THE REQUIREMENTS QUESTION
the date of issuance. Te customer must sign the LOA and make the initial deposit within those 60 days, or the LOA is automatically canceled. If this happens, the customer has to request a new LOA, and the price may change as a result of production schedules, availability of raw materials or other manufacturing vari- ables. Te customer may also request an extension within the 60 days to prevent the LOA from expiring.
THE HOWITZERS ARE HERE
An M109-A5 howitzer is off-loaded to a trailer at the port in Punta Arenas, Chile, in Decem- ber 2014. The self-propelled howitzer was one of 12 purchased by the Chilean army through USASAC’s FMS program.
Although no specific format is required for an LOR, it should identify the desired defense articles and/or services in suffi- cient detail to enable the implementing agency to determine the item’s avail- ability and releasability and to prepare an accurate cost estimate. Implementing organizations for the Army include the U.S. Army Security Assistance Com- mand (USASAC), the U.S. Army Corps of Engineers, the U.S. Army Medical Materiel Agency and the Security Assis- tance Training Field Activity of the U.S. Army Training and Doctrine Command.
An LOR may request P&A of the goods and services the customer is interested in purchasing. P&A is a rough order-of- magnitude estimate of projected cost and availability. It is intended for planning purposes only, not for the customer to use in budgeting. DOD takes pains to emphasize that this number is only an estimate. Te final cost of the sale will appear in the LOA and may differ from the initial P&A estimate. Before any offer is made that would introduce a new capa- bility to a country, it must first be cleared through the Deputy Assistant Secretary
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of the Army for Defense Exports and Cooperation (DASA(DE&C)), to ensure that the planned sale has addressed all releasability issues and to avoid giving the partner nation a false impression.
Te LOA is the actual contract between DOD and the customer for the sale; it represents a bona fide offer by the U.S. government to sell the items described therein. Te LOA becomes an agreement when the customer signs it and provides the initial deposit payment specified in the LOA. While P&A and LOA data are both estimates, an LOA reflects the customer’s specific requirements and con- tains the most precise data available when the document is prepared. Regardless of the price listed on the LOA, the customer is liable for the full cost of any article or service provided pursuant to the LOA. Tat means that when the United States and the partner nation eventually iron out incomplete or poorly defined require- ments, the partner nation will pay for any cost increases.
LOAs include an offer expiration date and are typically valid for 60 days from
LENDING A HAND If the partner nation has not fully devel- oped a requirement, the LOR may contain insufficient information for the receiving organization. If requested or agreed to by the partner nation, the implementing agency may put together a survey team of experts to help the nation define requirements more fully. USASAC and the PEOs have done this frequently at the request of the partner nation, in coordination with the senior defense offi- cial at the country’s U.S. embassy.
For example, the Office of the Program Manager-Saudi Arabian National Guard (SANG), PEO Aviation and USASAC representatives
recently assisted the
SANG. Representatives gathered at a meeting in early April to discuss procure- ments as part of the U.S. Army’s effort to help the Kingdom of Saudi Arabia’s Min- istry of the National Guard modernize its aviation force. Te modernization encom- passes training, equipment, maintenance, supply, procurement, management, orga- nization, health care and facilities. Te Kingdom of Saudi Arabia is conducting combat operations within its region, and the Guard must be prepared to answer any call and accomplish assigned mis- sions. Te goal was to synchronize actions across the aviation enterprise to ensure that the partner modernizes its aviation force as efficiently as possible.
Army AL&T Magazine October-December 2015
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