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April 2011 www.sname.org/sname/mt The congressional notification time frame is an established statutory period of 15 days for NATO coun- tries, Australia, Japan and New Zealand. For all other countries, notification is comprised of a twenty day advanced (informal) notice and a thirty day statutory notice. Congress can adopt a joint resolution if they object to a proposed sale. If no congressional objection is made, the advance or the statutory notice periods will lapse and the sale can proceed with DSCA approval. Signed agreement Once the LOA is prepared, DSCA countersigns the LOA, and it is then forwarded to the purchaser for acceptance. An LOA becomes an agreement when it is signed and accepted by an authorized representative of the pur- chasing country and funding is provided. e purchaser is normally given 60 days to review and sign the LOA and to forward copies to the IA and the Defense Accounting and Finance Center with any required initial payment. is must be completed on or before the oer expiration date which is identied on the rst page of the LOA. Payments must be in U.S. dol- lars and may be transmitted by check or wire transfer. If a purchaser knows that an expiration date cannot be met, a request for an extension should be made to the cognizant IA to keep the oer open. Policy consideration or contractor-provided price and delivery time frame quotes may preclude a time extension. After receiving the initial deposit, obligational authority (OA) is released to the cognizant IA. OA is evidence that case acceptance, including proper funding, has been received and the case may be implemented. e means by which the U.S. govern- ment fullls the FMS program requirements depend upon the nature of the material and services being furnished. Typically, a program consists of the pro- curement of items from new production, as well as provision of selected items from government stocks. e entire system may be composed of both contrac- tor furnished and government furnished material, equipment, and subsystems. Items to be procured are contracted from industry by various U.S. government buying activities. FMS purchases may be consolidated with U.S. government purchases or placed on a sepa- rate contract, whichever is more expedient and cost eective. FMS case execution is usually the longest part of the FMS process. Case execution ends when the last item or service is ordered and completed. An FMS case is considered closed when a nal statement of account is issued to the customer. Why FMS Considering the current downward trend in U.S. mil- itary equipment purchases, international sales can provide additional market opportunities for defense contractors. ere are two options when it comes to international military equipment sales: direct com- mercial sales (DCS) and FMS. While direct commercial sales avoids the lengthy FMS and government contract- ing processes, the issue of obtaining the proper licensing authority (a long process in itself) to proceed with inter- national military sales is a signicant risk that must be mitigated. In principle, DCS should provide a reduced cost for the same services provided in FMS, considering that FMS requires all expenses be paid by the foreign customer, including U.S. government labor and over- head, which impacts total project cost. The reason countries choose FMS is that inter- national procurements are the same for U.S. military procurements. All necessary logistics and equipment support are included in the FMS project unless speci- cally declined by the customer. LOAs are government to government agreements and as such, once a purchase is made, the U.S. government goes to great lengths to keep the purchase fully operational throughout the sys- tems lifecycle. Today, there are numerous systems, long retired from the U.S. inventory, such as the TARTAR mis- sile system, still operational in allied militaries. FMS can present strong business opportunities to U.S. industry as long as a full understanding of the FMS process is in hand. Taking the time to work with the Security Assistance Team overseas and understanding our allies military requirements give knowledgeable defense contractors leverage when oering moderniza- tion projects to targeted countries. Far too often, U.S. defense contractors travel overseas with a pre-planned sales pitch for modern military equipment that does not function within a nations infrastructure. As a whole, the FMS process has been and will continue to be a major component of security assistance. It can be a win-win- win situation for our international partners, the U.S. government, and U.S. defense contractors. MTAlfred Gaiser is former program manager of the International Fleet Support Program Oce (PMS 326). He is currently assigned as chief of sta, Naval Systems Engineering Directorate, NAVSEASYSCOM SEA 05.