PERU
July 2009
04/14/08
The Sales Process
Foreign
Purchaser
Needs
State
Defense
MILDEPs
President
Congress
Supplies
and
Services
SAM-I, 5/1/2009
04/14/08
FMS Terminology
What’s a FMS Case?
A government to government
agreement to transfer
defense articles &
services is a:
Letter of Offer & Acceptance
=LOA
= FMS Case
=Case “BN-D-YCY”
=Case YCY
04/14/08
International Sales Process
FMS Case lifecycle phases (DISAM Text Page 5-2)
Preliminary, Definition and Request
Offer and Acceptance
(SAMM C-5)
Implementation, Execution, and Closure
(SAMM C-6)
04/14/08
Security Assistance Policy
Documents

Security Assistance Management Manual (SAMM)
DoD 5105.38-M

DSCA Policy Memoranda

Financial Management Regulation 7000.14-R, Vol.
15, Security Assistance Policy and Procedures

Reconciliation and Closure Manual DoD 5105.65-M
(RCM)
 MILDEP Specific Policy Manuals
04/14/08
Customer Decisions
Where
Cost
What Kind
When
How
Many
=
Minister of
Defense
Bandaria
Non-U.S.
Sources
U.S.
Munitions
List
Needs
Arms
Export
Control
Act
U.S.
Commercial
Export
FMS
Letter
Of
Request
(LOR)
04/14/08



Letter of Request Checklist
Identification Information
 Purpose:
 P&A- Price & Availability
 LOA-Letter of Offer &
Acceptance

 Lease
 Purchaser
 Pre-negotiations
 Transparency

 Acceptance Time Frame
 International Solicitation
Major Item Considerations
 Standard Model
 Quantity

 Unique Configuration
 Delivery Timeframe
 Transportation
 Warranties
 Sole Source
Support Considerations
 Operations Concept
 Maintenance Concept
 Supply Concept
 Initial Spares




Support Equipment
Facilities
Follow on Support
Publications
Services




FMS Case Reviews
Training
DOD/Contractor Services
Site Survey
Financial Considerations



Funding Source
Payment Schedule/Initial
deposit
Financial Waivers
Total
Package
Approach
Special Considerations





Memorandum of
Understanding (MOU)
Offsets
Commercial Negotiations
Special Reports
Interoperability
LOR Writing Guide
04/14/08
Need LOR preparation help?
 DISAM’s LOR Writing Guide
 USASAC’S Commodity Specific
Checklists (Int’l Customers tab)
 AFSAC On-line
 Implementing Agency (IA)- Country
Program Director (CPD)
USASAC-U.S. Army Security
Assistance Center
AFSAC-Air Force Security
Assistance Center
04/14/08
LOR Applications
LOR Submissions
Selecting
04/14/08
LOR Applications
LOR Submissions--Screen 1
Selecting
The customer may submit a ‘New LOR’ or ‘View/Modify’ an existing LOR.
For new LORs, the user must select the type of LOR required (Purpose of
Request) and establish a ‘unique’ Country Reference Number.
For existing LORs, the user may query by the Country Reference Number OR the
AFSAC Reference Number. The user can view any existing LOR; however, only
‘open or pending’ LORs can be modified.
04/14/08
LOR Applications
LOR Submissions--Screen 2
The user enters
applicable LOR data
on this screen, then
clicks ‘Continue’ to
proceed to the next
screen. Edits will
ensure user completes
all required fields.
Note that the user
requested P&A data in
this LOR Submission
example.
Multi-line phase allows
the user to select one
or more
materiel/services.
Selecting
04/14/08
Channels of Request
Letter
Of
Request
LOR
State
DSCA
Combatant Command
U.S. Embassy
Implementing
Agency
PROCEED
Bandaria
Prepare LOA
Congress
04/14/08
International Traffic in Arms
Regulations (ITAR)
 Provides registration / licensing requirements for


the commercial export of defense articles,
services, and related technical data.
Includes the United States Munitions List (USML)
Identifies “Significant Military Equipment” (SME)
 SME requires special considerations because of “Their
capacity for substantial military utility or capability”
SME also defined in §47(9), AECA


Identified by an Asterisk (*) on the Munitions List
[22 CFR 120-130]
04/14/08
Major Defense Equipment List
Approved
Charge
Helicopters
AH-1S Cobra (with T-53-L-703 Engine) System without C-Nite
AH-1W Super Cobra (with 2 T-700-GE-401 Engines)(N)
AH-1Z (H1 Helicopter upgrade) with two T700-GE-410 Engines
AH-64 Apache Helicopter System (with 2 T-700 Engines) (A)
AH-64 (New) Apache Helicopter System with 2 T-700 Engines
CH-47D Chinook (without T-55 Engines) (A)
OH-58D Kiowa with one T-703 engine (with Mast Mtd Sights) (A)
SH-2G (with 2T-700-GE-401 Engines) (N)
UH-1Y (H-1 Helicopter Upgrade) with two T700-GE-401C Engines
$147,604
$326,461
$897,452
$1,045,566
$1,328,033
$144,279
$663,082
$607,149
$761.197
Effective
Date
11 May 89
18 Jun 90
28 Nov 01
30 Dec 83
23 Feb 00
7 Aug 91
10 Aug 93
3 Jun 91
28 Nov 01
MDE List- SAMM Appendix-1
04/14/08
“Country Team Assessment”
for SME/MDE LOR’s (SAMM C5.T1)

U.S. Embassy/SCO Must Address:
 Reason nation desires articles/services
 Effect on recipient's force structure
 Reaction of neighboring nations
 Purchaser's ability to maintain, operate and



support
Economic impact and source of financing
Human rights considerations
Should USG approve purchase
SME=Significant Military Equipment
MDE=Major Defense Equipment
04/14/08
Defense Security Cooperation
Agency Responsibilities









Charter-Administer FMS
Policy (SAMM)
Congressional Input
FMS Country Program &
Financial Management
FMS Administrative
Budget
Credit Program (FMFP)
Training Program (IMET)
FMS Trust Fund Mgt
Waiver Authorities
 Memoranda of Understanding
 Security Cooperation Office







Mgt.
Computer System
Development & Management
Security Assistance Metrics
Payment Schedules/Special
Bills
Case Closure
Lean Six Sigma (LSS) Teams
Security Cooperation
Non-FMS Functions
04/14/08
Department of State
Arms Transfer Points of Contact
Under Secretary for Arms Control
& International Security
Bureau of Political-Military Affairs:
Regional Security and Arms Transfers (RSAT)
Director for Defense Trade Controls (DDTC)
04/14/08
Channels of Request
Letter
Of
Request
LOR
State
DSCA
Combatant Command
U.S. Embassy
Implementing
Agency
PROCEED
Bandaria
Prepare LOA
Congress
04/14/08
Preliminary
Definition &
Request
04/14/08
 Optional slides
04/14/08