What is the Foreign Military Sales program?
The United States Department of Defense's Foreign Military Sales ( FMS) program facilitates sales of U.S. arms, defense equipment, defense services, and military training to foreign governments.
How to price a foreign military sale to a foreign customer?
If the contractor has made sales of the item required for the foreign military sale to foreign customers under comparable conditions, including quantity and delivery, price the FMS contract in accordance with FAR Part 15. 225.7303-2 Cost of doing business with a foreign government or an international organization.
How does the US sell defense articles and services to foreign governments?
(a) The U.S. Government sells defense articles and services to foreign governments or international organizations through FMS agreements. The agreement is documented in a Letter of Offer and Acceptance (LOA) (see the Defense Security Cooperation Agency (DSCA) Security Assistance Management Manual (DSCA 5105.38-M)).
How does the United States decide which countries can purchase military equipment?
For this reason, the United States takes into account political, military, economic, arms control, and human rights conditions in determining the provision of military equipment and the licensing of direct commercial sales to any country.
How long does foreign military sales documentation?
The system shall retain Foreign Military Sales (FMS) documents for a period of 10 years from the date of final case closure. Exceptions, such as records associated with ongoing litigation proceedings and country suspensions, may be issued by the Defense Security Cooperation Agency (DSCA).
Who does DSCA report to?
The Director of the Defense Security Cooperation Agency (DSCA) reports to the USD(P) and administers and supervises the execution of all security cooperation programs for DoD. DSCA assigns Country Program Directors (CPDs) responsibility for all security cooperation activities for a country (or several countries).
Do you need an export license for FMS?
For FMS, DSCA and the Department of State (DOS) review and initiate new FMS cases, based on national security and foreign policy priorities. The U.S. Government is exporting on behalf of the U.S. vendor under the authority of the LOA, so the items do not require an export license.
What is the difference between FMS and FMF?
FMS refers to sales in w hich the U.S. government acts as the contractual intermediary betw een the contractor and the foreign government. FMF refers to financing extended by the U.S. government to certain allied countries to procure defense articles or services through either FMS or DCC transactions.
How does foreign military sales work?
Under FMS, the U.S. Government uses DoD's acquisition system to procure defense articles and services on behalf of its partners. Eligible countries may purchase defense articles and services with their own funds or with funds provided through U.S. Government-sponsored assistance programs.
Is DSCA part of DoD?
The Defense Security Cooperation Agency (DSCA), under the Department of Defense (DoD), leads, directs and manages security cooperation programs and resources to sup- port national security objectives that: build relationships which promote U.S. interests, build allied and partner capacities for self- defense and ...
What is the FMS process?
The FMS sales process begins when a country submits a formal Letter of Request (LOR). Ideally, this includes both a desired military capability, and a rough estimate of what the partner is able to spend. Sales are approved following U.S. government review and, when required, after Congressional notification.
Can defense contractors sell to other countries?
Chapter 39). Section 22 of the Arms Export Control Act (22 U.S.C. 2762) authorizes DoD to enter into contracts for resale to foreign countries or international organizations.
What is the difference between EAR and ITAR?
Here's a quick breakdown of these two concepts: International Traffic In Arms (ITAR): Regulates the sale, distribution, and manufacturing of defense-related items. The Export Administration Regulations (EAR): Regulates dual-use items not covered by ITAR, but still applies to some defense-related items.
What is Foreign Military Financing Program?
Foreign Military Financing (FMF) is a critical foreign policy tool for promoting U.S. interests around the world by ensuring that coalition partners and friendly foreign governments are equipped and trained to work toward common security goals and share burdens in joint missions.
What is FMS credit?
FMS Inc is a debt collector reporting a collection account on your credit report. In some cases this means they purchased the debt from the original creditor (i.e. a credit card or loan company).
Which program is funded by US Government Title 10 appropriations and used by DoD and other?
1.1. 2. DoD Appropriations. Congress appropriates funding to DoD for specific BPC programs through the annual DoD Appropriations Act, and in certain cases, through other appropriations acts....SectionTitleC15.6BPC Case Closure5 more rows
What is the DoD role in DSCA?
DoD is prepared to play a key role supporting disaster response, consistent with the NRF. Each FEMA Region has a DCO who works directly with the FCO and is the lead coordinator of DoD support. Additional forms of existing DoD DSCA support include: Immediate Response Authority.
What is the role of the DoD in DSCA operations?
