Nonproliferation: Further Improvements Needed in U.S. Efforts to Counter Threats from Man-Portable Air Defense Systems
Published: 2004-05-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The proliferation of man-portable air defense systems (MANPADS) has been of growing concern to the United States and other governments. The United States is pursuing a wide variety of activities internationally and domestically to address this threat. GAO was asked to assess efforts by (1) the State Department to control global proliferation of MANPADS, (2) the Department of Defense (DOD) to monitor end-use of U.S.-exported Stingers, and (3) the Department of Homeland Security (DHS) to develop technical countermeasures to minimize the threat of a MANPADS attack.
section_title: What GAO Found
paragraphs: In 2003, the State Department made important progress in its efforts to control the global proliferation of MANPADS. Thirty-two foreign governments made multilateral commitments to better control MANPADS and prevent their acquisition by terrorists. However, the State Department's ability to assess further progress in MANPADS nonproliferation is limited because the multilateral forums have no mechanisms to monitor members' implementation of commitments. In addition, the State Department obtained foreign government commitments to destroy or better secure MANPADS. DOD is required annually to inventory every Stinger missile system sold overseas. However, DOD's inventory inspection process has flaws. First, DOD records on the number and destination of Stingers sold overseas are incomplete, unreliable, and largely in hard-copy form. Because DOD has not required DOD agencies responsible for end-use monitoring to retain these records, it does not know how many Stingers have been sold overseas. Second, DOD officials overseas use inconsistent practices when inspecting Stinger inventories because DOD lacks procedures for conducting these inspections. To develop technical countermeasures to minimize the MANPADS threat to aircraft, the DHS initiated a 2-year program to adapt military aircraft defense systems to commercial aircraft. However, DHS faces significant challenges such as establishing system requirements and setting reliable cost estimates. The department adopted GAO's January 2004 recommendations to implement a knowledge-based approach to this development program. For example, DHS plans to use GAO-recommended criteria that ensure product knowledge is attained at key points in system development.

section_title: Letter
paragraphs: As we reported in May 2003, the threat of terrorist attacks against U.S.  personnel, facilities, and interests overseas was great because of the  number and types of terrorist organizations, the lethality of terrorists’  tactics, and the ability of terrorists to operate worldwide. Among these  threats, the proliferation of man-portable air defense systems (MANPADS)  has been of growing concern to the United States and other governments.  MANPADS are shoulder-launched surface-to-air missile systems designed  for military use by ground forces to defend against air attacks. However,  terrorists have acquired and used these MANPADS to attack and bring  down both military and commercial aircraft in areas of conflict.
You asked us to assess (1) the nature and extent of the MANPADS threat,  (2) the State Department’s efforts to control the international proliferation  of MANPADS, (3) the Department of Defense’s (DOD) end-use monitoring  of Stinger missiles, and (4) the Department of Homeland Security’s (DHS)  efforts to develop technical countermeasures to minimize the threat of a  MANPADS attack. We did not review other options for addressing the  MANPADS threat, such as law enforcement efforts, airport security, or  emergency flight training.
To address our objectives, we obtained documents and met with officials at  the Departments of Defense, State, and Homeland Security, and the  intelligence agencies. We interviewed foreign government officials and met  with representatives of the Secretariats of the Wassenaar Arrangement  and of the Organization for Security and Cooperation in Europe (OSCE) in  Vienna. We toured Stinger missile storage facilities in Germany and the  United Kingdom, observed Stinger missile inventory inspections in Turkey,  and interviewed U.S. DOD security assistance officials in those countries.  We also requested meetings with officials of the National Security Council  to discuss the prioritization of terrorist threats, but they refused to meet  with us or respond to our questions. We performed our work from April  2003 to March 2004 in accordance with generally accepted government  auditing standards. For additional information on our scope and  methodology, see appendix I.
subsections: section_title: Background
paragraphs: MANPADS are portable short-range surface-to-air missile systems designed  for use by one or two soldiers to attack fixed-wing aircraft and helicopters  during wartime. Basic components include the launch tube and missile,  gripstock (launcher or firing mechanism), and thermal battery. See figure 1  for an illustration of MANPADS components.
Due to growing concern in the late 1990s over the worldwide proliferation  of MANPADS to non-state actors, the United States led an effort to promote  improved export control policies for MANPADS, primarily in the  Wassenaar Arrangement. In December 2000, the 33 Wassenaar  Arrangement participating states adopted U.S.-proposed guidelines for  establishing a set of MANPADS export controls. While multilateral export  control regimes are a key policy instrument in the overall U.S. strategy to  combat the proliferation of weapons of mass destruction and conventional  weapons, they have limitations. The multilateral export control regimes are  voluntary, nonbinding arrangements among like-minded supplier countries.  While countries make no legally binding commitments in joining them,  participating countries undertake a political commitment to abide by the  goals and principles of the regime. The regimes operate on the basis of  consensus of all members and decisions on how to implement and interpret  regime decisions are left to the national discretion of each member. None  of the regimes identify specific countries as targets. Collectively the  regimes strive to stop, slow, or increase the cost and risk of detection  efforts by countries’ of concern to acquire sensitive technologies and  capabilities, including MANPADS.
The United States began selling its current MANPADS, the Stinger missile  system, to U.S. allies and U.S.-approved nations in 1982. Because the  Stinger missile system is among the most advanced of all MANPADS, the  United States has placed enhanced controls and requirements on its sale  and use. (See fig. 2 for a picture of the U.S. Stinger missile system.) Under  security assistance procedures, DOD provides defense articles, services,  and training to foreign governments and international organizations that  have been approved by the State Department and determined by the  President as supporting U.S. national security and foreign policy  objectives, according to DOD. In comments on a draft of this report, DOD  said that each proposed transfer of Stinger missiles is thoroughly vetted by  many different organizations and offices, thus providing DOD a high level  of confidence that the missiles under security assistance programs do not  pose a terrorist threat.
The Stinger missile system is one of only a few weapons systems that are  subject to “enhanced end-use monitoring” by DOD. If a Stinger missile  system sale is approved through the Foreign Military Sales process, State  and DOD sign and extend a letter of offer and acceptance (LOA) to the  customer nation. The LOA serves as a contract agreement between the  United States and the customer nation and requires the customer nation to  allow DOD to conduct annual inspections to ensure the Stinger systems are  being used and stored as required under the terms of the sale. Countries  that purchase Stinger missile systems from the United States are legally  bound to cooperate with these inspections or risk damaging future military  sales and cooperative relations with the United States.
