LegiStorm

What GAO Found

In summary, DOD's Office of the Secretary of Defense directed the Navy to cancel its competitive solicitation for 21 civilian Mi-17s because Russian authorities told DOD in late 2010 that, in accordance with Russian law, they would sell the helicopters only through Rosoboronexport since they were intended for military end use. Specifically, in response to letters written by the U.S. Ambassador to Russia, the Russian Ministry of Foreign Affairs confirmed to DOD that it considered the Mi-17s to be military because they were for use by the Afghan Air Force, and therefore could be sold only through Rosoboronexport, the sole entity responsible for Russian military exports.

DOD did not assess alternative means for procuring Mi-17s after verifying that Russia would sell the helicopters to the United States only through Rosoboronexport. The Navy's original procurement strategy in 2010 was to purchase civilian Mi-17s and subsequently add weapons to them for use in Afghanistan. However, given the Russian government's determination, DOD officials stated that no alternative approaches to procure the helicopters were available to them as any attempt to procure a new civilian aircraft could be blocked by Rosoboronexport if DOD did not go through them, and purchasing used helicopters posed safety concerns. Although some potential vendors told us that, if awarded a contract, they could provide these aircraft to DOD at a lower cost, an Army analysis determined that the price paid to Rosoboronexport for the Mi-17s was reasonable and fell within the historical range of the unit price paid for similar aircraft.

DOD determined that the Rosoboronexport contract offered the Army greater access to technical information from the original equipment manufacturer and increased assurance of safety compared to previous Mi-17 contracts. However, the risk of counterfeiting may be similar. The 2011 contract with Rosoboronexport provided Army officials with extensive access to the original equipment manufacturer's facilities and allowed for technical discussions on the aircraft's design, testing, and manufacturing processes. This level of insight enabled the Army to determine that the Russians' process was sufficient by U.S. standards to certify airworthiness. However, both Rosoboronexport and other vendors have purchased new Mi-17s that came from the original equipment manufacturer--a practice used to decrease the risk of counterfeiting. Therefore, GAO found no evidence that shows how Rosoboronexport would decrease the risk of counterfeit parts over other vendors if aircraft were purchased new from the original equipment manufacturer.

This letter responds to the Senate Armed Services Committee report 112-173 accompanying the 2013 National Defense Authorization Act, which directed GAO to review the Department of Defense (DOD) procurement of Mi-17 helicopters through Rosoboronexport, a Russian state-owned arms export firm. In response, GAO reviewed: (1) the reasons for DOD's cancellation of a 2010 competitive solicitation for 21 Mi-17 helicopters; (2) the extent to which DOD evaluated the availability and feasibility of alternative procurement approaches for military or civilian variants of the Mi-17 helicopter; and (3) DOD's assessment of the impact that contracting directly with Rosoboronexport may have had on the risk of access to technical data, aircraft safety, and counterfeiting.

For more information, contact Michael Courts at (202) 512-4841 or courtsm@gao.gov.