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Introduction

The Purpose of the Transparency Initiative

The transparency initiative was started to facilitate the improvement of timeliness and quality in the execution of U.S. Foreign Military Sales (FMS) through transparency and clear communications. Transparency refers to the sharing of information between the FMS products provider and customer. Clarity of requirements is critical in establishing expectations, from knowing the customer’s needs to understanding product availability. Transparency is also defined as providing information to improve our partners’ understanding of the complete acquisition cycle in terms of their procurement requirements for defense goods and services via FMS. Having clear exchanges of information during the entire process will improve understanding across the spectrum of activities within the FMS enterprise.

The Purpose of the Transparency Handbook

The Defense Security Cooperation Agency (DSCA) strategic plan, Vision 2020, set an objective to “increase confidence in FMS as a procurement option for partner nations”. Vision 2020 established DSCA’s Transparency Initiative, employing test cases and lessons learned which focus on the initial planning stages of a major procurement program, contracting, and execution to increase customer satisfaction and confidence. Relatively modest measures on the part of program offices, Implementing Agencies, and DSCA can significantly improve customer awareness, understanding, and participation during the FMS process. Clear program definition and open lines of communication help avoid confusion and unnecessary effort and result in better program success, thereby supporting U.S. policy and partner requirements.

This handbook provides guidance to:

  • Structure effective information exchanges to delineate specific milestones, topics, and actions in cases of complex1 programs for major procurements.
  • Encourage a productive dialogue between the partner and U.S. subject matter experts to ensure Letters of Request (LOR) are complete and executable.
  • Align partner needs and requirements with those systems and services that the United States has available, and reduce instances in which LORs need to be returned or rewritten in the course of the development of the Letter of Offer and Acceptance (LOA).

Background

To discuss in more detail, Security Cooperation (SC) refers to Department of Defense (DoD) activities with allied and partner nations that:

  • Build their capabilities for self-defense and coalition operations;
  • Build relationships that promote specified U.S. interests; and
  • Provide U.S. forces with peacetime and contingency access.

SC includes a wide range of activities using both Title 10 and Title 22 authorities to deliver a full-spectrum of capabilities. The Department administers Title 22 programs on behalf of the Department of State (DoS), including FMS, Foreign Military Financing (FMF), and International Military Education and Training (IMET).

Vision 2020 focuses on three core, fundamental approaches to lead the SC community:

  1. Synchronizing SC Activities: Working closely with the Office of the Deputy Assistant Secretary of Defense for Security Cooperation (ODASD(SC)), and leading the SC community in better coordination of the delegation and sequencing of efforts and in collaboration across the SC enterprise. This includes facilitating decision-making that addresses gaps, redundancies, and conflicts, and achieves long-term objectives. It also entails building adaptability into processes, so the enterprise can anticipate and respond to emergent and dynamic requirements.
  2. Meeting Customer Expectations: Tailoring solutions that are artfully deployed. Properly identifying and executing to customer expectations and enabling the U.S. Government to find more complete solutions to its challenges while remaining competitive in the global marketplace. Ensuring timeliness, accuracy in price forecasting, and effective coordination, particularly on logistics issues.
  3. Ensuring Effectiveness and Efficiency: Drawing on all SC tools to find the best solution for a given task while constrained by declining resources. Leading the community in the sustainable use of resources through business process improvement, modernization, and coordinated assessments of community effectiveness and efficiency.

Full Spectrum Capability

This “Full Spectrum Capability” chart Figure 1 illustrates the multiple considerations that effective SC planning, resourcing, execution, and evaluations must take into account.

Figure 1. Full Spectrum Capability Chart

Figure 1.  Full Spectrum Capability Chart

Foreign Military Sales Program

The largest security assistance program, FMS, is executed by DoD under DoD Title 22 authority. FMS is the primary method to transfer U.S. defense articles and services to partner nations and the linchpin for the success of many of our SC programs. The principal legislative authority for the FMS program is the Arms Export Control Act (AECA) of 1976, as amended.

The three categories of cases that are executed via the FMS process are:

  • Partner nation-funded cases. These represent the majority of cases.
  • FMF-funded cases. FMF is a multiyear Title 22-authorized DoS program executed by DoD that provides grants and may provide loans to partner nations for the purchase of weapons and defense equipment produced in the United States, as well as for acquiring U.S. defense services and military training.
  • Building Partnership Capacity (BPC)-Funded Cases. These cases are financed by funds that have been appropriated via various DoD (Title 10) and DoS (Title 22) authorities referred to as “BPC” programs.

Figure 2. FMS Process Chart

Figure 2.  FMS Process Chart

FMS Process Lanes

As depicted in Figure 2, FMS is executed through a system of processes owned by various stakeholders across the U.S. Government which balance competing interests and fulfill requirements of the AECA. The AECA requires three critical validations before a capability can be offered:

  • The transfer is of mutual benefit to the partner nation and U.S. Government;
  • The technology will be protected; and
  • The transfer is consistent with U.S. conventional arms transfer policies.

