a

GAO

United States General Accounting Office

Report to the Honorable Tom Harkin, 

U.S. Senate

June 2004 FOREIGN MILITARY 

SALES

Improved Navy 

Controls Could 

Prevent Unauthorized 

Shipments of 

Classified and 

Controlled Spare Parts 

to Foreign Countries

GAO-04-507
www.gao.gov/cgi-bin/getrpt?GAO-04-507.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact William M. Solis 

at (202) 512-8365 or solisw@gao.gov. 

Highlights of GAO-04-507, a report to the 

Honorable Tom Harkin, U.S. Senate 

June 2004

FOREIGN MILITARY SALES 

Improved Navy Controls Could Prevent 

Unauthorized Shipments of Classified 

and Controlled Spare Parts to Foreign 

Countries 

The Navy’s internal controls over foreign military sales using blanket orders 

are not adequate, placing classified and controlled spare parts at risk of 

being shipped to foreign countries that may not be eligible to receive them. 

The internal control inadequacies are as follows: 

• The Navy might not have followed DOD policy when it approved 

26 blanket orders leading to the release of classified spare parts to 

foreign countries. Navy policy states that classified parts can be 

requested under blanket orders when countries obtain waivers, but the 

Defense Security Cooperation Agency indicated that this Navy policy 

contradicts DOD policy, which prohibits the use of waivers. Navy 

officials have no plans to recoup these parts because the countries were 

approved to purchase them, and they were entitled to receive the parts 

under a different process. GAO agrees. However, Navy officials stated, 

there are no written policies to recover parts that countries should not 

have requested and received under blanket orders. 

• The Navy does not always document the reasons for overriding its 

system and releasing classified parts. According to the Standards for 

Internal Control in the Federal Government, all transactions and other 

significant events need to be clearly documented. GAO identified four 

blanket orders for which the Navy’s country managers overrode the 

system, but the files did not contain documents explaining the reasons 

for releasing the parts. 

• The Navy lacks written policies to process blanket orders from countries 

requesting spare parts by manufacturer or vendor part numbers. GAO 

identified two blanket orders for which the Navy released four classified 

parts. The release occurred because the Navy’s country manager 

substituted classified parts for parts ordered, which caused the system 

to bypass the control-edit function designed to check a country’s 

eligibility to receive the parts. 

• The Navy’s system lacked control edits over controlled cryptographic 

parts and allowed countries to obtain them under blanket orders without 

determining the countries’ eligibility to receive the parts. GAO identified 

five blanket orders for which the Navy’s system approved and released 

32 controlled cryptographic circuit card assemblies. According to DOD 

and Navy officials, the system has been modified and now reviews 

controlled cryptographic codes. Also, Navy officials do not plan to 

recover these parts because the countries were approved to purchase 

the parts and GAO agrees. 

• The Navy has not conducted periodic tests to ensure that its system is 

accurately reviewing and approving blanket orders in accordance with 

its foreign military sales policies. DOD and Navy officials said that the 

last systemwide test was conducted in 2000. However, according to the 

Defense Security Cooperation Agency, the Navy is not prohibited from 

periodically testing the system. 

From 1993 through 2002, the 

Department of Defense (DOD) 

delivered over $150 billion in 

services and defense articles, 

including classified and controlled 

items, to foreign countries through 

foreign military sales programs 

administered by the military. 

Foreign countries may request 

items using blanket orders, which 

are for a specific dollar value and 

are used to simplify supply actions 

on certain types of items. GAO was 

asked to review whether the Navy’s 

key internal controls restricted 

blanket orders for (1) classified 

spare parts and (2) controlled 

items sold to foreign countries. 

Also, GAO was asked to determine 

if periodic tests were conducted to 

ensure that the Navy’s system is 

working as intended. 

GAO recommends that the Navy 

resolve the differences between 

DOD and Navy policy on foreign 

countries’ use of waivers, establish 

policies to recover items shipped to 

countries not entitled to receive 

them, and document the reasons 

for overriding the Navy’s system. 

Also, GAO recommends that the 

Navy strengthen the system’s 

internal controls to ensure that 

blanket orders are always reviewed 

and revalidated, and periodically 

test these controls. 

DOD concurred with five of GAO’s 

recommendations and partially 

concurred with three other 

recommendations. 
Page i GAO-04-507 Foreign Military Sales 

Letter 1

Results in Brief 3

Background 7

Internal Controls over the Navy’s Foreign Military Sales Are 

Not Adequate 11

Conclusions 17

Recommendations for Executive Action 18

Agency Comments and Our Evaluation 19

Scope and Methodology 21

Appendix I Comments from the Department of Defense 24 

Figure 

Figure 1: The Navy’s Requisition Process for Foreign Military Sales 

of Spare Parts 10

Abbreviations 

DOD Department of Defense 

GAO General Accounting Office 

Contents 

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Page 1 GAO-04-507 Foreign Military Sales 

June 25, 2004 

The Honorable Tom Harkin 

United States Senate 

Dear Senator Harkin: 

From 1993 through 2002, the Department of Defense (DOD) delivered over 

$150 billion worth of services and defense articles—including classified 

and controlled cryptographic spare parts1

—to foreign countries through 

foreign military sales programs administered by the military services. 

Some sales occurred under blanket orders, which are cases that specify a 

specific dollar value rather than specific items. They are designed to 

simplify supply actions on certain categories of items for which foreign 

military sales customers will have a recurring need, such as unclassified 

spare parts, repair parts, minor components, training films, and 

publications. According to DOD policy, the management of classified and 

controlled spare parts is particularly important, given their potential to be 

released to foreign countries that may use them against U.S. interests.2

Also, according to DOD policy, DOD is required to control the export of 

technology, goods, and services that contribute to the military potential of 

any country or combination of countries that could prove detrimental to 

U.S. security interests. Under blanket orders,3

 the Navy’s policy is intended 

to restrict certain categories of items from being ordered without review 

such as classified materials. 

As requested, this report focuses on whether the Navy has adequate 

internal controls in place to prevent foreign countries from requisitioning 

and receiving, under blanket orders, classified and controlled spare parts. 

Internal control activities include policies, procedures, and processes that 

are essential for the proper stewardship of and accountability for 

government resources, and for achieving effective and efficient program 

 1

 Classified parts are restricted for national security reasons; controlled parts are not 

classified but contain military technology/applications or are controlled cryptographic 

parts, hereafter referred to as “controlled parts.” 

