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FMS - What Happens First

Defining Your Country’s Requirements

Your government determines its security objectives based on its own unique situation and priorities. This typically involves conducting an assessment of your strategic and operational needs and capabilities, and then identifying specific items or training your country must acquire to close or narrow the gap between your defense needs and your existing capabilities.

If you would like the U.S. to assist in the conduct of an assessment - or any part of an assessment - you can contact the SCO in your country, the appropriate MILDEP Country Manager, or the DSCA Country Program Director. Any one of them can arrange for you to meet with U.S. experts to discuss requirements, constraints, timelines, and potential options. If needed, we can also arrange more extensive and specialized assistance such as survey teams. These activities can help inform the request your government ultimately submits to the USG. They can save you considerable time; they help ensure your staff and leadership fully understand all of the technical and programmatic issues involved with the proposed acquisition; and they make sure your country gets the best solution (weapons, services, training, construction, etc.) to match your operational requirement and budget. If your country requires extensive assistance, the USG may request that you open an FMS case to cover the cost.

The Letter of Request (LOR)

Although we recommend opening a dialogue with the U.S. DoD as soon as you identify a need for a particular capability, the action that formally begins the FMS process is your LOR.

If you are sending the LOR from your home country and have questions about how to prepare it, your first contact should be with the SCO for your country. SCO personnel understand the FMS process and can be a valuable source of information and advice. If you do not know whether you have a SCO in your country, you can easily find out by contacting the U.S. Embassy.

You may also refer questions to your DSCA Country Program Director or to the appropriate Implementing Agency, especially if you work from your embassy in Washington D.C., or from a liaison office located in the United States.

There is no set format for an LOR. It can be a formal letter, an e-mail, or even a verbal request from a recognized official representative of your government. There are three general types of LORs:

  1. LOR for Price and Availability (P&A). These LORs are used by foreign customers to obtain basic information for further planning. In the LOR for P&A, you describe your requirement in as much detail as you have, and the USG replies with a rough estimate of the cost of the items and/or services you are interested in and an estimate of how long it would take the USG to deliver the item and/or service. It normally takes a MILDEP or other Implementing Agency about 45 days to respond to an LOR for P&A. It is important to keep in mind that P&A responses are Rough Order of Magnitude (ROM) estimates only. They do not constitute a commitment by the USG, and the data is used only for estimating P&A. If you decide to move to the next step and request an official government-to-government agreement, the MILDEP or other Implementing Agency will conduct a much more refined analysis resulting in a more accurate estimate for that agreement.

  2. LOR for a government-to-government Letter of Offer and Acceptance (LOA). The submission of this type of LOR is viewed by the USG as an official expression of interest by your country, prompting the appropriate MILDEP or other Implementing Agency to develop the government-to-government LOA detailing the defense equipment and/or services the USG will provide and a “best-estimate” cost to you, the customer. Very often, a country will submit an LOR for P&A, and then, once the general cost and delivery schedule is understood, follow with an LOR for LOA.

  3. LOR for a change to an already existing LOA. LORs are also used when you wish to request an Amendment or Modification to an existing LOA for which an FMS case has already been implemented. We will discuss Amendments and Modifications in more detail later in this guide.

LOR Guidance

Although there is no set format for an LOR, it needs to provide sufficient detail to allow a prompt and accurate response from the USG. SAMM Section C5.1.2. lists the minimum information that needs to be included in an LOR and SAMM Table C5.T3. describes the evaluation criteria the USG uses when determining whether or not a LOR contains all of the needed information. Appendix 1 of this guide provides additional information your government should consider when drafting an LOR.

While formal action must wait for receipt of a LOR, we encourage you to discuss complex LORs with the intended Implementing Agency prior to actually submitting the LOR to the USG. The Implementing Agency can assist you in developing or clarifying requirements. This helps ensure the LOR will request the equipment and services that will best meet your needs. Even if your country is very familiar with the FMS system, and has a clear understanding of your own equipment or training requirements, it would still be beneficial to contact the appropriate Implementing Agency prior to submitting your LOR since there could be any number of events on the U.S. side that might impact your FMS purchase, such as projected U.S. lot buys of the same item, planned upgrades, changes in contractors or subcontractors, or upcoming production line closures.

Requests that originate from within your country must be transmitted to the U.S. either by an authorized representative of your government or by the U.S. military representative at the U.S. Embassy in your country. LORs should be sent to the appropriate U.S. Implementing Agency and the Defense Security Cooperation Agency (DSCA) Operations Directorate. A list of all Implementing Agencies that process LORs, to include mailing addresses, is in SAMM Table C5.T2.

A more detailed guide to preparing LORs is available at Appendix 1 of this guide.