Notwithstanding U.S. controls over its Stinger missile systems, the concern  over a potential MANPADS attack against commercial aircraft has grown in  recent years. According to the U.S. government, terrorists are aware of the  severe economic consequences that a MANPADS attack could wreak on  the U.S. economy. In November 2002, terrorists used a MANPADS to attack,  but miss, a commercial airliner in Mombasa, Kenya—the first such attack  outside an area of conflict. Following this attack, according to DOD  officials, the National Security Council created an interagency task force to  pursue several options to reduce the risk of MANPADS attack, including  the feasibility of transferring counter-MANPADS technology from U.S.  military aircraft to U.S. commercial aircraft. In response to the conference  report accompanying the Emergency Wartime Supplemental  Appropriations Act, 2003, DHS began to review a variety of technical  options for counter-MANPADS systems with a goal of selecting a system  within 2 years for use on the U.S. commercial aircraft fleet. DHS is now  working with private contractors to develop a counter-MANPADS system.
section_title: MANPADS Pose a Threat to Commercial Aircraft
paragraphs: MANPADS pose a threat to commercial aircraft for several reasons. First,  MANPADS are widely available. The U.S. government estimates that  thousands of MANPADS worldwide are outside government controls.  Thousands more under government controls may be vulnerable to theft and  possible transfer to terrorist groups through illicit arms markets because  they are not subject to stringent national export standards nor do they have  adequate physical security. Second, MANPADS characteristics make them  attractive to terrorists. Finally, MANPADS have been successfully used to  attack and bring down aircraft.
subsections: section_title: MANPADS Are Widely Available Worldwide
paragraphs: Since the 1950s, 20 countries have developed or produced at least 30  different types of MANPADS, with a total production of more than a million  missiles. The majority of MANPADS are either located within military  arsenals; have been expended in live-fire exercises, wars, insurgencies, or  other conflicts; or have been destroyed, according to State Department  officials. Estimates of the global inventory of MANPADS range from  500,000 to 750,000 weapons, with approximately 1 percent outside the  control of national governments, according to intelligence sources. In  addition, according to the State Department, the numbers of MANPADS in  the global inventory are difficult to estimate because destruction of  MANPADS systems is not always publicized and the systems’ effective  lifetimes depend on how they are stored and maintained. Table 1 shows the  20 countries that have developed or produced MANPADS since the 1950s.
During the cold war, the United States, the Soviet Union, and their allies  provided MANPADS to several client states in surrogate cold war conflicts.  For example, the U.S. government transferred hundreds of Stinger missiles  in the mid-1980s to Afghan rebels that were fighting Soviet forces in  Afghanistan. U.S. intelligence officials stated that a number of these  weapons may have fallen into the hands of terrorist groups. The State  Department estimates that at least nine nonstate groups, including al  Qaeda, have obtained some type of MANPADS.
Some MANPADS produced during the cold war were surplus to countries’  defense needs in the 1990s. These MANPADS became widely available on  the black and gray arms markets where terrorists could acquire them. The  black arms market consists primarily of weapons that have been stolen  from government or private holdings, seized by combatant forces, supplied  by state sponsors to subnational groups, or produced illegally. Black  market transfers usually involve a small number of arms that do not move  through official licensing channels and are difficult to detect. Gray arms  sales can be large and involve sales of advanced weapons systems. Such  sales generally move through official government licensing channels and  rely on false documentation or other deceptive means to disguise the  buyer, supplier, type of weaponry, or another component of the transaction.  There are known black markets in Afghanistan, the Balkans, Iraq, Lebanon,  Somalia, Southeast Asia, and Yemen, according to the State Department.  Gray arms shipments of MANPADS to Africa have been delivered mostly to  countries that divert the weapons to subnational groups.
The new security challenges in Iraq have added to the global stockpile of  MANPADS available on the black and gray markets. According to  intelligence sources, thousands of MANPADS may have been provided to  Iraqi security forces or were stolen during hostilities in Iraq immediately  following the collapse of the Saddam Hussein regime in 2003. Therefore,  the number of MANPADS outside national controls may have doubled.
The U.S. government is also concerned that thousands of MANPADS under  the control of some foreign governments may be vulnerable to theft and  possible transfer to terrorist groups through the black and gray markets.
Some countries lack stringent national export standards, which increases  the likelihood that MANPADS will fall into the hands of terrorists,  according to the State Department. For example, China, Egypt, former  Yugoslavia, North Korea, and Pakistan have produced MANPADS but are  not Wassenaar Arrangement members. In 2000, Wassenaar Arrangement  members adopted the first multilateral guidelines for controlling the export  of MANPADS and strengthened these guidelines in 2003.
In addition, the U.S. government is concerned about the physical security  and inventory controls of MANPADS within certain countries’ arsenals,  where MANPADS are vulnerable to theft and possible transfer to terrorist  groups. For example, as of September 2003, the U.S. government had  identified at least 17 countries whose security over their MANPADS  stockpiles raised concerns. These countries included Bosnia and  Herzegovina, Liberia, Cambodia, Nicaragua, and Serbia. Total stockpiles  of MANPADS in these 17 countries are believed to number in the tens of  thousands, according to the State Department.
section_title: Characteristics of MANPADS Make Them Attractive to Terrorists
paragraphs: MANPADS are attractive to terrorists for acquisition and use against  commercial aircraft because they are lethal, easy to use, transport, and  conceal, and they are relatively inexpensive.
MANPADS are designed to be lethal. Frequently called heat-seeking  missiles, most MANPADS models employ sensors that search for and home  in on the target’s infrared signature, often the engine. Newer MANPADS can  recognize specific aircraft characteristics and reject simple  countermeasures or distractions, according to a defense manufacturer.  MANPADS are effective up to approximately 15,000 feet in altitude and 3  miles in range. Thus, while aircraft generally are safe from MANPADS when  flying at cruising altitude (30,000 feet), they are most vulnerable during  take off and landing.
MANPADS systems are relatively easy to use but do require training. An  individual rests the weapon on his or her shoulder, looks through a sight,  and pulls a trigger. MANPADS typically have a “fire-and-forget” design that  does not require the operator to remain in place to help guide the missile to  its target. MANPADS’ small size—about 5 feet long and a few inches in  diameter and less than 35 pounds—make them easy to transport and to  conceal. As a result, there have been recorded efforts to smuggle them into  the United States, including two thwarted attempts. In August 2003, the  Department of Justice reported that a British citizen in New Jersey tried to  sell Russian-made MANPADS to Federal Bureau of Investigation agents  posing as terrorists. Also, on November 6, 2002, three men with alleged  links to al Qaeda tried to buy Stinger MANPADS from U.S. and Hong Kong  law enforcement agents in Hong Kong, according to a 2003 State  Department report.
The costs of MANPADS, while varying significantly, are relatively  inexpensive. Some estimates range between $5,000 and $30,000 apiece on  the black market, while others suggest that they have sold for less than  $1,000 to as much as $100,000 apiece.
section_title: MANPADS Have Been Used to Attack Commercial Aircraft
paragraphs: In 2003, the State Department estimated that more than 40 aircraft had  been struck by MANPADS since the 1970s, causing at least 24 crashes and  more than 600 deaths worldwide. According to a November 2003  Congressional Research Service report, there have been 35 attempted  MANPADS attacks on commercial aircraft overseas since 1978, 24 of which  successfully took down the aircraft. Of these 35 attacks, 6 occurred  against large, multiengine jet aircraft, according to the State Department.  Five of these jet aircraft survived with minor damage; one attack was  catastrophic. According to State Department officials, the number of jet  aircraft hit is too small for accurate statistical analysis, and it is impossible  to predict the outcome of a MANPADS attack. To date, only one attack  occurred outside a conflict area—in Mombasa, Kenya, in November 2002— and none has occurred within the United States.
