Defense Trade: Better Information Needed to Support Decisions Affecting Proposed Weapons Transfers
Published: 2003-07-11T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The heightened visibility of advanced U.S. weapons in military conflicts has prompted foreign countries to seek to purchase such weaponry. In 2001, transfers of U.S. weapons and technologies to foreign governments totaled over $12 billion. The potential loss of U.S. technological advantage has been raised as an issue in recently approved transfers of advanced military weapons and technologies--such as military aircraft that were reported in the media to contain superior radar and avionics than those in the Department of Defense's (DOD) inventory. GAO looked at how releasability of advanced weapons is determined, how U.S. technological advantage is considered and protected, and what information is needed to make informed decisions on the potential release of advanced weapons.
section_title: What GAO Found
paragraphs: Before transfers are approved, the U.S. government must first determine if classified weapons or technologies are releasable to the requesting country according to the National Disclosure Policy (NDP). The process for determining releasability is complex. A foreign government's request is first reviewed by the military department that owns the requested weapon or technology. In cases where the request exceeds NDP's approved classification level, the military department forwards the request to the National Disclosure Policy Committee for its review. For some sensitive technologies, such as stealth, the case is also forwarded to a special committee for review. The process requires coordination among different U.S. government entities--including DOD, the military departments, the State Department, and the intelligence community--which have varying perspectives. Adding to this complexity, determinations of releasability are governed by broad guidance, which allows latitude in interpreting the unique circumstances of each proposed transfer. In determining the releasability of advanced weapons and technologies, a number of factors are considered, including how U.S. technological advantage would be affected. To protect U.S. technological advantage, safeguards--such as lowering the capability of a transferred weapon and withholding sensitive information on how the system operates--are considered for proposed transfers. However, the effectiveness of some individual safeguards may be limited. For example, one safeguard--the ability of the United States to deny spare parts to former allies--may not be effective if these countries are able to obtain spare parts through other means. While certain individual safeguards may not be as effective as desired, DOD officials said they consider various safeguards to ensure technological advantage is maintained. Information needed to assess releasability is not always complete, up-to-date, or available. For example, DOD's centralized National Disclosure Policy System database that was used to make decisions during the last 4 years only contained information for that time period. DOD has recently deployed an upgrade to the system, but has not yet determined its effectiveness. Other information, such as Central Intelligence Agency risk assessments--which provide counterintelligence information and risks involved in releasing advanced weapons to a foreign country--are often outdated or nonexistent. Finally, some intelligence information that could have a direct bearing on whether an advanced weapon or technology should be released is prepared for other purposes and is not provided to decision makers involved in releasability determinations.

section_title: Letter
paragraphs: The heightened visibility of advanced U.S. weapons in military conflicts  over the last decade has prompted foreign countries to increasingly seek  to purchase such weaponry. In 2001, transfers of weapons from the U.S.  government to foreign governments totaled over $12 billion, or 46 percent  of the world market share, representing a 15 percent increase in market  share since 1997. According to the Department of Defense (DOD), such  transfers can help strengthen defense coalitions and enhance  interoperability between the United States and its allies, as well as extend  production lines and lower unit costs for key weapon systems. Before  transfers are approved, the U.S. government must first determine if  classified weapons or technologies are releasable to the requesting  country according to policies and procedures stated in the National  Disclosure Policy (NDP).
The potential loss of U.S. technological advantage has been raised as an  issue in recently approved transfers of advanced military weapons and  technologies—such as those to the United Arab Emirates and South Korea  of military aircraft that were reported by the media to contain superior  radar and avionics than systems in DOD’s inventory. Therefore, you asked  us how the U.S. government protects technological advantage when  considering the transfer of advanced weapons. This report (1) describes  the process for determining the releasability of advanced weapons and  technologies, (2) describes how U.S. technological advantage is  considered and protected through this process, and (3) assesses the types  of information needed to make informed decisions on the potential release  of advanced weapons.
To conduct our work, we reviewed and analyzed policies and procedures  and the relevant directives and guidance governing the potential release of  advanced weapons and technologies. To identify safeguards to protect  U.S. technological advantage, we reviewed and analyzed records for  selected weapon systems approved for release. We also analyzed data on  various assessments and information used in the releasability process. We  spoke with officials in DOD, the military departments, the Joint Chiefs of  Staff, the Department of State, and the intelligence community to  understand how the process works, what safeguards are considered to  protect U.S. technological advantage, and what information is used to  support the decision-making process. Details on our scope and  methodology are provided in appendix I.
subsections: section_title: Background
paragraphs: The Arms Export Control Act, as amended, is the primary statute  governing exports of U.S. defense articles and services, including  advanced weapons and technologies, to eligible countries through the  government-to-government Foreign Military Sales program and sales made  directly by U.S. companies. The act also includes a statement of  conventional arms transfer policy, which provides that sales of defense  items be consistent with U.S. national security and foreign policy interests.  The Conventional Arms Transfer Policy, a Presidential Decision Directive  last updated in 1995, provides policy for weapons transfers. In addition to  stipulating that transfer decisions be made on a case-by-case basis, the  policy has several key goals that must be considered when transferring  weapons:    Ensure U.S. military forces maintain technological advantage over their  adversaries.
