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The FMS Process
Presented by:CAPT Patrick Holub, USN
Director, CENTCOM DivisionNavy International Programs Office
Presentation for:
Naval Attache Orientation13 October 2011
2BRIEF DATE: DD MONTH YYYYCONFIG. MGR: YOUR NAME, CODE, (???) ???-????
International Customer
Foreign Military Sales (FMS)
U.S. Government
LOAFrom Stock
$
New Production
Services,
or
Information,
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International Customer
Foreign Military Sales (FMS)
U.S. Government
Letter of Offer and Acceptance (LOA)
$
• FMS case is a government-to-government "contract"• Buyer-seller relationship• US procures equipment and services IAW standard
acquisition practices• The US can neither make nor lose money on the case
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FMS ProcessIPO times are goals
MILITARY DEPT SIGNS (MILSIGN) & DSCA COUNTER-
SIGNS(9 DAYS)
US SIGNED LOA SENT TO
EPO
LOA SIGNED BY EPO
LOA DRAFT PACKAGE SENT TO DSCA CASE WRITING DIV (CWD)
"MILAP"(18 DAYS)
NIPO CONDUCTS
PRELIMINARY DISCLOSURE
REVIEW(1 TO 5 DAYS)
NIPO WRITES LOA DRAFT W/0 FINAL SCOPE, COST
AND SCHED (2 DAYS)
SYSCOM COORDINATES WITH CONTRACTOR AND PROVIDES FINAL SCOPE,
COST AND SCHED
SYSCOM SECURITY OFFICE CERTIFIES DEFENSE ITEM IS RELEASEABLE TO
CUSTOMER
IF MDE $14M OR MORE* NIPO SENDS 36B TO CONGRESS VIA DSCA (30 TO 90 DAYS)
IF NOT RELEASABLE, NIPO MAY PURSUE NEW RELEASE POLICY THROUGH DON (TTSARB), THEN LO/CLO, THEN NDPC
(60 DAYS TO ONE YEAR)
CUSTOMER SENDS LOR TO
NIPO
NIPO WITH PM VALIDATES LOR
(5 DAYS)
(14 TO 60 DAYS)
* or defense articles or services $50M or more; design and construction services $200M or more.
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• Important that LOR communicates all the customers requirements
Beginning Of Process
CUSTOMER SENDS LOR TO NIPO
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Middle Of Process
• Less than 5% of the time there will be a disclosure issue
• Lengthy process, many reviews by many organizations
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• NIPO will build LOA based on past sales price and schedule information
Middle of Process
• If MDE $14m or more NIPO sends 36b to Congress via DSCA or Defense Articles or Services $50m or more; Design and Construction Services $200m or more.
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Middle of Process
• NIPO historical pricing data may not be correct – things at the production line may have changed
• SYSCOM confirms existing releasability policy
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End of Process
• New process designed to make DoD more efficient –all services using the same tools
• Processes and automation aside, people have to be responsible
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Implementation & Execution
EQUIPMENT AND/OR
SERVICES ARE DELIVERED
NIPO IMPLEMENTS
CASE TO SYSCOM
SYSCOM (CAO) NEGOTIATES & AWARDS
CONTRACTS AND PLACES REQUISITIONS
CUSTOMER MONITORS
PROGRESS BY PMR OR LIAISON
NIPO ISSUES LOA AMENDMENT OR
MODIFICATION TO REFLECT
PROGRAM CHANGES
MAY BE ASSOCIATED DCS PROCUREMENTS
NIPO REVIEWS & ENDORSES ANY
EXPORT LICENSES
PARTS PROVISIONING &
TRAINING PROGRAMS (BOTH OPERATIONAL AND
MAINTENANCE) ARE INITIATED
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Security Cooperation Reform
• FMS has been characterized as being too slow and too reactive
• FMS Community has responded with:• Compressed Rapid Acquisition Fielding and Training
process (CRAFT) – means to accelerate truly urgent programs
• Special Defense Acquisition Fund – program to stockpile low cost equipment (e.g. guns, ammo) in anticipation of FMS sale
• Expeditionary Requirements Generation Teams –cadre to travel to country to obtain in-depth perspective of country requirement
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