Audit of the Department of Defense Foreign Military Sales Acquisition Process (DODIG-2022-053)

What We Did:

The objective of this audit was to determine whether the DoD managed the acquisition of defense articles and services to meet partner country foreign military sales (FMS) requirements, and whether the metrics used by DoD components maximize the results of the FMS acquisition process. This audit focused on the timeliness of the DoD FMS acquisition process and the accuracy of FMS acquisition data that the DoD reported to Congress.

We conducted this audit in response to a reporting requirement contained in House Report 115 676, to accompany the National Defense Authorization Act for FY 2019. This is the second audit report the DoD Office of Inspector General issued in response to the reporting requirement. The first audit report addressed the DoD FMS agreement development process.

What We Found:

The Military Department IAs managed the acquisition of defense articles and services to meet foreign partner FMS requirements. Of the 18 FMS cases reviewed, none had acquisition related delays that negatively affected the agreed upon period of performance for the delivery of defense articles and services. Instead, there were either no delays with the agreed upon period of performance or the delays resulted from circumstances outside the control of the Military Department IAs. Specifically,

• no delays occurred for eight FMS cases as a result of the DoD FMS acquisition process, • delays occurred for seven FMS cases because foreign partners changed requirements, and • delays occurred for three FMS cases because of contractor related issues.

The delays that negatively affected the agreed upon period of performance for the delivery of defense articles and services were outside of the Military Department IAs control. Therefore, we are not making any recommendations related to the DoD’s management of its FMS acquisitions.

The DoD’s reporting on the status of its FMS acquisitions did not fully comply with the congressional reporting requirements. Specifically, the Military Department IAs used inconsistent processes to track and report FMS acquisitions, and we identified problems with Section 887 reporting for all 18 FMS cases reviewed. The Section 887 reporting problems included inaccurate, incomplete, and unsupported data. In addition, the Office of the Under Secretary of Defense for Acquisition and Sustainment did not obtain Section 887 reporting input from the Military Department IAs in a timely manner.

As a result, the DoD Section 887 reporting inaccurately reflected the status of the DoD FMS acquisition process and was not submitted to Congress in a timely manner. The inaccurate and untimely reporting negatively affects the usefulness of the information provided to Congress. In addition, there are ongoing DoD initiatives directed by the Deputy Secretary of Defense to automate the tracking and reporting on the status DoD FMS acquisitions. The incomplete, inaccurate, and unsupported data this audit identified negatively affects the quality of the information used to support those initiatives.

What We Recommend:

We recommend that the Assistant Secretary of the Army for Acquisition, Logistics, and Technology:

• provide the results of all corrective actions initiated during the audit to improve the accuracy of Army FMS acquisition milestone system data; and • establish guidance, controls, and oversight to improve the accuracy of the FMS acquisition milestone data in Army automated information systems.

We recommend that the Under Secretary of Defense for Acquisition and Sustainment coordinate with the Military Department IAs and issue guidance to require that the milestones established for the FMS acquisition process are clearly defined and consistently applied to meet the reporting requirements of Section 887 of the National Defense Authorization Act for FY 2018.