Help allies and friends deter or defend against aggression, while promoting  interoperability with U.S. forces when combined operations are required.    Promote stability in regions critical to U.S. interests, while preventing the  proliferation of weapons of mass destruction and their missile delivery  systems.
Promote peaceful conflict resolution and arms control, human rights,  democratization, and other U.S. foreign policy objectives.
Enhance the ability of the U.S. defense industrial base to meet U.S.  defense requirements and maintain long-term military technological  superiority at lower costs.
While the Conventional Arms Transfer Policy generally covers all arms  transfers, NDP specifically governs the releasability of classified military  information, including classified weapons and military technologies. NDP  establishes a framework for policy decisions on proposed transfers to  foreign recipients and is key in governing the release of an advanced  weapon or technology. These decisions are made before weapons or  technologies are approved for transfer. As implemented by DOD Directive,  this policy specifies that releasability decisions must satisfy five criteria.  For example, the proposed transfer must be consistent with U.S. military  and security objectives and be protected by the foreign recipient in  substantially the same manner as the United States. The DOD Directive  also requires department officials to enter NDP case data, including  releasability decisions, into a centralized database to facilitate the  coordination and review of potential transfers of weapons.
In November 2002, the White House announced that it had begun a  comprehensive assessment of the effectiveness of U.S. defense trade  policies to identify changes needed to ensure that these policies continue  to support U.S. national security and foreign policy goals. It also aims to  assess how U.S. technological advantage can be maintained. The  assessment is expected to cover such topics as the Arms Export Control  Act and the military departments’ technology release policy, as well as a  determination of the effectiveness of the Defense Trade Security  Initiatives. The assessment is also expected to cover issues related to the  NDP process.
section_title: Process to Determine the Releasability of Advanced Weapons and Technologies Is Inherently Complex
paragraphs: The process governing the release of advanced weapons and technologies  is inherently complex because it involves multiple, multilevel reviews by  various U.S. government entities and individuals with varying  perspectives. A country’s request for an advanced system initially is sent to  the military department that is responsible for—or “owns” the weapon or  technology, which then coordinates with various functional units to arrive  at a decision on whether to fulfill the request. Depending on the  circumstances of the request and the outcome of this initial review, the  request may be submitted to an interagency committee and other special  committees for additional review. Further, because the reviewers  represent different agencies, they bring varying perspectives to the  process and must reconcile differences to reach a unanimous decision on  each request. Finally, the guidance governing the process is broad and  applied on a case-by-case basis, allowing decision makers to use judgment  and interpretation when considering each foreign country’s request for the  release of an advanced weapon or technology.
subsections: section_title: Multiple Reviews Are Conducted
paragraphs: A foreign government’s request for the transfer of an advanced weapon or  technology is directed to the military department that is responsible for  the particular weapon or technology. Each military department has its  own review process for determining whether the weapon or technology  should be released (see fig. 1). To develop a position, the military  department receiving the request coordinates with and obtains input from  military experts in various offices and divisions within those offices. For  example, we were told that the Air Force coordinates a proposed transfer  of an Air Force fighter aircraft to a foreign government with subject matter  experts in functional offices, such as acquisition, plans, operations, and  weapons systems division. These experts, in turn, may consult with other  experts within their divisions. For instance, the weapons systems division  may coordinate with its electronic warfare staff, its radar staff, or both to  obtain input.
Military department reviews can result in one of three outcomes:  concurrence, concurrence with limitations and conditions, or  nonconcurrence. If a consensus to approve a request cannot be reached,  the request is elevated within the military department for a final decision.  If the requested item (1) is not covered in NDP, (2) exceeds the NDP  classification level specified for a particular foreign country, or (3) does  not comply with NDP criteria, the military department may seek an  exception to NDP from the National Disclosure Policy Committee, an  interagency review forum. Timelines for military departments’ reviews of  requests can vary. For example, Army officials stated that some cases can  be handled quickly while others may require a major investment of time  and resources.
When NDPC receives a request for an exception, the Executive Secretariat  distributes the request to committee members and seeks a unanimous vote  within 10 days (see fig. 2). Each committee member coordinates a position  with various experts. For example, the Joint Staff sends the request to the  Combatant Command that has responsibility for the country requesting  the advanced weapon or technology. The Combatant Command, in turn,  coordinates the request with various units within the Command, which  may include the Scientific Advisor, plans and operations division, weapons  systems division, and intelligence division to provide input on such issues  as the impact of the transfer on the region. These units may further  coordinate with other offices within their units. A final coordinated  Command position is then provided to the Joint Staff NDPC member.
