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Control Threshold Does Not Fully Address National Defense Authorization 
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June 30, 2006: 

Congressional Committees: 

Subject: President's Justification of the High Performance Computer 
Control Threshold Does Not Fully Address National Defense Authorization 
Act of 1998 Requirements: 

The United States controls the export of high performance computers for 
national security and foreign policy reasons. High performance 
computers have both civilian and military applications and operate at 
or above a defined performance threshold (which was formerly measured 
in millions of theoretical operations per second [MTOPS], but is now 
measured in Weighted TeraFlops [WT]).[Footnote 1] The U.S. export 
control policy currently organizes countries into "tiers," with tier 3 
representing a higher level of concern related to U.S. national 
security interests than tiers 1 and 2. A license is required to export 
computers above a specific performance level to countries such as 
China, India, Israel, Pakistan, and Russia. 

Policy objectives of U.S. computer export controls are to (1) limit the 
acquisition of highest-end, high performance computer systems by 
potential adversaries and countries of proliferation concern and (2) 
ensure that U.S. domestic industries supporting important national 
security computer capabilities can compete in markets where there are 
limited security or proliferation risks. Over the last few years, the 
effectiveness of U.S. export controls in meeting these policy 
objectives has been challenged by market and technological changes in 
the computer and microprocessor industries. 

The National Defense Authorization Act of 1998[Footnote 2] requires 
that the President provide a justification to Congress for changing the 
control threshold for exports of high performance computers to certain 
sensitive countries.[Footnote 3] The President's report must, at a 
minimum, (1) address the extent to which high performance computers 
with capabilities between the established level and the newly proposed 
level of performance are available from foreign countries, (2) address 
all potential uses of military significance to which high performance 
computers at the newly proposed level could be applied, and (3) assess 
the impact of such uses on U.S. national security interests. In 
February 2006, the President set a new control threshold for high 
performance computers and a new formula for calculating computer 
performance.[Footnote 4] 

GAO is required by law[Footnote 5] to assess the executive branch's 
proposed changes to the current control thresholds related to foreign 
availability and the national security risks of exporting high 
performance computers between the previous and proposed thresholds. To 
comply with the statutory requirement, we reviewed the three statutory 
requirements for the justification, the documentation used by executive 
branch officials to support the conclusions in the President's February 
2006 report, and export control regulations pertaining to high 
performance computers. We also interviewed officials from the 
Departments of Commerce and Defense who were responsible for producing 
the President's report. We addressed this report to relevant 
congressional committees of jurisdiction for this mandate. We conducted 
this review from February 2006 to May 2006 in accordance with generally 
accepted government auditing standards. 

Background: 

The United States controls the export of high performance computers and 
related components (e.g., microelectronics) through the Export 
Administration Act of 1979 and the implementing Export Administration 
Regulations.[Footnote 6] The act authorizes Commerce to require firms 
to obtain licenses for the export of sensitive items that may be a 
national security or foreign policy concern. The Departments of 
Defense, Energy, and State assist Commerce, which administers the act, 
by reviewing export applications and supporting Commerce in its reviews 
of export control policy. 

Beginning in 1996, the executive branch organized countries into four 
computer tiers, with each tier above tier 1 representing a successively 
higher level of concern related to U.S. national security interests. In 
2001, tiers 1 and 2 were merged. Current U.S. export control policy 
places no hardware license requirements on tier-1 or tier-2 countries, 
primarily those in Africa, Asia, Central and Eastern Europe, Japan, 
Latin America, and Western Europe. Exports of computers above a 
specific performance level to tier-3 countries, such as China, India, 
Israel, Pakistan, and Russia, require a license. Exports of high 
performance computers to tier-4 countries, such as Iran, North Korea, 
and Syria, are essentially prohibited. This report refers to tier-3 
countries as "countries of concern." 

The President has periodically changed, on the basis of technological 
advances, the threshold above which export licenses are required. He 
last raised the threshold in 2002 to 190,000 MTOPS. In a February 3, 
2006, report to Congress, the President reported that he was replacing 
the formula for calculating computer performance current at the time 
with a new formula derived from industry standards that is more 
accurate and easier to calculate than MTOPS. He also set a new 
threshold for high performance computer exports on the basis of the new 
formula. 

