Rare earths contain one or more of the following 17 elements in the periodic table: the lanthanides that begin with lanthanum (atomic number 57) through lutetium (atomic number 71) and two non-lanthanides that have similar properties, yttrium and scandium (see figure 1). These elements are referred to as rare because they appear in low concentrations in the ground—though relatively abundant overall—and are difficult and costly to mine and process. Rare earth elements are often classified as either heavy or light based, in part, on their chemical properties. According to the United States Geological Survey, heavy rare earth elements are generally less abundant and more expensive due to their scarcity, more unique characteristics, and strong demand relative to the light rare earth elements. DOD has a particular interest in two heavy rare earth elements, yttrium and dysprosium. Rare earth elements are generally found in mined ore, separated and converted into intermediary forms, such as oxides, and further processing depends on the application. For example, the intermediary form can be turned into a metal, and added to other materials to form an alloy for use in semi-finished metal components that are incorporated into end products. The United States was the leader in global production of rare earth oxides, metals, and alloys from the 1960s through the 1980s but currently has limited capability. According to a 2013 Congressional Research Service report, global production is prevalent outside the United States due, in part, to lower labor costs and more lenient environmental standards. At present, the United States generally relies on imports from global manufacturers of rare earths, such as metals, alloys, and magnets. See figure 2 for a representative rare earth metals supply chain that is generally outside the United States. The United States is a major consumer of defense and commercial end products containing rare earths, however, its demand for rare earths is approximately nine percent of the global demand, according to DOD estimates. Also, DOD demand is approximately only one percent of the United States demand. Recent studies have shown that rare earths are essential to the production, sustainment, and operation of U.S. military equipment. Reliable access to the necessary material, regardless of the overall level of defense demand, is a bedrock requirement for DOD. Some defense applications with rare earths are coatings for jet engines, missile guidance systems, antimissile defense systems, satellites, and communication systems. Examples of commercial products with rare earths are automotive catalytic converters, petroleum refining chemicals, flat panel displays, permanent magnets, and rechargeable batteries for hybrid vehicles. Since 2010, DOD has conducted studies and published reports on various rare earths issues in response to congressional mandates (see table 1 below). DOD also periodically issues two reports on the defense industrial base and on “critical” and “strategic and critical” materials. The Annual Industrial Capabilities Report to Congress provides analyses of sectors of the defense industrial base such as aircraft and ground vehicles and summarizes the department’s efforts to identify the availability of materials, such as rare earths. The biennial Strategic and Critical Materials Report on Stockpile Requirements summarizes DLA-Strategic Materials’ analyses of materials for the National Defense Stockpile. In addition, in July 2014 the DOD Inspector General issued a report assessing whether DOD effectively planned for life-cycle sustainment of rare earth elements for the defense industrial base. The DOD Inspector General found that DLA-Strategic Materials lacked procedures to validate supply and demand data for its stockpiling model. Further, the Inspector General identified internal control weaknesses related to the assessment of rare earth element supply and demand for defense applications. Specifically, the Inspector General found that DOD lacked a comprehensive and reliable approach to assess rare earth element supply and demand. The DOD Inspector General recommended that DLA-Strategic Materials have a plan for using verified and validated data to improve forecasts for the stockpile. DLA-Strategic Materials generally agreed, noting that its model is being reviewed and will be accredited. Three organizations in the department have related statutory requirements to manage risks from DOD’s use of “critical” and “strategic and critical” materials, such as rare earths. The three organizations are DLA-Strategic Materials and the Office of the Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy (MIBP), both in the Office of the Undersecretary of Defense for Acquisition, Technology and Logistics (OUSD(AT&L)), and the Strategic Materials Protection Board (SMPB). Their select responsibilities are shown in table 2 below. In addition to MIBP and DLA-Strategic Materials representation, the SMPB membership is department-wide and includes designees of the Assistant Secretary of the Army for Acquisition, Logistics and Technology and the Assistant Secretary of the Navy for Research, Development, and