While the AECA, the International Traffic in Arms Regulations (ITAR), and U.S. foreign and national security policy considerations, among other factors, limit sales of advanced U.S. military technologies, FMS now face new obstacles.

“We’ve always said countries benefit from buying into our acquisition process to get economies of scale, so if we are not buying as much or at all, then contracting just for an international partner could drive costs up even if there is no alternative. Some contractors already are doing what they can to keep their production lines open and, in some cases, will be relying heavily on international partners,” Manville noted.

Depending on the timeline for production and delivery, a major sale – such as 84 new F-15SAs to Saudi Arabia, the highest-value single foreign arms sale in U.S. history – can serve multiple goals:  significantly increasing partner nation fleet modernization and capability, providing needed work for U.S. defense contractors as DoD’s purchase of major new weapons systems declines, enhancing the recipient nation’s self-defense and regional security capabilities (thus reducing the need for deployment of shrinking U.S. forces) and improving  interoperability with U.S. forces in any future coalition actions. All of these are important factors considered during the approval process for a proposed FMS.

FMS also are being affected by increasing competition. After the fall of the Soviet Union, which essentially had been the sole military equipment provider to nations in the Soviet Bloc, Russia made a major entry into the international arms market as it sought to raise money through the sale of excess Soviet equipment, mostly to developing nations. In the past 10 to 15 years, however, Russia has stepped up to competing with the United States and Europe – which also has significantly increased its arms sales effort – with new and more advanced equipment. China also is emerging as a competitor in some markets.

“Today, the French and British, for example, are producing a lot more. Russia has always been a competitor – in 2013, the U.S. had 29 percent of the international defense market and Russia 26 percent. They are targeting the Middle East, Asia, and Africa. China is focusing on Asia and Africa, as well, but both will sell anywhere there is demand,” Manville explained.

The combination of all those factors prompts FMS to be seen as more than a process for delivery of  defense articles and services to specific countries to build their capacity and capability as allies, current or future.  It is a way to increase America’s overall exports.

But there are differences, both in the U.S. approach to FMS and the ability of others to fully compete.

The wars in Iraq and Afghanistan led to the enactment of new so-called “pseudo-FMS” authorities and programs.  Those pseudo cases typically involved the use of one- or two-year money to permit the U.S. government to acquire and deliver capabilities to those countries and their militaries, not only to be more compatible with U.S. forces, but to enable them to take over their own security efforts as U.S. and coalition forces withdraw.

“We used [the] FMS system in ways we never had before, in a wartime situation to help those countries participating in coalition operations,” Manville said. “That will be a regularly available tool in the future. Before Iraq and Afghanistan, there were smaller programs, such as DoD counter-narcotics, but the lessons from how the FMS system was used there [Southwest Asia] will now be available to future authorities.”

“If we wanted to stand up a completely new system to track funds, using the service acquisition systems, it would take a lot of time and money and you wouldn’t have the infrastructure and in-place personnel who knew how to work the system.”

FMS cases also can use new tools to fast-track deliveries to fill immediate demands. The Special Defense Acquisition Fund, a long-dormant tool resurrected by Congress in fiscal year 2012, may be used to buy certain defense articles in anticipation of future demand. The authority and process also may have an incidental benefit of being able to level out peaks and valleys for some manufacturers, typically leading to reduced acquisition costs.

“If we hope to retain our technological edge in a time of fiscal austerity, we must continue to invest in research and development…

“The key is making sure we understand the requirements early enough to leverage these tools and get good demand signals allowing us to flex the system and expedite the process,” Manville explained. “If we are being reactive, it does make things busier; having the time to put some thought into it makes our job a lot easier, but we take our demand signals and priorities from our chain of command and do what is necessary.

“More people understand the processes today – night and day compared to a decade ago. In the past, it was DSCA coming to the table with the tools and authorities to allow us to expedite the process, and we started the education process from there. Today, security cooperation is becoming a greater priority for everyone, more the norm of how we do business. And because DoD is operating more in that environment and no longer going to war unilaterally, we have to work with partner nations and build capacity so we can work together [in combat].”

Major changes in the past five years have helped open communication lines between DoD and State. That, in turn, has led to closer business relationships with policymakers regarding FMS and U.S. national security strategy as FMS has moved from largely reactive to a more anticipatory mode.

According to Deputy Assistant Secretary of State for the Bureau of Political-Military Affairs Gregory M. Kausner, changes in conventional arms transfers policy signed into law by President Barack Obama in January 2014 not only add specific directives on protecting fundamental freedoms and human rights, they enhance both national security and U.S. technological and industrial viability.

“If we hope to retain our technological edge in a time of fiscal austerity, we must continue to invest in research and development,” he told the International Institute for Strategic Studies on April 23, 2014. “By contributing to economies of scale, foreign sales can help maintain U.S. investment in the defense sector. While we do not approve transfers strictly based on the health of the U.S. industrial base, we would be foolish not to consider its impact.

“The arms industry is a competitive market. Just because another exporter is willing to sell to a potential recipient, however, does not mean we should. But the influence that comes with an arms sale should not be underestimated – and we should be careful not to cede such influence to others. [But] we cannot plug in complex variables and hope for a perfect policy prescription. We often hear the question, ‘Do you ever reject an arms transfer?’ Although we do not advertise such decisions, we reject sales all the time.”

Even so, streamlined processes, new authorities under which arms transfers can be made and a more aggressive posture for FMS have and will continue to change – and expand – the program for the foreseeable future.

For further information on FMS, contact the local U.S. Embassy SCO or military attaché, DSCA, send an e-mail to LPA-Web@dsca.mil, or call 01-703-601-1646.

This article first appeared in the U.S. Defense Security Cooperation Agency – Defense Solutions for America’s Global Partners 2014 publication.