The President's report stated that the new formula, Adjusted Peak 
Performance (APP),[Footnote 7] as expressed in weighted TeraFlops, more 
accurately differentiates between high-end, special-order, high 
performance computers and commercial, readily available systems. It 
also stated that APP places more weight on vector systems than 
nonvector systems.[Footnote 8] Finally, the report stated that the 0.75 
WT control level takes into consideration the widespread foreign 
availability of computing capacity. 

We reviewed prior justifications for changing the export control 
thresholds on high performance computers and found that the changes 
were not adequately justified. For example, previous President reports 
failed to address all uses of military significance to which high 
performance computers could be applied at the new thresholds and the 
impact of such uses on national security, as required by law. 

We recommended in previous GAO reports that (1) Commerce convene a 
panel of experts to conduct a comprehensive assessment of possible 
options to safeguard U.S. national security interests related to 
computer exports, such as replacing the MTOPS performance 
metric;[Footnote 9] (2) Commerce, Defense, and State assess the 
national security threat and proliferation risks of U.S. exports of 
high performance computers to countries of concern;[Footnote 10] and 
(3) Defense determine what countermeasures are necessary, if any, to 
respond to enhancements of the military or proliferation capabilities 
of countries of concern derived from high performance 
computing.[Footnote 11] In 2002, we recommended that Congress should 
consider requiring the executive branch to fully comply with existing 
statutes before the executive branch alters or eliminates the export 
control threshold for high performance computers.[Footnote 12] This 
would include assessing the national security and military uses of 
computers at the higher threshold. In 2004, Commerce implemented the 
first recommendation to convene a panel of experts, which agreed to 
replace the MTOPS metric with a new APP formula. The executive branch 
has not implemented our other two recommendations. A list of GAO 
products related to this review is shown at the end of this report. 

Summary: 

The President's February 2006 report did not fully address the three 
requirements of the National Defense Authorization Act of 1998. 
Therefore, the report did not present the full implications of the 
threshold change to Congress. 

Worldwide Computer Availability Was Not Adequately Documented: 

Although the President's report indicated that foreign computing 
capacity below the new control level is currently widely available, 
agency officials (1) did not adequately document how they established 
the new export control threshold at 0.75 WT on the basis of their 
assessment of worldwide availability and (2) could not document that 
they verified key information used in their decision. Defense said that 
a High Performance Computer Working Group, established by Commerce and 
comprised of U.S. government and industry representatives, evaluated 
and compared information on computer systems and performance levels 
from government, industry, academia, and intelligence sources. 
Officials said they also held informal meetings and discussions with 
the computer industry on technology developments. We reviewed the 
information the agencies collected but could not determine the basis 
for selecting the new threshold compared with other possible thresholds 
assessed because the agencies did not document the steps leading to 
their decision. 

Furthermore, officials said that they relied on a Top500 Supercomputer 
List maintained by the University of Tennessee and the University of 
Mannheim in Germany to help establish worldwide computer availability. 
However, the information on the Top500 List is not verified by the U.S. 
government; is self-reported by respondents[Footnote 13] to a 
questionnaire; and may not be error-free despite their efforts to 
verify it, according to the list's producers. Defense said in its 
comments that the Working Group calculated the APP levels for the 
Top500 List computers, compared these levels with Defense testing data 
on comparable systems, and found consistent results. However, Defense 
did not disclose and document how many systems from the Top500 List it 
reviewed when it made these comparisons or whether these systems were 
in countries of concern. Accordingly, the U.S. government determined 
the worldwide availability of high performance computers on the basis 
of information that might not be accurate and reliable. 

Although not required by law, Commerce could have conducted a foreign 
availability assessment, which is the principal mechanism identified in 
the U.S. Export Administration Regulations for determining the 
availability of controlled items. This assessment determines whether 
items of comparable quality and quantity are available from non-U.S. 
sources that would render U.S. export controls on the item 
ineffective.[Footnote 14] 

All Potential Military Uses of Computers Were Not Adequately Assessed: 