2 Security Assistance Management Manual, DOD 5105.38-M (Oct. 3, 2003). 

3

 The Navy commonly refers to blanket orders as “direct requisitioning procedures,” “open 

end requisitioning,” or “pull requisitioning.” 

United States General Accounting Office 

Washington, DC 20548 
Page 2 GAO-04-507 Foreign Military Sales 

results.4 Our overall objective was to determine the adequacy of the Navy’s 

internal controls for foreign military sales under blanket orders. More 

specifically, we assessed and tested whether key internal controls 

adequately restrict blanket order sales of classified and controlled spare 

parts to foreign countries and determined whether periodic tests were 

conducted to ensure that the Navy’s Management Information System for 

International Logistics5

 was working as intended. 

As agreed with your office, this report is one in a series on DOD’s foreign 

military sales program administered by the military services. This 

particular report focuses on the Navy, which sold classified and controlled 

spare parts to foreign countries valued at over $2.5 million for the period 

October 1, 1997, through April 30, 2003. In July 2003 we reported on the 

adequacy of the Air Force’s internal controls over shipments of classified 

and controlled spare parts to foreign countries.6

 Also, in September 2003 

we reported on the adequacy of the Air Force’s internal controls over 

shipments of spare parts containing military technology to foreign 

countries.7

 Furthermore, in April 2004 we reported on the adequacy of the 

Army’s internal controls over shipments of classified spare parts and items 

containing military technology to foreign countries.8

To accomplish our review, we obtained data from the system on classified 

and controlled spare parts that were purchased under blanket orders from 

October 1, 1997, through April 30, 2003. During this period, a total of 38 

 4

 Internal control activities help ensure that management directives are carried out. The 

control activities should be effective and efficient in accomplishing the agency’s control 

objectives. U.S. General Accounting Office, Standards for Internal Control in the Federal 

Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).

5

 The Management Information System for International Logistics, hereafter referred to as 

“the system,” is the Navy’s logistics information and tracking system for foreign military 

sales. It validates foreign customers’ requisitions and determines whether items requested 

are authorized. 

6

 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, GA0-03-664 (Washington, D.C.: July 29, 2003). 

7

 U.S. General Accounting Office, Foreign Military Sales: Air Force Does Not Use Controls 

to Prevent Spare Parts Containing Sensitive Military Technology from Being Released to 

Foreign Countries, GAO-03-939R (Washington, D.C.: Sept. 10, 2003). 

8

 U.S. General Accounting Office, Foreign Military Sales: Improved Army Controls Could 

Prevent Unauthorized Shipments of Classified Spare Parts and Items Containing 

Military Technology to Foreign Countries, GAO-04-327 (Washington, D.C.: Apr.15, 2004). 
Page 3 GAO-04-507 Foreign Military Sales 

blanket order requisitions for classified and controlled spare parts were 

processed for shipments to foreign countries. We verified the Navy’s 

system to determine whether it approved and released the selected 

blanket order requisitions in accordance with DOD foreign military sales 

policies. To conduct this work, we obtained from the Navy all blanket 

order shipments to foreign countries for the period mentioned above and 

matched the spare parts’ stock numbers to a government database9

 to 

identify the classified and controlled parts that were shipped to foreign 

countries. We conducted our review in accordance with generally 

accepted government auditing standards. Further details are presented in 

the Scope and Methodology section of this report. 

The Navy’s internal controls over foreign military sales pursuant to blanket 

orders are not adequate, placing classified and controlled spare parts at 

risk of being shipped to foreign countries that may not be eligible to 

receive them. The internal control inadequacies we identified are as 

follows: 

• The Navy might not have followed DOD policy when it approved 

blanket order requisitions leading to the release of classified spare 

parts to foreign countries. According to Navy policy, classified material 

can be requisitioned under blanket orders when foreign countries 

obtain waivers from the Navy. We identified 26 of 38 requisitions in our 

review for which foreign countries obtained waivers from the Navy to 

release 108 classified spare parts such as circuit card assemblies and 

radar receivers. According to the Defense Security Cooperation 

Agency, the Navy policy contradicts DOD policy, which prohibits the 

services from using waivers to allow foreign countries to obtain 

classified material under blanket orders. Also, according to the policy, 

the agency is not required to approve all blanket order cases and their 

corresponding notes. Nonetheless, Navy officials stated that the 

Defense Security Cooperation Agency approves the Navy’s blanket 

order agreements, which contain notes authorizing the Navy to release 

restricted items on a case-by-case basis. In addition, the Navy provided 

examples of blanket order cases that were approved by the Defense 

Security Cooperation Agency and contained the notes allowing foreign 

countries to obtain classified material under blanket orders. Also, Navy 

 9

 We used the government database called “FEDLOG,” which contains logistics information 

on items in the supply system and provides the identification of spare part numbers and 

their security classifications. 

Results in Brief 
Page 4 GAO-04-507 Foreign Military Sales 

officials indicated that they have no plans to recover these classified 

parts because the countries were approved to purchase the parts under 

different procedures. We agree with the Navy officials’ decision. In 

addition, according to Navy officials, there are no written policies or 

procedures that address the return of materials that foreign countries 

should not have requisitioned and received under blanket orders. 

Without written policies or procedures, the Navy cannot be assured 

that appropriate steps will be taken to recover materials shipped to 

foreign countries that are not eligible to receive them. 

• The Navy did not always document its reasons for overriding the 

system to release classified spare parts to foreign countries as required. 

According to the Standards for Internal Control in the Federal 

Government,10 all transactions and other significant events need to be 

clearly documented. The standard states that such documentation 

should be properly managed and maintained and should be readily 

available for examination. We identified 4 of the 38 requisitions where 

the Navy’s country managers11 overrode the system and shipped 

classified antennas, radar receivers, and circuit card assemblies, but 

the case files did not contain any documentation for the transactions 

explaining the reasons for the release of the classified parts. According 

to Navy records, the Navy country managers manually entered four 

blanket order requisitions into the system. According to records from 

the Naval Inventory Control Point, Navy International Programs 

Directorate,12 the Navy’s country managers incorrectly submitted these 

blanket order requisitions as “pushed requisitions,” 13 which caused the 

requisitions to bypass the control-edit function the system. Also, the 

Navy International Programs Directorate officials did not locate any 

documentation in the case files to indicate if a waiver had been 

obtained for these requisitions. 

