The government’s process of managing international sales of weapons systems made by United States companies could be improved if the Defense Department’s acquisition and contracting personnel are better equipped to deal with Foreign Military Sales (FMS), industry representatives told a House panel on May 11.
“Contracting officers generally don’t have any dedicated focus on FMS contracts,” Tom Davis, senior fellow with the National Defense Industrial Association, told the House Armed Services Subcommittee on Oversight and Investigations. “So when it comes to making a choice between working on contract that has a domestic program that has an immediate degree of pressure because it involves a capability we are trying to get out to our armed forces in the field, inevitably the focus will go there.”
Remy Martin, vice president of International Affairs at the Aerospace Industries Association, in his prepared remarks to the committee said, “We must consider the question of whether or not the Security Cooperation Enterprise is able to manage on a sustainable basis Foreign Military Sales, Direct Commercial Sales, and hybrid cases that are growing in complexity, number and urgency. In the absence of greater resources, training, and a focus on Security Cooperation Enterprise Reform, we will discover the answer is no at the worst possible time.”
The House Armed Services Committee in a series of hearings this spring and in Chairman Mac Thornberry’s (R-Texas) markup of the FY ’17 defense authorization bill is closely examining the DoD’s processes and pace of U.S. arms sales to international customers and whether reforms are needed to expedite closure on deals.
Rep. Vicky Hartzler (R-Mo.), chairman of the Oversight Subcommittee, said in her opening remarks that “some believe the Department of Defense’s FMS process is too cumbersome and bureaucratic. Others offer that the process is designed to be deliberately slow and methodical in order to achieve the correct outcome in determining whether or not the U.S. supplies military capabilities that appropriately further U.S. national security interests.”
Martin told Hartzler “candidly” that throughout the FMS process, to include the larger Security Cooperation Enterprise, “it’s a challenge to find anybody that’s able to figure out where they fit in relative to every other part.” He said most people aren’t focused on the larger process and “how they can help support a timely movement from start to finish to get out to the other side.”
Davis and Martin both told the panel that a lack of staffing and stress on the acquisition corps hurts the FMS processes. Davis, in his prepared remarks, said that at the Office of the Secretary of Defense for Acquisition, “some of the biggest delays occur following contract award,” due to “resourcing and human capital” issues. “Simply put,” Davis stated, “domestic programs take a higher priority over FMS programs, and the internal staffing within DoD is insufficient to review licensing requests in a timely manner.”
Martin said the issue of resource constraints and a lack of international sales expertise combine to make the FMS process worse.
“So if you already have a deficit of expertise within that group and you’re shrinking that acquisition workforce, it exacerbates the problem,” Martin told the panel.
Davis and Martin said FMS cases can drag on for three years. Martin said industry isn’t looking for reforms that mean the U.S. government always says “yes” to foreign sales but instead wants a quicker determination up or down. This will also give potential customers more confidence that the U.S. can move quickly on a sale and prevent countries like Russia and China from getting the business.
Martin said Russia and China have become more aggressive in exporting defense technology “as tools to advance their strategic geopolitical objectives.”
The State Department is responsible for managing the larger FMS program. Asked by Hartzler where the biggest holdups are in the process, Davis said he has no data to offer but that based on his experience the biggest delays are typically outside of DoD.
This is because of broader foreign policy considerations, Davis said. These are legitimate concerns but need to be addressed and reconciled more quickly, he said.
Martin, however, said that a lot of the problems still reside within DoD, adding that throughout the entire process “there’s so many different ways you can go off the rails.”
Despite concerns about the slowness in getting FMS deals completed, international business for U.S. defense companies has been looking up. Martin said that the FMS system managed $34 billion in sales in FY ’14, $47 billion in FY ’15, and through the first seven months of FY ’16 $29 billion.