The President's report also did not adequately assess the potential 
military uses of computers with performance capabilities at the new 
threshold (0.75 WT). First, the report could have disclosed, but did 
not, that U.S. government officials had identified 15 high performance 
computing platforms[Footnote 15] that would no longer need to be 
reviewed for a license at the new control threshold.[Footnote 16] 
Second, the report could have discussed, but did not, how the new 
threshold would impact 29 computers that Commerce licensed with 
extensive conditions for export since the executive branch last raised 
the threshold in 2002 to 190,000 MTOPS. As a result of the decision to 
move to the new level, all but 1 of those 29 computers would now be 
eligible for export without a license and without conditions to 
countries of concern, such as China, India, and Russia.[Footnote 17] 
Rather than address all potential uses of military significance for 
these computers, as required by law, the report provided selected 
examples of computer applications, such as the design, development, and 
production of weapon systems; military operations; and nuclear weapons 
design and simulation. The report stated that the majority of computers 
used for these purposes fall below the new and old thresholds for tier- 
3 countries. It also provided some examples of national security 
applications that require computer performance levels above the new 
threshold. Defense officials stated that a strategic assessment of 
selected applications and computing power at a given threshold would be 
more useful to Congress than the assessment in the current reporting 
requirement, which they said is too narrowly focused. However, the 
report did not provide this assessment, either. 

National Security Impact of Militarily Significant Computer Uses Was 
Not Assessed: 

Since the President's report did not adequately assess the potential 
military uses of computers at the proposed new threshold of 0.75 WT, it 
did not assess the impact that militarily significant uses of those 
computers would have on U.S. national security. Instead, the report 
discussed how the new threshold would allow the United States to 
maintain a technological lead by controlling the less widely available, 
most advanced computer systems best suited for innovative national 
security applications above the new threshold. In addition, Defense 
officials stated that assessing the national security impact on 
computers between the old and new thresholds would be very time- 
consuming and resource-intensive. 

Agency Comments and Our Evaluation: 

We received written comments on a draft of this report from Commerce 
and Defense, which are reprinted in enclosures I and II. Commerce and 
Defense disagreed with our finding that the executive branch did not 
have a rigorous process to establish the new computer control 
threshold. The agencies stated that an interagency group compared 
information on computer systems and performance levels from government, 
industry, academia, and intelligence sources, and discussed the new 
threshold with foreign governments. The agencies also said that the 
U.S. government verified information on the Top500 List upon which they 
relied to evaluate state-of-the-art systems and to help calculate the 
APP levels for high performance computers. Accordingly, Commerce stated 
there is no basis to assert that worldwide availability was determined 
on information that might not be accurate and reliable. 

Defense also disagreed with our finding that the President's report did 
not adequately assess the potential military uses of computers with 
performance capabilities at the new threshold or the impact such 
militarily significant uses would have on U.S. national security. It 
stated that Defense did not provide an exhaustive list of all potential 
military applications because the number and diversity of military 
applications and the rate of change in high performance computing make 
comprehensive analysis of all potential applications, their national 
security impact, and appropriate responses impractical. In addition, 
Defense stated that we did not recognize the pace of technology 
developments in computing and stated that systems have an average 
lifespan of 3 to 6 years. Thus, according to Defense, many of the 
computers exported during that time are or are becoming obsolete. 

In response, we added some additional information to this report to 
more fully describe the process and sources of information that 
Commerce used to establish the new export control threshold. Although 
the interagency group collected and analyzed a large amount of raw data 
on computer performance levels, the documentation that the agencies 
provided did not demonstrate how they met the requirements of the law 
or provide a step-by-step approach that an outside reviewer could 
verify. For example, we could not confirm that the U.S. government 
verified information on the Top500 List. Commerce stated that agencies 
verified the list by comparing the APP performance level of computers 
on the Top500 List with benchmark data on comparable U.S. systems. 
However, Commerce did not provide documentation on how many Top500 List 
computers Defense reviewed or whether the systems assessed included 
those manufactured by countries of concern. Moreover, Defense officials 
said in interviews that they did not adequately document how they 
established the new export control threshold at 0.75 WT on the basis of 
their assessment of worldwide availability. 

We do recognize the rapid pace of technological change in the computing 
industry. However, it is important to note that because certain 
computer systems are no longer as useful to the U.S. government as 
newer systems does not mean that these computers would not have some 
militarily significant use for a country of concern. 

Defense's assertion that it was impractical to provide an exhaustive 
list of all potential military applications to meet the requirements of 
the law is not noted in the President's report to Congress nor did the 
report indicate that the executive branch sought legislative relief 
from this mandated requirement. 