 10 U.S. General Accounting Office, Standards for Internal Control in the Federal 

Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).

11 We use the term “Navy country manager” to mean an official who performs such 

functions as supply and financial technical work in support of the foreign military sales 

program. 

12 Hereafter referred to as “Navy International Programs Directorate.” 

13 Requisitions prepared by the U.S. supply system for the customer are called “push” 

requisitions because the U.S. supply system sends material to the customer (i.e., as part of 

the initial set of spare parts that accompany a weapon system). 
Page 5 GAO-04-507 Foreign Military Sales 

• The Navy lacks written policies and procedures to guide the processing 

of blanket order requisitions from foreign countries requesting spare 

parts by manufacturer or vendor part numbers. Consequently, and in 

violation of DOD and Navy policy, the Navy International Programs 

Directorate allowed the release of classified spare parts under blanket 

orders to foreign countries that requested parts by using manufacturer 

or vendor part numbers. We identified 2 of the 38 requisitions in our 

review for which the Navy released four classified spare parts under 

blanket orders. When a foreign country submits a blanket order 

requisition for parts by manufacturer or vendor part numbers, the 

Navy’s system, which does not recognize part numbers, will stop 

processing the requisition and identify it for manual review. If a 

corresponding government-classified spare part (national stock 

number)14 is identified, the Navy’s country manager will submit a 

transaction into the system in order to change the part number to a 

national stock number, and allow the system to continue processing 

the requisition. The requisition for the newly substituted spare part 

then bypasses the system’s control-edit function, designed to determine 

the foreign country’s eligibility to receive the part. 

• The Navy’s system lacked control edits over controlled cryptographic15

spare parts, and allowed foreign countries to obtain these controlled 

parts under blanket orders without determining whether the countries 

were eligible to receive them. Navy policy requires that physical 

security measures be used to protect controlled cryptographic spare 

parts. According to DOD policy, parts containing controlled 

cryptographic and telecommunication parts are considered 

unclassified but must be controlled, and the loss of these parts could 

adversely affect U.S. national security. DOD materials that contain 

controlled cryptographic parts and secure telecommunications 

equipment are used to deny unauthorized persons information derived 

from telecommunications of the U.S. government related to national 

security. In our review, we identified 5 out of 38 blanket order 

requisitions for which the Navy’s system erroneously approved and 

released 32 controlled circuit card assemblies’ cryptographic spare 

parts to foreign countries. According to DOD and Navy officials, the 

system was not programmed to review controlled cryptographic item 

 14 A corresponding government spare part (national stock number) identifies a specific 

item of supply. 

15 Cryptography equipment provides security to telecommunication by converting 

information to a form unintelligible to an unauthorized interception. 
Page 6 GAO-04-507 Foreign Military Sales 

codes; consequently, the system automatically approved these 

requisitions and allowed the release of these parts to foreign countries. 

On the basis of our review, which identified the Navy system’s lack of 

internal controls over controlled spare parts, the Navy has modified the 

Management Information System for International Logistics to review 

foreign countries’ requisitions for controlled cryptographic parts and 

identify them for manual review to determine whether the foreign 

countries requisitioning the parts are eligible to receive them. 

According to Navy officials, they do not plan to recover these particular 

controlled cryptographic parts because the foreign countries 

requisitioning the parts were entitled to receive them. 

• The Navy has not conducted periodic tests, as required by federal 

internal control standards to ensure that its system is accurately 

reviewing and approving blanket order requisitions for compliance 

with restrictions and operating in accordance with the Navy’s foreign 

military sales policies. GAO’s and the Office of Management and 

Budget’s internal control standards require that a system such as the 

Navy’s be periodically tested to ensure that it is working as intended 

and that the ability to accurately review and approve requisitions is not 

compromised. According to DOD and Navy officials, the last major 

systemwide testing was conducted in 2000, but this test did not 

determine whether the system was accurately reviewing and approving 

blanket order requisitions. According to Defense Security Assistance 

Development Center officials, who are responsible for managing the 

Navy’s foreign military sales automated system, periodic tests of the 

Navy’s system have not been conducted recently because, in October 

1998, the Defense Security Cooperation Agency directed that no 

additional funds be used to expand the current system. However, 

Defense Security Cooperation Agency officials stated that this directive 

does not preclude the Navy from periodically testing the system and 

reviewing the procedures to assess compliance. 

Since the Navy’s system has already been modified to review controlled 

cryptographic spare parts requisitioned under blanket orders prior to 

shipping them to foreign countries, we are not making a recommendation 

in this area. We are recommending, however, that the Secretary of Defense 

instruct the Secretary of the Navy to resolve the conflict between the DOD 

and Navy policies on the use of waivers; require that the Navy’s country 

managers manually submit into the Navy’s system correct blanket order 

requisitions; and establish policies and procedures to follow when 

documenting system overrides and processing blanket orders using 

manufacturer or vendor part numbers. Also, we are recommending that 
Page 7 GAO-04-507 Foreign Military Sales 

the Navy establish policies to recover spare parts shipped to foreign 

countries not entitled to receive them. 

We are also recommending that the Secretary of Defense instruct the 

Under Secretary of Defense for Policy to modify the Navy’s Management 

Information System for International Logistics so that it validates blanket 

order requisitions on the basis of stock numbers’ security classifications 

when items are requested by manufacturer or vendor part numbers and to 

periodically test the Navy’s system to ensure that it is accurately reviewing 

and approving blanket order requisitions. 

In written comments on a draft of this report, DOD concurred with five of 

our recommendations and partially concurred with three of our 

recommendations. DOD’s comments and our evaluation of them are 

discussed on page 19. 

The sale or transfer of U.S. defense items to friendly nations and allies is 

an integral component of 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-togovernment agreements or through direct sales from U.S. manufacturers. 

The Arms Export Control Act16 and the Foreign Assistance Act of 1961,17 as 

amended, authorize the DOD foreign military sales program. 

The Department of State sets overall policy concerning which countries 

are eligible to participate in the DOD foreign military sales program. DOD 

identifies military technology that requires control when its transfer to 

potential adversaries could significantly enhance a foreign country’s 

military or war-making capability. Various agencies such as the 

Department of State and DOD are responsible for controlling, in part, the 

transfer or release of military technology to foreign countries. 