Although there have been no MANPADS attacks within the United States,  the threat posed by terrorists equipped with MANPADS is of credible  concern, according to the Deputy Administrator, Transportation Security  Administration, Department of Homeland Security. He stated that even an  unsuccessful MANPADS attack on a commercial airliner would have a  devastating economic and political impact. As of late February 2004, there  was no credible, specific intelligence about planned MANPADS attacks  against commercial aircraft in the United States, according to DHS  officials.
section_title: State Department Has Led Efforts to Control MANPADS but Has Limited Ability to Assess Extent of Progress
paragraphs: The State Department led the U.S. efforts to achieve agreements with  foreign governments on a U.S. strategy to prevent terrorist acquisition of  MANPADS through illicit arms markets. The department’s efforts resulted  in agreements from members of several multilateral forums on key  elements of its strategy. However, the State Department’s ability to assess  progress toward reducing MANPADS proliferation is limited by the  multilateral forums’ lack of mechanisms to monitor countries’  implementation of their commitments. The department also obtained— through bilateral diplomatic channels—foreign governments’ commitments  to destroy or secure MANPADS. The State Department has procedures in  place to confirm destruction of MANPADS through its bilateral efforts.
subsections: section_title: U.S. MANPADS Strategy Moved Forward in Multilateral and Bilateral Forums
paragraphs: In early 2003, the United States began to implement a strategy to reduce the  risk of terrorists acquiring MANPADS through illicit arms markets. The  State Department is leading the U.S. efforts to implement the strategy  through multilateral forums and bilateral diplomacy. The first five points of  the strategy focus on export controls and security that can be undertaken  in multilateral forums; the last element addresses the State Department’s  bilateral approach on MANPADS security and destruction. The six points  urge foreign governments to  adopt stringent, best-practice export controls on MANPADS;  extend export controls to essential components of MANPADS;  develop technical launch control features to prevent unauthorized use;  enact comprehensive laws, regulations, and enforcement mechanisms  on the production, transfer, and brokering of MANPADS;  exchange information on uncooperative governments and entities and  ban transfers to nonstate actors; and  enhance stockpile management of MANPADS, including the destruction  of stocks in excess of national security needs.
section_title: Multilateral Agreements Strengthened Commitments on Exports and Controls
paragraphs: In 2003, the State Department began to obtain commitments from members  of multilateral forums to (1) limit MANPADS to legitimate governments and  their agents and (2) ensure that they provide MANPADS with strong and  effective security and controls. In early 2003, the State Department  presented its proposal to the members of the Group of Eight and the  Wassenaar Arrangement.
In June 2003, the Group of Eight members responded to the U.S. proposal  by adopting an action plan that reflected the United States’ six strategy  points. The Group of Eight members committed to promote the Wassenaar  Arrangement principles on MANPADS to other states, share information on  their implementation of the adopted action plan, and discuss MANPADS  issues at their June 2004 summit.
In December 2003, the Wassenaar Arrangement members adopted an  enhanced set of principles for MANPADS exports. The Wassenaar  Arrangement’s principles reflected the key points in the U.S. strategy.  Members agreed to assess the adequacy and effectiveness of the recipient  government’s physical security arrangements for the transport and storage  of MANPADS inventories and ensure that any infringement of export  control legislation related to MANPADS would be subject to adequate  penalty provisions or criminal sanctions. The Wassenaar Arrangement  members agreed to exchange information on countries that failed to meet  security guidelines and on non-state entities attempting to acquire  MANPADS, promote MANPADS guidelines to non-Wassenaar Arrangement  members, and add MANPADS to their annual data reports on arms  transfers.
The State Department promoted the six-point U.S. strategy in three  additional multilateral forums in 2003, as follows:   At the October 2003 Asian Pacific Economic Cooperation summit, the  U.S. government presented the key elements of the strategy that had  been adopted by the Group of Eight in June. In the final ministerial  statement, participants committed to stronger domestic controls on the  production, stockpiles, transfer, and brokering of MANPADS.
The participant states of the OSCE also followed the Group of Eight’s  lead and issued two statements on MANPADS in 2003. Both noted the  potential for OSCE to use its policy document on small arms and light  weapons to prompt additional steps against illicit trade in MANPADS.  Furthermore, the OSCE Secretariat hosted a workshop in January 2004  to share best practices for countering the MANPADS threat; the  workshop brought together international experts and senior civil  aviation security and counterterrorism officials from the OSCE states.
In 2003, U.S. experts led efforts to revise the United Nations Register of  Conventional Arms,creating a new MANPADS subcategory. A State  Department official said that the MANPADS data reported by  participating nations will provide greater transparency into the volume  of trade in MANPADS and eventually might lead to greater  accountability for transfers to nations and regions of concern.
section_title: Forums Lack Mechanisms for Assessing Members’ Compliance
paragraphs: The multilateral forums lack mechanisms and capability to assess data on  arms transfers and members’ compliance with their commitments to  reduce MANPADS threats. As a result, each participating country may  make its own assessment and consult with the forums or other member  countries on a bilateral basis.
The multilateral forums have no mechanisms to allow them to monitor or  measure members’ implementation of their political commitments. For  example, the Group of Eight is not a legal entity and has no permanent  Secretariat. Although the Wassenaar Arrangement has a Secretariat,  Secretariat officials stated that its infrastructure does not allow for the  Secretariat to perform analyses of data reported by members. Such  analyses are left to the individual members to perform and bring before the  membership for discussion.
Furthermore, the voluntary and nonbinding nature of consensus-based  multilateral forums means they have no explicit tools to enforce members’  compliance with their commitments. These forums rely on diplomatic  pressure to influence compliance or the occasional intelligence  information from member states to identify activities that might be  inconsistent with their commitments. Without multilateral enforcement  mechanisms, the U.S. government has little assurance that commitments  by member countries to improve their controls over MANPADS will have  an impact on members’ national policies and practices to reduce  MANPADS proliferation. According to the State Department, the U.S.  government must rely on other means for such assurance.
section_title: Bilateral Programs Focused on Destruction and Security of MANPADS
paragraphs: To address the strategy’s sixth point, the United States provides bilateral  assistance to foreign governments to (1) identify and destroy MANPADS  stocks that are excess to their national security needs, loosely secured, or  obsolete and (2) assess and improve security of storage facilities for  MANPADS retained for national defense purposes.
In 2003, State Department officials approached certain countries to discuss  the disposition of their excess MANPADS stockpiles. In some cases, the  United States offered technical expertise or funded the destruction of  MANPADS stockpiles. According to State Department officials, by March  2004, the United States had received commitments from nine countries— including Bosnia and Herzegovina, Cambodia, Liberia, Nicaragua, and  Serbia—to destroy nearly 10,000 excess MANPADS stocks; as of May  2004, 8,155 of these MANPADS had been destroyed. For example, State  Department personnel discovered some MANPADS in insecure locations in  Liberia in 2003; they were brought to the attention of U.N. military forces in  Liberia, were secured, and subsequently destroyed. (Fig. 3 shows the  Liberian MANPADS.)
The State Department has provided approximately $200,000 to assist in the  destruction of 8,155 MANPADS. As part of this effort, U.S. officials  convinced the government of Bosnia and Herzegovina to destroy its entire  stockpile of nearly 6,000 MANPADS. Actual destruction was performed by  the international Stabilization Force, according to the State Department.
The United States is also providing countries with assessments of the  security of their MANPADS arsenals. The United States is concerned that  MANPADS stored in relatively insecure foreign arsenals could be  vulnerable to theft or illicit transfer to countries of concern or nonstate  entities. In fiscal year 2003, DOD’s Defense Threat Reduction Agency  (DTRA) conducted arsenal security assessments in six countries: Angola,  Bosnia and Herzegovina, Cambodia, Ecuador, El Salvador, and Nicaragua.  DTRA plans to provide assessments to six additional countries in fiscal  year 2004—one country in Latin America, two in Asia, two in Africa, and  one in Eastern Europe. The assessments included reviews of the physical  structures and practices of security officials, recommendations for  infrastructure improvements, and orientations for security personnel on  U.S. military practices for securing arsenals. According to DTRA and State,  poorly secured arsenals include those that are filled to over capacity, are  relatively close in proximity to buildings or civilian populations, are  inadequately maintained, or have poor facility security.
