Acquiring Assets through Foreign Military Sales
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The Government of Mexico purchased four CN235-300M aircraft (similar to the Coast Guard’s HC-144A). Oct. 1, 2010, the Foreign Military Sales program awarded a $157.9 million contract to EADS North America to produce these aircraft. The fourth and final delivery took place May 2, 2012, at EADS' facility in Seville, Spain. Photo courtesy of Airbus Military.
As the Coast Guard acquires new ships, boats, and aircraft, the assets are made available, through the FMS program, to other countries under already established contracts.
Why purchase through the FMS program?
- The FMS program represents a direct and mutually beneficial relationship between the government of an allied/friendly sovereign country and the U.S. government. FMS, transactions are government-to-government and therefore more transparent than direct commercial sales.
- In contrast with direct commercial sales, the U.S. government will negotiate with manufacturers on behalf of the customer country to obtain the most advantageous terms, prices, economies of scale and accompanying efficiencies. The U.S. government assumes all contracting risk.
- Customer country purchases, whenever possible, are grouped with U.S. government purchases to lower total acquisition costs to all purchasers (both U.S. and international).
- Congress must be notified if a sale includes equipment and/or services totaling $50 million or if significant defense equipment is valued at $14 million. With FMS, any required notifications to Congress are jointly sponsored by the Defense Security Cooperation Agency (DSCA) and the Department of State.
- The U.S. government will ensure that all facets of operational requirement are addressed from initial acquisition, training and spare parts through to long-term supportability and logistics.
- FMS fosters a closer relationship between the U.S. government and customer country.
How does a foreign government initiate a purchase?
To start the process, a Letter of Request (LOR) from an authorized foreign government representative is required and permits the Office of International Acquisition to answer requests for information. The LOR carries no obligation to purchase the article or service. The DSCA provides a step-by-step guide on how to prepare a LOR. Once an LOR is received, a FMS case is established. Part of the FMS review process involves reviewing requirements and determining if the technology involved is releasable for export. Check out FMS assets available for purchase