The key difference between the three missions is that DOD is responsible for the federal response to HD; DOD is in support of other federal agencies' HS responsibilities; and DOD conducts DSCA operations in support of another primary agency supporting a state, local, territorial, or tribal response.
Who is the principle approval authority for the activation of the DSCA program?
DSCA is initiated by a request for DOD assistance from civil authorities or is authorized by the President or SecDef.
Who does DCSA work for?
The Defense Counterintelligence and Security Agency (DCSA) performs investigations on individuals working for or on behalf of the Executive Branch of the United States per Executive Order 13467, as amended.
What does DoD do?
DoD provides contracting support, requirements evaluation, logistics support, and works directly with the U.S. supplier. As the exporting party in a Foreign Military Sales case is the United States Government, FMS sales are exempt from the requirement for export licenses.
How long does an EDA lease last?
Each lease agreement must be for a fixed duration not exceeding five years. The President, however, may terminate the lease and require the return of the leased article at any time during the duration of the lease. EDA. Under section 516 of the FAA, the United States may grant transfer or sell EDA to foreign governments.
What is a govwebsite?
A .govwebsite belongs to an official government organization in the United States.
Why are defense transfers important?
At the same time, defense transfers and exports provide significant benefits to the United States, not only in strengthening our partners and partnerships but also in terms of our own military procurement and the health of U.S. defense industrial base.
Is DCS faster than DoD?
defense industry. DCS may at times be faster, and might also prove better for acquiring items not purchased by the U.S. military for its own needs.
Is the FMS process efficient?
While processing times can vary depending on the circumstances of individual proposed sales, the State FMS review process is an efficient one. State reviews and adjudicates FMS sales offers on a daily basis, typically providing its assent in all but a small minority of cases.
Can a partner transfer a defense article?
If a partner who was the original purchaser of a U.S. defense article wishes to transfer – via sale, exchange, or grant –to a third party, the two parties must seek permission from the Department of State for such a transfer, in order to ensure it comports with U.S. foreign policy goals and technology transfer concerns.
What does the word PEACE mean in FMS?
Some U.S. Air Force (USAF) FMS programs are assigned two-word code names beginning with the word PEACE, indicating oversight by USAF headquarters. The second word in these codenames is often chosen to reflect some facet of the customer. Codenames appear in all capital letters.
What is FMS in banking?
FMS is carried out with countries that are authorized to participate and is subject to approval based on the mechanism to procure services, a deposit in a U.S. trust fund or appropriate credit, and approval to fund services.
What is FMS in military?
The United States Department of Defense's Foreign Military Sales ( FMS) program facilitates sales of U.S. arms, defense equipment, defense services, and military training to foreign governments. The purchaser does not deal directly with the defense contractor; instead, the Defense Security Cooperation Agency (DSCA) serves as an intermediary, ...
What is the FMS program?
The Defense Security Cooperation Agency (DSCA) administers the FMS program for the Department of Defense (DoD). Under FMS, the U.S. Government uses DoD’s acquisition system to procure defense articles and services on behalf of its partners. Eligible countries may purchase defense articles and services with their own funds or with funds provided ...
What is FMS in military?
What Is FMS? Foreign Military Sales (FMS) is the U.S. Government’s program for transferring defense articles, services, and training to our international partners and international organizations. The FMS program is funded by administrative charges to foreign purchasers and is operated at no cost to taxpayers.
What is DSCA 5105.38?
The Security Assistance Management Manual (DSCA 5105.38-M) provides DoD-wide guidance on the management and implementation of DoD Security Assistance and Security Cooperation programs over which DSCA has responsibility.
What is a non-recurring cost?
Nonrecurring costs (NCs) are those one-time costs incurred in support of previous research, development, or production of certain major defense equipment (see DoD Directive (DoDD) 2140.2: "Recoupment of Nonrecurring Costs (NCs) on Sales of U.S. Item ). They are "sunk costs," in that the U.S. Government pays them to develop or produce a given defense article or weapons system specifically for the U.S. armed forces.
What is the Arms Export Control Act?
The Arms Export Control Act requires the Department of Defense to recover NCs for certain major defense equipment that is sold through the Foreign Military Sales system. The statute permits those costs to be waived under certain circumstances, such as to standardize equipment with other countries or to avoid a loss of sale.
What is the MDE for North Atlantic Treaty Organization?
