What GAO Found Patent owners can pursue litigation in federal courts if others use their inventions without permission (known as patent infringement). Because patent infringement lawsuits can cost millions of dollars, some patent owners rely on third-party litigation funding. This funding involves an arrangement in which someone who is not named in a lawsuit provides funding to a plaintiff (typically the patent owner) or law firm in exchange for a portion of the proceeds from the lawsuit if it is successful. Patent litigation funders GAO interviewed identified multiple factors that inform their decision on whether to invest in a particular patent lawsuit. One funder told GAO they prefer cases in which a patent owner shared information about an invention with another company that then used the invention without permission, as this scenario can be compelling to a jury. Funders also said they look to fund lawsuits with strong patents that are not likely to be invalidated during the litigation. Funders use various arrangements to fund patent litigation (see figure). According to stakeholders and GAO's analysis of funding agreements, some funders require that they receive two to three times their investment before the patent owner receives any proceeds from a successful lawsuit. Examples of Patent Litigation Funding Arrangements Third-party funded patent litigation has increased significantly since 2019 and now accounts for a substantial proportion of all patent litigation, according to stakeholders GAO spoke with and industry estimates. Most large technology companies GAO interviewed said that more than half of all patent infringement lawsuits filed against them had confirmed or suspected third-party funding. Most of these companies said they typically have dozens of lawsuits filed against them each year. Stakeholders GAO interviewed noted multiple benefits associated with third-party funding of patent litigation. For example, funders and other stakeholders GAO spoke with said third-party funding allows resource-constrained patent owners, such as small companies, to file patent infringement lawsuits that they otherwise could not have filed. University officials and inventors told GAO this funding option is important because, from their perspective, fewer law firms are taking cases under a contingency fee arrangement due to the unique costs and risks of patent litigation. Stakeholders also identified several challenges associated with third-party funding. Technology companies told GAO that the patents associated with many of these third-party-funded cases have weak infringement claims, and that the companies must incur legal defense costs even though they say these patents are likely to be invalidated. In addition, third-party funders may complicate settlement negotiations, contributing to longer settlement times, according to technology companies, mediators, and a judge GAO interviewed. However, funders GAO interviewed said they structure their funding agreements to allow the plaintiff to settle at any time and to generally incentivize early settlement. Many stakeholders GAO spoke with, including some funders, were open to some requirements that would mandate that plaintiffs disclose to parties involved in a lawsuit whether the plaintiffs have received third-party funding, given the limited public data on third-party funding. Stakeholders identified multiple benefits of disclosure requirements, such as: Identifying conflicts of interest. Several technology companies and other stakeholders GAO interviewed said that disclosure requirements could help judges determine whether they have a conflict of interest, such as a financial interest in a company involved in a lawsuit. Identifying foreign involvement. Several stakeholders said disclosure requirements may shed light on whether a foreign entity is involved in patent litigation. Some stakeholders said foreign funding might be a strategy to undermine U.S. companies. Facilitating case resolution. Several stakeholders said that knowing whether a third party is funding a patent infringement case may motivate defendants to pursue settlements, knowing that the plaintiff has ample resources for a lengthy legal battle. At the same time, stakeholders GAO interviewed identified multiple concerns with disclosure requirements, such as: Relevance to litigation. Several stakeholders, including multiple funders and district court judges, said that disclosure of the third-party funding is not relevant to the patent litigation and could distract from the merits of the case. Potential biasing of litigation. Several stakeholders, particularly law firms and funders, said that if disclosure requirements were to include sharing the amount of third-party funding, it may be overly advantageous to defendants because it would reveal the extent of their opponents' financial resources. Burden on court system. Several stakeholders, including two funders and two district court judges, said that disclosure requirements could increase the cost and length of litigation. For example, it could create additional burdens on the court system, which would need to collect and review the disclosures. Why GAO Did This Study Patents grant inventors exclusive rights to their inventions for a limited time. To protect these rights, some patent owners have turned to third-party litigation funding to help cover the high costs of patent litigation. Patent litigation can be particularly