropriate. We conducted our review from March 2005 to January 2006,

in accordance with generally accepted government auditing standards.2

Agencies have taken a number of actions to address technology transfer 

issues associated with the JSF program. In response to our 2003 

recommendation, the JSF Program Office tasked the prime contractor to

develop an international industrial plan to anticipate time frames for 

national disclosure and technology transfer decisions. The Office of the 

Secretary of Defense also issued guidance calling for the use of similar 

industrial-planning tools for other development programs that include 

foreign partners. Further, DOD is using a variety of practices to expedite 

the processing of export control licenses for the JSF program. For 

example, agencies have staff specifically dedicated to the JSF licensing 

process to focus agency resources on the JSF program. In addition, agency 

stakeholders provide consultation to license applicants on draft licenses, 

and all formal license applications are prescreened to determine if they are 

eligible for an abbreviated review process. The JSF prime contractor and 

agency officials have also used options available to them under the 

International Traffic in Arms Regulations, such as a Global Project 

Authorization and an exemption used in obtaining bids and proposals from 

foreign contractors.3

 The Global Project Authorization was intended to be

Results in Brief 

 2

The DOD Inspector General is also currently examining the JSF licensing process.

3

The unofficial term “bid and proposal exemption” is what the JSF program office refers to

in utilizing a regulatory exemption for disclosing technical data pursuant to DOD 

authorization. 

Page 2 GAO-06-364 Joint Strike Fighter
a mechanism for approving the transfer of low technology, nonsensitive 

items between pre-approved U.S. and foreign companies in about 5 days; 

however, this mechanism’s use has been limited. Additionally, to avoid 

program delays, the JSF program office has certified 350 requests from 

U.S. contractors to use the “bid and proposal exemption,” allowing the 

transfer of information without a license between approved U.S. and 

foreign contractors for purposes of obtaining bids and proposals. Further, 

due to the involvement of international partners in the early design phase 

of the program, issues related to the releasability of classified information, 

technologies, and systems will continue to be addressed as they arise. 

The JSF program began in 1996 and is the largest DOD acquisition 

program to date with an estimated cost of over $250 billion for the 

development and production phase of the program. The program’s goals 

are to develop and field a family of stealthy fighter aircraft for the Navy, 

Air Force, Marine Corps, and U.S. allies. To achieve its mission, JSF will 

incorporate low observable technologies, defensive avionics, advanced 

onboard and offboard sensor fusion, internal and external weapons, and 

advanced prognostic maintenance capability. The program intends to 

produce three variants. The carrier suitable variant will complement the 

Navy’s F/A-18 E/F. The conventional take-off and landing variant will 

primarily be a replacement for the Air Force’s F-16 and A-10 aircraft and 

will complement the F-22A. The short take-off and vertical landing variant 

will replace the Marine Corps’ F/A-18 and AV- 8B aircraft. 

Background 

In October 2001, Lockheed Martin was awarded a contract to develop the

airframe and integrate the system components. Subsequently, Lockheed 

Martin awarded multi-billion-dollar subcontracts to its development 

teammates—Northrop Grumman and BAE Systems—for work on the 

center and aft fuselage, respectively. In addition to the Lockheed Martin 

contract, DOD has contracts with both Pratt & Whitney and General 

Electric to develop two interchangeable aircraft engines. The program is 

currently in the fifth year of an estimated 12-year development phase. The 

current estimated cost for the development phase is about $41.5 billion. 

The JSF program is an international cooperative program consisting of the 

U.S. and eight foreign partners: the United Kingdom, Italy, the 

Netherlands, Turkey, Denmark, Norway, Canada, and Australia. The JSF 

program structure was established through a framework memorandum of 

understanding (MOU) and individual supplemental MOUs between each of 

the partner country’s defense department or ministry and DOD, 

negotiating on behalf of the U.S. government. These agreements identify 

Page 3 GAO-06-364 Joint Strike Fighter
the roles, responsibilities, and expected benefits for all participants. 

