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Appendix 1 - Letter of Request (LOR) Guide

The action that formally begins the FMS process is the Letter of Request, or "LOR". The LOR is a document generated by a purchasing government and submitted to the USG. It can be either a request for the purchase of defense articles or services, or it can request rough-estimate Price and Availability (P&A) data to help your government decide whether or not to pursue a purchase further. LOR's can be submitted through formal correspondence, as a request for proposal (RFP's), or via discussions, e-mail, letters, or messages. In replying to an LOR, the Implementing Agency will prepare either an LOA for an FMS case, or P&A data, whichever you requested.

Format

There is no set format for an LOR. It can be provided to the USG in most any format so long as we know it has been transmitted by an official representative of your government and it contains at least the minimum required information.

Submission

SAMM Section C5.1.3. describes the LOR channels of submission procedures. DSCA and the applicable Implementing Agency should be action addressees on all LORs, with copies provided to the SCO and the Regional Combatant Command (CENTCOM, PACOM, SOUTHCOM, EUCOM, AFRICOM, or NORTHCOM). Requests for Significant Military Equipment (SME) and Major Defense Equipment (MDE) should also be provided to the Department of State Political-Military Affairs (PM) Bureau. See SAMM Section C5.1.3. for additional information on SME and MDE requests. If you are not sure whether the items you are requesting are SME, MDE, or neither, you can ask the U.S. Security Cooperation Organization at the U.S. embassy in your country, the MILDEP/Implementing Agency, or DSCA for assistance.

Minimum Information Requirements

There are many things that should be considered and included when developing an LOR to purchase a defense article or service from the DoD. The detail of the LOR will depend upon the type of case - whether blanket, CLSSA, or defined - and the sophistication of the weapon system requested.

SAMM Section C5.1.2. lists seven LOR information requirements. They are:

  1. Identify the desired defense articles and/or services in sufficient detail for the United States Government (USG) to prepare an accurate cost estimate;

  2. Indicate whether Price and Availability (P&A) data, a Letter of Offer and Acceptance (LOA), or an LOA Amendment or LOA Modification is desired;

  3. If for a blanket order LOA (SAMM Section C5.4.3.2.) or CLSSA (SAMM Section C5.4.3.3.), include the desired materiel and services value or the desired total case value;

  4. Indicate the proposed method of financing (your own national funds, U.S. Foreign Military Financing (FMF), etc.)

  5. Identify any anticipated involvement in the requested case by anyone not a duly appointed officer or government civilian employee of the requesting government - i.e., a "third party" - so that the receiving Military Department (MILDEP)/Implementing Agency (IA) may initiate appropriate reviews and approval requests;

  6. Contain the name and address of the originator and a traceable reference number, such as a letter serial number; and

  7. Identify the intended/anticipated recipient unit for any defense articles and/or services to be purchased with Foreign Military Financing (FMF) funds, recognizing such unit designations may change as the case is implemented and equipment is delivered to the host nation. The SCO will update the recipient unit designation at the time of LOA signature, if applicable, by alerting the IA who will input updated information into DSAMS.

Some LORs, such as Blanket Order or CLSSA cases or follow-on LORs to change already-existing LOAs, are often very simple, and so completing the first information requirement and providing “sufficient detail” is relatively quick and easy. LOAs for these FMS cases reflect categories of items (normally to support one or more end items) with no itemized list or quantities. For instance, your LOR may be for a Blanket Order FMS case or CLSSA to support C-130 and F-16 spare parts with a total FMS case value of $1,000,000; or it might simply request a “Blanket Order FMS case for training”.

Defined Order cases range from relatively uncomplicated - such as buying standard end-items like cargo trucks, to very complex - such as major aircraft purchases. In the former instance, an FMS customer would need to specify the number and type of trucks and the desired configuration, and then might need to provide some additional detail on things like paint type and color scheme, spare and repair parts, tool sets, diagnostic and calibration equipment, extreme cold weather kits, and driver and maintenance training. For the more complex requests, the USG will need significantly more information to respond quickly with an offer that fully meets your country’s needs.