The Defense Security Cooperation Agency, under the direction of the 

Under Secretary of Defense for Policy, has overall responsibility for 

administering the foreign military sales program, and the military services 

generally execute the sales agreements with the individual countries. A 

foreign country representative initiates a request by sending a letter to 

 16 Pub. L. No. 90-629. 

17 Pub. L. No. 87-195. 

Background 
Page 8 GAO-04-507 Foreign Military Sales 

DOD asking for such information as the price and availability of goods and 

services, training, technical assistance, and follow-on support. Once the 

foreign customer decides to proceed with the purchase, DOD prepares a 

Letter of Offer and Acceptance stating the terms of the sale for the items 

and services to be provided. After this letter has been accepted, the foreign 

customer is generally required to pay, in advance, the amounts necessary 

to cover the costs associated with the services or items to be purchased 

from DOD and then is allowed to request spare parts through DOD’s 

supply system. 

For the Department of the Navy, foreign military sales policy and oversight 

are the responsibility of the Navy International Programs Office, under the 

direction of the Deputy Assistant Secretary of the Navy for Research 

Development, and Acquisition. The Navy International Programs Office is 

primarily responsible for directing, guiding, and implementing the U.S. 

Navy’s foreign military sales program. The Naval Inventory Control Point, 

International Programs Directorate is responsible for recording, managing, 

and reporting the material and service order transactions associated with 

the Department of the Navy Security Assistance Program. 

The Navy International Programs Office’s responsibilities begin with the 

initial negotiation of a foreign military sale and end with the transfer of 

items and completion of all financial aspects of the sales agreement. Also, 

the Navy International Programs Office uses an automated system called 

the “Management Information System for International Logistics” to 

support the U.S. Navy’s management of the foreign military sales program. 

The Navy originally developed the system in 1978, and in October 1997, the 

Defense Security Cooperation Agency transferred the Navy’s system to the 

Defense Security Assistance Development Center. The Navy retained 

responsibility for defining system-user requirements, designing new 

processes, and directing programming modifications to the system’s 

applications. However, the overall responsibility for providing system 

information technology maintenance support, such as writing and testing 

the programs and coordinating infrastructure support, was transferred to 

the Defense Security Assistance Development Center. 
Page 9 GAO-04-507 Foreign Military Sales 

Foreign military sales requisitions for Navy spare parts and other items are 

initially processed through the automated system. For blanket orders, the 

system uses the security classification code,18 the cognizance code,19 the 

Federal Supply Group, federal supply class, and the National Stock 

Number20 to restrict the spare parts available to foreign military sales 

customers. Once the system validates a requisition, the requisition is sent 

to a supply center to be filled and shipped. The Navy’s requisition process 

for foreign military sales of classified and controlled spare parts is shown 

in figure 1. 

 18 It is called the “controlled inventory item code,” and it indicates the security 

classification and security risk or controls for storage and transportation of DOD assets. 

19 A cognizance code is a two-character alphanumeric code providing supply management 

information, identifying the type of items referred to, and identifying the item manager who 

has control over it. 

20 The Federal Supply Group identifies, by title, the commodity area covered by classes 

within a group and their physical or performance characteristics. The Federal Supply 

Group makes up 2 of the 13 digits combined to create the National Stock Number, which 

identifies a specific item of supply. 
Page 10 GAO-04-507 Foreign Military Sales 

Figure 1: The Navy’s Requisition Process for Foreign Military Sales of Spare Parts 

Note: This flowchart provides only a brief overview of the complex processes in the Navy’s foreign 

military sales process. 
Page 11 GAO-04-507 Foreign Military Sales 

The Navy’s internal controls over foreign military sales pursuant to blanket 

orders are not adequate, placing classified and controlled spare parts at 

risk of being inappropriately shipped to foreign countries. We found that 

the Navy (1) might not have followed DOD policy when it approved 

requisitions under blanket orders leading to the release of classified spare 

parts to foreign countries and that a written policy does not exist to 

recover parts shipped to foreign countries that may not be eligible to 

receive them, (2) lacks adequate documentation for overriding the system 

to release classified spare parts, (3) lacks written procedures to guide the 

processing of blanket order requisitions from foreign countries that 

request parts by manufacturer or vendor part numbers, (4) lacked system 

control edits to review blanket order requisitions for controlled 

cryptographic spare parts, and (5) has not conducted periodic tests to 

ensure that its system is performing as intended. As a result of these 

inadequate internal controls, classified and controlled spare parts could be 

shipped to foreign countries that may not be entitled to receive them 

under blanket orders. 

The Navy might not have followed DOD policy when it approved 27 of 38 

blanket order requisitions leading to the release of classified spare parts to 

foreign countries. According to Navy policy, classified material can be 

requisitioned under a blanket order when a foreign country obtains a 

waiver from the Navy. However, according to the Defense Security 

Cooperation Agency, this Navy policy contradicts DOD policy, which 

prohibits the services from using waivers to allow foreign countries to 

obtain classified material under blanket orders. From these 27 blanket 

order requisitions, we identified 26 for which the foreign country obtained 

waivers from the Navy to release 108 classified spare parts such as circuit 

card assemblies and radar receivers. For these 26 blanket order 

requisitions, there is a conflict in the interpretation of DOD and Navy 

policy on the use of waivers to grant foreign countries access to classified 

material under blanket orders. According to Navy officials, the system 

identified the 26 requisitions for review, requiring the Navy’s country 

managers to manually review them. The country managers contacted item 

managers and obtained waivers, which allowed them to override the 

system and release the classified materials to foreign countries. In one 

case, we found that the Navy shipped 30 classified towed body21 spare 

parts to a foreign country under a blanket order. Navy International 

 21 A towed body is a torpedo countermeasure transmitting set for ships. 

Internal Controls over 

the Navy’s Foreign 

Military Sales Are 

Not Adequate 

Navy Might Not Have 

Followed DOD Policy 

When It Approved 

Requisitions Leading to the 

Release of Classified Spare 

Parts under Blanket 

Orders 
Page 12 GAO-04-507 Foreign Military Sales 

Programs Directorate officials stated that the Navy uses waivers to grant a 

foreign country a one-time exception, enabling the country to obtain a 

classified spare part in support of a major end item that the country 

acquired through the foreign military sales program. Also, Navy officials 

stated that the Defense Security Cooperation Agency approves the Navy’s 

blanket order agreements, which contain notes authorizing the Navy to 

release restricted items on a case-by-case basis. However, according to the 

DOD policy, the agency is not required to approve all blanket order cases 

and their corresponding notes. Nonetheless, the Navy provided examples 

of blanket order cases that were approved by the Defense Security 

Cooperation Agency and contained notes allowing foreign countries to 

obtain classified material under blanket orders. 