If any NDPC member votes not to approve a request for an exception,  there is a negotiation period for no more than 20 days. During this time,  the member that has requested the exception may propose or accept  placing different or additional conditions on the request to gain unanimity.  If agreement cannot be reached, the request is elevated to the Chairman  for a decision. Members have 10 days to appeal the Chairman’s decision or  it is accepted. If a committee member appeals the decision, the request is  elevated to the Deputy Secretary or Secretary of Defense. However, of the  330 exceptions reviewed over the last 4 years, only 1 had been appealed  and 2 denied. The appeal and denials covered requests for weapons and  technologies and intelligence information. In addition, 5 requests for  exceptions related to weapons and technologies were withdrawn before a  decision was reached. According to DOD officials, most exceptions are  approved with limitations and conditions.
In addition to the military departments’ reviews and the NDPC exception  process, special committee processes are set up to review requests for  sensitive technologies that may be included in a proposed transfer. For  example, if a proposed transfer includes a stealth component, the military  department submits the case to the Director of Special Programs within  the Office of the Under Secretary of Defense for Acquisition, Technology,  and Logistics who manages low observable/counter low observable  (LO/CLO) issues (see fig. 3). Precedent decisions, which are contained in a  database, are used to determine the releasability of the technology. Based  on the level of sensitivity of the technology involved, the case may be  elevated to the Tri-Service Committee for further review. Some  controversial or extraordinarily complex cases may require exceptions to  precedent LO/CLO policy and further elevation to the LO/CLO Executive  Committee for final decision. If needed, the Tri-Service Committee can  charter a “Red Team,” which, according to DOD officials, is composed of  subject matter experts, including those from industry, academia, and the  military department laboratories. The Red Team is convened to assess the  risks associated with the proposed transfer. The Tri-Service Committee  and the Executive Committee make their decision based on their  assessment of the information provided by the military department that is  responsible for the technology and the pros and cons presented by the Red  Team, if convened.
section_title: Varying Perspectives and Broad Guidance Governing Potential Transfers Add to the Complexity of the Review Process
paragraphs: The multilayered reviews involved in the process for determining the  releasability of an advanced weapon or technology can be particularly  complex because individual entities and decision makers have varying  perspectives. For example, the combatant commanders’ position may  concentrate on such issues as the effects the proposed transfer could have  on coalition warfare, political-military relations in a region, and their plans  and operations. The State Department, concerned with U.S. foreign policy  goals, tends to focus on issues such as the proposed transfer’s potential  effect on the stability of the region of the requesting country. Others may  deliberate the benefits and risks of the proposed transfer. In addition, we  were told that resource issues, including turnover of officials involved in  the releasability process, can affect the reviews. As we previously  reported, military personnel rotate, on average, every 2 years.
The guidance governing releasability adds further complexity to the  review process because it is broad and implemented on a case-by-case  basis, allowing for judgment and interpretation of the unique  circumstances surrounding each transfer. Specifically, decisions on the  release of advanced weapons or technologies must satisfy five broad NDP  criteria that are subject to interpretation. (See app. II for a discussion of all  five criteria and examples of information to be considered for each.) For  example, one criterion decision makers must consider is whether the  proposed transfer is consistent with U.S. military and security objectives.  In examining this criterion, decision makers must address multiple factors,  including how technological advantage would be protected if the weapon  or technology were sold or transferred. According to NDPC members, the  broad criteria allow for a certain level of flexibility that is needed in  determining whether an advanced weapon should be released to a foreign  country. Some NDPC members further pointed out that this flexibility is  especially critical in the current foreign policy environment in which many  different countries are working with the United States in the war on  terrorism.
section_title: Technological Advantage and Various Safeguards Are Considered When Determining Releasability
paragraphs: One criterion NDPC must consider when determining the releasability of  advanced weapons and technologies is that the transfer must be consistent  with U.S. military and security objectives. In satisfying this criterion,  military experts involved in the NDP coordination and review process told  us they consider the effect the transfer could have on U.S. technological  advantage, along with various safeguards—both case-specific and  general—to protect this advantage. The effectiveness of individual  safeguards may be limited; however, a variety of safeguards may be  considered.
In considering technological advantage, military experts said that they first  review relevant military department documents and policies to determine  if the requested weapon or technology exceeds the technology thresholds  specified for the country making the request. If the requested weapon or  technology exceeds this threshold, the experts may consult and  coordinate with military engineers, the contractor that manufactures the  weapon or technology, the system program office, and other operational  experts to incorporate appropriate safeguards—typically in the form of  case-specific limitations and conditions—to protect U.S. technological  advantage. These include (1) sanitized or export variants, where the  released weapon or technology has a lower operational capability or less  advanced technology than what the United States has in its inventory;       (2) anti-tamper measures, where features are built into the weapon to  prevent reverse engineering such as code encryption, and protective  coatings on internal weapon components; (3) time-phased release, where  the advanced weapon or technology is not released until the United States  has fielded a better capability; and (4) withheld information and data,  where the transfer does not include information such as software source  codes. Military experts said that program offices, in some cases, conduct  verification tests and the Defense Contract Management Agency works  with contractors to ensure that limitations and conditions are  implemented before the weapon is transferred.