Partners have a wide range of choices when it comes to purchasing defense articles and services. In addition to FMS, partners can often purchase a defense article or service from a U.S. company through Direct Commercial Sales (DCS), or buy a system with similar capabilities from a third country government or company. Our partners turn to the U.S. Government, through FMS, as their provider of choice for several reasons.

  • Access to the same or similar equipment, systems, and operating procedures used by the U.S. Armed Forces, helping to ensure interoperability and economies of scale.
  • The FMS process uses the same acquisition process DoD uses, which is largely open and transparent, and operates without profit to the U.S. Government. This helps partners ensure they are getting fair value for their purchases and minimizes the likelihood of corrupt or opaque practices that might characterize other sources of defense articles.
  • FMS encourages a “total package approach.” This means that DoD encourages provisioning beyond a single end-item, system, or platform to include the associated spares, maintenance, and training to achieve effective and sustainable capacity.
  • FMS provides a long-term defense relationship between the partner nation and the United States.

The Importance of Pre-LOR Discussions

This handbook focuses on complex programs developed and executed through the U.S. FMS system. Many less complex procurements via FMS can benefit in the planning stages from the appropriate level of discussion between the country, Security Cooperation Organization (SCO), and U.S. subject matter experts. These discussions between customer and the SCOs in-country and country desks at the Implementing Agency (IA) and DSCA will be instrumental in obtaining the necessary information to support the development of requirements for the equipment, training, or services our partners need to meet a capability need. Often a conference call will provide the insight necessary to support a complete and actionable LOR. Other tools can be used to match country requirements to U.S. programs, such as Video Teleconference, meetings with local embassy officials, site surveys, Expeditionary Requirement Generation Teams (ERGT), Studies and Analysis FMS cases, and so forth. The level of effort and resources naturally depends on requirements, which are addressed under the Resources Implications section, below.

Transparency Tools and Milestones

There are tools and milestones that can be used to enhance understanding and communications through the FMS case development and implementation stages. Such events are offered by the IA with active participation by the appropriate program office and FMS coordinating offices to ensure the proper expertise is available to provide the information the customer requires to make acquisition decisions. The work is funded according to resource guidance for Pre-LOR efforts (See SAMM Table C9.T2.).

Table 1. Transparency Milestones

Milestone Name Description

I

 

Pre-LOR Meeting

 

This involves structured discussions in the Pre-LOR stage and the resulting discovery that occurs to guide the partner country in development of its LOR. Discussions that involve the development of a concept of operations/total package approach that are generally admin funded. This could lead to either an admin funded or case funded LOA development process. Key transparency objectives that need to be addressed in these pre-LOR discussions are: the basis for the requirement, ability to fund, ability to absorb into existing organizational structure, and long term logistics support.

II

 

Post-LOR Receipt Meeting

 

This meeting is used to confirm/clarify information received in the LOR and solicit any additional information required to make the LOR fully actionable. It can follow the same structure as the Pre-LOR review.

III

Draft Program Plan

 

The Defense Acquisition Guidebook (Chapter 2 – Program Strategies) addresses requirements for an acquisition strategy, which can be modeled to inform the partner country of the major elements of its program. A Program Plan, based on that structure, provides detailed information that can serve as the basis of the LOA, with the additional benefit of answering many of the FMS partner’s questions in advance. Such a program plan may not be considered Standard Level of Service and may require advance partner funding.

IV

 

LOA Line-by-Line Review

 

Additional transparency prior to formal case offer can reduce unnecessary effort by reviewing the major elements of the draft case with the partner to ensure it fulfills the partner’s requirements. A line-by-line review, conducted via briefing slides or with an approved draft LOA, ensures working level understanding and prepares the partner country staff to explain the LOA to their senior military and civilian leadership.

V

 

LOR-to-LOA Tracking Matrix

 

This matrix tracks each requirement mentioned in the LOR to the corresponding line(s) in the LOA. It is provided by the IA and program office to the FMS customer during the LOA line-by-line briefing, or as a separate document or table. As with all of these tools, it is tailored to the individual program.

VI

 

LOA-to-Contract Matrix

 

After the LOA is signed, the program office updates the matrix to trace each line in the LOA regarding contract information such that the FMS customer will be able to trace a given requirement from request to U.S. Government agreement, to contract. Future transparency test cases will develop this concept further.

These milestones are part of the continuum that includes the internal review of the LOR by the IA (such as Army’s Quality Review Board, Navy’s Quick-Look), and the Pre-Countersignature Meeting, where U.S. officials review complex cases for accuracy and completeness.

Figure 3. Transparency Milestones

Figure 3.  Transparency Milestones

 

 

 


Footnotes:
1"Complex," as in Defined Order LOAs and associated Amendments considered "purchaser-unique" in nature, as discussed under Anticipated Offer Date Category C in the SAMM, Table C5.T6.