costly and risky because even after significant investment in filing a patent lawsuit, the patent itself can be invalidated by a court. The high risks and costs of patent litigation have made it an attractive investment opportunity for third-party funders, who provide capital to support litigation in exchange for a share of the potential proceeds. Some stakeholders have raised questions about the extent of third-party patent litigation funding and the associated economic impacts. Most courts do not require disclosure of such funding arrangements. Thus, publicly available data on litigation funders and third-party financing arrangements remain limited. Some stakeholders have raised questions about how this limited disclosure affects transparency in the judicial process. GAO has reported on the use of third-party funding across litigation more broadly in Third-Party Litigation Financing: Market Characteristics, Data, and Trends (GAO-23-105210). GAO was asked to review recent developments in third-party funding of patent litigation. This report describes selected funders' perspectives on factors that influence patent litigation funding decisions. It also provides information on the extent of patent litigation funding, as estimated by data GAO reviewed and stakeholders GAO interviewed, and challenges in determining the extent of such funding. This report also describes the perspectives of selected stakeholders on the legal and economic effects of patent litigation funding. GAO conducted semi-structured interviews with selected entities with knowledge of recent developments in third-party funding of U.S. patent litigation. GAO interviewed patent litigation funders, large technology companies, research universities, law firms, district court judges, mediators, individual inventors, and other industry stakeholders. GAO reviewed 12 patent litigation cases suspected of being third-party funded, and through a search of publicly available information, identified challenges in determining whether these cases were indeed third-party funded. GAO also reviewed selected studies by academic researchers and government agencies. Additionally, GAO reviewed patent litigation funding agreements, financial reports from publicly traded patent litigation funders, and industry estimates of third-party funding in patent litigation. For more information, contact Candice N. Wright at (202) 512-6888 or WrightC@gao.gov.

What GAO Found Marketplace plans are statutorily required to cover essential health benefits (EHB). These benefits include items and services in 10 categories, such as emergency services and hospitalization. The federal advance premium tax credit (APTC) is available to help eligible enrollees afford their marketplace plans. States may mandate additional benefits for marketplace plans to cover. States are responsible for identifying these non-EHB mandated benefits based on the standard established by the Centers for Medicare & Medicaid Services (CMS). CMS does not collect information on states that have identified non-EHB mandated benefits. Through interviews with relevant national organizations, GAO found at least six states that identified non-EHB mandated benefits. These states' mandated benefits included pediatric hearing aids and fertility care. APTCs must exclude the costs of non-EHB mandated benefits, so that federal funds are not used to subsidize their costs. To calculate APTCs, CMS relies on insurers to report premium data that excludes the cost of these benefits. Entity Responsible for Premium Costs of Mandated Benefits CMS oversees the requirements related to non-EHB mandated benefits primarily through technical assistance, according to agency officials. CMS officials said that states frequently reach out to them for assistance, including asking them for advice on whether a benefit requirement they are considering would be a non-EHB mandated benefit. However, CMS has not assessed whether its oversight approach is sufficient, and thus, has limited assurance that APTC amounts exclude the costs of non-EHB mandated benefits. This poses a risk to its oversight objective and is inconsistent with federal internal control standards that call for identifying, analyzing, and responding to risks related to achieving agency objectives. Conducting such an assessment of its oversight approach and making changes as appropriate would provide greater assurance that the APTC is appropriately excluding these costs. Why GAO Did This Study In February 2024, over 20 million Americans purchased health insurance coverage through the marketplaces established by the Patient Protection and Affordable Care Act. In 2022, 90 percent of marketplace enrollees were eligible for federal APTC payments, which totaled over $75 billion. CMS has expressed concerns that states may not identify non-EHB mandated benefits and that the APTCs do not exclude the costs of these benefits, resulting in improper federal payments. GAO was asked to review states' non-EHB mandated benefits and CMS efforts to ensure that federal funds do not subsidize their costs. This report (1) describes what is known about states' non-EHB mandated benefits and (2) examines CMS efforts to ensure that APTCs exclude the costs of states' non-EHB mandated benefits. GAO reviewed federal law, regulations, and CMS documentation; and interviewed CMS officials and stakeholders from three national organizations with insight on state-mandated benefits.