Scope and Methodology: 

To address the requirements of the National Defense Authorization Act 
of 1998, we reviewed the statutory requirements for the justification, 
the documentation that executive branch officials said they used to 
support the conclusions presented in the President's report, and the 
export control regulations pertaining to high performance computers. We 
also interviewed officials from the Departments of Commerce and Defense 
who were responsible for producing the report. 

We are sending this report to interested congressional committees and 
to the Secretaries of Commerce and Defense. We will also make copies 
available to other interested parties on request. In addition, the 
report will be available at no charge on the GAO Web site at 
[Hyperlink, http://www.gao.gov]. 

Please contact me at (202) 512-8979 if you or your staff have any 
questions concerning this report. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. Key contributors to this report include Stephen M. 
Lord, Jeffrey D. Phillips, Ian Ferguson, Lynn Cothern, Hai Tran, and 
Mark Speight. 

Signed by: 

Joseph A. Christoff: 
Director, International Affairs and Trade: 

List of Congressional Committees: 

The Honorable John Warner: 
Chairman: 
The Honorable Carl Levin: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Richard C. Shelby: 
Chairman: 
The Honorable Paul S. Sarbanes: 
Ranking Minority Member: 
Committee on Banking, Housing, and Urban Affairs: 
United States Senate: 

The Honorable Duncan L. Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Henry J. Hyde: 
Chairman: 
The Honorable Tom Lantos: 
Ranking Minority Member: 
Committee on International Relations: 
House of Representatives: 

Enclosure I: Comments from the Department of Commerce: 

United States Department Of Commerce: 
Bureau of Industry and Security: 
Washington, D.C. 20230: 

June 9, 2006: 

Joseph A. Christoff: 
Director, International Affairs and Trade: 
United States Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Christoff: 

Thank you for the opportunity to review the Government Accountability 
Office (GAO) draft numbered correspondence entitled President's 
Justification of the High Performance Computer Control Threshold Does 
Not Fully Address NDA Act Requirements (GAO-06-754R). The draft 
correspondence suggests that the President's February 2006 report on 
revisions to the high performance computer (HPC) controls did not fully 
address the foreign availability portion of the National Defense 
Authorization Act requirements. 

The Administration conducted a thorough review of U.S. export controls 
on high performance computers (HPCs) in the two years leading up to the 
President's February 3, 2006 decision to revise our HPC export control 
policy to Tier 3 countries. This review involved extensive discussions 
among all relevant agencies, including the Departments of Commerce, 
State, Defense, and Energy, on the national security impact of 
modifying the existing controls, identifying a new formula (Adjusted 
Peak Performance (APP)) to replace the Composite Theoretical 
Performance (CTP) formula, and setting the new licensing threshold at 
0.75 WT (Weighted TeraFLOPS). The Administration studied the advances 
in microprocessor technology and computer architectures, examined the 
widespread foreign availability of computing capacity, and evaluated 
the competitiveness of the U.S. computer industry in the global market 
place. 

This review was informed by the "Top 500 Supercomputers List" - a list 
well-known to the government experts as a reliable source of data on 
the world-wide availability of computing capacity. The Top 500 List is 
a comprehensive and reliable resource for evaluating the state-of-the 
art in high performance computing. This global list is used by 
academic, government, and industry experts worldwide for tracking and 
identifying trends in high performance computing. It should be noted 
that 305 of the 500 systems in the November Top 500 List are located in 
the United States and a number of them are owned and operated by the 
U.S. Government. Furthermore, a company or individual who wants to 
enter his machine in the Top 500 List must provide the results of his 
Linpack benchmark test and submit the results to random verification by 
the organizer. The Top 500 List is studied and watched by people around 
the world. Overstating HPC performance would certainly have negative 
repercussions on a manufacturer/exporter's credibility and sales. 
Moreover, as noted in the Department of Defense's comments on the draft 
correspondence, agencies compared the APP performance levels of 
computers on the Top 500 List with the Defense benchmark data on 
comparable systems and found consistent results. Thus, information on 
the Top 500 List was verified by the U.S. government. 