Currently DOD is negotiating one MOU for all partner countries related to

the production phase of the program. 

The JSF program allowed foreign countries to become partners at one of 

three participation levels during the system development and 

demonstration phase of the program, based on financial contribution. In 

return for their contributions, partner countries receive proportionate 

benefits, such as number of staff represented in the program office, access 

to program data and technology, and membership on management 

decision-making bodies. As shown in table 1, the foreign partners plan on

contributing over $4.5 billion, or about 11 percent, for the system 

development and demonstration phase and are expected to purchase over

700 aircraft beginning in the 2012 to 2015 time frame. Israel and Singapore 

are involved as security cooperation participants, a nonpartner 

arrangement, which offers limited access to program information. 

According to DOD, foreign military sales to these and other nonpartner 

countries could include an additional 1,500 to 3,000 aircraft. 

Table 1: Joint Strike Fighter Partner Financial Contributions and Estimated Aircraft Purchases 

Dollars in millions 

System development and demonstration Productions

Partner country Partner level 

Financial 

contributionsa

Percentage of

total costs

Projected

quantitiesb

Percentage of total 

quantities

United Kingdom Level I $2,056 5.0 150 4.7

Italy Level II 1,028 2.5 131 4.1

Netherlands Level II 800 1.9 85 2.7

Turkey Level III 175 0.4 100 3.2

Australia Level III 144 0.3 100 3.2

Norway Level III 122 0.3 48 1.5

Denmark Level III 110 0.3 48 1.5

Canada Level III 100 0.2 60 1.9

Total partner $4,535 10.9 722 22.8

United States $36,946 89.1 2,443 77.2

Source: DOD and JSF Program Office. 

a

Chart values do not reflect nonfinancial contributions from partners.

b

Partner quantities are preliminary and were developed for U.S. planning purposes. The estimates 

were developed by the United States in collaboration with partner countries, but no specific national 

agreements or arrangements have been established with partner countries for production; therefore,

these projected production quantities are subject to change. 

Page 4 GAO-06-364 Joint Strike Fighter
DOD has stated that the core objectives of armaments cooperation are to

increase military effectiveness through standardization and 

interoperability and to reduce weapons acquisition costs by avoiding 

duplication of development efforts with U.S. allies. According to DOD and 

the program office, through its cooperative agreements, the JSF program 

contributes to armaments cooperation policy in four areas 

• political/military—expanded foreign relations; 

• economic—decreased JSF program costs from partner contributions; 

• technical—increased access to the best technologies of foreign 

partners; and 

• operational—improved mission capabilities through interoperability 

with allied systems. 

Under the Arms Export Control Act (AECA), DOD is provided the 

authority to enter into cooperative programs with certain U.S. allies.4

 In 

March 1997, the Secretary of Defense directed that DOD engage allies in 

discussions as early as possible to determine the potential for

collaboration to meet coalition needs and ensure interoperability among 

allied systems. DOD guidance states that the department will give 

favorable consideration to transfers of defense articles, services, and 

technology consistent with national security interests to support these 

international programs. Unlike other international cooperative programs, 

the JSF program does not guarantee foreign or domestic suppliers a 

predetermined level of work based on a country’s financial contribution to 

the program. Instead, foreign and domestic suppliers will generally bid 

competitively for JSF work. DOD and the JSF Program Office use the term 

“best value” to describe this competitive approach.

5

 4

Section 27 of the AECA, 22 U.S.C. § 2767 (2000). 

5

This is not necessarily the same as “best value” under the Federal Acquisition Regulation 

(FAR), which is the expected outcome of an acquisition that, in the Government’s 

estimation, provides the greatest overall benefit in response to the requirement. 48 C.F.R.

