GAO to State Department: Fix export review process

The State Department should revamp its cumbersome process for reviewing export licenses before embarking on a planned e-license process system, the General Accounting Office recommends in a report released Jan. 10.

The GAO investigation was done in response to defense industry concerns that the State Department's extended reviews for defense articles and services is resulting in lost sales. It found that the department loses or delays thousands of applications a year.

The report, "Export Controls: Re-engineering Business Processes Can Improve Efficiency of State Department License Reviews," was delivered Dec. 31 to the Senate Armed Services subcommittee on readiness and management support.

John Douglass, president and chief executive officer of the Aerospace Industries Association, said the report affirmed the view of U.S. aerospace companies that the State Department's export licensing process for defense products must be improved.

The report said the average processing time for applications in 2000 was 23 days when they remained in-house, and 91 days when they required review by external agencies or departmental offices outside Defense Trade Controls, the office in charge of processing the requests.

According to an earlier office report, the State Department completed more than 46,000 license application reviews in fiscal 2000. The department authorizes more than $20 billion in commercial defense trade each year, according to the State Department Web site

The State Department argued that the export licensing reviews can be lengthy because of the intensive process of evaluating the impact the commercial offerings will have on foreign policy and national security.

But the report charged that process inefficiencies extend the review process unnecessarily. No formal guidelines are in place for when to request external agency reviews, resulting in unneeded reviews.

Also, the department has no procedures to monitor the flow of license applications through the system, nor guidelines on how long reviews should take.

"In fiscal 2000, hundreds of applications were lost and thousands were delayed while no substantive review occurred," the report said.

GAO recommended the department establish timeline goals, develop guidance for referrals and implement tracking mechanisms. GAO also suggested implementing these changes before the department's planned conversion to an all-electronic processing system to prevent "imbedding an inefficient process" into the system.

According to the report, the State's licensing office is planning to develop an electronic business processing system to automate the process for submitting license applications.

"The new electronic system must incorporate procedures for ensuring the efficient flow of applications through the process," the report said.