Complex FMS Purchases

An Implementing Agency is limited in what it can do with a less-than-complete LOR. So, for more complex purchases, you should include as much detail as possible in the LOR. If at all possible, consult with the appropriate Implementing Agency before submitting the LOR so that it contains all of the necessary information when submitted. Some MILDEPS have useful tools you can use when drafting your LOR:

  • Army: The U.S. Army Security Assistance Command (USASAC) posts LOR checklists for many of its most commonly requested systems at the International Customers tab at the USASAC Website.
  • Air Force: The U.S. Air Force Security Assistance Center (AFSAC) also posts LOR checklists for its commonly requested systems at the “Letter of Request Preparation” tab under “Application Links” in the toolbar on the left-hand side of the AFSAC webpage. On the same webpage, you can request access to AFSAC’s Automated LOR tool. Click on the “Letter of Request Submission” tab under “Application Links” in the toolbar on the left side of the AFSAC Webpage and then click on “LOR Automated Tool”. To use the Automated LOR tool, you must have (or establish) a user account. To establish a new user account for the U.S. Air Force Automated LOR tool, follow the instructions listed on the site.
  • Navy: The U.S. Navy International Programs Office (Navy IPO) is in the process of adopting an Automated LOR tool. Until such time as the Navy Automated LOR tool is active, you can contact the Navy IPO or the appropriate Navy Systems Command (e.g. Navy Sea Systems (NAVSEA) Command, or Navy Air Systems (NAVAIR) Command) to discuss the LOR you are drafting.

In instances in which your country submits an LOR but is not familiar enough with the particular U.S. weapon system to be able to include adequate detail, the Implementing Agency will contact you to begin discussing the details needed to make the LOR “complete” - i.e. something the Implementing Agency can use to offer you a well thought-out program. These discussions might be accomplished via e-mail or telephone - or they may require face-to-face meetings at which the Implementing Agency provides you and your subject matter experts with enough information about the weapon system, and the training and support requirements that come with it, so that your government can clarify its needs.

In some instances, to fully understand your country’s requirements and to ensure the weapon system’s configuration and support package are properly matched to your situation, the Implementing Agency may need to do more detailed assessments and/or site surveys. If this sort of extensive technical assistance is needed, the USG may request that your country submit a LOR for a technical assistance case to fund the additional work.

The dialogue between you and the Implementing Agency will ensure your country gets the most accurate LOA possible and, ultimately, the right equipment for your country’s needs. However, you should understand that, if only initiated after LOR submission, it could increase the time between when your country’s LOR was submitted and the USG response in the form of an LOA. The Implementing Agency can proceed with incomplete information if necessary, but doing so increases the risk the LOA will not adequately reflect your country’s needs and have to be re-done (we call it “restating the LOA”).

Building the LOR - General Guidance

When developing an LOA response to your country’s LOR, the USG takes a “systems” approach - generally referred to as the “Total Package Approach” (See SAMM Section C4.3.2.). U.S. experts, with years of experience behind them, design a program that takes everything into consideration - your operational requirements, your affordability targets, your delivery schedule, and all of the related logistics, maintenance, transportation, facilities, and training considerations.

While not required to provide any more information than the minimum described earlier, you should consider addressing the following when drafting an LOR for a major weapon system:

Basic Identification Data

  • Identify the type of response desired. The LOR must be specific as to what is expected from the implementing agency in response to the LOR. The LOR may request pricing and availability (P&A) data for planning purposes; this is not an offer to sell. A request for a Letter of Offer and Acceptance (LOA) will result in the IA providing an offer to sell defense articles and services. An amendment to an existing case which will result in the change to an implemented LOA may also be requested. If a lease of a defense article is desired, indicate this in the LOR to include the lease period. Be explicit about which product is requested in response to the LOR. For additional information click on the link to SAMM Section C5.2.