Military department officials told us that in addition to case-specific  limitations and conditions, they also consider other general safeguards to  preserve U.S. military superiority. These include (1) superior U.S. tactics  and training, where military tactics for maneuvers and operations may not  be shared with other nations; (2) control of system spare parts, where the  United States can stop providing spare parts to former allies; and   (3) countermeasure awareness, where the United States has the ability to  develop measures to defeat the released system because of its knowledge  of how the system functions.
However, the effectiveness of certain individual safeguards used to protect  technological advantage may be limited for various reasons. For example,  a time-phased release may not be effective if the fielding of a more capable  weapon or technology is delayed and does not coincide with the  contractual delivery date of the weapon to be released to the foreign  government. As we reported in January 2003, schedule delays have been  pervasive in certain major acquisition programs. The Air Force’s F/A-22,  the next generation fighter aircraft, for example, was initially expected to  be fielded in September 1995. As development proceeded, the estimated  fielding date was pushed out 8 years to September 2003. According to a  current estimate, the F/A-22 projected fielding date has slipped another      2 years to December 2005. In addition, factors outside of U.S. control can  diminish the effectiveness of certain individual safeguards. For example,  the United States may stop providing spare parts to former allies, but these  countries may obtain needed parts through other means, such as  “cannibalizing” parts from other weapons or obtaining parts from other  countries at a higher cost through the “grey market.” Some DOD officials  told us that while certain individual safeguards may not be as effective as  desired, they consider various safeguards for each proposed transfer to  ensure technological advantage is maintained.
section_title: More Complete, Current, or Available Information Would Better Support Determinations of Releasability
paragraphs: In addition to considering technological advantage when making  releasability decisions, NDPC considers other criteria such as a foreign  government’s capability to protect U.S. classified military information,  including weapons or technologies. Information such as Central  Intelligence Agency (CIA) risk assessments and NDPC security surveys  can be used to validate a country’s capability to provide such protection.  DOD’s centralized database contains some of this information, as well as  historical case data; however, it is not always complete, up-to-date, or easy  to access. In addition, some information such as end-use monitoring  reports, which may identify countries that have not protected U.S. military  information, is not provided to NDPC.
subsections: section_title: DOD’s Centralized NDP Database Was Not Complete and the Effectiveness of the Upgrade Is Unknown
paragraphs: DOD requires that NDP exception cases be recorded in a centralized  automated system to assist committee members in reviewing,  coordinating, and reaching decisions on proposals to release classified  military information. This centralized system contains several databases,  including the National Disclosure Policy System, which tracks and assigns  exception cases, records releasability decisions, and contains historical  data on exceptions. Historical data are important for identifying weapons  or technologies that have been released to the requesting country, as well  as its neighboring countries. However, the National Disclosure Policy  System that was used to make decisions during the last 4 years contained   data only for decisions made during that time period. It did not contain  data on exceptions that were decided in prior years.  In addition, it did not  allow users to conduct full text searches or to search for specific data  elements, such as exceptions by country, weapon system, or date.
Because of limited historical data in the National Disclosure Policy  System, NDPC members told us that they could not always use it to  analyze precedent cases. To obtain historical data and other information,  the military departments have relied on their own separate databases  containing information on their departments’ prior requests for transfers.  Unlike the military departments, other NDPC members do not have their  own databases. For example, the State Department has relied on manual  reviews of paper files and discussions with country experts or other  officials with knowledge of prior cases—assuming the files still exist and  the experts and officials still work at the State Department. Because of  limitations in the National Disclosure Policy System, the NDPC Executive  Secretariat has also relied on manual file reviews to identify information  necessary for preparing its annual NDP report to the National Security  Council.
To add more capability to the National Disclosure Policy System, DOD’s  Policy Automation Directorate developed an upgrade that is expected to  provide historical data from 1960 to the present and enhance data query  ability. According to NDPC officials, the upgrade has taken over 3 years to  develop because of other priorities, technical issues, and limited input  requested from users on the requirements and improvements for the  upgraded database. In addition, deployment of the upgraded system was  delayed several months because the upgrade had been experiencing  technical problems. For example, NDP exception cases have been  mislabeled as “current” when they were 2 years old, some cases were  missing from the system, and certain queries did not always provide  accurate results. While the upgrade has recently been deployed, the NDPC  Executive Secretariat stated that it may take about 3 to 4 months to assess  its effectiveness.
section_title: CIA Risk Assessments and NDPC Security Surveys Are Often Outdated
paragraphs: As part of the NDP process, the DOD Directive requires decision makers  to determine whether foreign recipients of classified military information  are capable of providing substantially the same degree of security  protection given to it by the United States. In addition to historical  precedence, decision makers can rely on CIA risk assessments and NDPC  security surveys to make these determinations. The National Disclosure  Policy System includes information such as security surveys, but it does  not include CIA risk assessments. CIA risk assessments provide  counterintelligence risk information, including the assessment of risks  involved in releasing classified material to a foreign government. NDPC  security surveys consist of reviews of the foreign government’s security  laws, regulations, and procedures for protecting classified information.  These reviews include making certain that recipients (1) have procedures  to provide clearances to personnel, restrict access to properly cleared  individuals, and report promptly and fully to the United States any known  or suspected compromises and (2) agree not to reveal to a third party any  U.S. classified military information without prior consent of the U.S.  government.