Also, we identified 1 out of the 38 requisitions for classified spare parts 

that the system erroneously approved. According to Navy officials, the 

system is programmed to identify for manual review classified spare parts 

that are requested under blanket orders. However, the Navy system’s 

history records did not show that the country manager manually reviewed 

or overrode the system to approve the release of one blanket order 

requisition for classified parts. According to the Defense Security 

Assistance Development Center officials who are responsible for this part 

of the Navy’s system, the records contain information such as the spare 

parts’ security classification and federal supply group. Also, the officials 

stated that the system records the security classification code only for 

those codes that have been identified as classified. The item record is 

updated every month and the previous month’s data are overwritten in the 

system. At the time of our review, DOD officials could not confirm the 

security classification for the classified parts because the item’s records 

had been overwritten. The spare parts’ classifications were not recorded in 

the system’s history files at the time when the foreign country requested 

the spare parts. According to Navy officials, the hard copy for this foreign 

military sales case file was retired and sent to the Federal Records Center. 

Also, the Navy officials stated that either there was no stock item record in 

the system when the foreign country requested the parts or if there were 

an item record, it did not reflect a security classification for the spare part. 

Nonetheless, DOD officials stated that if the same requisition were 

submitted today, the system would identify it for manual review because 

the current item records show that these spare parts are classified. Also, 

DOD officials stated the new DOD Security Assistance system, entitled the 

“Case Execution Management Information System,” may preclude this 

type of error in the future. According to the Defense Security Cooperation 

Agency, the initial deployment of the new system is expected to begin in 

the Fiscal Year 2007-8 time frame. 
Page 13 GAO-04-507 Foreign Military Sales 

According to Navy policy, the Navy International Programs Directorate 

may advise foreign countries to return parts that the Navy shipped in 

error. However, Navy officials stated that they have no plans to recover 

the classified parts we identified in our review because the countries 

justified the need for the classified parts and obtained written waivers. 

Also, the Navy officials stated that the foreign countries could obtain the 

classified spare parts under a different process such as a defined order.22

We agree with the Navy officials’ decision. However, according to Navy 

officials, there are no written policies or procedures that address the 

return of materials that foreign countries should not have requisitioned 

and received under blanket orders. If this situation were to occur, Navy 

officials said that they would work with the Security Assistance Office 

located in the country involved to recover the material. However, without 

written policies or procedures, the Navy cannot be assured that 

appropriate steps will be taken to recover materials shipped to foreign 

countries that may not be eligible to receive them. 

The Navy did not always document its reasons for overriding the system to 

release classified spare parts to foreign countries. According to the 

Standards for Internal Control in the Federal Government, all 

transactions and other significant events need to be clearly documented. 

The standards state that such documentation should be properly managed 

and maintained and should be readily available for examination. We 

identified 4 of the 38 requisitions for which Navy’s country managers 

overrode the system and shipped classified antennas, radar receivers, and 

circuit card assemblies, but the case files did not contain any 

documentation for the transactions explaining the reasons for the release 

of the classified spare parts. According to Navy records, the Navy’s 

country managers manually entered these four blanket order requisitions 

into the system. Navy policy indicates that foreign countries may submit 

requests for spare parts by mail or by fax, requiring Navy country 

managers to manually enter the requests into the system so they can be 

processed, controlled, tracked, and recorded. Navy records indicate that if 

the Navy country managers manually submit the requisitions as if the 

foreign country had initiated the requests called “pull requisitions,” the 

system will validate them in order to determine whether the foreign 

country is eligible to receive the classified spare parts. However, if the 

 22 Defined orders are foreign military sales cases used to specify defense articles and 

services that are identified and approved in the letter of agreement. 

Navy Lacks Adequate 

Documentation for 

Overriding System to 

Release Classified Spare 

Parts 
Page 14 GAO-04-507 Foreign Military Sales 

blanket order requisitions are referred for review because the spare parts 

are classified, the country manager will use a waiver to override the 

system and allow the system to continue processing the requisitions. 

Nonetheless, if the Navy’s country managers submit the requisitions as if 

the U.S. government had initiated the requests—called “pushed 

requisitions,”—the system will cause the requisitions to bypass the 

control-edit function designed to determine whether the foreign countries 

are eligible to receive the parts. According to records from the Navy 

International Programs Directorate, the Navy’s country managers 

incorrectly submitted these blanket order requisitions as “pushed 

requisitions,” causing the requisitions to bypass the control-edit function 

in the system. A “push” type requisition is not subjected to the same level 

of processing checks as a “pull” type requisition. Also, the Navy 

International Programs Directorate officials did not locate any 

documentation in the case files to indicate if there was a waiver obtained 

for these requisitions. However, remarks in the system’s history files for 

one requisition indicated that the system command was contacted but no 

further information was available. According to Navy officials, country 

managers are aware that they need to maintain documentation of blanket 

order waiver approvals and denials. However, we found that the 

supporting documentation was not in the case files to justify the country 

managers’ decisions to override the system to approve and release the 

classified spare parts. 

The Navy lacks written policies and procedures to guide the processing of 

blanket order requisitions from foreign countries that request classified 

spare parts by manufacturer or vendor part numbers. Consequently, and in 

violation of DOD and Navy policy, the Navy allowed the release of 

classified spare parts under blanket orders to foreign countries that 

requested parts by manufacturer or vendor part numbers. We identified 

2 out of 38 requisitions in our review for which the Navy released four 

classified spare parts (servo amplifiers and network bias) under blanket 

orders. 

