Module 5 (Foreign Military Sales) Flashcards by Eugene Acacio

is one of the components of the US Security Assistance Programs pursuant to US Foreign Assistance Act (FAA) of 1961.

US Foreign Military Sales (FMS) Program

How well did you know this?

Not at all

Perfectly

is a group of programs authorized by the US Foreign Assistance Act (FAA) and Arms Export Control Act (AECA) or other related statutes by which the US provides defense articles, military training and other defense related services by grant, credit, cash sale, lease or loan to its partner nation.

US Security Assistance Programs (US SAP)

How well did you know this?

Not at all

Perfectly

US Security Assistance Programs (US SAP) strictly implements no assistance to oppositions of US Foreign Policy, such as:

Violation of Human Rights
Communist Countries
Grants sanctuary to International Terrorists
Discrimination against US Personnel
Delivers/Receives nuclear materials
No adequate steps to stop drug trafficking

How well did you know this?

Not at all

Perfectly

What are the Components of US Security Assistance Programs (US SAP):

Economic Support Fund
Leases
Emergency Drawdowns
Third-Country Transfer
International Military Education and Training Program
Peacekeeping Operations
Building Partner Capacity (Sec. 333)
>US Counterterrorism Program – J4
>Maritime Security Initiatives – J5
Foreign Military Financing (FMF) – J4
Excess Defense Articles (EDA) – J4
Direct Commercial Sales (DCS) – J4
Foreign Military Sales (FMS) – J4

How well did you know this?

Not at all

Perfectly

ARTICLE 1.- Subject to mutual agreements, the Government of the United States of America will furnish military assistance to the Government of the Republic of the Philippines in the training and development of armed forces and in the performance of other services essential to the fulfillment of those obligations which may devolve upon the Republic of the Philippines under its international agreements including commitments assumed under the United Nations and to the maintenance of the peace and security of the Philippines…

RP-US Military Assistance Agreement of 1947 and 1953

How well did you know this?

Not at all

Perfectly

An Act to promote the foreign policy, security, and general welfare of the United States by assisting peoples of the world in their efforts toward economic and social development and internal and external security, and for other purposes.

US Foreign Assistance Act of 1961

How well did you know this?

Not at all

Perfectly

The________ gives thePresident of the United Statesthe authority to control the import and export of US defense articles and defense services. This Act requires international governmentsreceiving weapons from the United States to use the armaments for legitimate self-defense only.

US Arms Export Control Act of 1976

How well did you know this?

Not at all

Perfectly

Philippines Legal Basis for Procurement via US FMS Program:

Republic Act 9184 and its Revised IRRs

>Thru Sec 53.8 Defense Cooperation Agreement under Sec 53 Negotiated Procurement of RA 9184

How well did you know this?

Not at all

Perfectly

The Contracts or LOA for the acquisition projects using Republic Funds are entered pursuant to Section 53.8 that allows the procurement of equipment with an agency or instrumentality of another country with which the Philippines has entered into a ________.

Sec 53.8 Defense Cooperation Agreement

How well did you know this?

Not at all

Perfectly

TRUE or FALSE

Republic Act 9184 and its Revised IRRs
“Sec 4.2. Any Treaty or International or Executive Agreement to which the GoP is a signatory affecting the subject matter of the Act and this IRR shall be observed. In case of conflict between the terms of the Treaty and this IRR, the former shall prevail.”

TRUE

How well did you know this?

Not at all

Perfectly

A program that authorizes eligible foreign countries/ US partner nation to purchase defense articles, services and training from the US Government using National Funds or grant funds from the US Foreign Military Financing (FMF) Program.

Foreign Military Sales (FMS) Program

How well did you know this?

Not at all

Perfectly

A Government-to-Government Agreement pursuant to Sec.4.2 of Republic Act 9184. Each ________ project is documented through the Letter of Offer and Acceptance (LOA) as Contract Agreement.

Foreign Military Sales (FMS) Program

How well did you know this?

Not at all

Perfectly

The ________ emphasizes the Total Package Approach to defense acquisitions.