  • If your country previously requested and received P&A information and now you want to ask for an LOA, your LOR should reference the FMS case identifier provided with the P&A. For example: “We request an LOA for items as defined in Price and Availability document BN- D-AAA provided by the U.S. Air Force letter number 11-AA on January 16, 2013.”

  • If requesting a lease, you must provide information about where the items will be used or based during the lease period and the duration of the requested lease. The U.S. response to a lease request is somewhat different than an LOA (See example in SAMM Figure C11.F6.). You will need to request a separate LOA (FMS case) or group of FMS cases to cover support costs for the items being leased, or you may specify in the lease LOR what existing FMS case will be used to cover support costs (spare parts, repair services, training, etc.). See more information on leases at SAMM Section C11.6.

  • Specify who and what organization within your country is submitting the LOR (Army, Navy, Air Force, or other agency). Be as specific as possible, to include providing a name, phone number, mailing address and e-mail address. This is the person the Implementing Agency will contact if additional information is required.

  • If any preliminary meetings with the Implementing Agency have taken place, you should include notes from those meetings with the LOR. If pricing was negotiated with a company before submitting the LOR, this information should be included in the LOR. If a price is negotiated after the LOR is submitted but prior to the USG obtaining the pricing for the items these negotiated prices and the name of the company should be provided to the IA so the price can be included in the final LOA.

  • Identify any international competitions/solicitations related to the purchase, if any. The USG can respond to an international solicitation for defense equipment or services with an LOA. If your country has issued an international solicitation, request for information (RFI), or request for procurement (RFP), note this in the LOR and include copies of any documents so that we can ensure you receive a comprehensive response that meets all of the requirements specified in the solicitation, RFI, or RFP. More information on FMS and international competitions can be found at SAMM Section C4.3.1.

  • Are you currently involved in commercial negotiations with potential U.S. suppliers/companies? As a matter of general policy, the USG does not provide FMS data if the purchasing country is involved in ongoing negotiations with a U.S. contractor for the same item (see SAMM Section C4.3.7.)

  • Normally, the USG provides a date 60 days for you to review an LOA or LOA Amendment. We call this the Offer Expiration Date (OED) If, due to your government’s internal structure or process, you need more than 60 days to review the document, you should include a comment to that effect in the LOR. Similarly, if you must have the LOA submitted to you by a specific date (perhaps to conform to your government’s budgetary cycle), be sure to include that information also. Costs, delivery schedules, and other critical events are estimated based on your country accepting the LOA by the specified OED.

Capability needs

  • Describe the type of equipment desired. Be as specific as possible. If you don’t know or are not sure what you need, describe the operational/strategic requirement you are trying to meet so that the U.S. Implementing Agency can offer recommendations.

  • Number of systems desired

  • Configuration desired. Many end items have different options in both standard and non-standard configurations. For example, a truck may have several options to choose from; two or four wheel drive, standard or automatic transmission, with or without air conditioning, with or without gun mount, with or without ambulance litter fixtures, and others. These may all be standard options, but you must choose which configuration is needed. There may be other options available that are not part of the standard U.S. configuration. Standard versions are usually less expensive, easier to support, and easier to upgrade or modify.

  • Where you expect to base those systems and where you expect their operational areas will be.

  • Interoperability requirements. What other existing national systems must the items you are purchasing be interoperable with? Do you wish your systems to be interoperable with the United States or with another nation?

  • The concept of operation and operational tempo for the equipment (how will you employ them, how often will they be used, how long will the missions be, and under what sorts of environmental conditions?)

  • The operational or strategic effect your country would like to achieve with this equipment

  • Reliability, maintainability, and availability requirements. This information will influence many things, including the recommended number of systems and accompanying training and support package.

  • Required delivery dates for capability (describe when and how many you need for initial training, for an Initial Operational Capability (IOC), and for Full Operational Capability (FOC). This information can affect the production schedule and cost of the total package. If no specific timeline is given, the implementing agency will select the option with the lowest cost and most convenient delivery timeline when writing the LOA.

Affordability

  • What is your country’s budget for this program?

