International Acquisition & Exportability Fundamentals

1. International Acquisition & Exportability Fundamentals

2. Overview International Acquisition & Exportability (IA&E) Topics • Security Cooperation • Int’l Acquisition Forms and Mechanisms • Technology Security & Foreign Disclosure • Defense Exportability • Summary International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure DefenseExportability

3. Security Cooperation All DoD interactions with foreign defenseestablishments to build defense relationshipsthat promote specific US security interests,develop allied and friendly military capabilities for self-defense and multinational operations, and provide US forces with peacetime and contingency access to a host nation. Security Cooperation is a DoD Term (Joint Pub 1-02)

4. Security Cooperation Elements Combined Exercises Int’l Armaments Cooperation Equipment Sales & Financing Defense Contacts & Familiarization Humanitarian Efforts & Civic Assistance Support to Operations Int’l Training & Education

5. Security Cooperation Elements Elements that involve defense acquisition in color Combined Exercises Int’l Armaments Cooperation Equipment Sales & Financing Defense Contacts & Familiarization Humanitarian Efforts & Civic Assistance Support to Operations Int’l Training & Education DoDD 5132.03 October 2008

6. Major Legislation Title 22 Legislation • Arms Export Control Act (AECA) • Foreign Military Sales (FMS) • Direct Commercial Sales (DCS) • Cooperative Programs • Foreign Assistance Act (FAA) • Grant Aid • International Military Education and Training (IMET) • Excess Defense Articles (EDA) Title 10 Legislation • Building Partner Capacity (BPC) • Cooperative RDT&E • Acquisition and Cross Servicing Agreements (ACSAs)

7. International Acquisition & Exportability (IA&E) International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration

8. International Armaments Cooperation (IAC) • Cooperative research, development, and acquisition projects and programs • Enabling Programs • Personnel exchange (ESEP & APEP) • RDT&E Information Exchange Program (IEP) • International Cooperative R&D (ICR&D) program • Coalition Warfare Program (CWP) • Foreign Comparative Testing Program (FCT) • International Cooperative Programs (ICPs)

9. International Cooperative Programs (ICPs) Major System Examples • F-35 Joint Strike Fighter (JSF) • NATO Alliance Ground Surveillance (AGS) • Rolling Airframe Missile (RAM) • Evolved SeaSparrow Missile (ESSM) • Multifunctional Information Distribution System (MIDS) • Guided Multiple Launch Rocket System (GMLRS) • Wideband Global SATCOM (WGS) Scope • DoD concludes about ~30 international agreements/year for ICPs • Most agreements are for S&T or early R&D projects • Some agreements for cooperation on a “piece” of a program • Limited number of fully cooperative major system development/production programs

10. The Nature of ICPInternational Agreements • Each IA is unique • Not a Treaty, but much more than an international handshake • An Executive Department Agreement that may have a Congressional reporting requirement • Legally binding for the U.S. • Enforceable through mutual agreement (no arbitration) • Reciprocal

11. IAC & ICP Key Players & Processes International Interaction • Project ideas • Policy • Limited funding • Internationalagreementapprovals Defense Coop Committees, MOU Reviews AT&L Director of International Cooperation [AT&L(IC)] • Project ideas • Policy • Limited funding • Internationalagreementdevelopment International Program Organizations (IPOs) Senior Nat’l Reps, Cooperation Reviews NIPO SAF/IA DASA(DE&C) DoD Agencies: DTRA, DARPA, MDA AFRL, PEOs, SPOs RDECOM, Labs, PEOs ONR, NRL, PEOs, POs • Project ideas • Funding • Management • Execution S&T WGs, Conferences, Visits/Mtgs Many Others

12. AT&L ICP Agreements Process Cooperative Opportunity • Timeline • Highly dependent on international agreement complexity • For simple Project Agreements (PAs), ~12 months from RAD to agreement signature • Complex multilateral MOUs can take significantly longer Discussions Request Authority to Develop (RAD) Negotiations Request for Final Approval (RFA) Sign Agreement Execute Program • AT&L Process Owner • Director of International Cooperation, USD(AT&L)/IC • Responsible for international cooperation policy & providing international agreement approvals to DoD Components

13. ICPs Vs. Defense Sales DEFENSE SALES (Buyers-Sellers) Rigidly Structured Bilateral Arrangement Foreign Gov’t is Customer Foreign Gov’t Requirement Foreign Gov’t End User Foreign Gov’t Funds U.S. Sets Terms (LOA) U.S. Controls Implementation Foreign Gov’t Pays for Services USD(P) Oversees (Title 22) ICPs (Partnerships) Flexible Bilateral or Multilateral Foreign Gov’t is Partner Joint Requirement Both Gov’ts Are End Users Both Gov’ts Fund Terms are Negotiable Both Participate in Oversight Cost of Services are Shared USD(AT&L) Oversees (Title 10)

14. International Acquisition & Exportability (IA&E) International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration

15. Security Assistance Programs Security Assistance is a State Department-led effort primarily implemented by DoD Program Administration Responsibilities • Department of Defense • Foreign Military Sales (FMS) • Foreign Military Financing Program (FMFP) • Int’l Military Education & Training (IMET) • Foreign Military Construction Services (FMCS) • Leases • Drawdowns • Excess Defense Articles (EDA) • Department of State • Peacekeeping Operations • Int’l Narcotics Control & Law Enforcement • Nonproliferation, Antiterrorism, Demining, and Related (NADR) • Direct Commercial Sales (DCS) • US Agency for Int’l Development • Economic Support Fund (ESF)