US Foreign Military Sales (FMS) Program

How well did you know this?

Not at all

Perfectly

What can be sold through FMS?

DEFENSE ARTICLES
DEFENSE SERVICES
DESIGN & CONSTRUCTION SERVICES

How well did you know this?

Not at all

Perfectly

weapons, weapon systems, munitions, aircraft, vessel, boat, component or parts

Defense Articles

How well did you know this?

Not at all

Perfectly

services, test, inspection, repair, training, publication, or defense information

Defense Services

How well did you know this?

Not at all

Perfectly

engineering services, technical advisory assistance

Design and Construction Services

How well did you know this?

Not at all

Perfectly

3 Types of FMS Projects

US Funded
RP Funded (National Funds)
Co-Investment

How well did you know this?

Not at all

Perfectly

[Type of FMS Projects]

through US Foreign Military Financing (FMF)

US Funded

How well did you know this?

Not at all

Perfectly

[Type of FMS Projects]

Capital Outlay/MOOE/Modernization/Other Special Sources

RP Funded (National Funds)

How well did you know this?

Not at all

Perfectly

[Type of FMS Projects]

combination of RP & US Funds

Co-investment

How well did you know this?

Not at all

Perfectly

Term used to identify a request from an eligible partner nation for the purchase of US defense articles and services, including EDA.

Letter of Request (LOR)

How well did you know this?

Not at all

Perfectly

JUSMAG-Phil receives our ________ in-country

Letter of Request (LOR)

How well did you know this?

Not at all

Perfectly

Letter of Request (LOR) can request 2 things:

Price and Availability (P&A)

- Letter of Offer and Acceptance (LOA)

How well did you know this?

Not at all

Perfectly

- Rough order of magnitude (ROM) data - Sufficient for planning, but not for budgeting - Not an offer to sell

Price and Availability (P&A)

- Most precise estimate based on info provided - Sufficient for budgeting - Offer to sell

Letter of Offer and Acceptance (LOA)

Authorized document used by the USG as an offer to sell defense articles and services to foreign country The offer becomes a contract once it is accepted and funding is provided. Subject to many conditions and restrictions

Letter of Offer and Acceptance (LOA)

Document used by USG to sell defense articles, services (including training), and design/construction services to a foreign country or international organization

Letter of Offer and Acceptance (LOA)

Signed LOA + subsequent revisions = ______________

Foreign Military Sales (FMS) Case

3 LOA Terms of Sale

- Open Source - Sole Source - Existing Inventory

[LOA Terms of Sale] US Government will bid out among qualified US Companies

OPEN SOURCE

[LOA Terms of Sale] AFP specifically identifies the Company

SOLE SOURCE

[LOA Terms of Sale] The AFP can request for the USG to provide ________ items especially during “emergency”

EXISTING INVENTORY

4 LOA Terms of Payment

- Cash with Acceptance - Cash prior to delivery - Dependable Undertaking - FMS Credit

[LOA Terms of Payment] Full payment upon acceptance of LOA

Cash with Acceptance

[LOA Terms of Payment] Full payment before the delivery

Cash prior to delivery

[LOA Terms of Payment] Initial deposit and quarterly payment

Dependable Undertaking

[LOA Terms of Payment] FMF-funded

FMS Credit

Pertains to the retransfer, disposal, or change of end-use of US-origin articles, services, or data that was obtained through US Security Assistance Program, to a third party.