In addition, the techniques employed in achieving the stated 
performance are repeated by different people around the world. Many of 
the tools are available from open sources and others have reported 
similar results. There is no reason to suspect that foreign vendors 
have been exaggerating their results. Also, Western market research 
groups and consultants, such as IDC and the Asian Technology 
Information Program, have visited these foreign sites and reported on 
them. Further evidence of the reliability of the Top 500 is the support 
for the APP formula and control level by the Government of Japan and 
our Wassenaar Arrangement regime partners based on the data in the Top 
500 List. 

Conducting a formal foreign availability assessment under part 768 of 
the Export Administration Regulations would have resulted in a very 
similar interagency review process. Such an assessment would have also 
relied on the Top 500 List because it represents the most comprehensive 
and transparent documentation of HPC performance worldwide. 

The most recent Top 500 List underscores the widespread availability of 
computer clusters that have increased in both performance and 
applications. In the most recent Top 500 List, released in November 
2005, 360 systems are clusters. 

In light of the above, the second full paragraph on page 5 of the draft 
correspondence should be significantly revised. Agency officials did 
conduct a rigorous, well-founded review to determine worldwide 
availability. Agency officials did verify entries on the Top 500 List. 
Thus, there is no basis for asserting that worldwide availability was 
determined on information that might not be accurate and reliable. 

Two other points are worth noting. On page 5, the draft correspondence 
states that "U.S. Government officials had identified 15 types of high 
performance computers that would no longer need to be reviewed for a 
license at the new control threshold." While a license will not be 
required for HPCs in those configurations, licenses will continue to be 
required for larger configurations. The computer platforms are not 
fully decontrolled but only less capable versions. 

Finally, the licensing data illustrates the rapid advance of 
technology. In addition to the one HPC approved prior to December 31, 
2005 that would continue to require a license for export to Tier 3 
counties, Commerce has approved two HPC license applications, each with 
WT value over 0.75. Therefore, there are now three HPC licenses with WT 
values over 0.75 to Tier 3 countries. As previous adjustments to the 
HPC licensing threshold, we expect a slowdown in license applications 
in the short term but the number of license applications will rise 
again as technology advances. Industry has already announced 
performance improvements with multi-core processor technology in the 
coming years. 

Once again, I appreciate the opportunity to comment on the draft 
correspondence. Our point of contact on this issue is Bernard Kritzer, 
Director of the Office of National Security Controls and Technology 
Transfer. Mr. Kritzer can be reached at (202) 482-5491. 

Sincerely, 

Signed by: 

Matthew S. Borman: 
Deputy Assistant Secretary: 

The following are GAO's comments on the Department of Commerce letter 
dated June 9, 2006. 

GAO Comments: 

1. We added additional information to this report to more fully 
describe the administration's review of U.S. export controls on high 
performance computers and sources of information that Commerce used to 
establish the new export control threshold and the role of the High 
Performance Computer Working Group. 

2. Commerce stated that a company representative or individual who 
wants to enter his or her machine on the Top500 Supercomputer List must 
provide the results of testing and submit the results to random 
verification by the list's organizer. However, Commerce did not provide 
any documentation on how many or which systems the list's organizer 
randomly verified. Moreover, the list's producers acknowledged that 
information on the list is self-reported by respondents to a 
questionnaire and may not be error-free. Commerce also stated in its 
comments that agencies compared the Adjusted Peak Performance (APP) 
level of computers on the Top500 List with Department of Defense 
benchmark data on comparable systems and found comparable results. 
However, Commerce did not state or provide documentation on how many or 
which Top500 List computers Defense reviewed that were comparable to 
U.S. government systems. This would be important information to 
determine how many of the 500 systems the U.S. government reviewed and 
whether they included systems in or manufactured by countries of 
concern. Finally, Commerce stated that the Top500 List was verified by 
the U.S. government. On the basis of the documentation that the 
agencies provided, we cannot confirm that the U.S. government verified 
information on the Top500 List. In our original audit work, Defense and 
Commerce officials stated that they did not perform an independent 
analysis of computers produced by tier-3 countries, but that they 
relied on other sources of information to estimate the performance of 
such computers. 