For North Atlantic Treaty Organization member countries, South Korea, Australia, Japan, Israel, and New Zealand: major defense equipment (MDE) of $25M or more; any defense articles or services of $100M or more; or design and construction services of $300M or more.
How long is the notification period for North Atlantic Treaty Organization?
For North Atlantic Treaty Organization member countries and organizations, South Korea, Australia, Japan, Israel, and New Zealand there is a 15-day statutory notification period.
What year did GAO analyze nonrecurring cost waivers?
To conduct this work, GAO analyzed DOD data of nonrecurring cost waivers for fiscal years 2012 through 2017, the most recent and complete data, to identify the value of waivers. GAO then reviewed a non-generalizable sample of 24 of these waivers that included a mix of justifications and geographic regions. GAO reviewed relevant DOD policy and interviewed DOD officials about the process to assess these waivers.
What is the Arms Export Control Act?
The Arms Export Control Act, as delegated, authorizes the Defense Security Cooperation Agency (DSCA) within DOD to waive nonrecurring costs under certain circumstances, such as to standardize equipment with allies.
How much has the DOD waived?
However, governments may ask DOD to waive those costs. DOD has granted $16 billion in waivers over the last 6 years to help these sales go through. We found that DOD has prioritized the benefits of making sales over recouping costs, and that it serves U.S. interests to do so.
What does DSCA consider when reviewing waivers?
When reviewing waivers, DSCA considers foreign policy and national security factors, such as interoperability with allies, and economic factors, such as support for the U.S. defense industrial base. Agency officials stated that approving waivers helps ensure sales go through and such broader benefits are realized.
What do foreign governments buy?
Foreign governments buy billions of dollars of defense equipment through the Department of Defense's foreign military sales program. They are required to reimburse DOD for certain research, development, and other one-time costs related to the equipment.
Does DSCA have final approval authority?
DSCA has final approval authority; however, multiple DOD offices must review and provide input on each waiver, with some offices reviewing waivers for the same purpose. Federal standards for internal control call for agencies to allocate resources and assign responsibilities to achieve efficiency and effectiveness.
What does DSCA mean?
DSCA announcements mean that the State Department has decided the potential FMS cases meet its standards, but this does not guarantee the sales will happen in their announced forms. If the U.S. Congress does not object, the foreign customer begins to negotiate on price and quantity, both of which can change during the final negotiations.
How much is the 517 AN/PRC-158 worth?
The NATO alliance’s Communications and Information Agency to buy 517 AN/PRC-158 Manpack UHF SATCOM radio systems, worth an estimated $65 million. Also included in the package would be “crypto fill devices, man-portable ancillaries, vehicular ancillaries, deployed Headquarter ancillaries, power support, and operator and maintenance training,” per the DSCA notice.
How much did Chile buy the SM-2?
Chile was approved to purchase up to 16 Standard Missile-2 (SM-2) Block IIIA missiles, along with support equipment and contractor assistance, with an estimate price tag of $85 million. The anti-air weapons are slated to be used aboard two recently transferred former Adelaide-class frigates to the Chilean Navy.
How much did America sell in weapons in FY20?
America sold $175 billion in weapons abroad in FY20. The total is an increase over the previous year. By: Aaron Mehta. Jordan was approved for an F-16 Air Combat Training Center and related equipment, with an estimated cost of $60 million.
When was the last FMS case approved?
The last FMS cases approved by the State Department came in late December; the Biden team has since announced a pause and review of a number of weapon sales approved by the Trump administration, most notably on weapons purchased by Saudi Arabia and the United Arab Emirates.
Who is Aaron Mehta?
About Aaron Mehta. Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News , covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.
What is the FMS process?
The FMS sales process begins when a country submits a formal Letter of Request (LOR). Ideally, this includes both a desired military capability, and a rough estimate of what the partner is able to spend. Sales are approved following U.S. government review and, when required, after Congressional notification. After the sale is approved, the DSCA issues a Letter of Offer and Acceptance (LOA) specifying the defense articles, training, and support being offered for delivery. Major FMS sales formally notified to Congress are publicly announced on the DSCA website .
Why are defense transfers important?
Properly regulated defense transfers support the U.S. defense industrial base, promote interoperability, and reduce the costs of procurement for our own military. Up to 1 million people across our nation rely on U.S. defense exports for their jobs. These individuals and the companies they work for represent a key part of American entrepreneurship and innovation, as they help to maintain the United States as the world leader in the defense and aerospace sectors and ensure our armed forces sustain their military edge.