What GAO Found Available industry data and stakeholder interviews suggest crypto assets are a small part of the 401(k) market. Crypto assets are generally private-sector digital instruments that depend primarily on encryption and distributed ledger or similar technology to conduct transactions without a central authority, such as a bank. Limited Department of Labor (DOL) data prevent systematic measurement of crypto assets in 401(k) plans. Based on available information, crypto assets are a small part of the 401(k) market. GAO identified 69 crypto asset investment options available to 401(k) participants. Participants may have multiple ways to access these options. Some may have access through their 401(k) plans' core investment options. Participants may also have access to crypto assets outside these core options, through arrangements like self-directed brokerage windows. GAO's analysis of investment returns indicates crypto assets have uniquely high volatility—a measure of their riskiness to participants—and their returns can come with considerable risk. GAO's simulation found a high allocation (20 percent) to bitcoin, the crypto asset with the longest price history, can lead to higher volatility than smaller allocations (1 and 5 percent). Further, GAO's interviews with researchers and firms that develop crypto asset investment options indicate there is no standard approach for projecting the potential future returns of crypto assets. DOL guidance states that 401(k) fiduciary responsibility does not change when crypto assets are offered as investment options. ERISA requires fiduciaries to be prudent in selecting and monitoring their 401(k) plans' core investment options, including any crypto asset investment options. DOL officials told GAO they generally had not required fiduciaries to select and monitor all options offered outside this core—for example, through self-directed brokerage windows—in accordance with ERISA's fiduciary standards. Thus, participants who invest outside their plan's core may have to take primary responsibility for selecting and monitoring crypto asset investment options (see figure). 401(k) Participants May Assume Greater Responsibility When Investing outside Core Investment Options Lack of comprehensive data, along with regulatory uncertainty GAO has previously identified, limits federal oversight of participant investment in crypto assets in 401(k) plans. DOL does not have comprehensive data to identify 401(k) plans that give participants access to crypto assets. For example, the forms 401(k) plan fiduciaries file to meet federal reporting requirements do not identify crypto asset investment options in plans with fewer than 100 participants. Plans with 100 or more participants aggregate self-directed brokerage window investments, hindering DOL's ability to isolate investments in crypto assets. Additionally, federal regulatory gaps GAO identified in June 2023 remain unaddressed. As a result, certain crypto assets continue to trade in markets that do not have investor protections or comprehensive oversight. Why GAO Did This Study Retirement savings in 401(k) plans totaling more than $6.7 trillion in 2022 are a key component of the U.S. retirement system. Since 2022, some investment firms have offered options for participants to invest in crypto assets, raising questions among regulators and some in industry. GAO was asked to review crypto asset investment options in 401(k) plans. This report examines (1) the presence of crypto asset investment options in 401(k) plans, (2) the potential effects of crypto assets on participant savings, (3) how fiduciaries meet ERISA responsibilities when offering crypto assets in 401(k) plans, and (4) the extent of federal oversight of crypto asset investment options in 401(k) plans. GAO reviewed data from firms that serve 401(k) plans, forms filed by 401(k) plans, and relevant federal statutes, regulations, and guidance. GAO conducted 28 interviews with government officials, researchers, and associations of plan fiduciaries, participants, service providers, and crypto asset companies. GAO also performed a simulation analysis to estimate potential retirement savings.