Our analysis shows that of the approximately 70 percent of countries  covered by NDP that had exceptions approved for advanced weapons and  technologies between 1997 and 2002, most have outdated or no CIA risk  assessments. Specifically, of these, 66 percent were conducted more than  5 years ago and 12 percent have not been completed (see fig. 4). And while  22 percent of CIA risk assessments are currently up-to-date, our analysis  shows that an overwhelming majority of these risk assessments will be out  of date by the end of 2003.
According to the NDPC Executive Secretariat, CIA officials have been  unable to respond to some requests to update risk assessments because of  resource reductions and other agency priorities. Responding to a CIA  request, the Secretariat prioritized the top four or five assessments that  were needed in 1999. However, NDPC would like to have all assessments  updated every 2 years.
In addition, while NDPC has set a goal to perform security surveys every    5 years, some of them are outdated while others were not conducted.  Specifically, 23 percent of these surveys are 5 years or older and 7 percent  have not been completed for countries that had exceptions approved for  advanced weapons and technologies between 1997 and 2002, (see fig. 5).  And while 70 percent of security surveys are currently up-to-date, our  analysis shows that over half of these surveys will be out of date by the  end of 2003.
Some NDPC security surveys have not been completed in a timely manner  because of lack of foreign government cooperation, and other unforeseen  circumstances, such as country unrest and limited resources. According to  NDPC officials, the scheduling of NDPC security surveys is a time- consuming effort performed by one staff member who has other  responsibilities. In addition, security surveys are performed as a collateral  duty by the Executive Secretariat. Depending on their availability,  committee members also volunteer to assist the Executive Secretariat in  conducting the surveys.
NDPC officials also noted that in some cases, assessments and surveys  may not be needed because the system or technology requested is not  significant and the country makes infrequent requests. For example, a  country may request one weapon requiring an exception in a 20-year time  frame, negating the need for expending resources to regularly update or  conduct a CIA risk assessment or security survey for that country.
However, NDPC members told us that the CIA risk assessments and the  NDPC security surveys provide different information that is often  important for making NDPC decisions. CIA risk assessments are  particularly important for exception cases because they provide an  evaluation of a country’s security forces and the risk environment of a  country that will potentially receive U.S. advanced weapon systems.  However, because the assessments are outdated, they likely do not reflect  the current conditions of the countries and therefore cannot be relied on  for deciding exception cases. Further, the upgraded National Disclosure  Policy System does not include CIA risk assessments—which NDPC  members have said would be useful to have in the new upgraded system.  According to some NDPC members, having outdated or no NDPC security  surveys may hamper efforts to determine whether a country could protect  advanced weapons and technologies from compromise. Specifically,  without these surveys, NDPC members may not be able to identify  weaknesses in the country’s current systems or areas that need  improvement. In addition, the NDPC Executive Secretariat said, in some  cases, when security surveys were not prepared, decisions were made to  grant exceptions because benefits were deemed to outweigh risks.
section_title: Some Intelligence and Other Information Not Currently Provided to NDP Decision Makers
paragraphs: Once weapons have been transferred to other countries, the State  Department and the intelligence community track information on their use  and disposition. For example, a State Department-chaired committee  collects intelligence information on the illegal transfers of weapons to  third parties and transfers of non-U.S. weapons among foreign countries.  However, according to some NDPC members, this information is used by  the State Department primarily for nonproliferation purposes and is not  provided to NDPC. This information could assist NDPC members in  determining the releasability of a weapon or technology to a foreign  country because it indicates how well the country has protected  previously transferred advanced weapons and technologies. Further, this  information can provide a more accurate assessment of the types of  weapons the country receiving the illegal transfers has in its arsenal.
In addition, information from DOD’s recently initiated end-use monitoring  program could also be useful in making releasability decisions. The  program will include monitoring of sensitive defense articles, services, and  technologies that have special conditions placed on them when  transferred through the Foreign Military Sales program. However, DOD  has not yet determined the resources needed to conduct the end-use  monitoring requirements outlined in the program’s policy. The end-use  monitoring program manager is expected to provide reports on end-use  violations to NDPC. Committee officials said that this information would  be useful because it would indicate how well a country is protecting the  weapons and technologies that have been transferred through the Foreign  Military Sales program.
