International Acquisition & Exportability Fundamentals

Overview International Acquisition & Exportability (IA&E) Topics Security Cooperation Int’l Acquisition Forms and Mechanisms Technology Security & Foreign Disclosure Defense Exportability Summary International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability

Security Cooperation is a DoD Term (Joint Pub 1-02) All DoD interactions with foreign defense establishments to build defense relationships that promote specific US security interests, develop allied and friendly military capabilities for self-defense and multinational operations, and provide US forces with peacetime and contingency access to a host nation. Security Cooperation is a DoD Term (Joint Pub 1-02)

Security Cooperation Elements Combined Exercises Equipment Sales & Financing Defense Contacts & Familiarization Int’l Armaments Cooperation Support to Operations Humanitarian Efforts & Civic Assistance Training & Education

Security Cooperation Elements Elements that involve defense acquisition in color Combined Exercises Int’l Armaments Cooperation Equipment Sales & Financing Defense Contacts & Familiarization Humanitarian Efforts & Civic Assistance Support to Operations Int’l Training & Education DoDD 5132.03 October 2008

Major Legislation Title 22 Legislation Arms Export Control Act (AECA) Foreign Military Sales (FMS) Direct Commercial Sales (DCS) Cooperative Programs Foreign Assistance Act (FAA) Grant Aid International Military Education and Training (IMET) Excess Defense Articles (EDA) Title 10 Legislation Building Partner Capacity (BPC) Cooperative RDT&E Acquisition and Cross Servicing Agreements (ACSAs)

International Acquisition & Exportability (IA&E) Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration

International Armaments Cooperation (IAC) Cooperative research, development, and acquisition projects and programs Enabling Programs Personnel exchange (ESEP & APEP) RDT&E Information Exchange Program (IEP) International Cooperative R&D (ICR&D) program Coalition Warfare Program (CWP) Foreign Comparative Testing Program (FCT) International Cooperative Programs (ICPs)

International Cooperative Programs (ICPs) Scope DoD concludes about ~30 international agreements/year for ICPs Most agreements are for S&T or early R&D projects Some agreements for cooperation on a “piece” of a program Limited number of fully cooperative major system development/production programs Major System Examples F-35 Joint Strike Fighter (JSF) NATO Alliance Ground Surveillance (AGS) Rolling Airframe Missile (RAM) Evolved SeaSparrow Missile (ESSM) Multifunctional Information Distribution System (MIDS) Guided Multiple Launch Rocket System (GMLRS) Wideband Global SATCOM (WGS)

The Nature of ICP International Agreements Each IA is unique Not a Treaty, but much more than an international handshake An Executive Department Agreement that may have a Congressional reporting requirement Legally binding for the U.S. Enforceable through mutual agreement (no arbitration) Reciprocal

IAC & ICP Key Players & Processes International Interaction Project ideas Policy Limited funding International agreement approvals AT&L Director of International Cooperation [AT&L(IC)] Defense Coop Committees, MOU Reviews International Program Organizations (IPOs) SAF/IA DASA(DE&C) NIPO Project ideas Policy Limited funding International agreement development Senior Nat’l Reps, Cooperation Reviews DoD Agencies: DTRA, DARPA, MDA AFRL, PEOs, SPOs RDECOM, Labs, PEOs ONR, NRL, PEOs, POs Many Others Project ideas Funding Management Execution S&T WGs, Conferences, Visits/Mtgs

AT&L ICP Agreements Process Cooperative Opportunity Timeline Highly dependent on international agreement complexity For simple Project Agreements (PAs), ~12 months from RAD to agreement signature Complex multilateral MOUs can take significantly longer Discussions Request Authority to Develop (RAD) Negotiations Request for Final Approval (RFA) Sign Agreement Execute Program AT&L Process Owner Director of International Cooperation, USD(AT&L)/IC Responsible for international cooperation policy & providing international agreement approvals to DoD Components

ICPs Vs. Defense Sales ICPs (Partnerships) Flexible Bilateral or Multilateral Foreign Gov’t is Partner Joint Requirement Both Gov’ts Are End Users Both Gov’ts Fund Terms are Negotiable Both Participate in Oversight Cost of Services are Shared USD(AT&L) Oversees (Title 10) DEFENSE SALES (Buyers-Sellers) Rigidly Structured Bilateral Arrangement Foreign Gov’t is Customer Foreign Gov’t Requirement Foreign Gov’t End User Foreign Gov’t Funds U.S. Sets Terms (LOA) U.S. Controls Implementation Foreign Gov’t Pays for Services USD(P) Oversees (Title 22)

International Acquisition & Exportability (IA&E) Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration

Security Assistance Programs Security Assistance is a State Department-led effort primarily implemented by DoD Program Administration Responsibilities Department of Defense Foreign Military Sales (FMS) Foreign Military Financing Program (FMFP) Int’l Military Education & Training (IMET) Foreign Military Construction Services (FMCS) Leases Drawdowns Excess Defense Articles (EDA) Department of State Peacekeeping Operations Int’l Narcotics Control & Law Enforcement Nonproliferation, Antiterrorism, Demining, and Related (NADR) Direct Commercial Sales (DCS) US Agency for Int’l Development Economic Support Fund (ESF)

FMS & BPC Key Players & Processes International Interaction DoD-wide SC Policy FMS Admin $ SC & FMS transaction approvals Defense Security Cooperation Agency (DSCA) OSD/Joint Staff Level Component SC Policy FMS Admin $ allocation SC & FMS transaction development MILDEP HQ Focal Point SAF/IA DASA(DE&C) NIPO DoD Component Level Receive/respond to LORs Oversee LOA execution by PEOs, PMs, log centers, training orgs, etc SAF/IAR, AFSAC, AFSAT DASA(DE&C), USASAC, AMSAC, SATFA, COE, USACE NIPO DSCA, DCMA, DISA, DLA, DTRA, MDA, NGA, NSA Implementing Agencies (IAs) CoCOM Country Team Level