What is DCS case?
DCS cases are considered to be proprietary agreements between the foreign governments or companies and U.S. defense contractors; however certain information about cases notified to Congress is published quarterly in the Federal Register , in fulfillment of requirements in the Arms Export Control Act.
What is end use monitoring?
Review and End Use Monitoring are integral components of the process for U.S.-origin defense equipment delivered to any recipient nation. The United States works to ensure U.S.-origin defense equipment is used consistent with the agreement or licenses under which the arms were transferred. The United States is committed to expediting, when possible, defense transfers to U.S. allies and partners, while at the same time seeking to control access to U.S.-origin defense technologies by hostile state and non-state actors. Before U.S.-origin defense articles and services are exported or transferred to foreign entities, those entities must agree to: 1) not retransfer equipment to third parties without first receiving written U.S. government authorization; 2) not dispose of or use the defense article for purposes other than those for which they were furnished without first receiving written U.S. government authorization; and; 3) maintain the security of any item with substantially the same degree of protection afforded by the U.S. government.
What is a LOA in the DSCA?
government review and, when required, after Congressional notification. After the sale is approved, the DSCA issues a Letter of Offer and Acceptance (LOA) specifying the defense articles, training, and support being offered for delivery.
How long does it take to get a FMS?
Processing times for FMS cases vary, but they may take months to define and approve, especially for major defense articles that may require modifications to standard U.S. configurations. Partners often do not take delivery of the full package until years after the LOA is finalized, which is primarily due to the time required to construct sophisticated defense systems such as fighter aircraft.
How long are export licenses valid?
government review, and after congressional notification, as required. Export licenses are valid up to four years. Authorizations for defense services may be for longer timeframes. They may be extended or amended as needed.
What is the DSCA?
C4.3.1.2. Lead Agency for Advocacy. DSCA is the DoD focal point for policy regarding U.S. participation in international competitions. The Department of Commerce (DoC) is the lead USG agency for policy regarding advocacy of U.S. offerings to foreign governments. The Military Departments (MILDEPs) and defense contractor team develop the proposal, which is presented by the appropriate MILDEP as the representative of the U.S. government. Table C4.T4. identifies the lead agency and advocacy for the USG responses.
What is C4.1.1?
C4.1.1. Presidential Determination. The USG may sell, grant, or lease defense articles and services to a country or international organization only if the President makes a determination that the prospective purchaser is eligible based on the criteria summarized in Table C4.T1. Additionally, DoD and other agencies may have statutory authorization to expend appropriated funds on “pseudo” cases, which are usually administered under the FMS system and for which the USG is the purchaser. Pseudo cases are described in detail in Chapter 15.
What are the restrictions on retransfers?
Retransfer Restrictions. All purchasers or grant recipients must agree that they will not transfer title or possession of any defense article or related training or other defense services to any other country without prior consent from the U.S. Department of State (DoS) pursuant to AECA section 3 (a) (2) (22 U.S.C. 2753) and FAA, section 505 (a), (22 U.S.C. 2314). Special care must be taken to ensure that minor repair parts, fuel, or other defense articles that lose their identity when co-mingled, are controlled by the recipient government using procedures that assure all retransfers are properly approved. See Chapter 8 for information on re-transfers.
What are the presidential criteria for FMS?
FMS Eligibility Criteria. 1. The President finds that the furnishing of defense articles and defense services to such country or international organization will strengthen the security of the United States (U.S.) and promote world peace; 2.
What is eligibility determination?
An eligibility determination is not a guarantee that a sale will be made. Sales may be suspended and certain items may not be releasable to the requesting country for policy reasons or requirements of law. Table C4.T3. provides reasons that could cause a country to lose its eligibility status.
What is Chapter 4 of the Military Sales Program?
Chapter 4, Foreign Military Sales Program General Information, describes general legal, regulatory, and policy requirements relating to the foreign military sales program, including eligibility requirements and what may and may not be purchased.
When does the President suspend assistance?
The President shall suspend assistance to the government of any country when the government has nationalized, expropriated, or seized U.S. property, or have imposed discriminatory taxes. Assistance shall also be suspended if a country has initiated steps to repudiate or nullify existing agreements with U.S. citizens or entities without taking proper compensatory action (FAA section 620 (e) (22 U.S.C. 2370)).