The Navy attempts to prevent countries from obtaining classified spare 

parts by restricting countries from receiving spare parts associated with a 

unique security classification code and its designated national stock 

number. When a country submits a blanket order requisition by 

manufacturer or vendor part numbers, the Navy’s system will identify the 

requisition for manual review because the system does not recognize 

orders entered by manufacturer’s or vendor’s part numbers. A Navy 

country manager will review the blanket order requisition to identify the 

Navy Lacks Written 

Policies and Procedures to 

Guide the Processing of 

Blanket Order Requisitions 

by Manufacturer or Vendor 

Part Numbers 
Page 15 GAO-04-507 Foreign Military Sales 

corresponding government spare part that matches the one requested. If a 

corresponding government spare part is identified, the country manager 

will submit a change in the system and add the correct national stock 

number to allow the requisition to continue processing through the 

system. However, when the system continues to process these 

requisitions, its control-edit function does not check the spare part’s 

security classification to determine whether the foreign country is eligible 

to receive the part. According to Navy officials, there are no written 

policies or procedures on processing blanket order requisitions when 

foreign countries request classified spare parts by the manufacturer’s or 

vendor’s part numbers. 

The Navy’s system lacked control edits over controlled cryptographic 

spare parts and allowed foreign countries to obtain them under blanket 

orders without determining whether they were eligible to receive them. 

According to DOD policy, these controlled cryptographic and 

telecommunication parts, known as “Communications Security items,” are 

considered unclassified but must be controlled. The loss of these items 

could adversely affect U.S. national security interests. DOD materials that 

contain controlled cryptographic and secure telecommunications parts are 

used to deny unauthorized persons information derived from 

telecommunications of the U.S. government related to national security. 

We identified 5 out of 38 blanket order requisitions for which the Navy’s 

system approved and released 32 circuit card assemblies’ controlled 

cryptographic spare parts to foreign countries. According to DOD policy, if 

placed in the wrong hands, controlled cryptographic parts could adversely 

affect U.S. national security. According to the Defense Security Assistance 

Development Center officials, who are responsible for this part of the 

Navy’s system, the system was not programmed to review the controlled 

cryptographic item codes, and as a result, the system automatically 

approved and released the parts requested by the foreign countries. Navy 

International Programs Directorate and DOD officials were unaware that 

the system was not reviewing controlled cryptographic parts prior to their 

release to foreign countries until we identified the problem. On the basis 

of our review, which identified the Navy’s lack of internal controls over 

controlled spare parts, the Navy requested that the system be modified, 

and the Defense Security Assistance Development Center modified the 

system to review foreign countries’ requisitions for controlled 

cryptographic parts and identify them for manual review to determine the 

foreign countries’ eligibility to receive the parts. Also, according to 

controlled cryptographic item managers, they are required by the National 

Security Agency to verify that the foreign country can purchase the spare 

Navy’s System Lacked 

Control Edits for 

Controlled Cryptographic 

Spare Parts under Blanket 

Orders 
Page 16 GAO-04-507 Foreign Military Sales 

parts before they are shipped. In addition, Navy officials stated that the 

foreign countries were approved to purchase the controlled cryptographic 

parts and the countries have the weapon systems that these parts support. 

Therefore, according to the officials, there is no need to recover the parts. 

We agree with the Navy officials’ decision. However, according to Navy 

officials, there are no written policies or procedures addressing the return 

of spare parts that foreign countries should not have requisitioned and 

received under blanket orders. 

The Navy has not conducted periodic tests, as required by federal internal 

control standards, to ensure that its system is accurately reviewing and 

approving blanket order requisitions for compliance with restrictions and 

operating in accordance with the Navy’s foreign military sales policies. 

GAO’s and the Office of Management and Budget’s internal control 

standards require that a system such as the Navy’s be periodically tested to 

ensure that it is working as intended and that the ability to accurately 

review and approve requisitions is not compromised. In the Federal 

Information Systems Controls Audit Manual,

23 one of the internal control 

activities listed is the testing of new and revised software to ensure that it 

is working correctly. Furthermore, the Management of Federal 

Information Resources manual 24 requires that each agency establish an 

information system/management oversight mechanism to provide for 

periodic reviews, enabling the agency to determine how mission 

requirements might have changed and whether the information system 

continues to fulfill ongoing and anticipated mission requirements. A third 

guide, the Internal Control Management and Evaluation Tool 25 assists 

managers and evaluators in determining how well an agency’s internal 

control is designed and functioning. It lists monitoring as one of five 

standards of internal controls. Internal control monitoring should assess 

the quality of performance over time and ensure that findings from 

reviews are promptly resolved. Ongoing monitoring occurs during normal 

operations and includes regular management and supervisory activities, 

 23 U.S. General Accounting Office, Federal Information System Controls Audit Manual, 

GAO/AIMD-12.19.6 (Washington, D.C.: January 1999). 

24 Office of Management and Budget, Management of Federal Information Resources 

(Washington, D.C.: November 2000). 

25 U.S. General Accounting Office, Internal Control Management and Evaluation Tool, 

GAO-01-1008G (Washington, D.C.: August 2001). 

Navy Has Not Conducted 

Periodic Tests to Ensure 

That Its System Is 

Performing As Intended 
Page 17 GAO-04-507 Foreign Military Sales 

comparisons, reconciliations, and other actions people take in performing 

their duties. 

We found that the Navy’s system was not programmed to review foreign 

countries’ blanket order requisitions for controlled cryptographic spare 

parts. Navy International Programs Directorate and DOD officials were 

unaware of this deficiency until we identified it. On the basis of our 

review, the Navy has modified its system to review foreign countries’ 

requisitions for controlled cryptographic spare parts and identify them for 

manual review, to determine the foreign countries’ eligibility to receive the 

parts. 

Defense Security Assistance Development Center officials indicated that 

periodic tests of the Navy’s system have not been conducted because, in 

October 1998, the Defense Security Cooperation Agency directed that no 

additional funds were to be used to expand the current system. However, 

Defense Security Cooperation Agency officials stated that this directive 

does not preclude the Navy from periodically testing the system. 

According to DOD officials, the last major systemwide testing was 

conducted in 2000, but this test did not determine whether the system was 

accurately reviewing and approving blanket order requisitions. 

DOD officials pointed out that when minor changes are made to the 

system, full regression testing is conducted to verify that the program 

continues to work. As part of our review, we tested the system by 

reviewing the Navy’s restrictions applied to historical requisitions for 

classified and controlled spare parts. We found that the system did not 

always perform as intended. 

