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.