§§. 2.101 (2005). Such a procurement is conducted competitively under FAR procedures for

contracting by negotiation using any one or a combination of source selection approaches., 

48 C.F.R, §§ 15.002(b), 15.101 (2005). 

Page 5 GAO-06-364 Joint Strike Fighter
The AECA also provides statutory authority for the control of defense 

articles and services.6

 The Department of State oversees the export of 

military items and services.7

 The Directorate of Defense Trade Controls 

(DDTC) within the Department of State has been delegated the authority 

to regulate arms exports and administer the arms export-licensing system. 

The Defense Technology Security Administration (DTSA) represents DOD 

on export control issues. DTSA provides technical and national security 

reviews of and coordinates DOD’s position on export license applications 

referred or reviewed by DDTC. Due to the degree of international 

participation at both a governmental and an industry level in the JSF 

program, a large number of export authorizations are necessary to share 

project information with governments, solicit bids from partner suppliers, 

and execute contracts. The transfer of technologies necessary to achieve 

aircraft commonality goals for the JSF program is expected to far exceed

past transfers of advanced military technology for other systems. 

Before transfers are approved, the U.S. government must first determine if 

weapons or technologies are releasable to the requesting country 

according to the National Disclosure Policy. The National Disclosure 

Policy establishes procedures and criteria for releasing classified or 

sensitive military information to other countries. The National Disclosure 

Policy Committee (NDPC) is responsible for managing the National 

Disclosure Policy, making determinations whether to grant exceptions to 

the policy, conducting security surveys of foreign governments including

defense industries, and determining delegated authority among the 

services.8

 In cases where a request for transfer exceeds that authority, the

service can forward the request to the NDPC for its review. For some 

sensitive technologies, such as stealth, the case is also forwarded for 

review to a special committee that focuses on that particular technology.

 6

Section 38 of the AECA, 22 U.S.C. § 2778 (2000). 

7

The statutory authority of the President to regulate exports of defense articles and 

services was delegated to the Secretary of State by Executive Order 11958, as amended. 

The International Traffic In Arms Regulations implement that authority 22 C.F.R. parts 120-

130 (2005). 

8

The NDPC is composed of members of the State Department, DOD (Joint Staff, Army, 

Navy, and Air Force) and special members such as Department of Energy and the Central 

Intelligence Agency, among others (industry is not represented on the NDPC). 

Page 6 GAO-06-364 Joint Strike Fighter
DOD and the JSF program office have taken the following four key actions 

to avoid the potential negative effects on the program from delays in 

obtaining licenses for transferring technology to partner countries and 

foreign suppliers: 

• In response to our 2003 recommendation, the JSF Program Office 

directed the prime contractor to develop an international industrial 

plan to anticipate time frames for national disclosure and technology 

transfer decisions. 

• Agencies involved in the JSF export-licensing process are expediting 

the processing of license applications by dedicating staff to the JSFlicensing process, providing consultation to applicants on draft 

licenses, administering a prescreening process for the transfer of low 

technology and nonsensitive items, and by allowing addendums to be 

attached to license applications. 

• The JSF prime contractor and agency officials have used options 

available to them under the International Traffic in Arms Regulations 

(ITAR), such as Global Project Authorization (GPA) and an exemption 

used in obtaining foreign contractor bids and proposals, to help 

facilitate the export control process and avoid program delays. The 

GPA was intended to allow for technology transfer decisions regarding 

certain technologies to be made in 5 days or less; however, its use has 

been limited. Use of the bid and proposal exemptions is intended to 

avoid program delays by providing foreign contractors with 

information needed to compete for contracts without first obtaining an

export license. 

• Issues related to the releasability of classified information, technology, 

or systems to foreign partners are addressed as they arise in the JSF 

program because of the involvement of international partners in the 

early design phase of the program. According to DOD officials, they are 

incorporating new practices, such as stakeholder meetings, that are 

intended to facilitate a timely and collaborative decision-making 

process. 

