Case Execution and Delivery in Foreign Military Sales

Implementation ends and Execution begins when orders for the materiel and services are processed against the case. Execution is the longest phase in the life cycle of an FMS case. It can last many years for a major system sale case. During case execution, there are many actions that occur in the areas of acquisition, finance, logistics, and training.

SAMM C6.3.1 dictates that acquisition in support of FMS cases will be conducted in the same manner as it is for U.S. requirements, thus affording the international partner the same benefits and protection that apply to DOD procurement. This is one reason why international partners often prefer to buy via FMS. Accordingly, procurement and supply actions for FMS cases are normally carried out in the same manner by the same DOD procurement and logistics activities that support U.S. forces, although IAs may establish offices or positions within these organizations, specifically to coordinate and monitor FMS support. A typical FMS case includes items from both U.S. supply stocks and from new procurement. FMS procurement requirements may be consolidated on a single contract with U.S. requirements or may be placed on a separate contract, whichever is most expedient and cost effective.

Some of the key actions accomplished during the administrative lead time include thoroughly identifying the requirement; performing market research to determine source options; developing clear specifications or statements of work/objectives; identifying an acquisition strategy; formulating a source selection plan and evaluation criteria; advertising/soliciting for offers; allowing time for potential vendors to develop offers; evaluating competing offers; conducting discussions with industry to better understand offers; scoring industry proposals based on strengths/weaknesses/risks; selecting the offer that provides the overall best value; and awarding the contract.

An FMS case is not generally under the sole domain of any one organization. Many organizations can touch or impact an FMS case during its life cycle. As such, many organizations and people can be involved in the management of an FMS case. However, there should be one person assigned as the case manager for each case. Prior to case implementation, the IA assigns a case manager to integrate and manage all aspects of the case.

The case manager is accountable for all aspects of assigned FMS cases in compliance with applicable laws and regulations. This includes planning and execution functions as well as all financial, logistical, and acquisition matters associated with each program. The objective is to provide all articles and services within the cost and schedule estimated on the LOA. The case manager must stay on top of the assigned program and be aware of any problems that could impact the estimated cost or schedule. The case manager develops a program master plan that separates the case into management components, indicates significant activities in the execution of the case, and establishes an implementation schedule. Depending on the size or nature of the case, the plan covers the following: case description, key milestones (contract status, transportation plan, delivery schedule, training, contractor support, etc.); status, issues/risk; and key points of contact and responsibilities. The case manager provides the master plan to higher authority and to the international partner to forecast events and track progress. The master plan will be updated and reissued after significant project milestones, prior to Program Management Reviews, and as part of the development of amendments to the FMS case. Master plans are discussed in SAMM C2.2.6.

The case manager cannot accomplish all these objectives alone. Effective case management requires frequent communication with the weapon system program manager, the contracting officer, and numerous other key personnel in other organizations. When potential cost overruns or delays are identified, the case manager is expected to consult with the program manager, the contractor, and the international partner to ensure all potential options are explored and informed decisions can be made. Case amendments and modifications should be processed promptly to ensure the case reflects up-to-date estimates and descriptions for the program. After all articles and services have been provided, the case manager ensures that cases are closed in a timely manner.

Case management organizations and procedures vary among the MILDEPs. The case manager for blanket order or Cooperative Logistics Supply Support Arrangement (CLSSA) cases normally resides at the applicable MILDEP International Logistics Control Office (ILCO). The case manager for defined order cases may be in the ILCO or in the MILDEP weapon system program office. The case manager for training cases resides at the MILDEP security assistance training organization.

DSCA requires that FMS case reviews be conducted at least annually. Case reviews can also involve reviewing all FMS cases associated with an international partner. Case reviews have various names (depending on the country and the MILDEP) and can be attended by USG, international partner, and contractor personnel, depending on program, case size, and complexity.

In addition to case reviews, Program Management Reviews (PMRs) are effective tools for U.S. case managers and international partners to assess the overall program status relative to its objectives. PMRs focus on a specific weapon system sale and may include several related FMS cases. These program reviews, which usually involve face-to-face discussions with the international partner, identify problems as early as possible so that resolution can be accomplished before program milestones are impacted or compromised. PMRs also provide USG and international partner representatives with updates and exchanges of information. The frequency and the location of PMRs should be indicated in the case notes.