What GAO Found The Internet of Things (IoT) generally refers to the technology and devices that allow for the connection and interaction of “things” throughout such places as buildings, vehicles, and the transportation infrastructure. The National Institute of Standards and Technology (NIST) and the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency have issued guidance for securely procuring IoT. For example, NIST has issued cybersecurity guidance for agencies to use in mitigating risk with the acquisition, procurement, and use of IoT at all stages of a system's life cycle. In 2022 and 2023, the Office of Management and Budget (OMB) also issued guidance for ensuring that 23 civilian agencies covered by the IoT Cybersecurity Improvement Act of 2020 address NIST's guidelines, establish IoT inventories, and process IoT cybersecurity waivers. Many of the 23 civilian agencies have not yet fully addressed OMB's IoT requirements on inventories and waivers. Of these 23 agencies: Three stated that they would not complete their inventories by the OMB-established deadline of September 30, 2024, and stated that they plan to do so in fiscal year 2025; six did not provide time frames; and one stated that it does not intend to establish an inventory because it does not have any IoT. Six agencies reported granting IoT cybersecurity waivers of certain requirements. However, in following up with these six, officials from five of the agencies stated that they should not have reported waivers. Four of the five subsequently corrected their reported efforts. Additionally, one agency corrected its waiver by removing it, and one (the Department of Health and Human Services) has not yet corrected its waiver. In addition, OMB did not verify any of the reported waiver data and reported erroneous information. Office of Management and Budget (OMB) and Agency Implementation of Selected Internet of Things (IoT) Requirements Until OMB and agencies ensure that agencies are meeting OMB's requirements, the agencies will not be effectively positioned to assess risks so that they can impose appropriate security requirements and take other mitigating actions. Why GAO Did This Study Cyber threats to IoT—such as a recent cyberattack on a municipal water system—represent a significant national security challenge. The IoT Cybersecurity Improvement Act of 2020 includes provisions for (1) NIST and OMB to establish guidance for securely procuring IoT, and (2) 23 civilian federal agencies to implement IoT cybersecurity requirements. The act also requires OMB to establish a waiver process for those requirements. The act includes provisions for GAO to report every 2 years on IoT guidance and the waiver process through 2026. This report, the second of three, (1) describes guidance for securely procuring IoT, and (2) evaluates agencies' progress in addressing IoT cybersecurity and waiver requirements. GAO identified federal agencies with cybersecurity or acquisition responsibilities. GAO then described relevant guidance developed by those agencies covering IoT. It also compared agencies' implementation efforts to the act and OMB's requirements for IoT inventories and waiver processes. GAO also interviewed relevant agency officials.

What GAO Found The military departments are to “privilege” health care providers (i.e., review a provider's qualifications and grant permission to deliver specific health care services) for operational settings. Once privileged, providers should have professional performance and competence routinely evaluated. In July 2023, a Department of Defense (DOD) instruction directed the military departments to align their policies for privileging and evaluating providers with other DOD guidance. GAO found that Navy, Air Force, and Army are in varying stages of updating and finalizing their policies to align with the July 2023 instruction; however, none have yet issued new policies. Navy and Air Force each have draft policies and are working to finalize and issue them. Navy expects to issue its policy by March 2025; Air Force has not specified a completion date. Army has just begun to update its policy, with no completion date specified. Examples of Operational Settings Include Navy Hospital Ships and Army Field Hospitals GAO obtained information about the processes the military departments have been using for privileging and evaluating providers in operational settings. Both Navy and Air Force officials described processes for reviewing and accepting a provider's existing privileges at a military medical treatment facility for use in operational settings. Navy and Air Force officials also each described regular evaluations of the providers' delivery of care. Army could neither definitively describe its current processes for privileging providers nor a department-wide process for conducting provider evaluations. The July 2023 DOD instruction requires the military departments to have guidance for these processes. Updating their policies to align with current guidance, per the July 2023 instruction, would help each department better manage clinical quality in operational settings. Ensuring providers are properly qualified and continue to perform in a professional, competent manner are critical aspects of meeting the health care needs of U.S. service members. Why GAO Did This Study DOD health care providers deliver care in settings where military operations take place. These operational settings include hospital ships, field hospitals, and aircraft carriers. Providers go to these settings—usually from DOD's military medical treatment facilities—to provide critical health care services, such as trauma care for service members with battle injuries and civilian care during humanitarian missions. DOD military departments—Navy, Air Force, and Army—are responsible for ensuring providers in operational settings are qualified and competent to provide safe, quality care. This is part of DOD's overall effort to assure clinical quality across the military health system. House Report 117-397 accompanying the National Defense Authorization Act for Fiscal Year 2023 includes a provision for GAO to review how the military departments ensure provider quality in operational settings. GAO examined military departments' progress in updating relevant policies, among other issues. GAO reviewed policy documents and provider records and interviewed officials from the military departments and DOD's Defense Health Agency.