Actions Taken to 

Expedite License 

Processing and Avoid 

Program Delays 

Anticipating Technology 

Transfer Needs 

In July 2003, we reported that due to the early involvement of international 

partners in developing the system, the JSF program has had to mitigate a 

particular set of challenges related to technology transfers. To address 

these challenges, the prime contractor needs to anticipate time frames for 

national disclosure and technology transfer decisions. The anticipation of

these needs would allow for a timely submission of license applications as

Page 7 GAO-06-364 Joint Strike Fighter
well as providing time to identify potential back-up suppliers, if necessary.

Accordingly, we recommended that the JSF Program Office direct the 

prime contractor to complete an international industrial plan that 

• identified current and potential contracts involving the transfer of 

sensitive data and technology to partner suppliers, 

• evaluated the risks that unfavorable export decisions could pose for 

the program, and 

• developed alternatives to mitigate those risks, such as using U.S. 

suppliers. 

In response to our recommendations, in 2003 the JSF program office 

instructed the prime contractor to complete an international industrial 

plan. According to the prime contractor, the plan provides a roadmap that

represents potential licensing activities as a subset of the program 

schedule. Specifically, the plan identifies the need for a license to transfer 

certain technologies to foreign industry. It provides a mechanism for the 

prime contractor to anticipate “need” dates for receiving export licenses 

and provides a mechanism for identifying issues that may arise concerning 

the releasability of information, technologies, or systems so that early 

action can be taken to determine if an exception to the National 

Disclosure Policy or an appropriate committee review should be pursued.

In addition to the creation of the JSF prime contractor’s international 

industrial plan, DOD has added guidance to the Office of the Secretary of 

Defense’s Acquisition Guidebook calling for the development of similar 

industrial-planning tools in all programs with significant international 

involvement prior to the system design and demonstration phase. The 

guidance further states that the plan should project when export licenses 

will be required in support of the acquisition process and when critical 

milestones regarding National Disclosure Policy implementation will need

to be addressed. 

These plans are intended to provide for early planning for the program’s 

proposed technology releases to foreign industry. They also are intended 

to provide early planning for higher level special technical reviews and 

approvals in support of proposed technology releases to foreign industry.9

 9

Such reviews could be related to areas such as low observable/counter low observable,

anti-tamper, or cryptology. 

Page 8 GAO-06-364 Joint Strike Fighter
Further, they are intended to establish a detailed export license approvalplanning process for U.S.-foreign industry cooperation to meet critical 

program and contract timelines. The guidance recommends the plan 

include 

• a timeline that maps key projected export licenses against the program 

acquisition schedule; 

• a definition of the technologies involved in each export license; and 

• a list of U.S. contractors (exporters) as well as foreign contractors 

(end users) for each license. 

Expediting the JSF 

Licensing Process 

Agencies involved in the export-licensing process have employed a variety 

of methods to expedite the processing of license applications. The 

Directorate of Defense Trade Controls (DDTC) within the Department of 

State has dedicated one staff member to the JSF program. Additionally, 

the Defense Technology Security Administration (DTSA) within DOD has 

dedicated staff to specifically deal with issues related to licensing, 

technical aspects, and policy matters for the JSF program. These staffs 

coordinate directly with JSF program office staff dedicated to the licensing 

process. 

According to DTSA officials, along with dedicated staff, a new strategy is 

being used to accelerate processing export licenses for the JSF program. 

Officials across DOD provide advice and resolve issues with license 

applicants through stakeholder meetings prior to formal submission of 

license applications. DTSA officials described these stakeholder meetings 

as a proactive measure to ensure that the license applications are ready to

be assessed when they are received. DTSA officials stated that this process 

evolved in response to the concern that licensing delays could affect the 

JSF program schedule and that while stakeholder consultation could take

up to six months, it usually resulted in a shorter approval process. 

According to DTSA officials, these stakeholder meetings were created 

because of the JSF program and are currently unique to the program but 

would likely be incorporated into future large scale international 

cooperative programs. 

DTSA also prescreens all license applications to expedite the processing 

of licenses that do not require review by other DOD entities. Once an 

application is received from DDTC, it is prescreened by DTSA officials to 

determine if it meets eligibility criteria for an abbreviated review process. 