Finally, the intelligence community sometimes obtains derogatory  information on countries that may be of interest to NDPC in making  determinations of releasability. For example, NDPC officials said that in a  recent instance an intelligence agency discovered that a country  requesting the release of an advanced weapon system did not have the  security capabilities to protect U.S. classified military information, but did  not provide this information to NDPC during the review process. These  officials stated that while such cases are not typical, this type of  information would have been useful in evaluating whether the country  provided the same degree of protection that would be provided by the  United States—a key criterion governing NDP decisions.
section_title: Conclusions
paragraphs: The U.S. government has invested hundreds of billions of dollars in the  research and development of advanced weapons and technologies. To  protect this investment, it is important for decision makers to be fully  informed of the benefits and risks associated with the release of such  weaponry. The process for determining the releasability of advanced  weapons and technologies is necessarily complex because the integrity of  the process relies on multiple layers of decision makers who consider  numerous factors in assessing the risks involved if a weapon is  compromised or ends up in unfriendly hands. To minimize the risks, it is  critical that the decision makers have ready access to reliable and  complete information on such factors as the recipient country’s ability to  protect the advanced weapon or technology. Yet the process does not  always include a systematic sharing of up-to-date information with NDPC  members. Given the turnover of military officials involved in the NDPC  process, it is especially critical that complete and readily accessible data  from the National Disclosure Policy System database, up-to-date CIA  assessments and NDPC security surveys, and relevant intelligence  information from other agencies are available to make fully informed  decisions.
section_title: Recommendations for Executive Actions
paragraphs: To ensure that NDPC members have complete and accurate information in  a centralized database that facilitates coordination and decision making on  the potential release of advanced weapons and technologies, we are  recommending that the Secretary of Defense direct the NDPC Executive  Secretariat to    evaluate the accuracy and effectiveness of the upgraded National    determine with NDPC members the additional capabilities, such as  inclusion of CIA risk assessments, needed for the upgraded National  Disclosure Policy System, and    work with the DOD Policy Automation Directorate to address user  comments and technical problems related to the upgraded system as they  arise.
To ensure that useful and timely information is available for making  informed release decisions, we are recommending that the Secretary of  Defense direct the NDPC Executive Secretariat to    work with CIA to prioritize risk assessments that need to be updated,  establish a schedule for performing these assessments, and systematically  distribute the assessments to NDPC members through the automated  system or other means;    develop a plan to be used as a business case for determining the  appropriate level of resources required to conduct needed security surveys  or if a survey cannot be conducted, ensure that an alternative analysis of  or information on the foreign government’s security capability is made  available to NDPC members; and  identify what additional information, such as end-use monitoring reports,  would be useful to NDPC members, and establish a mechanism for  requesting this information from appropriate sources, and systematically  distribute it to NDPC members.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD agreed with a number  of our findings and recommendations but did not agree with others.  Specifically, DOD concurred with our recommendations to evaluate the  upgraded National Disclosure Policy System, prioritize CIA risk  assessments that need to be updated or conducted, and identify additional  information needed to facilitate decision making. DOD did not concur with  our recommendations to investigate further the capabilities of the  upgraded National Disclosure Policy System or establish a firm schedule  for addressing technical problems with the upgrade. DOD also did not  concur with our recommendation to develop a plan for NDPC security  surveys. Further, DOD stated that our depiction of the NDP process  appears to mislead the reader about the information available to  committee members when making decisions.
At the time of our review, DOD had taken 3 years to develop an upgraded  system primarily because of limited input requested from users, which  resulted in a major redesign of the system.  In addition, deployment of the  upgrade was delayed a number of times because of technical problems.   This system was deployed after our review was completed, and we have  since modified our recommendations to reflect the current situation. In  commenting on our original recommendations, DOD stated that  improvements to the upgrade cannot be identified at this time. However,  in our discussions with NDPC members, they have already identified  capabilities they would like to have in the upgrade, such as inclusion of  CIA risk assessments. Additionally, DOD stated that NDPC personnel will  identify problems with the system and bring them to the attention of the  software developers. We believe all users of the system, including  committee members and not just NDPC personnel, should participate in  the identification of technical problems to ensure that the system is  meeting user needs. Further, DOD said that developers have quickly fixed  minor software problems. We, therefore, are no longer recommending that  a firm schedule be established but rather that technical problems be  addressed as they arise.
With regard to our recommendation on a plan for NDPC security surveys,  DOD stated that it already develops a schedule for completion of such  surveys.  Implementation of the schedule is largely dependent on  committee members volunteering to conduct the surveys. However, the  plan we envisioned in our recommendation would include not only a  schedule but also information such as the reason each security survey is  needed and the level of resources necessary to schedule and conduct the  survey. We believe the plan would provide an opportunity to develop a  business case to determine if dedicated resources are needed to complete  security surveys on a prioritized basis, instead of largely relying on  committee volunteers. We have modified our recommendation to clarify  its intent.
We disagree that our report misleads the reader about the sufficiency of  the information available to make decisions. Committee members we  spoke with stated that information, such as more timely CIA risk  assessments and security surveys, would allow them to make more  informed decisions. Our recommendations are intended to enhance the  information needed for the decision making process. DOD’s letter and our  detailed evaluation of its comments are reprinted in appendix III.