As an outcome of these security assessments, the United States is  providing financial assistance to some countries that lack fiscal resources  for U.S.-recommended infrastructure improvements. For example, in fiscal  year 2003, the United States provided Serbia-Montenegro with $150,000 for  computers, software, training, and alarm systems to improve MANPADS  inventory processes and security; and in fiscal year 2004, the United States  will provide Cambodia with $233,000 for U.S.-recommended upgrades. In  addition, the State Department provided nearly $400,000 for stockpile  management and physical security upgrades as part of the MANPADS  destruction and threat reduction effort, according to State. As part of the  president’s February 2004 budget proposal to Congress for fiscal year 2005,  the State Department requested an additional $6 million above its previous  annual $3 million program budget for small arms and light weapons  destruction, in order to expand its bilateral efforts to destroy and secure  MANPADS.
section_title: Disposition of U.S. Stinger Missiles Sold Overseas Is Unknown
paragraphs: To prevent the proliferation of the U.S. Stinger missile system, DOD  monitors its end use in recipient countries. Although DOD has  strengthened the requirements for monitoring Stinger missile systems after  they have been sold to foreign countries, DOD has no requirement for DOD  organizations responsible for end-use monitoring to keep records on the  number and destinations of these Stingers. DOD’s Stinger records are  neither complete nor reliable. As a result, DOD cannot account for each  Stinger sold abroad. In addition, because DOD has no procedures for  performing Stinger inspections, security assistance organization (SAO)  officials use inconsistent practices in conducting Stinger inspections and  some are unclear about their inspection responsibilities.
subsections: section_title: DOD Reinstated Inspection Requirement for Stingers
paragraphs: The Arms Export Control Act (AECA) charges the President with  establishing a program that provides for the end-use verification of defense  articles that are particularly vulnerable to diversion or other misuse or  defense articles whose diversion or other misuse could have significant  consequences. In June 2003, DOD issued a directive requiring SAO  officials to conduct annual inventory inspections of 100 percent of Stinger  missile systems sold overseas. This directive reinstated the 100 percent  inventory requirement that had been in place since 1982 when DOD began  selling Stingers to foreign governments. In 1998, DOD had lowered the  Stinger inspection requirement to 5 percent, stating that the 100 percent  inventory inspections duplicated the 100 percent inspections conducted by  recipient governments twice a year. In 2003, DOD said that the 5 percent  inventory requirement was inadequate and reinstated the original  requirement to inventory 100 percent of Stinger systems.
DOD’s inventory requirement applies to Stinger systems (1) sold overseas,  (2) produced by a U.S.-authorized European consortium of four nations led  by Germany, and (3) produced by Switzerland under a U.S.-authorized  program. DOD inventory inspections are meant to verify that every Stinger  system, as identified by serial number, is still under the recipient  government’s possession and control. SAO officials are also required to  verify the adequacy of physical security at facilities storing Stingers. This  requirement is stated in the sales agreement—the LOA—signed by the  recipient country. DOD inspections are also meant to complement 100  percent inventory inspections that are performed by the recipient country.
Recipient country officials are required by the LOA to allow review by  SAOs to ensure that they are performing these inventory inspections.
Several DOD agencies and offices are responsible for controls over Stinger  missile systems. The U.S. Army, which owns the Stinger missile system, is  responsible for the missiles until they are shipped and received overseas by  the recipient nation. After that, SAOs are responsible for monitoring the  end-use of Stinger systems by recipient nations until these missiles are  disposed of or used. The central component of Stinger missile end-use  monitoring—missile inventory inspection—is performed by SAO officials  or, in some cases, by defense attachés at the U.S. embassy. DOD also  created the Golden Sentry program to monitor the end-use of sensitive  weapons systems such as Stinger, in response to AECA requirements.  DOD’s Defense Security Cooperation Agency (DSCA) manages this  program. DSCA’s responsibilities include: (1) performing overall  management of the Golden Sentry program, (2) issuing guidance to keep  the Golden Sentry program current and updating policies and procedures  for end-use monitoring, and (3) conducting visits to security assistance  organizations and host nations to assess compliance with enhanced end- use monitoring procedures.
The Federal Managers’ Financial Integrity Act of 1982 requires GAO to  issue standards for internal control in the federal government. According to  these standards, vulnerable assets such as inventories should be  periodically counted and compared with control records, and exceptions  should be examined.
DOD generates the following two primary types of records for its Stinger  end-use monitoring:  First, the Army generates shipping records, which contain serial  numbers for all Stingers sold overseas. Shipping records accompany  Stinger missile shipments and pass to the custody of SAOs upon the  Stinger shipment’s arrival in the recipient country. These records serve  as a baseline of all Stingers provided to the recipient country and as  Stinger control records, providing SAOs with the serial numbers to be  used in Stinger inventory inspections.
Second, SAO officials produce annual inventory records. Inventory  records are those records and materials that document the results of  inventory inspections performed by SAOs. At the end of the year, each  SAO is required to submit an end-of-year report on its Stinger missile  inventory inspections. This type of inventory record—the end-of-year  report—is used by DSCA to manage the Stinger missile end-use  monitoring program.
To apply federal government internal controls standards, DOD would  maintain reliable shipping records to serve as control records for  conducting its Stinger inventory inspections. Consequently, DOD would  establish consistent procedures for comparing these control records with  Stinger inventories in annual inventory inspections.
section_title: DOD’s Lack of Recordkeeping Requirements Resulted in Unreliable Stinger Control Records
paragraphs: DOD lacks reliable control records because there have been no DOD  requirements for DOD organizations responsible for end-use monitoring to  keep Stinger shipping records over the years. Without complete and  accurate Stinger shipping records, SAO officials have no reliable control  records against which to compare Stinger inventories.
DSCA, Army, and SAO officials said that Stinger shipping records are  missing or incomplete. According to Army and SAO officials, there is no  DOD requirement for DOD organizations responsible for end-use  monitoring to maintain Stinger shipping records. However, without  complete shipping records, DOD cannot reliably determine how many  Stingers were sold overseas or their serial numbers. Furthermore, Stinger  shipping records were missing for two main reasons, as follows:  First, the Army, DSCA, and SAO officials stated that most shipping  records are in hard-copy form, and some were lost or misfiled over the  years.
Second, Army and DSCA officials said that there has been great pressure  in recent years, particularly in the 1990s, to reduce paperwork at U.S.  missions and offices overseas. Therefore, many older Stinger records  were likely destroyed during efforts to dispose of older paperwork.
In comments on a draft of this report, DOD said that it has recordkeeping  requirements for implementing agencies and SAOs regarding security  assistance management. However, we found that these general  recordkeeping requirements apply to Foreign Military Sales case managers,  not to DSCA or SAOs, and to financial management purposes, not end-use  monitoring. Furthermore, Army officials said that they were unaware of  any requirement to maintain Stinger shipping records. DOD said that DSCA  would amend the Security Assistance Management Manual (SAMM) to  specifically identify the recordkeeping standards for end-use monitoring  activities to ensure that the requirements are clear.