16. FMS & BPCKey Players & Processes International Interaction • DoD-wideSC Policy • FMS Admin $ • SC & FMStransactionapprovals OSD/Joint Staff Level Defense Security Cooperation Agency (DSCA) • ComponentSC Policy • FMS Admin $allocation • SC & FMStransactiondevelopment MILDEP HQ Focal Point DoD Component Level NIPO SAF/IA DASA(DE&C) • Receive/respond to LORs • Oversee LOAexecution byPEOs, PMs, logcenters, trainingorgs, etc Implementing Agencies (IAs) SAF/IAR, AFSAC, AFSAT DASA(DE&C), USASAC, AMSAC, SATFA, COE, USACE NIPO CoCOM Country Team Level DSCA, DCMA, DISA, DLA, DTRA, MDA, NGA, NSA

17. FMS Process Preliminary Definition Letter of Request (LOR) Request Offer Letter of Offer & Acceptance (LOA) Acceptance Implementation • Timeline • By DSCA policy for a complex FMS case ~6 months from LOR to LOA signature • Many variables – cycle time often longer Execution Closure

18. Direct Commercial Sales (DCS) • Sale of defense articles, services, or training made or provided by U.S. defense industry to a foreign entity • Not administered by DoD and do not involve a government-to-government agreement • Foreign entity contracts directly with U.S. company • USG control procedure is accomplished through licensing

19. FMS vs DCS vs Hybrid • DoD is generallyneutralwhether a foreign country purchases through FMS or DCS • Certain items can be designated FMS only; based on complexity, sensitivity, interoperability, relationships • Most major system DCS programs will have an FMS companion effort for FMS-only items (i.e. a hybrid program) Many EW system international sales are “hybrid programs” due to classified aspects of system software functionality

20. Building Partner Capacity (BPC) • Title 10, DoD Security Cooperation programs executed through the FMS infrastructure • Differences from traditional FMS • USG Requesting Authority identifies requirement • Funded by the USG • “Pseudo”-LOAs are not signed by country • Title transfers in country • Variety of programs conducted under multiple legal authorities List of programs and BPC policies are contained in Chapter 15 of the SAMM

21. BPC Case Process Planning & Requirements Definition Memorandum of Request (MOR) Development Implementation Pseudo LOA Execution • Timeline • By DSCA policy 30 days from MOR to Pseudo LOA Closure

22. International Acquisition & Exportability (IA&E) International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration

23. The Dilemma Provide required capabilities quickly to allies and friends Protect the “crown jewels” of U.S. defense technology How can the USG/DOD best balance these two competing demands?

24. TSFD and Export Control Basics Fundamental Security Considerations Access Protection + Release Conditions • Not transfer or use for other purposes without U.S. consent • Provide substantially the same degree of protection as U.S. Type of Authorizations Export Control TSFD Disclosure Authorizations DoD Intel Community Interagency DoD Interagency State & Commerce DoD Interagency

25. International Acquisition & Exportability (IA&E) International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration

26. Designing for Exportability Past Why • Launch customer paid for technology security modifications to DoD configuration • Expensive and time consuming mods inhibit foreign sales • No authority to use appropriated funds for exportability design • Improves protection of Critical Program Information (CPI) and critical functions using Anti-Tamper (AT)/Cyber measures • Reduces overall DoD and foreign program protection costs • Makes our equipment available earlier to Allies and Friends Present • Defense Exportability Features (DEF) Pilot Program authorized by Congress in FY11 and subsequent Nat’l Defense Authorization Acts • OSD and the MILDEPs have selected 15 programs to participate as DEF Pilot Programs • Authorizes expenditure of DoD funds to evaluate exportability and facilitate planning; industry shares cost • Facilitates incorporation of program protection features in systems with high export potential during system development

27. What are the major benefits of International Acquisition Programs?

28. International Acquisition Benefits • Improved Interoperability • Economies of Scale • Production • Operations & Support • Maintain hot production base • Share sustaining engineering costs • Share production line shutdown costs • Share RDT&E costs • Share production non-recurring costs BPC DCS FMS ICP

29. International Acquisition & Exportability (IA&E) DoDI 5000.02 and DAU Training International Cooperative Programs Sales & Transfers Technology Security & Foreign Disclosure Defense Exportability Integration Goal = Improve Int’l Acquisition Outcomes!

30. Handouts

31. Defense Exportability Activities IOC C A B Engineering & Manufacturing Development Materiel Solution Analysis LRIP Sustainment Technology Maturation & Risk Reduction. Activities Require MDA Approval FRP Decision Operations & Support Materiel Development Decision DRFPRD CDD-V • Exportability Assessment • Projected sales • Technology complexity • Exportability Feasibility Studies • Conducted with program contractor • Included in TMRR contract • Funded by program or DEF PE • Industry provides 50% • Exportable Designs • Funded by program, cooperative program or customer, or industry (or combination) • May be multiple configurations • Exportable Version Production • Funded by customer • May be multiple configurations • Exportable Version Depot & Spares • Funded by customer Production & Deployment ICD CDD Draft CDD CPD FOC Disposal PDR CDR

32. Comparisons