The Navy has not maintained effective internal controls over foreign 

military sales conducted under blanket orders. Specifically, since the Navy 

may not have followed DOD policy, which prohibits the release of 

classified spare parts, the Navy might have released classified spare parts 

to foreign countries not eligible to receive them. Also, since the Navy has 

no written policies or procedures on the return of materials that foreign 

countries should not have requested and received under blanket orders, 

the Navy’s ability to recover the shipped classified or controlled spare 

parts is lessened. In addition, because the Navy lacks adequate 

documentation for system overrides, the Navy will not know the basis for 

approval of classified spare parts when manually processing blanket order 

requisitions. Furthermore, because the Navy has no written procedures to 

guide the processing of blanket orders when foreign countries request 

Conclusions 
Page 18 GAO-04-507 Foreign Military Sales 

spare parts by manufacturer or vendor part numbers and because the 

system does not validate these orders, there is no assurance that the Navy 

will be aware that classified spare parts may be shipped to foreign 

countries not eligible to receive them. Also, since the Navy has 

periodically failed to test the Management Information System for 

International Logistics, the Navy may not be able to determine whether its 

system is in compliance with requisitioning policies and procedures. 

Without adequate internal controls, classified and controlled spare parts 

may be released under blanket orders to foreign countries that may not be 

eligible to receive them, thereby providing military technology to countries 

that might use it against U.S. interests. 

To improve internal controls over the Navy’s foreign military sales 

program and to prevent foreign countries from obtaining classified and 

controlled spare parts under blanket orders, we are recommending that 

the Secretary of Defense instruct the Secretary of the Navy to take the 

following six actions: 

• Consult with the appropriate officials to resolve the conflict between 

the DOD and Navy policies on the Navy’s use of waivers allowing 

foreign countries to obtain classified spare parts under blanket orders. 

• Determine and implement the necessary changes required to prevent 

the current system from erroneously approving blanket order 

requisitions for classified spare parts until the new system is deployed. 

• Establish policies and procedures for the Navy’s country managers to 

follow when documenting their decisions to override the system when 

manually processing blanket order requisitions. 

• Require that the Navy’s country managers manually enter blanket order 

requisitions into the Navy’s system to correctly represent foreigncountry-initiated orders versus U.S. government-initiated orders so the 

Navy’s system will validate whether the foreign countries are eligible to 

receive the requested spare parts. 

• Establish policies and procedures to follow for blanket orders when 

the Navy’s country managers replace spare parts requested by 

manufacturer or vendor part numbers with corresponding government 

national stock numbers. 

Recommendations for 

Executive Action 
Page 19 GAO-04-507 Foreign Military Sales 

• Establish interim policies and procedures, after consulting with 

appropriate government officials, for recovering classified or 

controlled spare parts shipped to foreign countries that might not have 

been eligible to receive them under blanket orders until the Defense 

Security Cooperation Agency develops guidance on this issue. 

To improve the Navy system’s internal controls aimed at preventing 

foreign countries from obtaining classified and controlled spare parts 

under blanket orders, we are recommending that the Secretary of Defense 

direct the Under Secretary of Defense for Policy to require the appropriate 

officials to take the following two actions: 

• Modify the Navy’s system to revalidate blanket order requisitions when 

the Navy’s country manager replaces spare parts that are requested by 

manufacturer or vendor part numbers. 

• Periodically test the system to ensure that it is accurately reviewing 

blanket order requisitions before approving them. 

The Director of the Defense Security Cooperation Agency commented on 

a draft of this report for DOD and concurred with five of our 

recommendations and partially concurred with three of our 

recommendations. 

DOD partially concurred with our proposed recommendation to determine 

why the system erroneously approved a blanket order requisition for 

classified spare parts and make the necessary changes to prevent such a 

problem in the future. The department believes that the blanket order 

requisition in question was processed automatically by the system either 

because the item was not coded as classified at the time the requisition 

was processed or because the Navy’s system did not contain an item 

record for the national stock number. However, the department stated that 

historical information was unavailable to determine the coding at the time 

the requisition was originally processed in 1995. Moreover, the department 

believes that preventing this problem in the future would require utilizing a 

comprehensive feed from the Defense Logistics Information System of all 

DOD catalogued items, not just the Navy interest items the system 

currently screens. The department stated that the Navy’s current system 

database structure cannot accommodate such a comprehensive feed but 

that its future system would. The department emphasized that it would be 

an inefficient use of resources to modify the current Navy’s system, 

particularly given the age of the event. According to the department, the 

new DOD Security Assistance system, entitled the “Case Execution 

Agency Comments 

and Our Evaluation 
Page 20 GAO-04-507 Foreign Military Sales 

Management Information System,” will accommodate the comprehensive 

feed of all DOD-catalogued items and, therefore, preclude this type of 

error in the future. According to the Defense Security Cooperation 

Agency, the initial deployment of the new system is expected to begin in 

the Fiscal Year 2007-8 time frame. The intent of our recommendation is to 

ensure that the Navy’s system would not erroneously approve blanket 

order requisitions for classified spare parts. However, in its comments the 

department has focused on preventing the problem in the future without 

considering the existing problem in the current system. Since the Navy 

will not consider modifying the current system, it cannot be assured that 

current controls will prevent the system from erroneously approving 

future blanket order requisitions for classified spare parts. We continue to 

believe that resources should be utilized to prevent the current system 

from erroneously approving blanket order requisitions for classified spare 

parts until the new proposed system is deployed. Therefore, we have 

modified our recommendation accordingly. 

DOD also partially concurred with our recommendation to request Navy 

country managers to manually enter blanket order requisitions into the 

Navy’s system to correctly represent foreign-country-initiated orders 

versus U.S. government-initiated orders. The department stated that a 

great majority of these electronically submitted orders are not reviewed by 

the country manager but instead are recognized as foreign customersubmitted “pull” requisitions. DOD also suggested that our 

recommendation should be limited to those orders that are manually 

reviewed by a country manager who validates the customer’s eligibility to 

receive requested parts. The intent of our recommendation is to ensure 

that Navy country managers manually enter blanket order requisitions into 

the Navy’s system correctly so that the system will validate whether the 

foreign countries are eligible to receive the requested parts. We continue 

to believe that “pull” requisitions in this instance should be covered under 

this recommendation because among other things, there is no assurance 

that manually entered blanket order requisitions will undergo stringent 

reviews by Navy country managers to validate a customer’s eligibility to 

receive requested parts. In addition, allowing the Navy’s system to 

thoroughly validate blanket order requisitions will ensure that foreign 

countries are eligible to receive requested parts. Thus, we continue to 

believe that when the Navy country managers manually enter blanket 

order requisitions for foreign-country-initiated orders, they should 

correctly enter them into the Navy’s system so the system will validate 

whether the foreign countries are eligible to receive the requested spare 

parts. Otherwise, these types of requisitions would continue to be 
Page 21 GAO-04-507 Foreign Military Sales 

approved through the system without validating the foreign countries’ 

eligibility to receive the requested parts. 

