Government Staffing Needs
While the foreign military sales (FMS) program is not broken, the acquisition system that administers it is over-extended. Limited staffing spreads over various departments and agencies. As FMS requests from foreign governments continue to surge in 2017, the inadequate amount of expert contracting officers needed to review, approve, and process all transactions underscores the necessity of a streamlined inter-agency review process between the State Department and the Department of Defense.
Over the last several years, for example, the aerospace and defense industry has witnessed increases both in the use of Undefinitized Contract Actions (UCAs) and the length of time it takes to definitize UCAs. For FMS cases, contractors are usually forced to sign UCAs after the Defense Security Cooperation Agency (DSCA) signs a Letter of Offer and Acceptance (LOA) with a foreign customer. UCAs are used to facilitate timely delivery for security purposes, but contracting personnel shortages, or other issues, can drive the decision to require a UCA as well. It often takes over a year to definitize UCAs for FMS cases. This hurdle creates costs and uncertainties for both industry and foreign customers. Contractors are unable to negotiate advantageous prices, while foreign customers must wait for final delivery of their weapons systems.
Recommendations to Streamline the Process
- Establish a cadre of contracting professionals dedicated to FMS cases;
- Support contracting staff with additional resources from FMS administrative fees and funds through the annual NDAA;
- Provide the acquisition workforce with clear instructions on how auditing requirements fit into the FMS process;
- Create an open dialogue between foreign customers and the U.S. Government about the exact nature of the FMS process, from the LOA to the final delivery of the defense system; and
- Ensure timely implementation of relevant Fiscal Year (FY) 2017 NDAA provisions that position FMS cases on par with domestic cases.
While the FMS acquisition system is deliberative, to a certain degree, in weighing potential sales against national security priorities, those delays at all levels of the FMS process could have severe implications on the U.S. industrial base.