What GAO Found Department of Homeland Security (DHS) law enforcement agencies reported using over 20 types of detection, observation, and monitoring technologies in fiscal year 2023. This includes both technologies the agencies owned or leased, as well as technologies the agencies accessed through third parties such as commercial vendors and other law enforcement agencies. For example, all three selected DHS law enforcement agencies reported that they have agreements to query or view information from third-party automated license plate readers, providing law enforcement personnel with access to a nationwide source of license plate data. The selected DHS agencies also reported using a variety of analytic software, including some based on artificial intelligence (AI), that can enhance the capabilities of their detection, observation, and monitoring technologies. Figure: Examples of Detection, Observation, and Monitoring Technology DHS is developing policies and procedures to address bias risk from technologies that use AI, but it does not have policies or procedures to assess bias risks from the use of all detection, observation, and monitoring technology. DHS law enforcement agencies may seek out advice from DHS's Office for Civil Rights and Civil Liberties (CRCL) on bias issues related to technology use; however, there are no requirements to do so. As a result, CRCL's level of review of detection, observation, and monitoring technologies has varied. By developing policies and procedures to assess and address the risk of bias posed by DHS law enforcement agencies' use of detection, observation, and monitoring technologies, CRCL could help ensure these technologies are not infringing on civil rights and civil liberties by introducing bias. Technology use policies GAO reviewed at U.S. Customs and Border Protection (CBP), U.S. Immigration and Customs Enforcement (ICE), and Secret Service did not always address key privacy protections. DHS conducts privacy impact assessments to provide the public with information on how the agency plans to address key privacy protections. Policies, however, are needed to direct employees in how they are to implement these privacy protections when using a particular technology. By requiring that policies for the use of each technology address key privacy protections, DHS agencies would have better assurance that the privacy protections are being implemented and that technology users are aware of their responsibilities to protect privacy. Why GAO Did This Study Technologies such as automated license plate readers and drones can support federal law enforcement activities. However, the use of these technologies in public spaces—where a warrant is not necessarily required prior to use—has led to concerns about how law enforcement is protecting civil rights, civil liberties, and privacy. GAO was asked to review federal law enforcement's use of detection, observation, and monitoring technologies. This report examines 1) the use of these technologies in public spaces without a warrant by selected DHS law enforcement agencies and 2) the extent to which the agencies have policies to assess the use of technologies for bias and protect privacy. GAO selected CBP, ICE, and the Secret Service within DHS based on various factors, including the large number of law enforcement officers in these agencies. GAO administered a structured questionnaire and reviewed documents, such as technology policies. GAO also interviewed agency officials.