  • What is the funding source (your country’s national funds, U.S. Foreign Military Financing (FMF), an existing Memorandum of Agreement (MOA) or Memorandum of Understanding (MOU) with the United States)?

  • Are there any special payment requirements you have? Information on the required initial deposit and future payment schedule is included with the LOA the U.S. sends you. The initial deposit is required at the time your country’s approval authority accepts the case. If your country’s budgeting and approval process make it necessary, you can indicate in the LOR a maximum initial deposit and the appropriate timing for the payment.

  • Payment schedules normally require quarterly payments to DFAS in advance of estimated deliveries or anticipated expenditures, such as those for progress payments to the contractor. If you have a specific budget that must be adhered to, it may be feasible to modify the payment schedule - as long as it still meets the financial requirements of the FMS case.

  • The FMS system does allow for some pricing waivers. Two common examples are: non-recurring costs associated with the purchase of Major Defense Equipment (MDE) and waiver of the contract administrative surcharge. See SAMM Section C9.6. for additional information on waivers and discuss them with the Implementing Agency to determine whether your country is eligible. If pricing waivers are not requested in the LOR, LOA pricing will include these costs if applicable.

Acquisition

  • Will this capability be acquired entirely via FMS or by a combination of FMS and DCS?

  • Are there any special considerations related to the acquisition approach for this capability? Is there anything about the capability needed, the timeline it is needed within, and its affordability that will require a special approach, such as incremental acquisition or a lease as a gap-filler?

  • Noncompetitive procurement. To the greatest extent possible, the USG prefers to procure items under full and open competition. However, if your country already has a specific type of equipment made by a certain manufacturer, you may wish to procure future items from the same manufacturer to ensure commonality of spare parts. Or your country may, for other reasons, decided to use a particular U.S. manufacturer, or limit consideration to a certain group of contractors. We call these “Sole Source” requests and they must be submitted to us in writing - preferably in the LOR since the decision to procure Sole Source may significantly impact the cost and schedule we provide in the LOA. The sole source request must comply with the criteria in SAMM Section C6.3.4., and should be submitted with the LOR.

Logistics

  • What, if any, are your existing logistics capabilities related to the proposed sale (facilities, support equipment, trained personnel, etc.).

  • Maintenance concept. Do you plan to conduct maintenance within your country at the organizational, intermediate, and depot level? The answer has important implications for the spare parts and support package that comes with the case. Will you use your own maintenance and supply resources or do you plan to use U.S. contracted resources or those of another country?

  • Length of spares/repairs support. In your LOR, specify the number of years/months you would like to receive spare parts support for the major item you are purchasing. The Implementing Agency will assure that at least one year, and usually two years, of spare parts are included in the LOA.

  • Support equipment. The Implementing Agency will include all of the necessary support equipment to test, repair, and maintain major end items you requested. If your country already has the necessary support equipment, then include that information in the LOR.

  • Country requested material handling equipment (MHE)

  • Facilities (construction). Will your country need additional facilities (or to modify existing facilities) to house, support, and maintain the new equipment? Do current facilities meet the expected operational and support requirements? For example, is the runway at the air base where new aircraft will be delivered long enough and strong enough for them? Also, if your country is obligated to provide a certain level of security for any sensitive U.S. items purchased - such as night vision devices - it may be necessary for you to construct or upgrade storage facilities.

Country Data Requirements

  • Does your country require any additional data beyond that needed for standard operation and maintenance? If so, you should specify this in your LOR.

  • Publications. The Implementing Agency will ensure the LOA includes publications needed for the end items and for the support systems in the LOA. These publications will be provided in English. These are considered standard publications. Non-standard publications, such as those that are specially tailored or translated into another language, should be requested in the LOR.

Training

  • Will your country require training to operate or support the end items?

  • Do you prefer to conduct training in your country or in the United States?

  • Do you have any preferences or restrictions on whether the training is provided by the U.S. Department of Defense, by contractors, or a combination of the two?