3. We disagree that conducting a formal foreign availability assessment 
would have resulted in a similar interagency review process. The 
President's report provided only anecdotal examples of the availability 
of high performance computers in countries of concern, such as China, 
India, and Russia, even though the report asserted that the new control 
threshold was based on the widespread foreign availability of computing 
capacity. A foreign availability assessment is the principal mechanism 
identified in the U.S. Export Administration Regulations for 
determining the availability of controlled items. This assessment would 
determine whether items of comparable quality and quantity are 
available from non-U.S. sources, thus rendering U.S. export controls on 
the item ineffective. 

4. We disagree with Commerce's statement that the President's report 
was based on a rigorous, well-founded review to set the new control 
threshold and determine worldwide availability of high performance 
computers. Although the Working Group collected a large amount of 
information and raw data on computer performance levels, we found in 
interviews with Defense officials and our review of their data that 
agencies did not document their methodology or the steps leading to the 
new threshold of 0.75 Weighted TeraFlops (WT). The documentation that 
the agencies provided did not demonstrate a step-by-step approach that 
an outside reviewer could follow to verify how they reached their 
threshold decision. 

5. We acknowledge these technical comments and modified our report to 
address both points. 

Enclosure II: Comments from the Department of Defense: 

Defense Technology Security Administration: 
2900 Defense Pentagon: 
Washington, DC 20301-2900: 

Mr. Joseph A. Christoff: 
Director, International Affairs and Trade: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548: 

May 31 2006: 

Dear Mr. Christoff: 

This is the Department of Defense (DoD) response to the GAO draft 
report, "President's Justification of the High Performance Computer 
Control Threshold Does Not Fully Address NDA Act Requirements," dated 
May 19, 2006, (GAO Code 320413/GAO-06-754R). Thank you for the 
opportunity to review the draft report. DoD comments and clarifications 
are provided in detail below. 

The draft report states that the interagency (Departments of Commerce, 
Defense, State, and Energy) did not have a rigorous methodology or 
process to determine foreign availability and establish a computer 
control threshold. In fact, the High Performance Computer (HPC) Working 
Group, established by the Department of, Commerce and comprised of 
interagency and industry representatives, derived the new computer 
control metric Adjusted Peak Performance (APP) and the 0.75 Weighted 
TeraFLOPS (WT) threshold based on a methodology that evaluated and 
compared information on computer systems and performance levels from 
government, industry, academia, and intelligence sources. 

The Top 500 List represents the types of HPCs being built and used 
world-wide and was used by the HPC Working Group to evaluate the state- 
of-the-art in general-purpose computing and to confirm the qualitative 
difference between vector and scalar systems. The APP was calculated 
for the Top 500 List and the resulting rank ordering of systems 
reviewed by both government and industry. The interagency compared the 
APP performance levels of computers on this list with the results of 
DoD benchmark data on comparable systems and found consistent results. 
The interagency also looked at how well DoD Challenge Project software 
programs ran on comparable systems and again found consistency in 
performance ranking between the Top 500 List and DoD systems tested 
using APP. 

In setting the threshold, the HPC Working Group considered a number of 
factors, including the ability of other countries to assemble HPC 
systems and the rate of advance of HPCs. Additionally, the interagency 
consulted with the Government of Japan, as the only other producer of 
HPCs and as part of the US-Japan HPC Regime, to allow the Government of 
Japan to consult with their industry to test APP and ensure that 0.75 
WT was a mutually accurate control threshold. 

Commercial developments in commodity computing and consumer electronics 
are and will continue to rapidly encroach on licensing thresholds 
established to protect proprietary, scientific computing platforms. 
Small systems produced in large quantities, such as blade servers, and 
licensed by US and Japanese industries for worldwide production (e.g., 
in Taiwan, China, Singapore, Malaysia, and the Philippines), will soon 
exceed the licensing level of 190,000 MTOPS established in March 2002. 
The claim that under the new threshold only one computer of 29 licensed 
between March 2002 and January 2006 would need a license does not 
recognize the pace of technology developments in computing. Systems 
have an average lifespan of 3-6 years. As those systems become 
obsolete, they are replaced with newer, faster, and more efficient 
systems. Many of the computers exported during that time frame are or 
are becoming obsolete. In addition, powerful commodity clustered 
systems are being built from widely available commodity components and 
interconnects. 

