Defense Security Cooperation Agency

The Defense Security Cooperation Agency (DSCA) directs, administers, and provides guidance to the DoD Components and DoD representatives to U.S. missions, for the execution of DoD SC programs for which DSCA has responsibility.

What is meant by Security Cooperation?

• The Department of Defense (DoD) broadly defines Security Cooperation (SC) as those activities conducted with allies and friendly nations to:

  • Build relationships that promote specified U.S. interests

  • Build allied and friendly nation capabilities for self-defense and coalition operations

  • Provide U.S. forces with peacetime and contingency access

Who Manages the Security Assistance Details?

• The U.S. Congress establishes the laws, authorizes programs, appropriates funds, and has an oversight role in Security Assistance. The principal legislated responsibilities fall to the Department of State (DoS) and Department of Defense (DoD).
  

• The Secretary of State provides continuous supervision nbsp; and general direction for Security Assistance, including determining whether what Security Assistance programs a given country will have, as well as their scope and content. The Secretary of Defense implements programs to transfer defense articles and services on a government-to-government basis.
  

• The Defense Security Cooperation Agency (DSCA) is the principal Department of Defense organization through which the Secretary of Defense carries out responsibilities for Security Assistance. Within the Department of Defense, the Military Departments and other implementing agencies manage individual country programs, including the development of Letters of Offer and Acceptance (LOA), and the delivery of defense articles and services under the Letter of Offer and Acceptance. Financial management of accepted Letters of Offer and Acceptance is a responsibility of the Defense Finance and Accounting Service (DFAS).
  

• Usually a Security Assistance Organization (SAO), under the direction of the chief of the U.S. diplomatic mission, conducts the in-country management of each recipient nation's Security Assistance programs.
  

• The Security Assistance Organization provides this oversight in conjunction with its host nation counterparts, the country team within the diplomatic mission, the Regional Combatant Commander (COCOM) of the Unified Command, the Office of the Joint Chiefs of Staff (JCS), The Defense Security Cooperation Agency, and the Military Departments.

How Does the Sale of Military items Operate?

• Foreign Military Sales are managed and operated by the Department of Defense on a no-profit and no-loss basis. Countries and international organizations participating in the program pay for defense articles and services at prices that recoup the actual costs incurred by the United States. This includes a fee (currently 3.8% of what the defense articles and/or services cost, in most instances) to cover the cost of administering the program.
  
  When defense articles and/or services are required, the requesting country's representative provides a Letter of Request (LOR) to their U.S. counterpart. Copies are sent to the Department of State Bureau of Politico-Military Affairs and the Defense Security Cooperation Agency. The original is furnished to the Department of Defense Military Department or other implementing Defense Agency that will prepare the response in the form of a Letters of Offer and Acceptance (LOA).

  • Letters of Offer and Acceptance take three forms:

    1. Defined Line.

       • Certain defense articles and services can be provided only on Defined Line Letters of Offer and Acceptance, which offer items at individually estimated prices and delivery dates. The U.S. Government, where necessary, in turn contracts for the defense articles and services that are required to fulfill the Letters of Offer and Acceptance.

    2. Blanket Order.

       •  Most repair parts and routine services can be offered under Blanket Order Letters of Offer and Acceptance. These  Letters of Offer and Acceptance are perfectly suited for addressing recurring needs (i.e., where the customer will require additional defense articles or services on a periodic or frequent basis). Once established, the Blanket Order  Letters of Offer and Acceptance reduces the time needed for processing an order and contracting for the items and/or services required.

    3. Cooperative Logistics Supply Support Arrangement (CLSSA).

       • Under the CLSSA, the customer acquires access to the U.S. logistics pipeline for the support of specified end items. This allows supply of repair parts from existing U.S. stocks, without waiting for completion of a procurement cycle. CLSSAs are normally established for countries with well-developed logistics systems and with larger quantities of end items to be supported.

What is Available Under the Security Assistance Programs?

