International Acquisition and Exportability (IA&E) Elements December 2014 Frank D. Kenlon Professor...
-
Upload
abraham-white -
Category
Documents
-
view
241 -
download
0
Transcript of International Acquisition and Exportability (IA&E) Elements December 2014 Frank D. Kenlon Professor...
International Acquisition and Exportability (IA&E)
Elements
December 2014
Frank D. KenlonProfessor of International Acquisition (Intermittent)
Defense Systems Management College – International Dept [email protected], (410) 610-5040
2
International Acquisition & Exportability (IA&E)
Defense Exportability Integration
Sales & Transfers
Technology Security & Foreign Disclosure
InternationalCooperative
Programs
New term used in interim DoDI 5000.02
3
International Acquisition/ Security Cooperation Mechanisms
Mechanism Security
AssistanceInternational Armaments Cooperation
Direct Commercial Sales (DCS)
Building Partner Capacity (BPC)
Requirement Foreign Customer Mutually Determined
Foreign Customer DoD Determined
Relationship Buyer-Seller Partner Buyer-Seller 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 Foreign Customer Equitably Shared Foreign Customer DoD
Program Management
DoD Implementing Agency (IA)
Joint Foreign Customer DoD IA
Contract Privity DoD IA & Industry Partner Nations & Industry
Foreign Purchaser & US Industry
DoD IA & 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
National Security Strategy• Strengthen alliances to defeat global terrorism• Work with others to defuse regional conflicts• Develop agenda for cooperative action with
other centers of global power
National Defense Strategy• Shape the choices of key states• Strengthen & expand alliances
and partnerships• Secure U.S. strategic access &
retain freedom of actions
DoS/USAID Strategic Plan• Counterterrorism• Reduce/Eliminate WMD• Promote conflict prevention &
resolution• Conduct security cooperation
& security sector reform
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
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––––––––––––––––––––––––Deputy Secretary of Defense
Secretary of Defense––––––––––––––––––––––––Deputy Secretary of Defense
Under Secretary(Acquisition, Technology
and Logistics)
Under Secretary(Acquisition, Technology
and Logistics)
Under Secretary(Policy)
Under Secretary(Policy)
Defense Security Cooperation Agency
(DSCA)
Defense Security Cooperation Agency
(DSCA)
Director International Cooperation (AT&L IC)Director International
Cooperation (AT&L IC)Defense Technology
Security Administration (DTSA)
Defense Technology Security Administration
(DTSA)
Security AssistanceBuilding Partner Capacity
Technology Security
International Armaments Cooperation
7
TSFD and Export Control Basics
Fundamental Security Considerations
Release Conditions
Type of USG/DoD Authorizations
TSFD Foreign VisitsExport
• Not transfer or use for other purposes without U.S. consent• Provide substantially the same degree of protection as U.S.
Access Protection+
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 ProcessesMILDEP Processes
DoD Lead: Various
MILDEP-specific various
MILDEP Process
Other DoD Processes
DoD Lead: Various
Org.-specific various
Few documented processes
Interagency process
LO/CLO AT&L Primary
AT AT&L Primary
SAP SAPCO Specialized
DSC AT&L + Policy Specialized
Intel USD(I) Specialized
Data Links/WF DoD CIO Specialized
PNT/GPS DoD CIO Specialized
COMSEC NSA & DoD CIO Primary
GEOINT NGA Specialized
MTCR Policy Specialized
NDP Policy Primary
EW None No single process
NVD/INS DTSA Specialized
10
TSFD Oversight
• Arms Transfer and Technology Release (ATTR) Senior Steering Group (SSG) established in DoDD 5111.21:– 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 5111.21:– 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”
JCIDSGuidance
Non-Materiel Solutions
Materiel Solutions
DOTMLPF-P
Procurement or Modification
Additional ProductionOr Modification
CooperativeDevelopment Program
New DoD JointProgram
New DoD Component Program
WhatdoesDoD want
to sellOr
TransferIn
the Future?
Joint Staff, CoCOMs & Services Mil-to-Mil
engagementwith Allies & Friends
12
Defense Exportability Dilemma
How can the USG/DOD best balance these two competing demands?
Where does the money come from needed accomplish these goals?
Provide required capabilities
quickly to allies and friends
Protect the “crown jewels” of U.S. defense
technology
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
IOCA CB
LRIPTechnology Maturation &
Risk Reduction.
Production & Deployment
DRFPRD
MaterielSolutionAnalysis
CDD-V
CDDICD Draft
CDD
Operations & SupportMateriel
DevelopmentDecision
FRP
Decision
Sustainment
DisposalFOC
Engineering & Manufacturing Development
CDRCPDPDR
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• May be multiple
configurations
Exportable Version Depot &
Spares • Funded by
customer
Activities Require MDA Approval
17
Security Cooperation
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
CombinedExercises
Equipment Sales
& FinancingDefense
Contacts &Familiarization
Int’l Armaments Cooperation
Support to Operations
HumanitarianEfforts & Civic
Assistance
Int’lTraining & Education
Elements that involve defense acquisition
19
Benefits
DCSFMS
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
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)
Security Assistance is a State Department Program
21
Foreign Military Sales (FMS)
Requisition
ContractU.S.
Government
LOA
From Stock
Foreign Government
New Production
Services,
or
Information,
• Sale of U.S. defense equipment/servicesby U.S. Government
• Buyer-seller relationship• Foreign Funds (or U.S. grants/loans) with
administrative surcharge• Conducted under State Department Title 22
authority
Letter of Offer and Acceptance
LOR
Letter of Request
22
$13.26 $12.51 $13.00 $13.53 $10.58
$20.98 $23.29
$36.38 $38.09
$31.60 $32.10
$69.10
$27.81
$19.80
$7.19 $10.23
$7.09 $9.22
$7.23
$16.08 $17.19
$24.74 $27.83
$17.10
$26.00
$60.80
$16.32 $18.60
$-
$10
$20
$30
$40
$50
$60
$70
$80
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Bil
lio
ns
Total Sales
FMS Sales (National Funds)
Foreign Military Sales Trends
22
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
23
USMC
USMC
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
Foreign Government(s)
U.S.Government
Contract
InternationalAgreement
U.S. and/or Foreign Government Activity
Work
New Production
Service,
or
Information,
• Acquisition or technology project in any Defense Acquisition Management System phase
• Partnering relationship• Jointly managed• Costs, benefits, risks shared equitably
U.S. and/or Foreign Industry
International Cooperative Program
26
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 2010.06.”
Interim DoDI 5000.02 (Enclosure 2, paragraph 10)
27
Allied Interoperability
• 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 2010.06, Materiel Interoperability and Standardization with Allies and Coalition Partners
• 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
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)
U.S. Government
Contract
$Export License
ApplicationSigned Export License
U.S. CompanyForeign Entity
• 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
30
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)
Requisition
Contract
Implementing Agency
Pseudo LOA
Foreign Government
• 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
MOR
Memorandum of Request
Requesting Authority
Stock
Letter of Offer and Acceptance