The draft report states that the interagency did not adequately assess 
the potential military uses of computers with performance capabilities 
at the new threshold (0.75 WT), nor did it assess the impact that 
militarily significant uses of computers between the old and new 
thresholds would have on US national security. DoD did not provide an 
exhaustive list of all potential military applications because the 
number and diversity of military applications and the rate of change in 
high performance computing make comprehensive analysis of all potential 
applications, their impact, and appropriate responses impractical in 
evaluating the national security impact of changes in computer control 
levels. Rather, the HPC Working Group evaluated the effectiveness of 
proposed controls by looking at the 94 HPC systems in use in 2004 by 
the US Government for military and nuclear related research and 
development. This approach allowed the HPC Working Group to focus on 
systems of greatest utility to the HPC community. As noted in meetings 
with the GAO, national security related work is conducted across all 
computing performance levels - from desktop workstations available from 
multiple sources around the world, to high-end, proprietary HPCs 
available only in the United States and Japan. Export controls on 
computers cannot prevent a potential adversary from pursuing national 
security related work; controls can only limit access to the most 
efficient and reliable computers being used by the USG for 
computationally intensive military and intelligence related work. DoD 
invests heavily in high performance computing (hardware and software) 
to ensure that the research and development community has the most 
reliable and effective computing tools for development and testing of 
future combat and warfare systems. 

Finally, DoD actively pursues measures to protect militarily critical 
software through the Software Protection Initiative (SPI). The SPI and 
focused and effective controls on proprietary computer hardware and 
technology that protect and promote a robust industrial computing base 
are the most effective countermeasures to ensure US technological lead 
and protect the technological edge of the US warfighter. 

Sincerely, 

Signed by: 

Beth M. McCormick: 
Director (Acting), 
Defense Technology Security Administration: 

Enclosure: 
DoD Technical and Editorial Comments:

The following are GAO's comments on the Department of Defense letter 
dated May 31, 2006. 

GAO Comments: 

1. We added additional information to our report to more fully describe 
the process and sources of information that Commerce used to establish 
the new export control threshold, and the role of the High Performance 
Computer Working Group. This group was not cited in the President's 
report. Although the Working Group collected and analyzed a large 
amount of information and raw data on computer performance levels, 
Defense officials said in interviews that they did not document their 
methodology or how they set the new threshold at the 0.75 WT level. The 
documentation that the agencies provided did not demonstrate a step-by- 
step approach that an outside reviewer could follow to verify how they 
reached their threshold decision. 

2. Defense stated in its comments that agencies compared the APP level 
of computers on the Top500 List with Defense benchmark data on 
comparable systems and found consistent results. However, Defense did 
not state or provide documentation on how many or which Top500 List 
computers agencies reviewed that were comparable to U.S. government 
systems. This would be important information to determine how many of 
the 500 systems the U.S. government reviewed and whether they included 
systems in or manufactured by countries of concern. 

3. We recognize the rapid pace of technological change in the computing 
industry. However, because certain computer systems are no longer as 
useful to the U.S. government as newer systems does not mean that these 
computers would not have some militarily significant use for a country 
of concern. Moreover, the President's report does not identify the 
estimated numbers of computers available at a specific computing level 
in countries of concern. Thus, the report does not adequately assess 
the potential military uses or impact on U.S. national security that 
availability of these computer systems to countries of concern without 
a license would have. 

4. Defense stated that it did not provide an exhaustive list of all 
potential military applications because the number and diversity of 
military applications and the rate of change in high performance 
computing make comprehensive analysis of all potential applications, 
national security impacts, and appropriate responses impractical. 
Defense officials said that to generate a list of applications to be 
used on certain levels of computers would require reviewing and 
analyzing an extensive amount of information. However, the President's 
report did not state the Defense view that the requirement is 
impractical, nor did the agencies indicate that they appealed for 
legislative relief. 

5. The National Defense Authorization Act of 1998 requires the agencies 
to assess the potential military uses of computers at the new threshold 
and, therefore, the impact that changes in the control threshold will 
have on U.S. national security. Merely stating that Defense conducts 
national security-related work on computers at all performance levels 
does not respond to the requirement of the act to assess the national 
security uses that computers at the new performance threshold can have. 
Thus, we believe it would be useful for the executive branch to conduct 
this assessment and provide the results to Congress. 

Related GAO Products: 

Export Controls: More Thorough Analysis Needed to Justify Changes in 
High Performance Computer Controls. GAO-02-892. Washington, D.C.: 
August 2, 2002. 