No single DOD office has maintained copies of all the Stinger shipping  records. The two main offices that maintain such records—the Army and  the SAOs—have some of the Stinger shipping records. In addition, DSCA  has a database containing additional data on defense articles, including  Stingers, authorized and delivered under the Foreign Military Sales  program. However, we found discrepancies in the numbers of Stingers that  different DOD offices show were sold to foreign governments. For  example, one SAO reported in its 2003 inventory inspection of all Stinger  missiles in its recipient country that it found approximately 30 percent  more Stingers than the number that the Army stated had been provided to  that country. In a second example, a different SAO in 2002 reported the  total number of Stingers received by the recipient country over the years  as 156 missiles fewer than the number that the Army had on record.
According to data from the U.S. Army, the United States has exported 7,551  Stinger missiles to 14 countries (plus Taiwan) since 1982 through DOD’s  foreign military sales program (see table 2). The Army reconstructed its  information for us from a combination of its remaining original shipping  records and limited inventory inspection records dating back to 1982. As a  result of being constructed from incomplete data, some of the numbers in  the table likely under-represent the number of Stingers sold. We  determined that Army data are not a reliable single source of information  on the numbers and destinations of Stingers the United States has exported  overseas. Because of our concerns about the reliability of the Army data,  we looked at DSCA data on the number of Stinger systems exported by the  United States since 1982. According to our analysis of the DSCA data, the  United States has exported 8,331 Stinger missiles to 16 countries (plus  Taiwan). This data is from DSCA’s 1200 Series database, which shows the  quantities and dates of Stingers delivered to foreign governments. DSCA  provided us with this data, which we consolidated in this table. We  performed data reliability checks on the 1200 Series database and  determined that it was sufficiently reliable for comparison against the  information provided by the Army. As table 2 shows, there are significant  discrepancies between Army and DSCA data on the number of Stinger  missiles the U.S. has exported to foreign countries. For example, Army data  shows the U.S. has not exported any Stinger missiles to Egypt. However,  DSCA data indicates the U.S. has exported 89 Stingers to Egypt.
Because some SAOs lack Stinger shipping records and cannot always get  complete records from the Army, officials at DSCA and the three SAOs we  visited said that SAO officials have in some cases relied on foreign  government records. However, in August 2000, we reported that relying  on the foreign government’s records might pose a risk to achieving 100  percent accounting of the missiles because the reliability of accountability  systems varies from country to country. We further reported that DSCA had  discovered discrepancies in foreign governments’ Stinger missile  inventories after completing its annual inventory in December 1999. DSCA  officials stated in August 2000 that they would investigate these  discrepancies. We recommended that DOD reconcile discrepancies in  foreign governments’ Stinger missile inventories where discrepancies  existed. DSCA said that its 2000 inventory results showed no discrepancies  that warranted corrections. However, the 2000 inventory required  inspection of only 5 percent of Stingers and used unreliable Stinger control  records. As of April 2004, our specific recommendation had not been  implemented.
Some SAO officials stated that they prefer to receive Stinger serial number  information from DOD. However, because DOD does not have complete  original shipping records, SAO officials have sometimes had to rely on the  recipient country or the European Stinger Project Group to provide records  to perform the inventory inspections. For example, DSCA officials said that  in 2003 the Japanese government provided the only available Stinger  records in Japan. At one of the SAOs we visited, the latest SAO official  arrived in 2003 to find there was no Stinger paperwork on record. At  another SAO we visited, SAO officials had no record of the Stingers  purchased from the United States and relied solely on the European  consortium for serial number records for consortium-produced Stingers.
section_title: Stinger Inventory Inspections Are Impaired by Inconsistent Practices and Incomplete Inventory Records
paragraphs: DOD’s inventory inspection efforts are impaired because DOD lacks  procedures for conducting Stinger inspections and requirements for  keeping inspection records. Without procedures for conducting Stinger  inspections, DOD security assistance officials overseas use inconsistent  practices to perform Stinger inventory and physical security inspections. In  addition, DOD has no requirements for keeping records of inventory  inspections. As a result, practices for keeping inventory inspection records  have been left to the discretion of DOD officials at SAOs, DSCA, and the  Army, and the quality of inventory recordkeeping varied widely among the  SAOs we visited.
subsections: section_title: DOD Officials Use Inconsistent Practices to Perform Stinger Inspections
paragraphs: Officials at the Army and SAOs said that DOD has no procedures for  performing Stinger inspections. As a result, SAO officials use inconsistent  practices to perform Stinger inventory and physical security inspections. In  addition, even though Stinger sales agreements require physical security  inspections, DSCA has not issued procedures for performing physical  security inspections at facilities storing Stingers. As a result, we found that  SAOs use inconsistent practices in conducting security inspections, and  SAO officials said they are unclear about their responsibilities. At three  SAOs that we visited, we found the following differences in inspection  practices:  At one SAO, officials said they had inventoried approximately 25  percent of the recipient country’s Stingers in 2003. This inspection  involved opening the Stinger system container cases to read the serial  numbers on the missile systems. SAO officials stated that they were  unsure whether they were required under the new inventory  requirements to open all of the Stinger system container cases but that  this had been their practice for a few years. SAO officials said that they  looked for noticeable security deficiencies, but were unaware that they  were required to inspect the physical security of the Stinger system  storage facilities.
At a second SAO, officials said they had inventoried approximately 75  percent of the country’s Stingers in 2003. This inspection involved  reading the serial numbers on the Stinger system container cases and  opening approximately 10 percent of the container cases to read the  serial numbers on the missile systems. SAO officials said they were  unsure whether they were required under the new inventory  requirements to open the Stinger container cases but that this had been  their practice for several years. SAO officials said they performed a  physical security inspection of the Stinger storage facilities, including  inspecting the status of lighting, fencing, locks, keys, and guard  postings. Officials stated that they inspected these security features  because the primary SAO inspecting official had previous physical  security experience.
At a third SAO, officials said they inventoried 100 percent of the Stinger  inventory in 2003 by reading the serial numbers on the Stinger system  container cases. SAO officials said they did not open any of the  container cases. In addition, SAO officials stated that they did not  perform any physical security inspection of the Stinger system storage  facilities because they knew of no requirement to do so.
We reported in August 2000 that DOD had similar problems in the routine  monitoring of defense articles the United States sold overseas. At that  time, we reported that DOD had not effectively implemented the routine  monitoring requirement that its field personnel observe and report on  foreign governments’ use of U.S. defense articles and services transferred  through the Foreign Military Sales program, including Stingers. DOD had  not issued guidance specifying what monitoring was required. As a result,  field personnel interpreted differently the requirements and activities that  they were to perform. We recommended that DOD issue additional  guidance for the routine observation of U.S. defense articles sold overseas.  As of April 2004, our specific recommendation had not been implemented.
The lack of inventory inspection procedures may result in Stingers not  receiving the level of inspection envisioned by DOD and would impair  DSCA’s ability to collect consistent and useful inventory data necessary for  managing the Stinger end-use monitoring program. DSCA officials said that  DSCA planned to issue official procedures for performing inventory and  physical security inspections at the end of 2003 but had not done so at the  time of this report. Notwithstanding the absence of inspection procedures,  DSCA officials stated that SAOs are required to meet the new 100 percent  inspection requirements in 2004 and report on their inspection results by  December 1, 2004. According to DSCA officials, in 2003 SAOs performed  100 percent inventory inspections of Stinger systems in 11 (or almost 60  percent) of the 17 countries (plus Taiwan) that have purchased Stingers.
section_title: DOD Lacks Complete and Reliable Records of Inventory Inspections
paragraphs: DSCA, Army, and SAO officials said that DOD lacks complete and reliable  inventory inspection records. Army and SAO officials said the records  deficiencies occurred because there have been no requirements for  keeping records of Stinger inventory inspections over the years. In the  absence of recordkeeping requirements, practices for keeping inventory  inspection records have been left to the discretion of SAO, DSCA, and  Army officials.