The Department of State did not provide formal written comments;  however, a senior State official said that the report was informative.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution of this report until         30 days after its issuance. At that time, we will send copies of this report to  the Chairmen and Ranking Minority Members of the House Committees on  Government Reform, on International Relations, and on Armed Services  and Senate Committees on Governmental Affairs, on Foreign Relations,  and on Armed Services. We will also send copies to the Secretaries of  Defense and State and the Director, Office of Management and Budget. 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) 512-4841 or Anne-Marie Lasowski at (202)     512-4146 if you or your staff have any questions concerning this report.  Major contributors to this report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To ascertain the process for determining the releasability of an advanced  weapon or technology, we conducted a literature search, reviewed the  related law and regulations, and analyzed policy, directives, and guidance  governing the process. We interviewed officials in the Departments of  Defense and State, the military departments, the Joint Chiefs of Staff, three  Combatant Commands, and the intelligence community to understand  how the interagency committee process works for reviewing exceptions to  the National Disclosure Policy (NDP). We also obtained briefings on  special committee processes such as the Low Observable/Counter Low  Observable Executive Committee process. We analyzed military  department policies and procedures for reviewing requests for the transfer  of weapons and technologies and discussed the review and coordination  processes with pertinent military officials.
To determine if U.S. technological advantage is considered and protected  in the review process, we reviewed selected weapons transfers records,  including pertinent initial country requests; military department, Joint  Staff, and other National Disclosure Policy Committee (NDPC) members’  input and positions on the requests; and limitations and conditions  included in the final committee positions. We analyzed the types of  limitations and conditions used to protect technological advantage and  discussed these and their effectiveness with military department experts,  as well as Joint Staff officials. Through discussions with these officials, we  also identified other safeguards that committee members consider to  preserve U.S. military advantage. We reviewed GAO and Department of  Defense (DOD) reports related to these various safeguards and specific  limitations and conditions.
To identify and assess the types of information used in the process, we  reviewed the NDP and DOD’s and the military departments’ releasability  regulations. We interviewed officials in the Executive Secretariat for the  NDPC, the military departments, Joint Staff, and State Department to  obtain their perspectives on information required for NDP exception  decisions. We also obtained a briefing and demonstration on DOD’s  centralized National Disclosure Policy System database and its upgrade  and discussed the capability of this system with various users. We  analyzed data on Central Intelligence Agency risk assessments and NDPC  security surveys performed over the last 25 years. We determined the  number of assessments and surveys that were performed more than   5 years ago or were not completed for countries that had received  exceptions to NDP for potential weapons transfers during 1997 through  2002. We identified additional information that may be useful to the  National Disclosure Policy Committee and discussed this with committee  members.
We performed our review from June 2002 through May 2003 in accordance  with generally accepted government auditing standards.
section_title: Appendix II: National Disclosure Policy Criteria
paragraphs: The National Disclosure Policy Committee (NDPC) considers five criteria  when determining the releasability of classified military information,  including weapons and technologies. These criteria are broad and are  implemented on a case-by-case basis. Table 1 provides the criteria and the  types of information that decision makers consider when assessing each  criterion.
section_title: Appendix III: Comments from the Department of Defense
paragraphs: The following are GAO’s comments on the Department of Defense’s  (DOD) letter dated June 24, 2003.
subsections: section_title: GAO Comments
paragraphs: 1.  We disagree with DOD’s statement that our depiction of the National  Disclosure Policy (NDP) process appears to mislead the reader about  the sufficiency of the information available to make decisions. We  accurately describe the process, but found that the information  supporting the decisions was not always complete, up-to-date, or easy  to access. We further acknowledge in the report that each request is  reviewed on a case-by-case basis. While DOD states that supporting  information must be furnished to each member of the Committee for  review, committee members we spoke with stated that information  such as more timely National Disclosure Policy Committee (NDPC)  security surveys and Central Intelligence Agency (CIA) risk  assessments would facilitate the process, thus allowing members to  make more informed decisions.  2.  The National Disclosure Policy System that was used to make  decisions during the last 4 years contained data only for decisions  made during that time period. DOD indicated that this system was a  follow-on to another database containing historical data. However,  some committee members and officials told us that this older database  is not easy to use and contains only summary information. In addition,  one committee member does not have access to this database. The  report clearly states that an upgraded system has been developed.  DOD asserted that glitches and technical problems are to be expected  for a system in development. We understand that such technical  problems can occur with an upgrade. However, at the time of our  review, the system had taken over 3 years to develop, and deployment  was delayed a number of times because of technical problems and  limited input requested from users. As DOD has acknowledged, the  effectiveness of the upgrade is yet to be determined.  3.  We believe that it is too early for DOD to assert that the upgraded  system has proven to be reliable and efficient, given that it will not  formally assess the effectiveness of the system until September 2003.  DOD’s response acknowledges that improvements are expected but  cannot be identified at this time. However, NDPC members told us  about capabilities they wanted included in the upgrade, such as  inclusion of CIA risk assessments. We believe that DOD should be  proactive in seeking input from users about such additional  capabilities needed for the upgraded system. We have clarified our  recommendation to indicate that this information should be obtained  from members after they have had an opportunity to use the system  and can assess the need for improvements.  4.  DOD acknowledged that as NDPC personnel identify problems with  the upgraded system, they will bring these problems to the attention of  the software developers.  However, our recommendation was directed  toward obtaining input from all NDPC members who are users of the  system, not just NDPC personnel, to ensure that user needs are met. In  addition, DOD said that developers have quickly fixed minor software  problems. We, therefore, are no longer recommending that a firm  schedule be established but rather that technical problems be  addressed as they arise.    5.  While DOD indicates that it already develops a schedule for  completion of NDPC security surveys, our recommendation is  intended to include not only a schedule but also additional  information. Specifically, we believe that a plan should also identify  surveys to be conducted and the reasons each survey is needed;  establish time frames for completing these surveys; and estimate the  resources needed to schedule and conduct these surveys. Based on  this information, DOD can develop a business case to determine if  dedicated resources, instead of committee volunteers, are needed to  ensure that surveys are completed on a prioritized basis. We have  modified our recommendation to clarify this point.