In addition, DOD partially concurred with our recommendation to recover 

classified and controlled spare parts shipped to foreign countries that 

might not have been eligible to receive them under blanket orders. The 

department noted that this particular issue has been cited in previous GAO 

reports on DOD’s foreign military sales programs. The department also 

suggested that the Defense Security Cooperation Agency provide 

standardized policies and procedures. The intent of our recommendation 

is for the Navy to have policies and procedures in place to recover 

classified or controlled spare parts shipped to foreign countries that might 

not have been eligible to receive them under blanket orders. We 

acknowledge the department’s comments on recommending that the 

Defense Security Cooperation Agency provide standardized policies and 

procedures for recovering classified and controlled spare parts. However, 

as noted in our report, the Navy currently has no policies and procedures 

addressing this issue. If a foreign country requested and obtained 

classified and controlled spare parts for which it is not eligible, the 

country would not necessarily be likely to report this error to the Navy, 

particularly if the country in question had intended to order the parts. 

Therefore, we have modified our recommendation to establish interim 

policies and procedures, after consulting with appropriate government 

officials, for recovering classified or controlled spare parts shipped to 

foreign countries that might not have been eligible to receive them under 

blanket orders until the Defense Security Cooperation Agency develops 

guidance on this issue. 

DOD also provided technical comments for our consideration in the final 

report and we incorporated changes as appropriate. DOD’s formal 

comments appear in appendix I. 

To determine the adequacy of the Navy’s internal controls for foreign 

military sales under blanket orders, we assessed and tested whether the 

Navy’s key internal controls adequately restricted blanket orders for 

classified and controlled spare parts sold to foreign countries and 

obtained current DOD and Navy guidance on the foreign military sales 

programs. We also held discussions with key officials from the Naval 

Inventory Control Point, Navy International Programs Directorate, 

Philadelphia, Pennsylvania, to discuss the officials’ roles and 

responsibilities, as well as the criteria and guidance they used in 

performing their duties to restrict foreign countries from requisitioning 

Scope and 

Methodology 
Page 22 GAO-04-507 Foreign Military Sales 

under blanket orders classified and controlled spare parts. Also, we 

interviewed the officials regarding the requisitioning and approval 

processes applicable to classified and controlled spare parts. In addition, 

we obtained written responses from officials at the Defense Security 

Cooperation Agency, Washington, D.C., to identify the agency’s roles and 

responsibilities regarding the policies and procedures relevant to the 

foreign military sales programs. We also interviewed officials from the 

Defense Security Assistance Development Center, Mechanicsburg, 

Pennsylvania, to discuss their roles and responsibilities, as well as the 

criteria and the guidance they used to maintain and oversee the Navy’s 

Management Information System for International Logistics to restrict 

foreign countries from requisitioning under blanket orders classified and 

controlled spare parts. Furthermore, we interviewed officials to determine 

the functional and operational controls that are used to validate 

requisitions entered into the system. We also determined whether the 

Navy periodically conducted tests to validate the system to ensure that it 

accurately identified for review and approval blanket order requisitions to 

support foreign military sales. In addition, we obtained and reviewed 

documentation identifying the system tests to determine how often they 

were conducted. Also, we interviewed Navy and DOD officials to 

determine how periodic reviews and tests of the system were performed. 

To support our analysis, we obtained records from the Navy International 

Programs Directorate on all classified and controlled spare parts that were 

purchased by using blanket orders and approved for shipment to foreign 

countries from October 1, 1997, through April 30, 2003. Also, we limited 

our review to blanket orders because defined orders and Cooperative 

Logistics Supply Support Agreements specified the parts that countries 

were entitled to requisition by the national stock number. We tested the 

system by identifying the 38 requisitions for classified and controlled spare 

parts that were shipped under blanket orders and reviewed the 

restrictions applied to determine if the system was operating as intended. 

We verified the Navy’s system to determine whether it approved and 

released the selected blanket order requisitions in accordance with DOD 

foreign military sales policies. To conduct this work, we obtained from the 

Navy all blanket order shipments to foreign countries for the period 

mentioned above and matched the spare parts’ stock numbers to a 

government database to identify the classified and controlled parts that 

were shipped to foreign countries. While we identified some issues 

concerning the appropriate procedures for such spare parts, in all the 

cases we reviewed, we found that the parts had been ordered and shipped 

from the Navy’s system. 
Page 23 GAO-04-507 Foreign Military Sales 

We conducted our review from May 2003 through April 2004 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 

date of this report. At that time, we will send copies of this report to the 

Secretary of Defense; the Secretary of the Navy; the Director, Office of 

Management and Budget; and interested congressional committees. We 

will also make copies available to others upon request. In addition, the 

report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

Please contact me at (202) 512-8365 if you or your staff have any questions 

concerning this report. Key contributors to this report were Lawson (Rick) 

Gist, Jr.; Carleen Bennett; Latrealle Lee; Elisah Matvay; Arthur James, Jr.; 

Ann DuBois; and Cheryl Weissman. 

Sincerely yours, 

William M. Solis, Director 

Defense Capabilities and Management 
Appendix I: Comments from the Department 

of Defense 

Page 24 GAO-04-507 Foreign Military Sales 

Appendix I: Comments from the Department 

of Defense 

Note: Part of the 

enclosure to this letter 

provided technical 

comments, which we 

considered and 

incorporated in our report 

as appropriate. The 

technical comments are 

not attached. 
Appendix I: Comments from the Department 

of Defense 

Page 25 GAO-04-507 Foreign Military Sales 

Note: Page numbers in 

the draft report may differ 

from those in this report. 
Appendix I: Comments from the Department 

of Defense 

Page 26 GAO-04-507 Foreign Military Sales 
Appendix I: Comments from the Department 

of Defense 

Page 27 GAO-04-507 Foreign Military Sales (350440) 
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