In the absence of recordkeeping requirements, we found that the condition  of Stinger inventory inspection records overseas varied widely among the  three SAOs we visited. For example, one SAO had most of its Stinger  inventory inspection records from the past 5 years. Another SAO had  almost no Stinger paperwork in place. Still another had a few scattered  records with incomplete inventory inspection information contained in  them.
In addition to the SAOs, we found that DSCA has gaps in its inventory  inspection records. DSCA has maintained a total of 18 annual inventory  inspection reports from SAOs over the 22-year history of Stinger sales. For  2002—the most recent year for which records were available—DSCA had  on record inventory inspection reports of 6 of 16 countries (plus Taiwan)  that received Stingers. Moreover, DSCA has no procedures for SAOs to  report the results of their Stinger inventories. As a result, DSCA said that  some SAOs report their Stinger missile inventories using missile serial  numbers but that others do not.
section_title: U.S. Is Determining Feasibility of Countermeasures to Protect Commercial Aircraft
paragraphs: In response to the conference report accompanying the Emergency  Wartime Supplemental Appropriations Act, 2003, DHS initiated a 2-year  system development and demonstration program in 2003 for a counter- MANPADS system. As we reported in January 2004, DHS faces significant  challenges in adapting a military counter-MANPADS system to commercial  aircraft. Such challenges include establishing system requirements,  maturing technology and design, and setting reliable cost estimates. Our  work on the best practices of product developers in government and  industry has found that such challenges can be successfully overcome by  using a knowledge-based approach. Using this approach, product  developers employ specific practices to ensure that a high level of  knowledge regarding critical facets of the product is achieved at key  junctures in development. We recommended that the Secretary of  Homeland Security fully implement a knowledge-based approach in its  counter-MANPADS development program; the Secretary fully concurred.
subsections: section_title: Department of Homeland Security Faces Technical Challenges Adapting Military Counter-MANPADS Systems to Commercial Aircraft
paragraphs: Concerned that the potential for terrorists to use MANPADS against  commercial airliners has grown in recent years, the U.S. government is  considering the installation of technical countermeasures on commercial  aircraft. Members of Congress have also expressed concerns that civilians  traveling by air must be protected while mitigating the potential financial  burden for the airlines industry. DHS was tasked with researching the  potential of adapting countermeasures already used by the U.S. military to  the commercial fleet. In January 2004, DHS awarded the initial contracts  for a 2-year program to develop and demonstrate a counter-MANPADS  system for commercial aircraft. DHS faces significant challenges in  adapting a military counter-MANPADS system to commercial aircraft in the  initial phases of its program.
First, DHS is challenged with establishing system requirements to lay out  the framework and end-state goals for the program. Requirements  involving new technologies, system maintenance, system integration, and  system security may involve trade-offs between competing objectives, such  as performance and cost. This would enable DHS to derive the most  effective solution at a realistic life cycle cost.
Second, DHS is challenged with developing the technology and design to a  mature level so that it can be adapted for commercial use. For example, it  is challenging to reduce the high false alarm rate found in missile warning  systems used by the military. It also is challenging to increase the system’s  reliability by 10 times from the current 300 hours expected on military  systems to 3,000 hours required for commercial viability. Fitting a wide  variety of commercial aircraft body types even though its design,  placement, and integration will affect each type of aircraft differently and  make all aircraft more costly to operate. DHS also is challenged with  developing a plan to safeguard the new equipment on civilian aircraft in a  variety of settings at airports both within the United States and abroad.  Finally, it will be a challenge to develop a missile launch notification  system that effectively passes warning information in the National Airspace  System.
Third, DHS is challenged to develop reliable cost estimates regarding the  procurement, integration, operation, and support of the countermeasures  system on commercial aircraft. It will be challenging to provide a major  capital investment to increase the contractors’ capacity to quickly produce  a large number of countermeasure systems. (The current military  production capacity of four systems per month cannot meet the demand  for any significant portion of the estimated 6,800 aircraft in the civilian U.S.  fleet.)
section_title: Knowledge-Based Approach Has Been Adopted by Successful Product Developers
paragraphs: Challenges such as those faced by DHS’s counter-MANPADS program can  be significantly addressed through the use of a knowledge-based approach,  as demonstrated by our past work on the best practices of leading  product developers in industry and government. This approach helps  decision makers make informed investment decisions based on knowledge  they gain at three critical junctures or knowledge points during product  development, which will reduce risks and increases the likelihood of  successful outcomes. These three knowledge points are as follows:  Knowledge Point 1—Needs and resources are matched. This level of  knowledge is attained when a match is made between a customer’s  needs and the developer’s technical, financial, and other resources.  Achieving a high level of technological maturity at the start of system  development is a particularly important best practice. This means that  the technologies needed to meet essential product requirements have  been demonstrated to work in their intended environment.
Knowledge Point 2—The product design is stable. This level of  knowledge is attained when the product’s design is shown to meet the  customer’s requirements. A best practice is to achieve design stability at  the system-level critical design review, usually held midway through  development. Completion of engineering drawings at the system design  review provides tangible evidence that the design is stable.
Knowledge Point 3—Production processes are mature. This level of  knowledge is attained when it is demonstrated that the product can be  manufactured within cost, schedule, and quality targets. A best practice  is to achieve production maturity at the start of production. This means  that all key manufacturing processes produce output within statistically  acceptable limits for quality.
A knowledge-based approach also involves the use of controls or exit  criteria to ensure that the required knowledge has been attained at each  critical juncture. Using this approach will enable managers to (1) conduct  activities to capture relevant product development knowledge, (2) provide  evidence that knowledge was captured, and (3) hold decision reviews to  determine that appropriate knowledge was captured to allow a move to the  next phase. If the knowledge attained at each juncture does not confirm the  business case on which the effort was originally justified, the program does  not go forward.
Use of a knowledge-based approach has enabled leading organizations to  deliver high quality products on time and within budget. Efforts that have  not done so frequently experience poor cost, schedule, and performance  outcomes. Figure 4 shows a comparison of a knowledge based approach  with the DHS counter-MANPADS plan.
section_title: DHS Has Begun to Use a Knowledge-Based Approach
paragraphs: DHS included some knowledge-based elements in its original solicitation  released on October 3, 2003. For example, DHS plans to conduct design  reviews, require periodic performance assessments from the contractor,  use an integrated product team to identify and resolve issues, conduct  systems engineering work in both phases, and require the development of a  prototype to help identify and resolve specific design and manufacturing  risks.
During our review, we asked DHS to identify its controls or exit criteria for  use in determining whether needed knowledge had been attained by the  end of Phases I and II of its program. In its solicitation of October 3, 2003,  DHS had required the contractor to satisfy certain criteria to receive  payment for each milestone, but the Phase I exit criteria were not  knowledge-based. They did not require the contractor to demonstrate that  key product knowledge had been obtained. Rather, the criteria were based  on the contractor providing information, such as the Long Lead Items List,  at key payment milestones. Also, the Phase II exit criteria were not  identified and were to be proposed by the contractor and subject to  negotiation.