Each LOR is reviewed and validated by the MILDEP or other Implementing Agency and by DSCA to ensure that the prospective FMS purchaser is eligible, that the defense articles/services may be sold, that the request originated from a recognized official representative of your government, and that the LOR is clear and complete.

The Implementing Agency is responsible for taking action on your LOR. Based on your request the Implementing Agency will normally prepare one of the following:

  1. A Price and Availability (P&A) response

  2. A government-to-government Letter of Offer and Acceptance (LOA)

  3. An amendment to an LOA (if you’ve requested a change or addition to an existing LOA)

  4. A lease

For the purposes of this guide, we will assume that a new LOA is the most appropriate response to your request - therefore, the following USG actions would be taken:

  1. We will acknowledge receipt: Within five days of receipt of a valid LOR, the U.S. Implementing Agency will acknowledge receipt.

  2. We may request more information: If information is unclear or is missing from your LOR, the Implementing Agency will contact you to obtain the missing information so that the LOR will be “complete”, meaning it contains enough information for the Implementing Agency to provide a response. While it may be possible to continue limited processing of some portions of the request, a response from the USG may be delayed until the information is provided or the request amended.

  3. We will assign an FMS case identifier: An FMS case identifier is assigned to each LOR. A case identifier consists of a Country Code, the code of the Implementing Agency developing your FMS case, and a unique three-position FMS case designator. For example, “BN-B-UXP” is an FMS case for Bandaria (“BN”-an imaginary country) being prepared by the U.S. Army (“B” is the Implementing Agency code for the U.S. Army). The “UXP” is a unique code assigned to your FMS case for the defense item, service, or training you have requested.

  4. We will assign an FMS Case Manager: An FMS Case Manager is assigned to every FMS case and is responsible for ensuring that the FMS case meets your requirements as identified in your LOR. The FMS Case Manager acts as the coordinator for both development of the FMS case and the subsequent “execution,” or performance of the FMS case. If you have questions about the progress of your FMS case, they should be directed to the appropriate FMS Case Manager. DSCA has assigned a Country Program Director (CPD) for each country and the Implementing Agency may also assign a Country Program Director for your programs. You may also contact these Program Directors if you have questions concerning the progress of your FMS case.

  5. We will review the request to determine if there are any releasability issues: Part of the USG review process involves determining if the technology involved is releasable for export. The releasability review takes place for both government-to-government FMS and for DCS that are directly negotiated between your country and a specific U.S. manufacturer. If the sale involves a system with technology that has not been previously approved for export to your country, this process will generally take longer than if the system has previously been reviewed and approved for export to your country. The DoD reviews each proposed sale or transfer of defense items or services and then provides a recommendation to the DOS. But only the DOS - not the DoD - has authority under U.S. law to approve the sale or transfer to a foreign country. Because there can be so many variables involved, it is often difficult to estimate with accuracy the amount of time a technology release review will take but, generally speaking, if sensitive technologies are involved, the sooner you can begin a dialogue with the Implementing Agency, the better.

  6. We will notify the U.S. Congress, if necessary: If a potential sale exceeds certain dollar thresholds, U.S. law requires that the sale be approved by the U.S. Congress prior to the USG offering an LOA to the requesting country. A complete list of Congressional Notification requirements can be found at SAMM Section C5.T13. In general, the thresholds are:

      NATO (+5)* All Other Countries

    Major Defense Equipment (MDE)

    $25 million

    $14 million

    Articles/Services

    $100 million

    $50 million

    Construction

    $300 million

    $200 million

    * “+5” = Australia, Israel, Japan, South Korea & New Zealand

MDE means any item in the International Traffic in Arms Regulation (ITAR) on the U.S. Munitions List (USML) that:

  1. Warrants special export controls (we call these items Significant Military Equipment (SME)) and mark them with an asterisk in the USML; and

  2. That have a nonrecurring Research and Development cost of $50 million or more or a total production cost of $200 million or more.

A list of MDE is contained in Appendix 1 of the SAMM. This notification process must be completed before the LOA can be formally offered to your country for consideration. When the official notification of a sale has been made to the U.S. Congress, this information is posted to the “Major Arms Sales” page of the DSCA Web Site.

The formal Congressional Notification period is 30 days (15 days for NATO (+5)), meaning that if no Congressional objection is raised prior to expiration of the 30-day period the sale may go forward. This does not include the 10-20 days the Implementing Agency and DSCA take to prepare the notification and coordinate it with the DOS. Lastly, in order for formal notification to occur, Congress (both the House and the Senate) must be in session for at least one day during the formal notification period.  The SAMM provides a more thorough discussion of Congressional notification requirements and process at SAMM Section C5.5.