efficient Defense Industrial Base to support our national security through Policy staff regularly meets with key policy stakeholders, and manages Congressional interaction with NDIA Chapters and Divisions. US DOD procures the defense articles under the same contractual provisions used for all DOD procurement. The opinions and conclusions in this paper are those of the author and are not intended to represent the official position of the DOD, USAF, or any other government agency. All rights reserved. 22201 FMF funds purchases are made through the Foreign Military Sales (FMS) program, which manages government-to-government sales. Our mission is to ensure the continued existence of a viable, competitive national technology and industrial base, strengthen the government-industry partnership through dialogue, and provide interaction between the legislative, executive, and judicial branches. Abstract : The transfer of arms from the U.S. to other countries under the Security Assistance Program is done in two basic ways: government-to-government Foreign Military Sales (FMS), and contractor-to-government Direct Commercial Sales (DCS). Challenges. When buying directly from the government’s stockpiles, foreign customers will have more leverage in the unit price of a defense system – as these same systems are also acquired by the U.S. military and defense agencies. However, they must carry more risk and administrative burdens. Our services are designed to demystify the international sales process, identify opportunities, connect with potential customers, and navigate the logistics of international sales. The NDIA Business Institute exists to build a more capable, qualified, and Both are viable options for U.S. defense companies seeking to do business overseas. The Vendor is responsible for submitting a completed DSP-83. From there, you might want to see the rest of my posts on FMS. The initial deposit required is usually somewhat lower than commercial contract down payments. DCS is the mode that foreign government deals with U.S. military suppliers directly, with the permission of the U.S. government. *FREE* shipping on qualifying offers. This may create difficulties for the Customer. In 2016 alone, aerospace and defense exports reduced the overall deficit by $80-90 billion dollars. The Foreign Military Sales (FMS) program manages government-to-government purchases of weapons and other defense articles, defense services, and military training. Ten countries are granted an exception that allows them to use FMF funding to pay for DCS contracts: Israel, Egypt, Jordan, Morocco, Tunisia, Turkey, Portugal, Pakistan, Yemen, and Greece. Direct Commercial Sales United States Government LOA CONTRACT Foreign Military Sales United States Contractor Foreign Government CONTRACT United States Government EXPORT LICENSE OFFSET AGREEMENT •The AECA requires that the FMS program must be conducted at no cost to the U.S. Government and may not be supported by appropriated funds. Major defense equipment is defined in DODD 2140.2, Recoupment of Nonrecurring Costs on Sales of … An essential course for manufacturers, exporters and their executives, and legal and financial advisors....Learn More Now The future of the Export-Import Bank of the United States (EXIM), and its credit and financing options to potential foreign customers; The strength or weakness of the U.S. dollar driving the price of aerospace and defense exports; and. 245 ... in its calculation of the nonrecurring cost recoupment charge when major defense equipment is sold by foreign military sales or direct commercial sales to foreign governments or international organizations. The United States Government benefits directly and indirectly from transfers of military technologies or systems to foreign governments or end users. Check out our Services or Contact Us to learn more. Financing Security ii. In the U.S. foreign arms sale, there are two modes, “Foreign Military Sale (FMS)” and “Direct Commercial Sale (DCS)”. Basically, DCS is any sale not through the FMS/FMF system. Join a local chapter and get plugged in to NDIA. These activities represent overhead management costs to the Customer. Foreign customers view the FMS process as more transparent, reliable, and secure. These methods help to increase standardization and interoperability between the U.S. and its Allies. However, as foreign competitors move into the global aerospace and defense market more vigorously, several factors will affect (and are affecting) the future long-term presence of the United States: 2101 Wilson Blvd, Suite 700 Any required notifications to Congress are jointly sponsored by the US DOD and the State Department. also read. VA The size and skill of the Customer contracting staff may be a limiting factor during procurement. Customer negotiates directly with the Vendor. A direct commercial sale requires an export license, which is issued by the Office of Defense Trade Controls at the State Department's Bureau for Political-Military Affairs. NDIA convenes events and forums for the exchange of ideas, which encourage research and development, and routinely facilitates analyses on the complex challenges and evolving threats to our national security. U.S. Defense companies have two main avenues for selling on the international market: Direct Commercial Sales (DCS) and Foreign Military Sales (FMS). The Apache sale is a hybrid procurement—Direct Commercial Sale (DCS) between Boeing and MoD and Foreign Military Sale (FMS) between government of India and the US government. This chart explains the main differences between Foreign Military Sales (FMS) and Direct Commercial Sales (DCS). A robust defense industrial-government network consisting of Divisions, Industrial Committees, and ad-hoc Working Groups. LMDefense provides consulting and brokering services to help U.S. defense companies do business overseas. U.S. Government’s Foreign Military Sales (“ FMS ”) program and similar mechanisms, and Direct Commercial Sales (“ DCS ”) negotiated directly between the