What GAO Found The U.S. Department of Agriculture's (USDA) Farm Service Agency (FSA) is responsible for distributing $3.1 billion in loan debt assistance appropriated under the Inflation Reduction Act of 2022 (IRA) to distressed borrowers with qualifying farm loans. As of April 2024, GAO found that FSA had distributed approximately $2.3 billion to borrowers who were delinquent on their FSA or other qualifying loan. According to FSA officials, about 44 percent of FSA delinquent loans received assistance. Approximately half of the borrowers (52 percent) received $25,000 or less. About half of all assistance distributed went to borrowers in the Plains and South regions—areas where delinquent farm loan amounts were highest. In October 2024, FSA officials said they are using $250 million of the remaining funds to assist about 4,600 borrowers. GAO will continue to track the distribution and use of the funds. Inflation Reduction Act Section 22006 Assistance Recipients by Region, as of April 29, 2024 According to agency officials, FSA is taking steps to measure the impact of IRA loan debt assistance. For example, FSA is tracking whether such assistance has resulted in improvements in borrowers' delinquency rates, the number of loan accounts in bankruptcy, and foreclosure rates. FSA expects to complete its performance monitoring and report results later this year. Why GAO Did This Study Federal farm loan programs serve as a safety net for agricultural producers. The programs provide an important source of credit when farmers and ranchers are otherwise unable to secure a commercial loan. Disruptions from the COVID-19 pandemic and climate-related weather events put agricultural producers at risk of falling behind on loan payments and potentially losing their farms and ranches. Congress appropriated $3.1 billion to the Secretary of Agriculture for loan debt assistance under section 22006 of IRA. FSA's financial assistance pays off delinquent loan amounts and covers the next payment with no additional debt incurred by the borrower. The IRA also provides that GAO support oversight of the distribution and use of funds appropriated under the act. This report describes the status of FSA's distribution of loan debt assistance to qualifying borrowers under IRA Section 22006 from October 2022 through April 2024. GAO analyzed FSA data as of April 29, 2024 (the most recent data available), including borrowers’ loan status, amounts of financial assistance, and the location of their farm or ranch, or where their loans were serviced. GAO reviewed federal laws, program eligibility requirements, and FSA handbooks on farm loans. GAO also interviewed FSA officials to discuss actions the agency is taking to implement IRA Section 22006. For more information, contact Steve Morris at (202) 512-3841 or Morriss@gao.gov.

What GAO Found Amphibious warfare ships are critical for Marine Corps missions, but the Navy has struggled to ensure they are available for operations and training. In some cases, ships in the amphibious fleet have not been available for years at a time. The Navy and Marine Corps are working to agree on a ship availability goal but have yet to complete a metrics-based analysis to support such a goal. Until the Navy completes this analysis, it risks jeopardizing its ability to align amphibious ship schedules with the Marine Corps units that deploy on them. As of March 2024, half of the amphibious fleet is in poor condition and these ships are not on track to meet their expected service lives. Navy Assessment of the Condition of the Amphibious Warfare Fleet GAO identified factors that contributed to the fleet's poor condition and reduced its availability for Marine Corps' operations and training. For example, the Navy faces challenges with spare parts, reliability of ship systems, and canceled maintenance. GAO found that the Navy canceled maintenance for aging amphibious ships it planned to divest before completing the required waiver process. Navy officials said they no longer plan to cancel maintenance prior to completing the process, but the Navy has yet to update its maintenance policy to reflect that decision. Updating the policy would help ensure ships the Navy plans to divest do not miss maintenance if Congress restricts funds for divestment. The Navy is likely to face difficulties meeting a statutory requirement to have at least 31 amphibious ships in the future given the age of many ships and other factors. The Navy is considering extending the service life for some ships to meet the 31-ship requirement. However, these efforts will require up to $1 billion per ship, according to the Navy, with six ships needing service life extensions in the next 3 decades amid rising ship construction costs and maintenance backlogs. Why GAO Did This Study The Navy maintains a fleet of large amphibious warfare ships that are used primarily for Marine Corps missions, such as amphibious assault and humanitarian response. There are currently 32 amphibious warfare ships in this fleet, one more than the minimum the Navy is statutorily required to maintain. House Report 117-397 includes a provision for GAO to review plans for the amphibious warfare fleet. GAO's report examines the extent to which (1) the Navy and Marine Corps are addressing challenges with fleet availability; (2) the Navy is addressing maintenance challenges; and (3) the Navy is positioned to meet its fleet size requirements into the future. GAO reviewed Navy and Marine Corps documentation and interviewed officials responsible for overseeing fleet availability, maintenance, and new ship acquisition plans. GAO also visited six ships and spoke with officers and crew about maintenance issues.

