	Undercover Acquisitions of Sensitive Excess Military Items Identifies National Security Risk

Posing as private citizens, our undercover investigators purchased several  sensitive excess military equipment items that were improperly sold to the  public at DOD liquidation sales. These items included three ceramic body  armor inserts identified as small arms protective inserts (SAPI), which are  the ceramic inserts currently in demand by soldiers in Iraq and  Afghanistan; a time selector unit used to ensure the accuracy of computer- based equipment, such as global positioning systems and system-level  clocks; 12 digital microcircuits used in F-14 Tomcat fighter aircraft; guided  missile radar test sets used to check the operation of the data link antenna  on the Navy’s Walleye (AGM-62) air-to-ground guided missile; and  numerous other electronic items. Our investigators also posed as DOD contractor employees, entered  DRMOs in two east coast states, and obtained several other items that are  currently in use by the military services. Sensitive Excess Military Items Purchased at DOD Excess Property Liquidation Sales

Using a fictitious identity as a private citizen, our undercover investigator  applied for and received an account with DOD’s liquidation sales  contractor. During the undercover penetration at DRMO A, our investigators obtained  numerous sensitive military items that were required to be destroyed when  no longer needed by DOD to prevent them from falling into the wrong  hands. These items included two guided missile launcher mounts for  shoulder-fired missiles, six Kevlar body armor fragmentation vests, a  digital signal converter used in naval electronic surveillance, and an all- band antenna used to track aircraft. Waste Associated with Sales of A- Condition Excess Items that Military Services Are Continuing to Use in Operations

Because significant numbers of new, unused A-condition excess items still  being purchased or in use by the military services are being disposed of  through liquidation sales, it was easy for our undercover investigator to  pose as a liquidation sales customer and purchase several of these items  for a fraction of what the military services are paying to obtain these same  items from DLA supply depots. However, as demonstrated by our tests of security controls over sensitive  excess military equipment, DOD does not yet have effective controls in  place to prevent unauthorized parties from obtaining these items. Further, liquidation sales of items that  military units are continuing to purchase at full cost from supply inventory  demonstrates continuing waste to the taxpayer and inefficiency in DOD’s  excess property reutilization program.
Why GAO Did This Study

In light of GAO's past three testimonies and two reports on problems with controls over excess DOD property, GAO was asked to perform follow-up investigations to determine if (1) unauthorized parties could obtain sensitive excess military equipment that requires demilitarization (destruction) when no longer needed by DOD and (2) system and process improvements are adequate to prevent sales of new, unused excess items that DOD continues to buy or that are in demand by the military services.

What GAO Found

GAO investigators posing as private citizens purchased several sensitive military equipment items from DOD's liquidation sales contractor, indicating that DOD has not enforced security controls for preventing sensitive excess military equipment from release to the public. GAO investigators at liquidation sales purchased ceramic body armor inserts currently used by deployed troops, a cesium technology timing unit with global positioning capabilities, a universal frequency counter, two guided missile radar test sets, 12 digital microcircuits used in F-14 fighter aircraft, and numerous other items. GAO was able to purchase these items because controls broke down at virtually every step in the excess property turn-in and disposal process. GAO determined that thousands of military items that should have been demilitarized (destroyed) were sold to the public. Further, in June 2006, GAO undercover investigators posing as DOD contractor employees entered two excess property warehouses and obtained about $1.1 million in sensitive military equipment items, including two launcher mounts for shoulder-fired guided missiles, several types of body armor, a digital signal converter used in naval surveillance, an all-band antenna used to track aircraft, and six circuit cards used in computerized Navy systems. At no point during GAO's warehouse security penetration were its investigators challenged on their identity and authority to obtain DOD military property. GAO investigators posing as private citizens also bought several new, unused items currently being purchased or in demand by the military services from DOD's excess property liquidation sales contractor. Although military units paid full price for these items when they ordered them from supply inventory, GAO paid a fraction of this cost to purchase the same items, demonstrating continuing waste and inefficiency.