Letter of Request (LOR) Letter of Offer & Acceptance (LOA) FMS Process Preliminary Definition Letter of Request (LOR) Request Offer Letter of Offer & Acceptance (LOA) Acceptance Implementation Timeline By DSCA policy for a complex FMS case ~6 months from LOR to LOA signature Many variables – cycle time often longer Execution Closure

Direct Commercial Sales (DCS) Sale of defense articles, services, or training made or provided by U.S. defense industry to a foreign entity Not administered by DoD and do not involve a government-to-government agreement Foreign entity contracts directly with U.S. company USG control procedure is accomplished through licensing

FMS vs DCS vs Hybrid DoD is generally neutral whether a foreign country purchases through FMS or DCS Certain items can be designated FMS only; based on complexity, sensitivity, interoperability, relationships Most major system DCS programs will have an FMS companion effort for FMS-only items (i.e. a hybrid program) Many EW system international sales are “hybrid programs” due to classified aspects of system software functionality

Building Partner Capacity (BPC) Title 10, DoD Security Cooperation programs executed through the FMS infrastructure Differences from traditional FMS USG Requesting Authority identifies requirement Funded by the USG “Pseudo”-LOAs are not signed by country Title transfers in country Variety of programs conducted under multiple legal authorities List of programs and BPC policies are contained in Chapter 15 of the SAMM

Planning & Requirements BPC Case Process Planning & Requirements Definition Development Implementation Execution Closure Memorandum of Request (MOR) Pseudo LOA Timeline By DSCA policy 30 days from MOR to Pseudo LOA

International Acquisition & Exportability (IA&E) Defense Exportability Integration Sales & Transfers Technology Security & Foreign Disclosure International Cooperative Programs

The Dilemma Provide required capabilities quickly to allies and friends Protect the “crown jewels” of U.S. defense technology How can the USG/DOD best balance these two competing demands?

TSFD and Export Control Basics Fundamental Security Considerations Access Protection + Release Conditions Not transfer or use for other purposes without U.S. consent Provide substantially the same degree of protection as U.S. Type of Authorizations TSFD Disclosure Authorizations Export Control DoD Intel Community Interagency DoD Interagency State & Commerce DoD Interagency

International Acquisition & Exportability (IA&E) Defense Exportability Integration Sales & Transfers Technology Security & Foreign Disclosure International Cooperative Programs

Designing for Exportability Launch customer paid for technology security modifications to DoD configuration Expensive and time consuming mods inhibit foreign sales No authority to use appropriated funds for exportability design Past Present Defense Exportability Features (DEF) Pilot Program authorized by Congress in FY11 and subsequent Nat’l Defense Authorization Acts OSD and the MILDEPs have selected 15 programs to participate as DEF Pilot Programs Authorizes expenditure of DoD funds to evaluate exportability and facilitate planning; industry shares cost Facilitates incorporation of program protection features in systems with high export potential during system development Improves protection of Critical Program Information (CPI) and critical functions using Anti-Tamper (AT)/Cyber measures Reduces overall DoD and foreign program protection costs Makes our equipment available earlier to Allies and Friends Why

What are the major benefits of International Acquisition Programs?

International Acquisition Benefits FMS Improved Interoperability Economies of Scale Production Operations & Support Maintain hot production base Share sustaining engineering costs Share production line shutdown costs Share RDT&E costs Share production non-recurring costs BPC DCS ICP

International Acquisition & Exportability (IA&E) DoDI 5000.02 and DAU Training International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration Goal = Improve Int’l Acquisition Outcomes!

Handouts

Defense Exportability Activities IOC A C B LRIP Technology Maturation & Risk Reduction. Production & Deployment DRFPRD Materiel Solution Analysis CDD-V CDD ICD Draft Operations & Support Materiel Development Decision FRP Sustainment Disposal FOC Engineering & Manufacturing Development CDR CPD PDR Exportability Assessment Projected sales Technology complexity Exportability Feasibility Studies Conducted with program contractor Included in TMRR contract Funded by program or DEF PE Industry provides 50% Exportable Designs Funded by program, cooperative program or customer, or industry (or combination) May be multiple configurations Exportable Version Production Funded by customer Exportable Version Depot & Spares Activities Require MDA Approval

Comparisons International Cooperative Programs Foreign Military Sales (FMS) Direct Commercial Sales (DCS) Building Partner Capacity (BPC) Legal Authority AECA Section 27 & 10 U.S.C. 2350a AECA Sections 21 and 22 AECA Section 38 National Defense Authorization Acts DoD Oversight OUSD(AT&L) OUSD (Policy); DSCA OUSD (Policy); DTSA Primary Regulations DoDD 5000.01 & DoDI 5000.02 Security Assistance Management Manual (SAMM) International Traffic and Arms Regulations (ITAR) SAMM Relationship Partner Buyer-seller Provider-receiver Form of Agreement International Agreement Letter of Offer and Acceptance (LOA) State Department export license & commercial contract Pseudo-LOA (not signed by foreign country) Requirement Mutual Foreign customer (Letter of Request – LOR) DoD determined (Memorandum of Request – MOR) Funding Equitably shared DoD Program Management Joint DoD Implementing Agency (IA) DoD IA Contract Privity Partner nations and industry DoD IA and industry Foreign purchaser and U.S. industry Risks Production Cooperation Cooperative production Coproduction Licensed production N/A