Page 9 GAO-06-364 Joint Strike Fighter
DTSA officials stated that criteria for determining eligible items include 

low technology, nonsensitive items; items widely available worldwide; and 

items that have previously been approved through the process, among 

others. According to DTSA officials, prescreening has been taking place 

for 1 year to 2 years, and the typical time frame for a license in the 

abbreviated review process is 2 days to 5 days. 

The use of addendums to supplement license applications is another 

initiative that evolved in an effort to avoid delays in the JSF program. 

When additional information or clarification is needed before a license can 

be approved, officials from DDTC and DTSA have agreed to allow the 

applicant to attach addendums that include more specific technical 

information than initially provided. The addendums provide context and

clarity to the application. Previously, the license would have been returned 

with no action, requiring a resubmission and restart of the license process. 

Implementing Global 

Project Authorization and 

Making Use of Bid and 

Proposal Exemptions 

Another mechanism for expediting license processing is the use of a 

Global Project Authorization (GPA). The GPA is a comprehensive export

authorization for international cooperative projects authorized by the 

ITAR.10 An approved U.S. company submits an “Implementing Agreement” 

request to DDTC for authorization to export to an approved foreign 

company. DDTC can evaluate the request and based on compliance with 

an established set of conditions may authorize the transfer without 

sending the request through the formal licensing process. An 

implementing agreement under the GPA is expected to be approved in 

about 5 days. 

The Department of State, DOD, and the prime contractor agreed to the 

GPA for the JSF program based on the following conditions: 

• Technologies available for transfer through a GPA implementing 

agreement are based on a predetermined list of unclassified, low 

technology, nonsensitive items. 

• In using the GPA, both domestic and foreign companies must be on an 

approved list. The approved list was developed by the Department of 

State and DOD. There are currently 46 U.S. companies and 446 foreign

 1022 C.F.R. § 126.14 (2005). 

Page 10 GAO-06-364 Joint Strike Fighter
companies that have been authorized to utilize implementing 

agreements under the GPA for the JSF program. 

• Approved companies must follow a standard agreement format and 

special application process. 

While the GPA is designed to approve transfers within 5 days, its 

usefulness has been limited. Of the 46 U.S. companies eligible to use the 

GPA, only 3 have exercised that option. In 2005, only two implementing 

agreements were approved, and they were actually submitted in 2004. Only

one implementing agreement was submitted in 2005, and it was returned 

without action. Approved companies that wish to use the GPA must meet 

a special set of compliance requirements, imposed by the State 

Department, related to electronic record keeping and securing data.

Officials from the JSF program office, DTSA, and the prime contractor 

said that many companies have chosen to use the traditional license 

process instead of the GPA to avoid the extra costs and administrative 

burdens associated with these compliance requirements, such as the 

investment associated with the development of electronic databases. 

These issues also make the GPA especially difficult to use for smaller 

companies. Further, the GPA was authorized only for the system 

development and demonstration phase of the program and would need to

be reauthorized for the production phase. 

Another practice used by the JSF program office to avoid program delays 

and provide for competition among U.S. and foreign suppliers is the use of 

an exemption under the ITAR for the purpose of obtaining bids and 

proposals from foreign contractors. On March 8, 2004, DTSA issued 

guidance to the military departments on how to certify the use of ITAR 

exemptions. The guidance identifies five sections under the ITAR by which 

the U.S. government may certify exemptions.11 Section 125.4(b)(1) of the 

ITAR12 provides that technical data, including classified information, may 

be disclosed pursuant to an official written request or directive from the 

U.S. Department of Defense without obtaining an export license. This 

exemption has been unofficially labeled the “bid and proposal exemption” 

by the JSF program office, because the primary use has been in the 

process of obtaining bids and proposals from foreign contractors. 