Tribal applicants experience systemic barriers to access federal programs, funding, and services. For example, federal cost-share requirements can create obstacles for Tribes with limited financial resources to match funds. GAO has made recommendations to several agencies to help alleviate these barriers. The Big Picture The Office of Management and Budget annually reports the amount of federal funding by fiscal year that benefits or relates to American Indians and Alaska Natives (AI/AN). We have found that when Tribes compete with others for funding, they may receive a small portion of the total amount. We and others have previously found that limited access to federal funds and services contribute to long-standing disparities between AI/AN individuals and other Americans. For decades, we have identified challenges Tribes face in navigating federal programs and accessing federal funding. Although agencies have made progress in some areas by addressing our recommendations, systemic barriers remain across a variety of federal efforts. Additionally, in 2023, Executive Order 14112 recognized the undue burden placed on Tribes when accessing federal funds. The Executive Order directed agencies to proactively and systematically identify and address these burdens, including their root causes, where possible. It also acknowledged that such actions would be consistent with the federal government's commitment to fulfilling its trust responsibility. This Snapshot summarizes our recent findings about barriers to access and ways some agencies have addressed them, often in response to our recommendations. What GAO’s Work Shows We identified the following challenges Tribes may face when accessing federal agencies' programs and services: capacity limitations, financial constraints, limited agency communication, and remoteness of Tribes and federal agencies' limited awareness of tribal traditions and cultures. These obstacles in combination with common program characteristics can create additional barriers for Tribes seeking federal assistance. Managing administrative burdens such as application and reporting requirements can strain Tribes' staffing capacity. For instance, Tribes may not have program staff or may require additional technical assistance. We also found that Tribes can experience challenges navigating applications for multiple federal programs; and smaller Tribes can have limited capacity such as fewer staff to fill out program applications, especially for competitive grants, which has limited their access to federal assistance. To address this barrier, some agencies have provided financial assistance to help Tribes build capacity to the extent allowed by law; and minimized administrative burdens by streamlining applications; adopting compatible templates, policies, and procedures across agencies; and using self-determination contracts, self-governance compacts, or other flexible program delivery mechanisms, whenever possible. Financial constraints may hinder access to federal programs. For example, tribal governments generally do not have access to the traditional taxes that state and local governments can levy and therefore must rely on a combination of federal funds and economic development initiatives to support their operations. We have also reported that federal programs' cost-share requirements can be an obstacle for Tribes that do not have the resources to provide matching funds; and additional financial burdens for grant recipients—such as upfront costs before reimbursement—could be impossible for some Tribes to pay. Also, federal processing delays, such as those during the COVID-19 pandemic, have resulted in increased costs and short spending time frames for Tribes. To address this barrier, we have found that some agencies have lowered cost-share requirements to the extent allowed by law and better supported tribal economic development and planning by improving federal processes to ensure timely service delivery; and Congress has lowered cost-share requirements and established longer spending time frames to use federal relief funds. Limited agency communication with Tribes, such as a lack of or ineffective consultations, can contribute to delayed payments to Tribes. Some Tribes have also experienced agency officials' limited knowledge of historical context, combined with a lack of in-depth training on tribal consultations, which can result in agency officials reacting defensively and hinder effective consultations; delays or limited agency outreach on relevant information, including grant opportunities, which can impede Tribes' ability to act effectively; and a lack of constructive feedback from federal agencies on grant applications, which can delay or hinder Tribes' decisionmaking in pursuing other funding options. To address this barrier, some agencies have provided training to their staff on effective government-to-government consultation practices, such as collaborative agenda setting, understanding historical context and key concepts such as treaty rights; improved outreach efforts to increase access to information, such as funding opportunities and technical assistance on applications; and provided constructive feedback to tribal applicants in a timely manner to inform Tribes' decision-making and planning efforts. The remote locations of some Tribes may pose challenges due to limited infrastructure and hinder access to federal services. Additionally, agencies sometimes have a limited understanding of Tribes' traditional practices and may not consider Indigenous ecological knowledge and stewardship practices. To address this barrier, some agencies have incorporated consideration of infrastructure barriers, as well as traditional ecological knowledge and stewardship practices in federal program design and administration to the extent allowed by law; and increased regional outreach to Tribes and built relationships to improve agencies' ability to work with Tribes and respect tribal approaches. For more information, contact Anna Maria Ortiz at (202) 512-3841, or OrtizA@gao.gov.

