1. International Acquisition and Exportability (IA&E)
Elements
March 2017
TLO: Explain international considerations in defense acquisition
ELOs:
Describe legal and regulatory mandates for developing international acquisition strategies
Compare forms of international acquisition programs
Describe Technology Security and Foreign Disclosure planning considerations
Describe how international acquisition can contribute to weapons system affordability and interoperability
Describe benefits of and methods for incorporating defense exportability
features in initial designs
Frank D. Kenlon
Professor of International Acquisition (Intermittent)
Defense Systems Management College – International Dept
(410)

2. International Acquisition & Exportability (IA&E)
New term used in DoDI
Defense Exportability Integration
Sales & Transfers
Technology Security & Foreign Disclosure
International
Cooperative Programs
International Contracting

3. International Acquisition/ Security Cooperation Mechanisms
Security Assistance
International Armaments Cooperation
Direct Commercial Sales (DCS)
Building Partner Capacity (BPC)
Requirement
Foreign Customer
Mutually Determined
DoD Determined
Relationship
Buyer-Seller
Partner
Provider-Receiver
Form of Agreement
Foreign Military Sales (FMS) Letter of Offer and Acceptance (LOA)
International Cooperative Program (ICP) Agreement
Export License & Industry Contract(s)
Psuedo-LOA
Funding
Equitably Shared
DoD
Program Management
DoD Implementing Agency (IA)
Joint
DoD IA
Contract Privity
DoD IA & Industry
Partner Nations &
Industry
Foreign Purchaser & US Industry
Implemented by different organizations
under various laws and procedures

4. Key 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)

5. Strategic Guidance National Security Strategy DoS/USAID Strategic Plan
Strengthen alliances to defeat global terrorism
Work with others to defuse regional conflicts
Develop agenda for cooperative action with other centers of global power
DoS/USAID Strategic Plan
Counterterrorism
Reduce/Eliminate WMD
Promote conflict prevention & resolution
Conduct security cooperation & security sector reform
National Defense Strategy
Shape the choices of key states
Strengthen & expand alliances and partnerships
Secure U.S. strategic access & retain freedom of actions
National Military Strategy
Support national efforts to address complex security challenges
Deepen security relations with our allies and create opportunities for new partnerships
Prepare for an increasingly dynamic and uncertain future
Strategic Guidance for DoD
Challenging global security environment
Delicate balance between available resources and security needs
Maintain broad/versatile capability portfolio

6. OSD Oversight Secretary of Defense Security Assistance
––––––––––––––––––––––––
Deputy Secretary of Defense
Under Secretary
(Policy)
Under Secretary
(Acquisition, Technology and Logistics)
Defense Security Cooperation Agency (DSCA)
Defense Technology Security Administration (DTSA)
Director International Cooperation (AT&L IC)
Security Assistance
Building Partner Capacity
Technology
Security
International Armaments
Cooperation

7. 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 USG/DoD Authorizations
TSFD
Export
Foreign Visits

8. USG/DoD TSFD Authorizations
Internal MILDEP processes
Four primary DoD processes
Eight specialized DoD processes
All running independently under leadership of different offices
Required for FMS and cooperative programs; prerequisites to Export License approval for DCS

9. 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

10. TSFD Oversight
Arms Transfer and Technology Release (ATTR) Senior Steering Group (SSG) established in DoDD :
Overarching DoD authority to ensure clear senior-level direction
Serves as appeals board and mediation body
USD(P) & USD(AT&L) co-chairs with interagency participation
TSFD Office (TSFDO) also established in DoDD :
ATTR SSG Executive Secretariat and assesses/recommends changes to policies
Develops/implements procedures and checklists, coordinates documentation and policy, conducts outreach

11. Defense Exportability “Headwaters”
Joint Staff, CoCOMs
& Services
Mil-to-Mil
engagement
with Allies & Friends
JCIDS
Guidance
Non-Materiel Solutions
DOTMLPF-P
Procurement or Modification
What
does
DoD
want
to sell Or
Transfer In
the
Future?
Additional Production
Or Modification
Materiel Solutions
Cooperative
Development Program
New DoD Joint
Program
New DoD Component
Program

12. Defense Exportability 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?
Where does the money come from needed accomplish these goals?