• Defense articles, including major defense systems, subsystems, support equipment, repair parts, and publications are available under Security Assistance.

•  Defense services, including training in U.S. military schools or through mobile training teams, construction, engineering, contract administration, program management, technical support, and repair are also available. To encourage standardization and interoperability among U.S. and Service Assistance countries, Foreign Military Sales normally involves the transfer of those articles that have been fielded by U.S. forces. While sometimes available through Foreign Military Sales, nonstandard articles or services are normally acquired commercially.
  
  Under certain conditions, customers can elect to co-produce or co-assemble defense articles in lieu of transfer. Also, defense articles are occasionally leased to customers instead of sold.

What is the difference Between Foreign Military Sales and Direct Commercial Sale of U.S. Defense Articles or Services?

• The United States, With few exceptions, does not care whether a foreign enity acquires its defense articles and services under Foreign Military Sales (FMS) or through Direct Commercial Sales (DCS).

  •  Direct commercial sales:

    •  Direct commercial sales are negotiated by US companies and foreign buyers, without the involvement of the Pentagon. These sales must be approved by the State Department's Office of Defense Trade Controls, through the provision of an export license, and they are subject to the same congressional notification procedure as FMS. Most public and policy attention focuses on FMS, since this program is much more visible and has accounted for the majority of US arms exports over the years. But industry-direct shipments surpassed government-negotiated transfers in 1989 and have been valued at several billion dollars annually during the 1990s.

  • Foreign Military Sales:

    • Foreign governments also buy new and used weapons and services directly from the US government. These agreements are negotiated by the Pentagon. In addition to weapons, the Pentagon will also contract to deliver the goods, provide training in the operation and maintenance of the weapon, supply spare parts and give performance assurances. The military articles being sold through this program can come from either Pentagon stocks or new production. In the latter case, the Defense Department contracts with U.S. arms manufacturers to actually build the weapons and, in some cases, provide related services.

      • Researching FMS

        • The Pentagon publishes press advisories about proposed sales on its Internet site (www.defenselink.mil/news) at the same time that it notifies Congress of its intention to offer a contract to a foreign government. This press release usually discloses the weapon make and model, the principal manufacturer, the quantity to be delivered and the price. A more detailed version of the notice is published a few days later in the Federal Register. This four-page notice includes the official justification for the sale. Several specialty publications and their associated web pages-such as Arms Control Today, Arms Sales Monitor, Arms Trade News and Defense News-also report these sales notifications. Even the mainstream press sometimes reports on congressional notifications of major government-to-government sales. Keep in mind that the preceding sources report on potential sales-not on signed contracts.

        • To find out how much (in dollar terms) the US government actually contracted to sell and/or delivered to a particular government in each of the preceding ten years consult Foreign Military Sales Facts, published annually by the DSAA.

        • To find out which specific weapons were delivered to a particular foreign government through FMS in the previous fiscal year, a new annual report prepared by the Defense and State Departments known as the "Section 655" report. (Section 655 of the Foreign Assistance Act mandates preparation of the report.) From this document you can learn (for example) that Israel took delivery of 4,698 rifles from the United States in 1996.

        • You can always file a specific request with the Pentagon under the Freedom of Information Act. Quarterly reports from the Pentagon to Congress which are required by the Arms Export Control Act (Sections 25(a) and 36(a)) are another source of information.

• In general, Letters of Assistance promote standardization (by providing customers with defense articles identical to those used by U.S. forces), provide contract administration services which may not be readily available otherwise, and potentially help lower costs by consolidating Foreign Military Sales buys with U.S. purchases. Direct Commercial Sales allow the purchaser more direct interface during contract negotiation (and likely more opportunity for firm-fixed priced contracting), and acquire non-standard defense articles where special requirements demand tailoring the articles to meet a particular need.
   

• Although the extent of Department of Defense involvement is different, technology release approvals, and third country transfer approval requirements are the same for both methods of purchase.

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