The transfer of arms from the U.S. to other countries under the Security Assistance Program is done in two basic ways government-to-government Foreign Military Sales FMS, and contractor-to-government Direct Commercial Sales DCS. Use on contracts for foreign military sales shall be on a rent-free basis. Our consulting services can help you determine whether FMS or DCS is right for your company! These methods help to increase standardization and interoperability between the U.S. and its Allies. With State Department blessing, the Defense Security Cooperation Agency notifies Congress of major arms sales under the Foreign Military Sales program, starting a clock (typically 30 days) during which Congress can block a sale by passing a resolution to do so in both the House and Senate. Basically, DCS is any sale not through the FMS/FMF system. WHETHER FOREIGN MILITARY SALES OR DIRECT COMMERCIAL SALES: A CASE STUDY OF THE UK E-3 AWACS THESIS Larry L. Brown, GS-13 AFIT/GLM/LSM/90S-6 Approved for public release; distribution unlimited . Munitions List abroad. A September 2016 White House approval of the sale of fighter jets to the Middle East illustrates the impact that FMS has on the U.S. economy, while concurrently serving U.S. national security interests. © 2020 National Defense Industrial Association. Any required notifications to Congress are jointly sponsored by the US DOD and the State Department. The NDIA Business Institute exists to build a more capable, qualified, and the Foreign Military Sales program (FMS), through which the U.S. government procures defense articles as an intermediary for foreign partners. 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. Foreign Military Sales (FMS): Government-to-government sales facilitated and regulated by the United States government. The US DOD assumes contracting risk and is responsible for ensuring that the Vendor meets cost, schedule, and performance requirements. –The … VA DCS is regarded as a more flexible process, as the purchaser consults directly with industry about specific products and services it needs. The opinions and conclusions in this paper are those of the author and are not intended to represent the official position of the DOD, USAF, or any other government agency. The United States Government benefits directly and indirectly from transfers of military technologies or systems to foreign governments or end users. Challenges. The US DOD will negotiate with the Customer on behalf of the Vendor. NDIA Affiliates are subsidiary organizations that focus on specific areas and missions related to it's community of interest. It has been reproduced in the best form available to the Pentagon. Regulatory Coverage vs. This effort has provided legislative recommendations to assist Congressional acquisition reform efforts, many of which were enacted or influenced final provisions in the Fiscal Year 2016 and Fiscal Year 2017 National Defense Authorization Acts. There are various DOD offices involved in the FMS process. The granting of a license does not necessarily mean that items will be delivered immediately; licenses are valid for four years, during which sales may be delayed or … Munitions List (USML), pursuant to the International Traffic in Arms Regulations (ITAR). Competition in the form of subsidized, or state-owned, foreign defense companies receiving sole-sourced contracts in place of competitive contract bidding. Join a local chapter and get plugged in to NDIA. Customer negotiates directly with the Vendor. Foreign Military Sales. The size and skill of the Customer contracting staff may be a limiting factor during procurement. American arms manufacturers have two major channels through which they can sell major weaponry to foreign countries: foreign military sales ("FMS"), in which a government-to-government agreement is negotiated by the Pentagon; and direct commercial sales ("DCS"), in which industry negotiates directly with the purchasing country and must apply for a license from the State Department. The FMS program is funded by administrative charges to foreign purchasers and is operated at no cost to taxpayers. The USG is not involved in the sale (although the vendor is required to comply with U.S. regulations regarding military exports). The United States has four different ways to provide military equipment to Latin America: Foreign Military Financing (grants for military purchases), direct commercial sales (negotiated Customer – the Customer refers to the Foreign Government purchaser of the U.S. defense products. Both are viable options for U.S. defense companies seeking to do business overseas. Contracting risk and is responsible for submitting a completed DSP-83 policy team monitors, advocates for, and.... A limiting factor during procurement and Direct Commercial contracts generally require a relatively large down payment, at. ) may be a limiting factor during procurement growth in foreign Military Sales DCS. Is right for your company led NDIA ’ s overriding purpose is to build with. Can help you determine whether FMS or DCS is any sale not the... S overriding purpose is to build relationships with foreign countries by contracting on their behalf with industry.. 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