13. How Many Configurations?
Few
Simpler design and test
Simpler production and logistics
Easier upgrades
More affordable
Many
Greater customer choice
Treats countries differently
Tailored logistics and upgrades
More expensive
DoD and partner/customer nations must compromise to achieve optimal outcomes for all (easy to say, hard to do)

14. Defense Exportability Features (DEF) Pilot Program
FY11 NDAA directed SECDEF to “carry out a pilot program to develop and incorporate technology protection features in a designated system during the R&D phase of such system.”
Program Scope/Status
Identify MDAPs for which there is significant anticipated export demand and whose technical aspects are amenable to DEF
Pilot program to provide funding to evaluate exportability and facilitate planning for, design, and incorporation of exportability features during RDT&E
AT&L selects candidate programs from MILDEP nominations
FY12 NDAA change
Industry to share at least half the cost of developing and implementing program protection features
FY14 NDAA extended pilot program through October 2020
Defense Exportability is Part of BBP 2.0

15. 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

16. Backup Charts

17. 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)

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

19. Benefits Economies of Scale Maintain hot production base
DCS
FMS
ICP
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

20. Security Assistance Programs
Security Assistance is a
State Department Program
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)

21. Foreign Military Sales (FMS)
LOR
From Stock
Requisition
Letter of Request
LOA
Contract
Letter of Offer and Acceptance
Foreign Government
U.S.
Government
Services,
Sale of U.S. defense equipment/services by U.S. Government
Buyer-seller relationship
Foreign Funds (or U.S. grants/loans) with administrative surcharge
Conducted under State Department Title 22 authority
Information, or
New Production

22. Foreign Military Sales Trends

23. The Scale of FMS FMS and Service Procurement: 5 Year Average
Average annual procurement budget over last 5 years (FY09-13):
#1. $41.6 Billion USAF
#2. $39.7 Billion FMS
#3 $37.5 Billion U.S. Navy
#4 $32.4 Billion U.S. Army
#5 $8.4 Billion USMC
If we remove the FY12 Saudi Arabia F-15 sale and recalculate:
#1. $41.6 Billion USAF
#2 $37.5 Billion U.S. Navy
#3 $33.7 Billion FMS
#4 $32.4 Billion U.S. Army
#5 $8.4 Billion USMC
USMC
USMC
Cleared for Public Release

24. 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)

25. International Cooperative Program
Agreement
Work
U.S. and/or Foreign Government Activity
Foreign Government(s)
U.S.
Government
U.S. and/or Foreign Industry
Contract
Service,
Acquisition or technology project in any Defense Acquisition Management System phase
Partnering relationship
Jointly managed
Costs, benefits, risks shared equitably
Information, or
New Production

26. Interim DoDI 5000.02 (Enclosure 2, paragraph 10)
Acquisition Strategy
“Program management is responsible for integrating international acquisition and exportability considerations into the program’s Acquisition Strategy at each major milestone or decision point. Program management will consider the potential demand and likelihood of cooperative development or production, Direct Commercial Sales, or Foreign Military Sales early in the acquisition planning process; and, where appropriate, program managers will pursue cooperative opportunities and international involvement throughout the acquisition life cycle to enhance international cooperation and improve interoperability in accordance with DoD Instruction ”
Interim DoDI (Enclosure 2, paragraph 10)

27. Allied Interoperability
Equipment procured for U.S. forces employed in NATO, other allied, and coalition operations must be standardized or at least interoperable with equipment of allies and coalition partners
DoD complies with U.S.-ratified International Standardization Agreements to maximum extent feasible, subject to systems engineering tradeoffs
Program Managers to pursue opportunities throughout the acquisition life cycle that enhance international cooperation and improve interoperability
DoDI , Materiel Interoperability and Standardization with Allies and Coalition Partners

28. 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

29. Direct Commercial Sales (DCS)$
Contract
Export License Application
Signed Export License
Foreign Entity
U.S. Company
Foreign entity purchases U.S. defense equipment/services from U.S. company
U.S. Government control through licensing
Department of State for military items
Department of Commerce for civil & dual use items
U.S. Government

30. Program Managers should monitor program contractors’ marketing efforts
FMS vs DCS
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)
Program Managers should monitor program contractors’ marketing efforts

31. 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

32. Building Partner Capacity (BPC)
Stock
Requisition
MOR
Pseudo LOA
Memorandum of Request
Letter of Offer and Acceptance
Contract
Requesting
Authority
Implementing Agency
Provision of U.S. defense equipment/services by U.S. Government
Specific programs authorized in annual NDAAs
Conducted under Title 10 authority with DoD funding
Foreign Government