Third Party Transfer

THE 6-STEP FMS PROCESS

1. Defining Requirements 2. Letter of Request (LOR) 3. Letter of Offer and Acceptance (LOA) 4. Acceptance of LOA (signed) 5. Implementation 6. Case Execution

4-STEP FMS PROCEDURE FLOWCHART (REPUBLIC FUNDS)

1. Requirement Determination & Approval of Procurement through US FMS Program: LOR for P&A Data (Market Research) 2. Pre-Case Development: Crafting and Processing of LOR for LOA 3. Case Development: Offer and Acceptance 4. Case Implementation and Delivery

Prepares LOR for P&A data as part of Market Research (if deemed necessary)

END USER

Reviews and submits the LOR to JUSMAG-Phil if complete

Transmits the LOR to the concerned USG Agency for processing

JUSMAG-Phil

Processes the LOR & sends reply to P&A data to JUSMAG-Phil within 45 days

USG Agency

Transmits the P&A data to J4 upon availability

JUSMAG-Phil

Transmits the P&A data to End-User upon availability

Reviews and examines the P&A data and seeks approval for procurement through US FMS Program

END-USER

Decides whether or not to procure thru US FMS Program pursuant to Sec 4.2 of RA 9184 and its Revised IRR

SENIOR LEADERS

3 required attachments if Senior Leaders approved the procuement thru US FMS Program

- Annual Procurement Plan (APP) - Acquisition Decision Memorandum (ADM) - Bids and Awards Committee (BAC) Resolution

Prepares LOR for LOA and transmits it to J4

END-USER

Reviews the completeness of LOR and transmits it to JUSMAG-Phil for processing

Reviews the completeness of LOR and submits it to concerned USG Agency for processing

JUSMAG-Phil

Reviews and processes the LOR and craft corresponding LOA. Response time to the LOR depends on the type and complexity of cases (60 to 120 days or more)

USG Agency

Tranmits the LOA to J4 for transmittal to the End-User

JUSMAG-Phil

Transmits the LOA to the End-User for their review and recommendation

Reviews the LOA and recommend for acceptance, amendment or declination (whichever is applicable)

END-USER

If recommended for acceptance, ________ recommends for the SND’s approval of the LOA and subsequent wire-transfer of funds (thru Channel/via CSAFP)

Approves or disapproves the acceptance of the LOA and wire-transfer of fund

SND

If approved, ________ signs the LOA and transmits it to JUSMAG-Phil for implementation by the concerned USG Agency upon wire-transfer of funds Department Circular Nr 11

Issues a Memo to J4 to facilitate the wire-transfer of funds based on the issued SARO for the project

DAO, DND

Requests for the issuance of Allotment Advice (AA) to OFM

Issues Allotment Advice (AA) upon approval of the VCSAFP

J10

Prepares OBR and DV and forwards it to OFM (DV is named to ISAFP who will execute fund transfer to the Payee)

AFPPS (GHQ PC)

Records obligation of funds

J10

Prepares LDDAP to process request for issuance of Notice of Cash Allocation (NCA)

GHQ Accounting

Facilitates signing of LDDAP and requests availability of NCA to DBM thru ASFP, DND

J10

Endorses request for NCA to DBM

ASFM, DND

Issues Notice of Cash Allocation (NCA)

DBM

Prepares DV and check for transfer of funds (NCA) to AFPMATF

J10

CSAFP signs DV and check

VCSAFP

Sends copy of deposit slip to GHQ Accounting

J10

Certifies availability of funds in the DV (Box A)

GHQ Accounting

Approves and signs Box B of the DV then forwards it to AFPMFO for pre-audit

GHQPC, AFPPS

Conducts pre-audit and forwards the DV to 27th FSSU for issuance of check

J10

Issues check to AGDB

27th FSSU

Coordinates with CO, GHQPC and CO, 27th FSSU who will sign the form to effect the wire-transfer of fund to US Treasury

AGDB

Implements the LOA and commences the procurement in accordance with the existing US laws and regulations

USG Agency

J4 coordinates with JUSMAG-Phil for conduct of ________ if deemed necessary prior to the delivery of items

Quality Assurance Inspection (QAI)

Facilitates the delivery of equipment based on the Delivery Term Code indicated in the LOA. JUSMAG-Phil or AFP Freight Forwarder provides a Notice of Arrival through a copy Bill of Lading (sea freight) or Air Waybill (air freight) and Invoice Receipt (DD 1149)

USG Agency/JUSMAG-Phil/AFP Freight Forwarder

Directs respective THUs to facilitate the release of the shipment from the BOC. If request for tax deferment applies, submits request to J4