According to Air Force officials, the bid and proposal exemption is only 

 11The executive agent for disclosure is the Air Force for the JSF program. 

1222 C.F.R. § 125.4(b)(1) (2005). 

Page 11 GAO-06-364 Joint Strike Fighter
certified for use to export unclassified technical data to a foreign 

contractor if it is in the interest of the U.S. government. 

Under this exemption, the JSF program allows approved U.S. contractors 

to transfer technical data on proposed work to foreign contractors. The 

Air Force periodically publishes an exemption certification that provides 

scope and limits on the transfers, such as limiting the defense services and

technical data included in these exemptions to 

• build to print — a defense article can be produced from engineering 

drawings without any technical assistance from a U.S. exporter—and 

• build/design to specification — a foreign consignee can design and 

produce a defense article from requirement specifications without any 

technical assistance from the U.S. exporter. 

These exemptions must not include 

• design methodology — the underlying engineering methods and design 

philosophy utilized; 

• engineering analysis — analytical methods and tools used to design or 

evaluate an article’s performance against operational requirements; and 

• manufacturing know-how — information that provides detailed 

manufacturing processes and techniques needed to translate a detailed 

design into a finished article. 

The JSF Program Office must review, authorize in advance, and maintain a 

record of all JSF technical data released under the authority of the 

certification. So far, 350 requests from U.S. contractors to use the “bid and 

proposal exemption” have been certified by the JSF program office. 

Addressing Disclosure 

Issues Early in the 

Program 

To prevent potential delays, decisions related to the releasability of 

classified information, technologies, or systems to partner countries are 

addressed as they arise throughout the development of the system. While 

the Air Force, designated as the executive agent for disclosure for the JSF

program, has a certain level of delegated authority to disclose classified 

military information to foreign governments and international 

organizations, some requests exceed this authority. When a request 

exceeds its delegated authority, the Air Force must submit a request to the 

National Disclosure Policy Committee (NDPC) for an exception to the 

Page 12 GAO-06-364 Joint Strike Fighter
National Disclosure Policy. Other committees that may approve transfers 

include the Low Observable/Counter Low Observable Committee that 

adjudicates requests to sell or transfer stealth technology and the 

Committee on National Security Systems that adjudicates requests to sell 

or transfer cryptologic information and technology. 

According to DOD officials, planning for foreign disclosure issues is 

challenging because there are numerous processes among multiple U.S. 

government agencies and committees with delegated authority for 

management of foreign disclosure and export control requirements. There 

are additional difficulties in a cooperative program like the JSF program 

because of the involvement of the international partners early in the 

design phase. In the JSF program, the prime contractor’s international 

industrial plan is used to anticipate licensing needs and identify when 

discussions of releasability of classified information, technologies, and 

systems are necessary. In addition, the stakeholder meetings initiated by

DTSA have provided a mechanism for disclosure issues to be discussed 

prior to the formal submission of a license. As a result, these discussions 

are held as the concerns arise so they do not become major obstacles to 

the program schedule. These practices are intended to resolve issues 

related to the releasability of classified information, technologies, and 

systems and to ensure decisions are made by the proper committees in a 

timely manner to avoid delays to the license process. 

For example, in cases where a request for transfer exceeds the Air Force’s 

delegated disclosure authority for a particular country, the Air Force can 

seek an exception to the National Disclosure Policy. The National 

Disclosure Policy establishes criteria and conditions for releasing 

classified information, technology, or systems to other countries. The 

NDPC determines if it is in the United States’ interest to allow for the 

transfer of information, technologies or systems by granting an exception 

to National Disclosure Policy.13 The NDPC is composed of members of the 

State Department, DOD (Joint Staff, Army, Navy, and Air Force) and 

special members such as Department of Energy and the Central 

Intelligence Agency, among others. In order for a disclosure exception to 

be granted, it must be 

 13The NDPC is also responsible for managing the National Disclosure Policy, conducting 

security surveys of foreign governments including defense industries, and determining 

delegated authority among the services. 

