International Acquisition & Exportability Fundamentals

Are These Acronyms Familiar? ICP FMS DCS DEF TSFD

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

The Environment Export Control Reform Security Cooperation Program Protection Planning Defense Exportability Features JCIDS International Provisions Acquisition Policy Industry Foreign Sales Global Industrial Base Increasing DAW Involvement Technology/ Products Environment demands we change the way we train international acquisition professionals

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

ICPs Vs. Defense Sales ICPs (Partnerships) More 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) More 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

FMS and Service Procurement: 5 Year Average, FY10-14 The Scale of FMS FMS and Service Procurement: 5 Year Average, FY10-14 #1. $45.1 Billion Navy (incl. USMC) #2. $39.0 Billion FMS #3 $38.8 Billion Air Force #4 $32.4 Billion Army Benefits to the U.S. Builds U.S.-partner relationships Interoperability Lowers unit costs for the U.S. DoD Maintain production lines Dollars into the U.S. economy Jobs 8

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

Foreign Military Sales (FMS) Program Trends Foreign Military Sales (FMS) Sale of DoD Configuration with Exportability Modifications Integration of Buyer Furnished Equipment (BFE) Development and Integration of New Equipment Direct Commercial Sales Sale of DoD Configuration with Exportability Modifications DCS/FMS Hybrid Programs Sale of New or Highly Modified Systems International Cooperative Programs (ICPs) Cooperative Development of New Systems Incorporating Foreign Participation in DoD Program Cooperation Throughout Programs’ Life-Cycles Past Present

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

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

USG/DoD TSFD Processes MILDEP Processes DoD Lead: Various MILDEP-specific various MILDEP Process Other DoD Processes Org.-specific various Few documented processes Interagency process LO/CLO AT&L Primary AT SAP SAPCO Specialized DSC AT&L + Policy Intel USD(I) Data Links/WF DoD CIO PNT/GPS COMSEC NSA & DoD CIO GEOINT NGA MTCR Policy NDP EW None No single process NVD/INS DTSA

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

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

Int’l Acquisition Transactions Looking Forward -- Macro View Add Inquiry, Partnership Discussion or Request for Purchase FMS Export Control Capabilities & Tech Willing to Transfer US Strategy & Policy Initial TSFD & DEF TSFD DCS Int’l Acquisition Transactions ? ICP Desired Capabilities & Tech Foreign Strategy & Policy Other Engage Earlier Defense Acquisition System

Changing the International Acquisition Culture Conventional Separate ICP, FMS, DCS business planning Sequential, stove-piped transaction mechanisms Reactive TSFD and export control policy development Exportability mods to U.S. design by launch partners/customers IA&E Integrated international business planning Multiple, parallel transaction mechanisms Early TSFD and export control policy engagement Design for exportability throughout the acquisition life cycle Improved Outcomes for DoD, Allies, and Friends!

Back Up Charts

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

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)

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)

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 BPC policies & programs are contained in Chapter 15 of DoD’s Security Assistance Management Manual (SAMM)

USG/DoD TSFD Processes MILDEP Processes DoD Lead: Various MILDEP-specific various MILDEP Process Other DoD Processes Org.-specific various Few documented processes Interagency process LO/CLO AT&L Primary AT SAP SAPCO Specialized DSC AT&L + Policy Intel USD(I) Data Links/WF DoD CIO PNT/GPS COMSEC NSA & DoD CIO GEOINT NGA MTCR Policy NDP EW None No single process NVD/INS DTSA

DoDD 5111.21, “ATTR SSG and TSFDO” (New October 2014) OSD TSFD Initiative Arms Transfer and Technology Release (ATTR) Senior Steering Group (SSG) created in 2008 and formally established in 2012: Overarching DoD authority to ensure clear senior-level direction; USD(P) & USD(AT&L) co-chairs Serves as appeals board and mediation body TSFD Office (TSFDO) supports ATTR SSG efforts: ATTR SSG Executive Secretariat and assesses/recommends changes to policies Develops/implements procedures and checklists, coordinates documentation and policy, conducts outreach DoDD 5111.21, “ATTR SSG and TSFDO” (New October 2014)