SAMM C6.5 provides more comprehensive information on FMS reviews. Table C6.T5 of the SAMM identifies various types of reviews as well as the typical USG representatives, frequency, and timing for each. The Case-Related Manpower Functions and Funding Source Matrix, SAMM C9.T2A, helps identify the appropriate source of funding for each type of review. Depending on the type of review and the international partner/program involved, the following topics may be addressed during a case or program review as applicable:

• Major item contract status
• Major item delivery status
• Supply Discrepancy Reports (SDRs)
• Critical/urgent requirements and procedures
• Spares, supply, and shipment status
• Configuration issues
• Case financial status (commitments, obligations, and expenditures)
• Payment schedule adjustments
• Price increases and funding issues
• Transportation/shipping problems
• Training program
• Case closure

Under FMS, major weapon system sales are accomplished using the Total Package Approach (TPA). TPA provides the international partner the weapon system as well as all the necessary support elements to operate and sustain the system for an initial period. Subsequent FMS follow-on support cases may additionally be implemented for continued sustainment of the system throughout its operational life.

Follow-on support is that collection of sustainment activities provided subsequent to the initial support period and prior to the removal of the end item from inventory. Follow-on support negotiations are generally started during the weapon system acquisition phase to accommodate administrative and production lead times.

The follow-on support phase begins with the international partner planning follow-on support and ends when the international partner phases the weapon system out of its inventory. A newly purchased weapon system without follow-on logistics support rapidly takes on all of the characteristics of a museum piece—impressive, but inert and immobile. Obviously, this applies whether a U.S. MILDEP or an international partner becomes the owner of the system. There is a commercial equivalent to the concept of follow-on support termed “after-market” support. The same principles apply; however, in the military, this support takes on vastly greater dimensions. Segments of such support span the entire spectrum from spares through training to technical manuals. Each of the separate segments must be considered, because, if one is missing or is less than adequate, the system’s mission capability is significantly degraded or terminated.

Follow-on support, unlike initial support, involves the USG being in a reactive role rather than a proactive role. That is, the DOD responds to demands initiated by the international partner. Follow-on logistics support encompasses all the various services and materiel required to sustain a weapon system after its operations begin. Follow-on support includes replenishment of initial spares and repair parts, procurement of new support equipment not provided for in the initial allowance, procurement of repair and engineering services, replenishment of munitions, updates of technical publications, etc. Follow-on logistics support is designed to maintain defense systems/equipment in an operating condition or to modify an original configuration after a weapon system or item of major equipment has been originally acquired.

The timely rendering of follow-on logistics support is vital to the success of the FMS program. Without it, the equipment, usually purchased at a considerable cost, will become inoperable and of little value to the international partner, who might then very well question the value of major FMS purchases. Follow-on support should be considered at the same time as initial support. This is necessary because of the lead-time required to negotiate and implement the various types of follow-on support agreements and, in some instances, because of long lead times to procure required items.

The purchasing country has several options from which to choose in terms of the types of FMS cases available for follow-on support. Defined order cases, blanket order cases, and CLSSAs are all used in providing follow-on support. Each has distinct advantages and disadvantages as well as certain restrictions on the types of support that can be provided.

A Blanket Order case is typically used for follow-on support and training for a major item or weapon system following the initial support period. Initial or concurrent support is usually included in the original system sale Defined Order case as part of the TPA. Depending on the IA, a Blanket Order follow-on support case may be established for each category of item/service to be provided, for each major item/weapon system, or perhaps for support of multiple systems.

A CLSSA case is designed to provide more responsive follow-on spare parts support for U.S. produced military hardware owned by international partners. IAs may offer such arrangements with approval from the Defense Security Cooperation Agency (DSCA). A CLSSA consists of two cases. The first case, the Foreign Military Sales Order (FMSO) I case, is established up-front to buy “equity” in the DOD’s supply system for DOD-stocked, non-SME items used by the international partner on a recurring basis. This enables the DOD to augment defense stocks in anticipation of FMS demands and increases the probability of spare and repair parts being available for issue from DOD stock. The second case, the FMSO II case, is a Blanket Order CLSSA case used by the international partner to requisition those items. Many international partners prefer CLSSA cases for follow-on support.

The DOD offers the CLSSA as an effective means of replenishing the in-country stocks of spares and repair parts, which were initially furnished with end items of equipment. The CLSSA is an FMS arrangement for the furnishing of secondary items from the U.S. logistics system to a country in support of specific major end items/systems. The arrangement requires the country to make a financial investment in the DOD logistics system to fund its anticipated support requirements. The country, with the recommendation of the system program managers, identifies (by stock number and quantity) those secondary and support items which the country anticipates it will require annually. This list is known as the equity list, because of the international partner investment in the U.S. supply system. The investment permits the MILDEP to augment its stocks in anticipation of the country’s actual demands. The CLSSA is used for replenishment of consumables or for replacement of repairable components. It may not be used to acquire munitions, major end items, classified items, commercial off-the-shelf materiel, bulk fuel, or anything that the DOD doesn’t centrally stock or centrally manage. The CLSSA is not intended for initial support, but, rather, as a mechanism to resupply the initial support package.