Acquisition. From 2011 to 2015, DOD identified certain materials, including rare earths, as critical to meet its individual statutory responsibilities, but has not taken a comprehensive approach to identify which of these materials are critical to national security. Based on GAO’s prior work, the Office of the Deputy Under Secretary of Defense for Industrial Policy, the predecessor of MIBP, stated that it was collaborating with the Defense Logistics Agency’s National Defense Stockpile Center to create department-wide criteria for the terms “critical” and “strategic,” and expected to report the results of this effort at the end of calendar year 2008. As of November 2015, there were no department-wide criteria for these terms, but DOD officials said that they were considering discussing the definitions and possibly proposing a group of materials that meet the SMPB’s definition of critical to national security. SMPB and OUSD(AT&L) and two of its offices—MIBP and DLA-Strategic Materials—have separate, existing statutory definitions for critical materials. See table 3 for the varying definitions of critical materials by organization. The DOD organizations, generally using their respective definitions and analyses for their individual responsibilities, identified between three and eight of the rare earths as having met the definitions at least once from 2011 to 2015. Overall, 15 of the 17 rare earths were identified as critical at some point in the last 5 years. None of the organizations identified cerium or promethium as having met the definitions during that time period. See table 4 for the rare earths that each DOD organization separately identified as critical in defense applications, critical to national security, or as strategic and critical in different reports. DOD’s identification of which rare earths, if any, are critical to national security is fragmented. Three DOD organizations separately identified five different lists of rare earths during this time frame using their respective definitions of critical to national security. According to GAO’s risk management framework, comprehensive management of risk is a necessary step for agencies, like DOD, to manage and assess risk to help make informed decisions and prioritize resource investments. The SMPB, with the duty of designating specific materials as critical to national security, has reported to Congress in 2007, 2008, and 2011 that its focus is to assess the criticality of materials and to identify which materials are critical to national security, but has not done so. The SMPB acknowledged that identifying the materials critical to national security is necessary to ensure consistency among the DOD offices. However, in a February 2014 letter from MIBP to DLA-Strategic Materials, the respective offices of the chair and vice-chair of the SMPB, that discusses cooperation concerning the SMPB, the designation of materials critical to national security was not one of the areas outlined for proposed coordination. DOD officials told us that they are generally working toward coordinating MIBP’s sector analyses of the defense industrial base—such as aircraft and ground vehicles—with DLA-Strategic Materials’ analyses that support recommendations for materials to stockpile in order to have a more comprehensive understanding of supply chains. DLA-Strategic Materials’ responsibility for determining materials to stockpile under certain scenarios has been considered by some within DOD as a means to ensure materials critical to national security are available. For example, MIBP officials told us that they rely on DLA- Strategic Materials’ analyses and expertise for other responsibilities such as MIBP’s Title 10 responsibilities of ensuring reliable sources of materials critical to national security. However, DLA-Strategic Materials officials caveat their analyses as being valid for a single point in time and for decisions related to their title 50 responsibilities for the National Defense Stockpile, and not for other statutory responsibilities such as identification of materials critical to national security in the Title 10 definitions. To demonstrate that its analyses are valid for a specific point in time, DLA-Strategic Materials officials indicated that the identification of rare earths that meet the definition for strategic and critical may differ over time, unlike OUSD(AT&L)’s and MIBP’s lists, which have not changed. In addition, the DOD-created emergency scenarios may change for each biennial analysis, which affects DLA-Strategic Materials identification of which materials meet the definition for strategic and critical. Moreover, DLA-Strategic Materials officials told us that they are not responsible for designating if a material is strategic and critical but are tasked with determining if a material is estimated to have a shortfall in a given year based upon DOD emergency scenarios. In addition to DOD’s differing lists of critical rare earths, weapon system officials at the military departments that we spoke with also have identified what they consider as critical rare earths in their systems, but this information is not reported consistently or department-wide.