Security Levels
Foreign Military Sales
As the Coast Guard replaces its ship, boat, and aircraft inventory, it makes
available to other countries the opportunity to purchase these assets under
the same contracts through the Foreign Military Sales (FMS) program. As new
assets are delivered, the Coast Guard may release legacy assets for sale/transfer
to other countries through the Excess Defense Article (EDA) program. The
FMS/EDA program is the government-to-government method for selling/transferring
U.S.
defense
equipment,
services,
and training. Responsible
arms sales further
national security and foreign policy objectives by strengthening bilateral
defense relations, supporting coalition building, and enhancing interoperability
between U.S. forces and militaries of friends and allies. These sales also
contribute to American prosperity by improving the U.S. balance of trade
position,
sustaining highly skilled jobs in the defense industrial base, and extending
production lines and lowering unit cost for key weapon systems.
Why Foreign Military Sales (FMS)?
- The Foreign Military Sales (FMS) system represents a direct and mutually
beneficial relationship between the government of an allied/friendly
sovereign
country and the United States Government (USG). If defense-related equipment,
training and services are purchased through FMS, transactions
are government-to-government.
- In line with this relationship, the USG will negotiate with manufacturers
on behalf of the customer country to obtain the most advantageous terms,
prices, economies of scale and accompanying efficiencies. The USG assumes
all contracting risk.
- Customer country purchases, whenever possible, are grouped with USG
purchases to lower total acquisition costs to all purchasers (both U.S.
and international).
- FMS transactions, though somewhat complicated in their conception and
execution, are more transparent to financial scrutiny. Many customer
countries
rely on FMS to reduce/eliminate corruption in the defense acquisition
process.
- The USCG, by law, must make no profit on FMS activity. Any surcharges
assessed under FMS pay only actual costs incurred and any excess funds
at the conclusion of the project are returned to the international customer.
- The U.S. Coast Guard Office of International Acquisition and
the U.S. Navy International
Programs Office will ensure timely and accurate execution of:
- Equipment/training/services requirement identification
- Pricing and Availability (P&A) for these items
- Equipment/training/services delivery
- Financial management reviews
- The USG will approach an FMS transaction with the Total Package Approach
(TPA). TPA ensures that all facets of operational requirement are addressed
from initial acquisition, training and spare parts through to long-term
supportability and logistics. The international customer is provided
a "turn-key" solution that immediately establishes an Initial Operational
Capability (IOC).
- FMS fosters a closer relationship between the USG and customer country.
Letter of Request (LOR) Process
The Letter of Request (LOR) from an authorized foreign government representative
is a formal communication that starts the FMS process and permits the
Office of International
Acquisition
to answer
your requests for information. The Letter of Request carries no obligation
to purchase the article or service.
The DSCA Customer Electronic
Guide On How to Prepare the Letter of Request (LOR), prepared by the Defense
Security Cooperation Agency (DSCA) in August 2001, provides a step-by-step overview
of the Letter of Request process, which includes the policy regarding contents
of the LOR.