Learn More About the 7-Phase Process for the Foreign Military Sales Program
The Foreign Military Sales Program is authorized by the Arms Export Control Act (AECA) of 1976. The provisions of Section 3 of The Act allow for the United States’ selling of defense articles and services to foreign countries and international organizations that appear in DoD 5105.38-M, Security Assistance Management (SAMM), Table C4.T2. The president must first formally determine that participation in these transactions promote world peace and strengthen U.S. security.
Foreign countries and international organizations (customer/s) that are eligible to have their military requirements met through this program must go through a 7-phase process:
1.) Preliminary/Definition – Ongoing communication between the customer and U.S. representative, principally the in-country United States security assistance organization where items such as acquisition programs, training plans, financing, and U.S. defense contractors, etc. are located.
2.) Request – Once the customer has narrowed down their choice(s) of desired materials and contractors, they submit a Letter of Request (LOR), which should be as detailed as possible to the Implementation Agency (IA), which is the United States Government (USG) organization authorized to receive and process LORs.
3.) Development of Offer – The LOR is processed by the IA. There are two types of responses to the LOR; Price and Availability (P & A) which is provided for country planning purposes and shows estimated costs and projected availability of defense articles or services, or a Letter of Offer and Acceptance (LOA), which is an offer to sell defense articles and services to a foreign country or international organization. On average, preparation takes 120 days. If the offer exceeds a Section 36(b) (1) AECA threshold, notification of the offer must be provided to Congress. If the IA feels that a LOR should not be approved, they will coordinate with the Defense Security Cooperation Agency (DSCA) to determine the next steps.
4.) Acceptance of the Offer – The customer has 60 days to review and accept an LOA once it is received from the IA. The LOA is officially accepted once the customer sends signed copies of the LOA to Defense Finance Accounting Service-Indianapolis Center (DFAS-IN) and also sends in the initial deposit/payment due with acceptance as indicated on the LOA.
5.) Implementation - Organizational authority (O/A) is released to the cognizant IA by DFAS-IN. The IA then prepares case directives that direct and coordinate the case implementation process.
6.) Execution – Once requisitions for the LOA material and services are processed against the case, the implementation phase transitions into the case execution phase. This is the longest phase of the process and is completed when the last article or service is delivered or completed.
7.) Reconciliation and Closure – This step should actually begin once case directives are established and continue throughout the life of the case. Steps of the reconciliation process include review of proper accounting, accuracy, and thoroughness of data by way of financial and logistical actions; currency of schedules; and timeliness and completeness of reporting.
On August 27, 2015 the State Department made a determination approving a possible sale to the United Kingdom for AH- 64E APACHE GUARDIAN Attack Helicopters and associated equipment, parts and logistical support for an estimated cost of $3.00 billion, in connection to their LOR for the remanufacture and refurbishment of several hundred military-related assets.
One of the prime contractors for this potential sale is The Boeing Company in Mesa, Arizona. Eagle Enterprises has been an authorized distributor of Boeing AH-64 APACHE spare parts to the United States government for nearly 10 years and also has the ability to provide the government with parts for Boeing’s AV8B, C-17, F-15, F-18, CH-47, E-6, F-15, F-18, Harpoon, and KC-135. Eagle Enterprises has been awarded over 2,500 USG contracts and placed over $60 million in purchase orders with The Boeing Company.
USG agency procurement officers with requirements for Boeing Spare Parts are welcome to contact us at any time as we are generally able to provide same-day pricing.
Source Links
http://www.samm.dsca.mil/chapter/chapter-5
http://www.disam.dsca.mil/pubs/DR/05%20Chapter.pdf
https://www.pmddtc.state.gov/regulations_laws/aeca.html#i
http://www.gpo.gov/fdsys/pkg/USCODE-2010-title22/html/USCODE-2010-title22-chap39.htm
http://www.dsca.mil/major-arms-sales/united-kingdom-ah-64e-apache-guardian-attack-helicopters
Kené G. Thompson is the Director of Sales & Marketing for Eagle Enterprises. Thompson began her career at Eagle as an Account Manager and has recently moved into her Director role. Prior to coming to Eagle, Kené spent six years at Merrill Lynch and obtained her Series 7, Series 63, and Series 66 licenses. She also has five years of retail banking experience. Kené holds a Bachelor of Science in Accounting from Morgan State University located in Baltimore, Maryland.
