As of the end of fiscal 2017, Japan had yet to receive deliveries of about ¥34.9 billion worth of defense equipment it bought from the United States, a survey by the Board of Audit has revealed.
The board on Friday urged the Defense Ministry to negotiate with the U.S. side so that such delays will be resolved as soon as possible.
Under the foreign military sales program, the United States provides defense equipment to allied and friendly countries. In principle, Japan makes payments for U.S. military goods in advance of delivery and any overpaid amounts are refunded at settlement after delivery.
In the survey, the audit board looked at Japan’s defense equipment procurement from the United States in four fiscal years through the end of March 2018.
It found that the procurement amount soared from ¥111.7 billion in fiscal 2013 to ¥388.2 billion in fiscal 2017, with the Air Self-Defense Force’s share jumping in particular, although the threefold increase can be partly attributed to the yen’s weakening against the dollar.
The survey also revealed that 653 acquisition deals worth ¥141.7 billion had not been settled as of the end of fiscal 2017. Of those, deliveries had not been completed for 85 deals worth some ¥34.9 billion.
In procurement for the Maritime Self-Defense Force, some shipments were found to have been delayed for over six years. The delays made the MSDF unable to repair Harpoon anti-ship missiles in three cases.
At the ASDF, only 40 percent of computers to be used in F-2 fighters had been shipped. There were computers that had not been shipped for more than nine years.
Meanwhile, orders for five inspection equipment items for E-2C early warning aircraft had not been canceled, despite the U.S. side’s notification in July 2017 that they could not be shipped.
In the report, the audit board urged the ministry to study the possibility of having the U.S. side cut contract management fees, in addition to making requests for deliveries to settle the pending deals early.
A spokesman for the ministry-affiliated Acquisition, Technology & Logistics Agency said it takes the audit report seriously and will make efforts to improve the situation while closely cooperating with the U.S. side.
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