When GAO presented DHS officials with recommended exit criteria from  our past reports, they agreed to integrate them into an updated solicitation  and use them in monitoring the contractors’ progress. For example, at  Knowledge Point 1, exit criteria include the demonstration that critical  technologies are mature and system requirements are finalized. At  Knowledge Point 2, criteria include the completion of 90 percent of  engineering drawings at design review and the demonstration that a  prototype’s design meets requirements. At Knowledge Point 3, criteria  include the demonstration that manufacturing processes are under  statistical control. The use of this knowledge-based approach, including the  use of exit criteria should help ensure that DHS’s key decisions in  developing and demonstrating a counter-MANPADS system are based on  sufficient information.
section_title: Conclusion
paragraphs: The first MANPADS attack on a commercial aircraft outside of a conflict  area in 2002 highlights a growing potential for terrorists to use these easily  transportable weapons against commercial aircraft worldwide. Beginning  in 2003, U.S. multilateral and bilateral diplomatic efforts to reduce this  threat of MANPADS increased foreign governments’ commitments to  reduce MANPADS proliferation. If adequately implemented, these  commitments could significantly improve multilateral controls over  MANPADS exports, decrease excess stockpiles of MANPADS, and enhance  security over government stocks of these weapons. However, obtaining  foreign governments’ commitments was only the first step toward reducing  this proliferation; without mechanisms to monitor forum members’  compliance with their commitments, assessing progress toward reducing  MANPADS proliferation is difficult. Although the United States has  afforded a high priority to securing and monitoring its exports of Stinger  missile systems overseas, DOD’s end-use monitoring system has serious  deficiencies that undercut this purpose. DOD lacks reliable information on  the Stinger weapons it has sold to foreign governments over 20 years  because it has established no requirements for DOD organizations  responsible for end-use monitoring to generate and maintain records on the  numbers of Stingers shipped and inventoried each year and no procedures  for consistently carrying out these inventories. As a result, DOD lacks the  ability to periodically account for Stinger missile systems, compare the  results against credible control records, and examine discovered  exceptions.
section_title: Recommendations for Executive Action
paragraphs: Since multilateral forums lack mechanisms to monitor countries’  implementation of their commitments to improve export controls over  MANPADS, there are few means to assess the extent to which these  commitments are helping to reduce worldwide MANPADS proliferation.  Therefore, we recommend that the Secretary of State develop a strategy for  working within these forums to establish mechanisms to monitor and  report on (1) countries’ implementation of their commitments and (2) the  impact such implementation of commitments has on the flow of MANPADS  to black and gray markets.
Inadequate recordkeeping prevents DOD from knowing the disposition of  its Stinger missile systems sold overseas. Therefore, we recommend that  the Secretary of Defense establish standardized recordkeeping  requirements for all U.S. organizations responsible for maintaining records  on Stinger systems sold overseas.
DOD’s records on its Stinger missile system sales overseas are incomplete,  unreliable, and difficult to find and retrieve. In addition, its records are  divided among multiple organizations worldwide, and the quality and  extent of the records varied widely among three security assistance  organizations we visited. Therefore, we recommend that the Secretary of  Defense establish a centralized electronic database to (1) consolidate the  records of the U.S. Army, DSCA, and U.S. security assistance organizations  in countries with Stinger missile systems to establish a baseline of the  worldwide Stinger inventory and (2) track the inventory worldwide.
Because DOD lacks Stinger inspection procedures, DOD officials overseas  use inconsistent practices to perform Stinger inspections. Therefore, we  recommend that the Secretary of Defense direct DSCA to issue  standardized inventory and physical security inspection procedures for  U.S. security assistance organization officials.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of Defense, Homeland  Security, and State for their review and comment. We received written  responses from each that are reprinted in appendixes II, III, and IV.  Homeland Security and State also provided us with technical comments,  which we incorporated as appropriate.
DOD stated that it would amend its security assistance manual to  specifically identify record-keeping standards for end-use monitoring. DOD  also said that it is developing a database that would consolidate the types  of information noted in our recommendation. Finally, DOD stated that  DSCA and the Combatant Commands are developing checklists and  procedures that would provide guidance to SAOs conducting Stinger  inventory inspections.
DHS, as a result of implementing our previous recommendation to adopt a  knowledge-based approach, commented that its counter-MANPADS  program has in place milestones with entrance and exit criteria that must  be completed by the contractors before they can advance to the next stage.  These milestones include the System Requirements Review, Interim Design  Review, Preliminary Design Review, and the Critical Design Review.  Entrance and exit criteria for the Systems Requirements Review include  the completion of a Systems Concept and Concept of Operations, a System- level Requirements Analysis, and a Configuration Control Document.
The State Department concurred with our recommendations to the  Secretary of State, commended the report, and agreed that addressing how  participating governments implement the MANPADS policy undertakings  made in December 2003 is a key next step. Consequently, the U.S.  government and other Wassenaar states are examining implementation  during 2004 and will continue to do so in future years, according to the  department. The State Department also provided technical comments that  we incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies of this report to appropriate  congressional committees and to the Secretaries of Defense, Homeland  Security, and State. We also will 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.
If you or your staff has any questions concerning this report, please contact  me at (202) 512-8979 or at christoffj@gao.gov. A GAO contact and staff  acknowledgments are listed in appendix V.
section_title: Scope and Methodology
paragraphs: To assess the nature and extent of the man-portable air defense systems  MANPADS threat, we met with officials at the Departments of Defense,  State, and Homeland Security, and at the intelligence agencies. We also met  with foreign government officials in Austria, Germany, and the United  Kingdom, and exchanged correspondence with government officials in  France. In addition, we met with representatives of the Secretariats of the  Wassenaar Arrangement and of the Organization for Security and  Cooperation in Europe in Vienna. In addition, we reviewed U.S. documents,  including classified and unclassified State Department cables, reports, and  briefing slides presented to multinational forums, and testimony before  congressional committees. We also requested to meet with officials of the  National Security Council to discuss prioritization of terrorist threats, but  they declined to meet with us or respond to our questions.
To assess the U.S. government efforts to control the worldwide  proliferation of MANPADS, we reviewed documents and interviewed  officials in State Department’s Nonproliferation Bureau Office of Export  Control and Conventional Arms Nonproliferation Policy, Office of Export  Control Cooperation, Office of Policy, Public Affairs and Congressional  Relations; the State Department’s Political and Military Affairs Bureau  Office of Weapons Removal and Abatement (whose MANPADS officials  formerly were in the Office of Plans, Policy and Analysis until September  2003); and the State Department’s Arms Control Bureau Office of  Conventional Arms Control; as well as the Department of Defense’s (DOD)  Defense Threat Reduction Agency On-site Inspection Directorate  Interagency Liaison for Europe. To assess the reliability of the data  provided by the State Department on MANPADS destroyed, committed to  be destroyed, and U.S. funds expended on the destruction and  infrastructure improvements to foreign arsenals, we reviewed numerous  State Department cables, reviewed contractor documentation for some  MANPADS destruction, and interviewed State officials regarding their data  collection methods. We determined the State data was sufficiently reliable  for our reporting purposes. We also obtained and reviewed documents and  interviewed representatives of the Wassenaar Arrangement and the  Organization of Security and Cooperation in Europe (OSCE) in Vienna, as  well as State officials at the U.S. Mission to the OSCE and the U.S. Embassy  in Vienna. To obtain views of other countries on the impact of these  multilateral forums on MANPADS proliferation, we reviewed foreign  government documents and interviewed government officials of Austria,  France, Germany, and the United Kingdom.