  • Do you already have training devices (such as simulators)?

  • English Language Training (ELT). Most U.S.-provided training is conducted in English. Therefore, the personnel your country sends to attend training will need a certain level of English comprehension before they can begin. If needed, the U.S. can provide English language training in your country or at the Defense Language Institute’s English Language Training Center in Texas. If ELT is a consideration for your purchase, provide a description of your current capabilities, your needs, and preferences with regard to ELT delivery.

Transportation

  • Transportation of LOA material can be accomplished by your government, by a freight forwarder your government employs, or by the USG using the Defense Transportation System (DTS). Your LOR should include delivery preferences for the various types of material (major items, spares, munitions, publications), as well as any classified or hazardous materials. If you will use a freight forwarder, the LOR should identify the company and the type of freight it is cleared to handle. The Defense Institute of Security Cooperation Studies (DISCS - formerly DISAM) publishes a Freight Forwarder Selection Guide that can be found at the Publications tab of the DISCS website.

  • Staging Services. If requested in the LOR, the USG can arrange for consolidation of spare/repair parts or support equipment at a staging area for your pickup or for other dedicated transport to your country. Otherwise, the most common approach is for the USG to ship these items to your freight forwarder where they are consolidated pending onward shipment to your country.

  • Insurance. Your country must self-insure FMS shipments or obtain commercial insurance without any right of claim against the United States. This includes for returns. In exceptional situations, if requested in the LOR, an Implementing Agency may obtain insurance and the cost of the insurance will be billed as a separate line item on the Letter of Offer and Acceptance.

  • SAMM Chapter 7 explains FMS transportation in detail.

Program Development and Management

  • Do you anticipate the need for U.S. assistance with defining your requirements and/or conducting a site survey (note: depending upon the circumstances, the Implementing Agency may itself later recommend joint requirements definition meetings and/or site surveys in order to complete the LOA)?

  • Liaison Office. If your country would like to establish a Foreign Liaison Office in the United States (at the manufacturing plant or other key location), or have the USG establish a U.S. Field Office in your country to assist with program management, you should specify this in the LOR.

  • Special logistical or financial reports. Special reports are those reports not available to the customer through the Security Cooperation Information Portal (SCIP). Examples are the LOA’s supporting Manpower and Travel Data Worksheet (MTDS), the Defense Security Assistance Management System’s (DSAMS’s) Current Implemented Case Report, and LOA Line Item Pricing Calculations. Special reports provided by the Implementing Agency are above the Standard Level of Service so may incur additional costs. SAMM Table C9.T2. provides DSCA guidelines on Standard Level of Service.

Other Requests

  • Warranties. The Implementing Agency obtains the same warranties for FMS as it does for itself at no additional cost (SAMM Section C6.3.8.). These warranties are exercised within the Supply Discrepancy Report (SDR) process and do not require any special notation by you in the LOR. However, if your country requires any additional performance warranties, you should indicate so in the LOR. The Implementing Agency will negotiate these warranties with the contractor and will include any additional costs in the LOA.

  • Special Contract Terms. Identify any special contract terms your country may require. Depending upon the situation and the type of contract being used, the USG may or may not be able to accommodate a given request, but identifying the requirement early, in the LOR, will provide the U.S. program manager and contracting officer the maximum amount of time to determine whether your country’s request is feasible and, if not, to identify potential alternatives for meeting your needs.

  • Specify any desire for enhanced visibility and/or participation in the LOA development process. You should be aware that increased participation in the LOA development could slow the process, lengthen the time it takes the USG to offer your country an LOA, and increase costs.

  • Offsets. The DoD may not enter into or commit U.S. firms to any offset agreement. Responsibility for negotiating offset arrangements and satisfying all related commitments resides with the U.S. firm involved. The USG will not include offset arrangements in an LOA. However, the U.S. contractor may request offset costs be included as part of the line item(s) unit cost in P&A data and in the estimated prices quoted in an LOA. You can learn more about offsets at SAMM Section C3.9.1.