END-USER

Directs THU, GHQ & HSC and AFPPS to facilitate approval of tax deferment

Computes the total fund requirements for the release of FMS items from the BOC

THUs

Facilitates the availability of funds

END-USER

Upon receipt of funds and certificate of tax deferment, ________ shall coordinate with the BOC for the withdrawal of items and advises concerned SU of the incoming delivery

THU

Prepares the warehouse, receives the items and store it properly

Advises End-User 4s once the articles/items have been withdrawn and delivered to the SU

THU

Informs J4 and JUSMAG-Phil that the items have been delivered and are ready for inventory and inspection

END-USER

OJ4; JUSMAG-Phil; TIAC; End-User 4s; SAO, AFP; concerned SU; AFPMFO Representative; and Major Service SAO (for items for use of the Major Service); shall conduct inventory and inspection of the delivered items

Inspection and Acceptance

If case of discrepancies, End-User’s Major Service 4 submits ________ to JUSMAG-Phil thru J4 for requisitioning

Supply Discrepancy Report (SDR)

If items are complete, TIAC submits Report and ________ of Acceptance to DAO, DND

TIAC Certificate

Upon receipt of TIAC Report & Certificate, ________ issues a Memo to J4 to facilitate the Issuance Directive for the release of the items to the End-User

DAO, DND

Prepares and release Issuance Directive to SAO, AFP

Facilitates issuance of items to the SAO, End-User who shall prepare Requisition and Issue Slip (RIS)/ Inventory Receipt of Property (IRP) and submit it to the SU (P) for the issuance and release of the items

SAO, AFP

Facilitates the issuance of items to the SAO, End-User

Major Service/GHQ SAO

prepares Requisition and Issue Slip (RIS)/ Inventory Receipt of Property (IRP) and submit it to the SU.

SAO, End-User

issues the items to the End-User and submits a copy of the RIS/IRP to SAO, AFP for recording purposes.

SAO, SU

The ________ shall submit an After-Withdrawal Report to OJ4 (thru MS4s for MS items).

END-USER

Submits report to the GHQ and MS Accounting Center and reconciles records

Major Service/AFP SAO

FMS vs DCS

FOREIGN MILITARY SALES (FMS)

FMS vs DCS

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS USG does the work; USG support and involvement to resolve issues

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Transparent Process

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Total Package Approach (TPA) to ensure operational capability

FOREIGN MILITARY SALES (FMS)

FMS vs DCS USG has knowledge and data of prior procurements

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Customer benefits from economies of scale or existing contracts

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Cost - ________ Charges 3.2% for case development and management

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Limits customer involvement

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Risk of USG diversion to other priorities

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Usually overestimate costs; but unused funds are returned to customer

FOREIGN MILITARY SALES (FMS)

FMS vs DCS May result in extended contract lead-times to acquire non-standard materials and/or services

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Country has ownership of entire acquisition process

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Supports development of host government acquisition capabilities

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Customer negotiates own delivery schedule

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS May be able to negotiate contract faster than via DoD process

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Potential to pay in other than US dollars

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Limited USG support to resovle problems

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS U.S. Government only involved in export license review and congressional notification

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS May not be Total Package Approach

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Potentially limited technical knowledge of system

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Country needs contracting officer and auditor expertise

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Can capitalize on the use of the extensive DoD training facilities (i.e. ranges, etc.)

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Extensive DoD operational expertise and trained personnel

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Sole-Source requests for specific items

FOREIGN MILITARY SALES (FMS)

FMS vs DCS Customer can often decide where and when they want the training to occur

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Contractor may not have the operational expertise, capability, or trained personnel that the DoD has

DIRECT COMMERCIAL SALE (DCS)

FMS vs DCS Contractor may not have access to DoD training facilities (i.e., ranges, etc.)

DIRECT COMMERCIAL SALE (DCS)

This Act requires international governments receiving weapons from the United States to use the armaments for legitimate self-defense only.

US Arms Export Control Act of 1976