What GAO Found In October 2022, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a new rule to control the export of advanced semiconductors and related manufacturing equipment. Advanced semiconductors can be used for artificial intelligence, including in medical diagnosis and for military purposes, such as modeling nuclear explosions. Engineer Holding a Semiconductor The stated goal of BIS’s advanced semiconductors rule was to address U.S. national security and foreign policy interest and to counter the People’s Republic of China’s access to advanced computing to modernize its military, including nuclear weapons development, advanced intelligence collection and analysis, and surveillance. BIS published the rule as an “interim final” rule, which enabled enforcement of the rule before the end of a public comment period. BIS took this approach to avoid stockpiling of controlled items and to address other national security or foreign policy concerns. BIS issued two additional rules in 2023 that revised the controls of the 2022 rule. BIS also updated the technical specifications of the items controlled by these three rules and provided information requested by public commenters, such as on refined definitions and public briefings. After October 2023, BIS conducted reviews of its export controls, including reviewing public comments on existing rules. As a result of these reviews, BIS issued an April 2024 update to the rules. In September, BIS updated the Commerce Control List, among other changes. To develop, implement, and enforce compliance with the rules, BIS works with offices from six other U.S. agencies: the Departments of Defense, Energy, Homeland Security, Justice, State, and the Treasury. The roles of these agencies include providing technical or scientific expertise to Commerce, reviewing proposed rules, reviewing export license applications, conducting outreach to private sector and foreign partner governments to improve compliance with the rules, verifying the validity of licenses at the border, and investigating and prosecuting violations of the rules, among others. The private sector has taken steps to comply with the new rules, according to GAO’s analysis of public comments, BIS documents, and other sources, as well as a number of interviews with private sector representatives. Compliance steps that companies took include updating and maintaining compliance programs and self-reporting potential violations. GAO’s analysis identified 10 reported compliance challenges, including lack of clarity of the rules. For example, specific Export Control Classification Numbers and what they encompass were unclear, leading some companies to ask whether an appliance would be considered a “computer” for the purposes of the export control rules. BIS reported taking steps to address some of these challenges, including by soliciting feedback, refining definitions, and engaging with the private sector. For instance, BIS conducted briefings, seminars, and other outreach in the U.S. and overseas to increase public understanding of the export control rules and to collect industry feedback on ways to improve the rules’ clarity. BIS officials also told GAO that BIS plans to review the rules and publish periodic updates as needed, to match advancing technology and to improve the clarity of the rules, among other reasons. Why GAO Did This Study GAO was asked to report on BIS’s development and implementation of three advanced semiconductor and related manufacturing equipment export control rules promulgated in 2022 and 2023, as well as what is known about private sector compliance efforts. This report provides information on steps BIS has taken and plans to take, and on the roles of other U.S. agencies in developing, implementing, and enforcing the rules and in engaging with foreign partners. It also provides information on compliance steps companies have taken and challenges they have encountered, based on private sector public comments on the rules, as well as GAO interviews with Commerce and representatives from four advanced semiconductor industry companies, and two industry associations. GAO selected the companies that fulfilled specific criteria, such as whether they had developed, manufactured, or sold a product targeted by the rules, or submitted a public comment to the rules. GAO selected external counsel and industry associations based on a number of criteria, such as whether they had submitted a public comment on the rules or represented multiple companies in the U.S. semiconductor industry. In addition, the report describes steps Commerce has taken to address these challenges. A forthcoming GAO report will examine the steps BIS has taken to enforce the export control rules on advanced semiconductors and related manufacturing equipment, as well as BIS efforts to engage with key foreign partners regarding the rules. An additional forthcoming GAO report will examine BIS’s processes and resources to control exports more broadly. For more information, contact Nagla’a El-Hodiri at (202) 512-7279 or elhodirin@gao.gov.