Page 13 GAO-06-364 Joint Strike Fighter
• consistent with U.S. foreign policy, 

• consistent with U.S. military and security objectives, 

• provided the same degree of security protection by the recipient, 

• beneficial to the U.S., and 

• limited to information necessary for the purpose.

Although the NDPC seeks consensus within 10 days of a request, if any 

member votes against approval of a request, there is a negotiation period 

for no more than 20 days. If agreement still cannot be reached, the NDPC 

chairman can make a decision. That decision can also be appealed to the 

Deputy Secretary or Secretary of Defense. As of January 2006, the NDPC 

has granted six exceptions, as amended, to the National Disclosure Policy 

for the JSF program. 

A draft of this report was reviewed by the Department of Defense and the 

Department of State. The agencies did not provide written comments on 

the report. We received separate technical comments from the Department 

of Defense and incorporated them as appropriate. 

Agency Comments 

We are sending copies of this report to interested congressional 

committees; the Secretary of State; the Secretary of Defense; the 

Secretaries of the Navy and the Air Force; and the Commandant of the 

Marine Corps. We will also make copies available to others upon request. 

In addition, this report will be available at no charge on the GAO Web site 

at http://www.gao.gov. 

Page 14 GAO-06-364 Joint Strike Fighter
If you or your staff have any questions regarding this report, please 

contact me at (202) 512-4841. Key contributors to this report are listed in 

appendix I. 

Sincerely yours, 

Ann Calvaresi-Barr, Director, 

Acquisition and Sourcing Management 

Page 15 GAO-06-364 Joint Strike Fighter
Appendix I: 

A

GAO Contact and Staff 

cknowledgments 

Page 16 GAO-06-364 

Appendix I: GAO Contact and Staff 

Acknowledgments 

GAO Contact Ann Calvaresi-Barr (202) 512-4841 

In addition to the individual named above, Tom Denomme, Matthew Ebert, 

Kevin Heinz, Karen Sloan, and Adam Vodraska made key contributions to 

this report.

Staff 

Acknowledgments 

Joint Strike Fighter
Related GAO Products Related GAO Products 

Tactical Aircraft: Status of the F/A-22 and JSF Acquisition Programs 

and Implications for Tactical Aircraft Modernization. GAO-05-390T. 

March 2005.

Tactical Aircraft: Opportunity to Reduce Risks in the Joint Strike 

Fighter with Different Acquisition Strategy. GAO-05-271. March 2005.

Defense Trade: Arms Export Control System in the Post-9/11 

Environment. GAO-05-234. February 2005. 

Joint Strike Fighter Acquisition: Observations on the Supplier Base.

GAO-04-554. May 2004. 

Defense Acquisitions: DOD Needs to Better Support Program Managers’ 

Implementation of Anti-Tamper Protection. GAO-04-302. March 2004. 

Joint Strike Fighter Acquisition: Managing Competing Pressures Is

Critical to Achieving Program Goals. GAO-03-1012T. July 2003. 

Joint Strike Fighter Acquisition: Cooperative Program Needs Greater 

Oversight to Ensure Goals Are Met. GAO-03-775. July 2003. 

Defense Trade: Better Information Needed to Support Decisions 

Affecting Proposed Weapons Transfers. GAO-03-694. July 2003. 

Export Controls: Processes for Determining Proper Control of DefenseRelated Items Need Improvement. GAO-02-996. September 2002. 

Joint Strike Fighter Acquisition: Mature Critical Technologies Needed to 

Reduce Risks. GAO-02-39. October 2001. 

Defense Acquisitions: Decisions on the JSF Will Be Critical for 

Acquisition Reform. GAO/T-NSIAD-00-173. May 2000. 

Joint Strike Fighter Acquisition: Development of Schedule Should Be 

Changed to Reduce Risks. GAO/NSIAD-00-74. May 2000. 

(120392) Page 17 GAO-06-364 Joint Strike Fighter
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