Export Controls: Inadequate Justification for Relaxation of Computer 
Controls Demonstrates Need for Comprehensive Study. GAO-01-534T. 
Washington, D.C.: March 15, 2001. 

Export Controls: System for Controlling Exports of High Performance 
Computing Is Ineffective. GAO-01-10. Washington, D.C.: December 18, 
2000. 

Export Controls: Challenges and Changes for Controls on Computer 
Exports. GAO/T-NSIAD-00-187. Washington, D.C.: May 26, 2000. 

Export Controls: National Security Risks and Revisions to Controls on 
Computers. GAO/T-NSIAD-00-104. Washington, D.C.: February 28, 2000. 

Export Controls: Statutory Reporting Requirements for Computers Not 
Fully Addressed. GAO/NSIAD-00-45. Washington, D.C.: November 5, 1999. 

Export Controls: Implementation of the 1998 Legislative Mandate for 
High Performance Computers. GAO/T-NSIAD-00-53. Washington, D.C.: 
October 28, 1999. 

Export Controls: Information on the Decision to Revise High Performance 
Computer Controls. GAO/NSIAD-98-196. Washington, D.C.: September 16, 
1998. 

Export Controls: Changes in Controls Applied to the Export of High 
Performance Computers. GAO/T-NSIAD-98-250. Washington, D.C.: September 
16, 1998. 

Export Controls: National Security Issues and Foreign Availability for 
High Performance Computer Exports. GAO/NSIAD-98-200. Washington, D.C.: 
September 16, 1998. 

(320413): 

FOOTNOTES 

[1] A TeraFlop is a measure of the mathematical computing power of a 
machine in floating point operations per second. A floating point 
operation is meant to be an elementary operation, such as a sum, 
subtraction, multiplication, or division. This measure is used to 
express the speed of a processor. 

[2] Public Law 105-85, sec. 1211(d), 111 stat. 1933. 

[3] The Departments of Defense, Commerce, State, and Energy prepare the 
President's report under the coordination of the National Security 
Council. 

[4] The White House, Summary of Findings with Respect to Criteria Set 
Forth in Subsections 1211(d) and (e) of the National Defense 
Authorization Act for Fiscal Year 1998 (Washington, D.C.: Feb. 3, 
2006). 

[5] Public Law 106-554, app. B, sec. 314, 114 stat. 2763A-123. 

[6] 50 U.S.C. app. 2401 et seq., and 15 C.F.R., sec. 730. The 
authorities provided by this legislation expired on August 20, 2001. 
However, acting pursuant to the International Emergency Economic Powers 
Act (codified at 50 U.S.C. 1702), the President extended application of 
the act and the implementing regulation by Executive Order 13222 (66 
Fed. Reg. 44025). 

[7] The metric addresses our past recommendation to assess ways to 
address the shortcomings of high performance computer export controls 
based on MTOPS. See our report titled Export Controls: System for 
Controlling Exports of High Performance Computing Is Ineffective, GAO- 
01-10 (Washington, D.C.: Dec. 18, 2000). However, we did not assess 
whether APP is the most appropriate alternative to MTOPS. 

[8] A vector system is a computer with built-in instructions that 
performs multiple calculations on vectors (one-dimensional arrays) 
simultaneously. 

[9] GAO-01-10. 

[10] GAO, Export Controls: More Thorough Analysis Needed to Justify 
Changes in High Performance Computer Controls, GAO-02-892 (Washington, 
D.C.: Aug. 2, 2002); and Export Controls: Information on the Decision 
to Revise High Performance Computer Controls, GAO/NSIAD-98-196 
(Washington, D.C.: Sept. 16, 1998). 

[11] GAO-01-10. 

[12] GAO-02-892. 

[13] Respondents include high performance computer experts, 
computational scientists, manufacturers, and the Internet community, 
according to the Top500 List's producers. 

[14] 15 C.F.R. 768. 

[15] Computing platforms can operate at various performance levels 
based on the number of processors available. 

[16] Licenses will continue to be required for some of these high 
performance computers operating with a larger configuration of 
processors, according to Commerce. 

[17] Since December 31, 2005, Commerce stated that it approved licenses 
to export 2 additional computers above the new threshold of 0.75 WT to 
countries of concern, such as China, India, and Russia.

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