Finally, DOD states that no known alternative analysis currently exists  that would provide information comparable to that provided through  the security surveys. However, the department has acknowledged that  the CIA risk assessments may be used as the basis for decisions when  a security survey cannot be conducted. This is the type of alternative  analysis that we are referring to in our recommendation.
section_title: Appendix IV: Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: Anne-Marie Lasowski, Marion Gatling, John Ting, Ella Mann, Shelby S.  Oakley, Karen Sloan, Marie Ahearn, and Stan Kostyla made key  contributions to this report.
section_title: Related GAO Products
paragraphs: Export Controls: Processes for Determining Proper Control of   Defense-Related Items Need Improvement. GAO-02-996. Washington, D.C.:  September 20, 2002.
Export Controls: Department of Commerce Controls over Transfers of  Technology to Foreign Nationals Need Improvement. GAO-02-972.  Washington, D.C.: September 6, 2002.
Export Controls: More Thorough Analysis Needed to Justify Changes in  High Performance Computer Controls. GAO-02-892. Washington, D.C.:  August 2, 2002.
Defense Trade: Lessons to be Learned From the Country Export  Exemption. GAO-02-63. Washington, D.C.: March 29, 2002.
Export Controls: Issues to Consider in Authorizing a New Export  Administration Act. GAO-02-468T. Washington, D.C.: February 28, 2002.
Export Controls: Reengineering Business Processes Can Improve  Efficiency of State Department License Reviews. GAO-02-203.    Washington, D.C.: December 31, 2001.
Export Controls: Clarification of Jurisdiction for Missile Technology  Items Needed. GAO-02-120. Washington, D.C.: October 9, 2001.
Defense Trade: Information on U.S. Weapons Deliveries to the Middle  East. GAO-01-1078. Washington, D.C.: September 21, 2001.
Export Controls: State and Commerce Department License Review Times  Are Similar. GAO-01-528. Washington, D.C.: June 1, 2001.
Export Controls: Regulatory Change Needed to Comply with Missile  Technology Licensing Requirements. GAO-01-530. Washington, D.C.:   May 31, 2001.
Defense Trade: Analysis of Support for Recent Initiatives.  GAO/NSIAD-00-191. Washington, D.C.: August 31, 2000.
Foreign Military Sales: Changes Needed to Correct Weaknesses in End- Use Monitoring Program. GAO/NSIAD-00-208. Washington, D.C.:   August 24, 2000.
Defense Trade: Status of the Department of Defense’s Initiatives on  Defense Cooperation. GAO/NSIAD-00-190R. Washington, D.C.:  July 19, 2000.
Conventional Arms Transfers: U.S. Efforts to Control the Availability of  Small Arms and Light Weapons. GAO/NSIAD-00-141. Washington, D.C.:  July 18, 2000.
Foreign Military Sales: Efforts to Improve Administration Hampered by  Insufficient Information. GAO/NSIAD-00-37. Washington, D.C.:  November 22, 1999.
Foreign Military Sales: Review Process for Controlled Missile Technology  Needs Improvement. GAO/NSIAD-99-231. Washington, D.C.:   September 29, 1999.
Export Controls: 1998 Legislative Mandate for High Performance  Computers. GAO/NSIAD-99-208. Washington, D.C.: September 24, 1999.
Export Controls: Better Interagency Coordination Needed on Satellite  Exports. GAO/NSIAD-99-182. Washington, D.C.: September 17, 1999.
Defense Trade: Department of Defense Savings From Export Sales Are  Difficult to Capture. GAO/NSIAD-99-191. Washington, D.C.:   September 17, 1999.
Export Controls: Issues Related to Commercial Communications  Satellites. T-NSIAD- 98-208. Washington, D.C.: June 10, 1998.
Export Controls: Change in Export Licensing Jurisdiction for Two  Sensitive Dual-Use Items. GAO/NSIAD-97-24. Washington, D.C.:   January 14, 1997.
Export Controls: Sensitive Machine Tool Exports to China.   GAO/NSIAD-97-4. Washington, D.C.: November 19, 1996.
Export Controls: Sale of Telecommunications Equipment to China.   GAO/NSIAD-97-5. Washington, D.C.: November 13, 1996.
Export Controls: Some Controls Over Missile-Related Technology Exports  to China Are Weak. GAO/NSIAD-95-82. Washington, D.C.: April 17, 1995.