Foreign Military Sales: The Process and Benefits
As the Assistant Product Manager (APM) responsible for International Apache Programs, within Program Executive Office Aviation’s Project Manager Apache, I was asked numerous times about the Foreign Military Sales (FMS) process: What is FMS and why does the United States participate in the program? Who determines what we can sell and to whom? What is the process to sell equipment to a country? What does FMS do for “me” in the cockpit?
There are two methods of purchasing military equipment: FMS or Direct Commercial Sales (DCS). Through DCS, a country goes directly to a contractor or original equipment manufacturer to buy a product or service. This article focuses on the FMS process with frequently asked questions.
What is FMS?
FMS is the government-to-government method for selling U.S. defense equipment, services, and training. According to the Defense Security Cooperation Agency, the goal of the U.S. FMS program is “responsible arms sales to further national security and foreign policy objectives by strengthening bilateral defense relations, supporting coalition building, and enhancing interoperability between U.S. forces and militaries of friends and allies. These sales also contribute to American prosperity by improving the U.S. balance of trade position, sustaining highly skilled jobs in the defense industrial base, and extending production lines and lowering unit costs for key weapon systems.”
Who Determines Who Can Buy the Aircraft?
The U.S. Department of State determines eligibility and decides which major sales will be made either through FMS or DCS.
Though not directly responsible for the selection, DOD has extensive input on the policy. DOD determines what items can be sold and implements FMS programs. As a part of the process, the Geographic Combatant Commanders may be asked the questions “Why should we do the program?” and “How quickly must the program be executed?” A positive response from these commanders goes a long way in the approval process. Conversely, a negative response or a recommendation for denial weighs heavily on the potential case.
FMS sales also contribute to American prosperity by improving the U.S. balance of trade position, sustaining highly skilled jobs in the defense industrial base, and extending production lines and lowering unit costs for key weapon systems.
For most countries and equipment, congressional notification and review is a mandatory last step in the approval process before a country is offered a program. Because of the costs involved in aviation programs, every FMS case for new aircraft or the remanufacture of a current fleet requires congressional notification and review.
What is the FMS Sale Process?
For purposes of this discussion, I will use the Apache helicopter FMS as an example. The FMS process is a multi-faceted, multi-level procedure that can take years to mature from when ‘Country X’ expresses the desire for a new attack helicopter to the actual delivery of the selected U.S. platform. The process begins when Country X determines that it has a need for an attack helicopter, either to replace an older attack platform or to purchase a new capability. The replacement could mean upgrading a current platform to a newer version (such as from an A Model Apache to a D Model Longbow) or completely replacing an aged platform (for example, phasing out an AH-1 Cobra fleet). The selection process and final decision can take years because of the financial investment and political complexities involved.
Once the country decides on the desired aircraft, it works with the Security Assistance Office within the U.S. Embassy to develop a Letter of Request (LOR). That LOR is submitted to the Army for action to create the Letter of Offer and Acceptance (LOA), a “contract” between Country X’s government and the U.S. government regarding what the manufacturer will build.
When Congress approves the LOA, it is submitted to Country X for signature. At that point, the program begins in earnest. The LOA, or case, is assigned to the proper Life Cycle Management Command (LCMC). The LCMC is made up of the project manager (PM) and Security Assistance Management Directorate whose responsibility is to work the case through the entire life cycle of that program.
What Does FMS Do for “Me” in the Cockpit?
What does the FMS program do for me in the cockpit? It is a method of delivering capabilities earlier than programmed. A couple of the most notable examples of technologies for the Apache that were developed and fielded early because of FMS are the Modernized Target Acquisition Designation Sight/Modernized Pilot Night Vision System and Common Missile Warning System.
In the acquisition process, the PMs have funds programmed for future technology enhancements to the aircraft. Through the FMS process, a country can provide money to bring desired enhancements forward.
In the acquisition process, the PMs have funds programmed for future technology enhancements to the aircraft. Through the FMS process, a country can provide money to bring desired enhancements forward. During LOA development, improvements or enhancements are included in the case. As a side note, approval is required at the DOD and Department of the Army levels to include improvements to the platform. Also, all potential enhancements are coordinated with the PM before they are offered to the international partner, ensuring that the combined efforts support the PM’s overall fielding plan.
An indirect benefit of the FMS process is that countries have deployed their Apaches in support of joint allied operations around the world, including in Bosnia, Kosovo, Djibouti, Iraq, and Afghanistan. Every hour flown by our international partners is one less hour that a U.S. government crew has to be deployed from home.
FMS is a little known yet dynamic process that pays big dividends for the U.S. government and our international partners. From the industrial standpoint, billions of dollars are invested annually in the U.S. economy through the FMS process. From the PM standpoint, it provides a way to accelerate enhancements and capabilities through the infusion of funds. For the pilot in the cockpit, the enhancements on the aircraft directly affect warfighting capabilities.
- LTC RICHARD L. WILLIAMS was the APM for International Apache Programs at Redstone Arsenal, AL, until April 2010. He is currently the FMS Officer, Non-Standard Rotary Wing Aviation at Redstone Arsenal. Williams holds a B.B.A. in general business from Texas A&M University at Corpus Christi and an M.S. in systems acquisition management from the Naval Postgraduate School.