To assess DOD’s end-use monitoring of the U.S.-exported Stinger missile,  we reviewed documents and interviewed officials at DOD’s Defense  Security Cooperation Agency (DSCA), the U.S. Army, and State. We also  reviewed documents and met with officials at the U.S. European Command  in Stuttgart, Germany; the Office of Defense Cooperation in Bonn,  Germany; the U.S. Embassy in Berlin, Germany; the Office of Defense  Cooperation in Ankara, Turkey; and the Office of Defense Cooperation in  London, United Kingdom. In addition, we toured Stinger missile storage  facilities in Germany and the United Kingdom and observed Stinger missile  inventory inspections in Turkey. We also had telephone discussions with  representatives of the Raytheon Corporation, the company that produces  Stinger missiles for the U.S. Army. To assess the reliability of DOD’s data on  the number and destinations of Stinger missiles sold overseas, we reviewed  documents and interviewed officials at the Army and DSCA. As DOD relies  on data provided by the Army to track Stingers sold overseas, we assessed  those data. In addition, we also compared the Army’s data to data compiled  by DSCA, which DOD does not use to track Stingers overseas. Based on  prior GAO work, and a reasonableness check of the DSCA data, we  determined that the DSCA data were sufficiently reliable for the purposes  of establishing overseas Stinger sales, and could therefore serve as a check  on the Army data that are used by DOD. We learned that the Army  generated their data from Stinger shipping records, which include the  Stinger serial numbers, and from Stinger inventory inspection records  going back to 1982. During our interviews, questions arose about the  completeness of the Army data; when we compared the Army data with the  data compiled by DSCA, we found that Army records were indeed  incomplete. As a result, we determined that the Army data were not  sufficiently reliable for the purposes of tracking overseas Stinger missile  sales.
To assess the Department of Homeland Security’s efforts to develop  technical countermeasures to minimize the threat of a MANPADS attack,  we compared DHS’s plan for its counter-MANPADS system development  and demonstration program plan against the best practices of commercial  and military acquisitions identified in our past reports. We focused on  whether DHS will have sufficient information to make knowledge-based  decisions at each milestone. To determine what military countermeasures  are available for adaptation to commercial aircraft and what their  performance capabilities, cost, and schedule ramifications might be, we  met with DOD, Air Force, Army, and Navy officials, and analyzed relevant  documentation, including studies and test reports. We interviewed  representatives from Northrop Grumman, Boeing, BAE Systems, Raytheon  Corporation, and Sanders Design International regarding countermeasure  systems currently in production or development. We also met with  representatives from the airline industry, air transportation association,  and RAND. We conducted our work from April 2003 through March 2004 in  accordance with generally accepted government auditing standards.
section_title: Comments from the Department of Defense
paragraphs: The following are GAO’s comments on the Department of Defense letter  dated May 7, 2004.
subsections: section_title: GAO Comments
paragraphs: 1. We incorporated DOD’s comments on how it vets and reviews each  proposed transfer of Stinger missiles to foreign governments to present  a description of the review that occurs prior to delivery and monitoring  of Stingers. According to DOD, it provides defense articles, services,  and training to foreign governments and international organizations  that have been approved by State and determined by the President as  supporting U.S. national security and foreign policy objectives. DOD  said that each proposed transfer of Stinger missiles is thoroughly vetted  by many different organizations and offices, thus providing DOD a high  level of confidence that the missiles under security assistance  programs do not pose a terrorist threat. However, these procedures do  not negate the need for rigorous and comprehensive end-use  monitoring of Stingers after their delivery to recipients.
2.
In its comments, DOD stated that it has recordkeeping requirements for  implementing agencies and security assistance organizations regarding  security assistance management. However, the DOD recordkeeping  requirements to which DOD referred apply specifically to (1) case  managers of Foreign Military Sales transfers, not to organizations  responsible for end-use monitoring and to (2) Stinger missiles sold  through Foreign Military Sales, not those produced by European  countries under license agreement with the United States (roughly two- thirds of Stingers produced worldwide). DOD said that it would amend  the appropriate security assistance manual to specifically identify the  recordkeeping standards for end-use monitoring activities to ensure  that the requirements are clear.  3. DOD said it has provided procedures for conducting Stinger inventories  and inspections, regarding inspection recordkeeping and inventory  procedures. The document that DOD cited, DSCA Policy Memorandum  03-10, dated June 4, 2003, establishes a requirement for conducting a  100 percent annual Stinger inventory, but does not provide detailed  procedures for the SAOs on how such inventories are to be conducted.  The checklists noted in DSCA Policy Memorandum 04-11, dated April 2,  2004, (1) are directed to teams evaluating SAO inspections, not to the  SAOs themselves, (2) were provided as draft copies to Combatant  Commands only in October 2003, and (3) are currently out for comment  and recommendations prior to publication and dissemination,  according to DOD. Thus, these checklists had no impact on any of the  inventories or other data that we reviewed. Furthermore, DOD’s  comments about Combatant Commands’ directives are contradictory:  DOD states that the Combatant Commands are both developing these  procedures and have already issued them.  4. DOD stated we should not attribute to DSCA officials the point that  there had been great pressure in recent years to reduce paperwork at  U.S. missions and offices overseas. However, a DSCA official made this  statement.  5. DOD said that the 2000 inventory results showed no discrepancies that  warranted corrections. However, the 2000 inventory required  inspection of only 5 percent of Stingers and used unreliable Stinger  control records. As of April 2004, our specific recommendation had not  been implemented. 6. DOD stated that our finding that in 2003 the Japanese government  provided the only available Stinger records in Japan is incorrect. DOD  stated that the relevant U.S. office in Japan conducted a 100 percent  inventory of Stingers in-country and provided corresponding serial  numbers to DSCA. However, we asked DOD for documentary evidence  to show that this inventory did not rely on foreign government Stinger  records, but DOD provided none.  7. DOD said that it implemented our 2000 recommendation through  issuance of DSCA Policy Memorandum 02-43, dated December 4, 2002,  which established SAO responsibilities for end-use monitoring. This  guidance instructed SAOs to conduct routine end use monitoring with  host nations, using a December 1996 pamphlet, End-Use Monitoring of  Defense Articles & Services, incorporated into Appendix 5 of a June  2001 document, The Management of Security Assistance, to be found at  a listed Web site. We reviewed these documents and found them  insufficient to address our 2000 recommendation. For example, the  2002 DSCA Policy Memorandum lists a requirement to conduct routine  end-use monitoring, but does not provide procedures or detailed  guidance for doing so.  8. We said that DSCA has gaps in its inventory inspection records and that  DSCA has no procedures for SAOs to report the results of their Stinger  inventories. DOD commented that DSCA provided specific reports that  we requested and that DSCA Policy Memorandum 03-10 mandates that  the Combatant Commands consolidate and provide Stinger inventory  reports to DSCA by December 1 of each year. First, DSCA did not  dispute our finding that DSCA has maintained a total of 18 annual  inventory inspection reports from SAOs over the 22-year history of  Stinger sales or that for 2002, DSCA had on record inventory inspection  reports for 6 of 16 countries (plus Taiwan). Second, DSCA did not  provide only those reports it mentioned in response to our specific  request. On September 16, 2003, we requested from DSCA all inventory  inspection records related to Stingers, including records for those  countries that we planned to visit. On October 17, 2003,DSCA provided  requested records for multiple countries, including 4 countries that we  did not plan to visit; it did not provide the requested records for the  United Kingdom, which we did plan to visit.
section_title: Comments from the Department of Homeland Security
section_title: Comments from the Department of State
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
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section_title: GAO’s Mission
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subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Public Affairs