contractor and the foreign customer. doing business with the Department of Defense. Disclosure e. Contracts i. Place of Manufacture ii. FMS – an acquisition program administered through the Defense Security Cooperation Agency (DSCA), with final approval by the State Department – supports security cooperation between the U.S. and its allies. The US DOD will negotiate with the Customer on behalf of the Vendor. These methods help to increase standardization and interoperability between the U.S. and its Allies. While FMS cases must have departmental approval, they are exempt from the export licensing process. Competition in the form of subsidized, or state-owned, foreign defense companies receiving sole-sourced contracts in place of competitive contract bidding. direct commercial sales between foreign countries and U.S. contractors that are financed by foreign military financing credits are DoD procurements and should follow FAR and DFARS requirements for acquisition and contract administration. Unlike DCS, with FMS the foreign government has a contract with a US contractor American arms manufacturers have two major channels through which they can sell major weaponry to foreign countries: foreign military sales ("FMS"), in which a government-to-government agreement is negotiated by the Pentagon; and direct commercial sales ("DCS"), in which industry negotiates directly with the purchasing country and must apply for a license from the State Department. Vendor – the Vendor refers to the U.S. defense company seeking to sell their product overseas. Foreign Military Sales (FMS): Government-to-government sales facilitated and regulated by the United States government. Broadly, combat resource acquisition comes in two colors, FMS and DCS. U.S. Defense companies have two main avenues for selling on the international market: Direct Commercial Sales (DCS) and Foreign Military Sales (FMS). Or, learn more about LMDefense and our consulting services. Check out my overview of the benefits of FMS vs. the benefits of DCS. These organizations are driving the future of defense through education, access, and collaboration. There are various DOD offices involved in the FMS process. 2778 of U.S. Code, DCS is distinguished from the Foreign Military Sales (FMS) program, which manages government-to-government sales or transfers. A September 2016 White House approval of the sale of fighter jets to the Middle East illustrates the impact that FMS has on the U.S. economy, while concurrently serving U.S. national security interests. Defense technology transfers equip our international friends and allies with capabilities needed to address regional and global security concerns. Since offsets are utilized in both foreign military sales (FMS) and direct commercial sales (DCS), they are subject to the International Traffic in Arms Regulation (ITAR) and the Foreign Corrupt Practices Act (FCPA). This facilitates payment by the Customer. It has been reproduced in the best form available to the Pentagon. It is not spiral-bound Guidelines and Ground Rules b. The NDIA Chapters are the foundation of the Association. Through the Foreign Military Sales process, the U.S. government serves as a go-between for foreign partners and American industry. Direct Commercial. The State Department's Direct Commercial Sales (DCS) program regulates U.S. companies' sales of U.S. defense articles and defense services on the U.S. [email protected], LMDefense | 703-200-2409 | About | Contact, Our consulting services can help you determine whether FMS or DCS is right for your company! A sale of defense articles or defense services made under a Department of State issued license by U.S. industry directly to a foreign buyer, and which is not administered by DoD through FMS procedures. This is a NAVAL POSTGRADUATE SCHOOL MONTEREY CA report procured by the Pentagon and made available for public release. For this reason, the United States takes into account political, military, economic, arms control, and human rights conditions in determining the provision of military equipment and the licensing of direct commercial sales to any country. As part of this diverse network, over 1,560 corporate and 63,800 individual members are actively developing best practices, initiatives, technology, and products in defense with continued guidance and feedback from key stakeholders. (Basically, both DCS and FMS require the same type of notification). Foreign Military Sales (FMS) is the U.S. Government’s program for transferring defense articles, services, and training to our international partners and international organizations. Authorized under Sec. The Vendor must obtain export approval from the U.S. State Department. While the U.S. government contracts out to the defense industry on a competitive or sole-source basis, it may also sell directly from its own stockpiles. Click here for NDIA information related to Coronavirus (COVID-19), Defense Security Cooperation Agency (DSCA), Directorate of Defense Trade Controls (DDTC), International Traffic in Arms Regulations (ITAR, Website design and development by Americaneagle.com. Munitions List (USML), pursuant to the International Traffic in Arms Regulations (ITAR). As the Coast Guard acquires new ships, boats, and aircraft, the assets are made available, through the FMS program, to other countries under already established contracts. Why purchase through the FMS program? Foreign Military Financing of Direct Commercial Sales a. On a much less frequent basis, FMF also funds purchases made through the Direct Commercial Sales (DCS) program, which oversees sales between foreign governments and private U.S. companies. NDIA provides a platform through which leaders in government, industry and academia can collaborate and provide solutions to advance the national security and defense needs of the nation. the Foreign Military Sales program (FMS), through which the U.S. government procures defense articles as an intermediary for foreign partners. 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