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PERUJuly 2009

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ForeignPurchaser

Needs

ForeignPurchaser

Needs

State

Defense

MILDEPs

President

Congress

State

Defense

MILDEPs

President

Congress

Suppliesand

Services

Suppliesand

Services

The Sales Process

SAM-I, 5/1/2009

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FMS Terminology What’s a FMS Case?

A government to government agreement to transfer

defense articles & services is a:

Letter of Offer & Acceptance

=LOA

= FMS Case

=Case “BN-D-YCY”

=Case YCY

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International Sales ProcessFMS Case lifecycle phases (DISAM Text Page 5-2)

Preliminary, Definition and RequestOffer and Acceptance

(SAMM C-5)

Implementation, Execution, and Closure(SAMM C-6)

Case Development

Case Execution

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Security Assistance Policy Documents

Security Assistance Management Manual (SAMM) DoD 5105.38-M

DSCA Policy Memoranda

Financial Management Regulation 7000.14-R, Vol. 15, Security Assistance Policy and Procedures

Reconciliation and Closure Manual DoD 5105.65-M (RCM)

MILDEP Specific Policy Manuals

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Non-U.S.Sources

Non-U.S.Sources

NeedsArms

ExportControl

Act

ArmsExportControl

Act

LetterOf

Request(LOR)

U.S.Commercial

Export

U.S.Commercial

Export

FMSFMS

Minister ofDefenseBandaria

What KindWhat KindWhereWhere

CostCost

WhenWhenHowHowManyMany

=

U.S.Munitions

List

Customer Decisions

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Total PackageApproach

Letter of Request Checklist Support Equipment Facilities Follow on Support Publications

Services FMS Case Reviews Training DOD/Contractor Services Site Survey

Financial Considerations Funding Source Payment Schedule/Initial

deposit Financial Waivers

Special Considerations Memorandum of

Understanding (MOU) Offsets Commercial Negotiations Special Reports Interoperability

Identification Information Purpose:

P&A- Price & Availability LOA-Letter of Offer &

Acceptance Lease Purchaser Pre-negotiations Transparency Acceptance Time Frame International Solicitation

Major Item Considerations Standard Model Quantity Unique Configuration Delivery Timeframe Transportation Warranties Sole Source

Support Considerations Operations Concept Maintenance Concept Supply Concept Initial Spares

LOR Writing Guide

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Need LOR preparation help?

DISAM’s LOR Writing Guide USASAC’S Commodity Specific

Checklists (Int’l Customers tab) AFSAC On-line Implementing Agency (IA)- Country

Program Director (CPD)

USASAC-U.S. Army Security Assistance CenterAFSAC-Air Force Security Assistance Center

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LOR ApplicationsLOR Submissions

SelectingSelecting

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LOR ApplicationsLOR Submissions--Screen 1

The customer may submit a ‘New LOR’ or ‘View/Modify’ an existing LOR.

For new LORs, the user must select the type of LOR required (Purpose of Request) and establish a ‘unique’ Country Reference Number.

For existing LORs, the user may query by the Country Reference Number OR the AFSAC Reference Number. The user can view any existing LOR; however, only ‘open or pending’ LORs can be modified.

The customer may submit a ‘New LOR’ or ‘View/Modify’ an existing LOR.

For new LORs, the user must select the type of LOR required (Purpose of Request) and establish a ‘unique’ Country Reference Number.

For existing LORs, the user may query by the Country Reference Number OR the AFSAC Reference Number. The user can view any existing LOR; however, only ‘open or pending’ LORs can be modified.

SelectingSelecting

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LOR ApplicationsLOR Submissions--Screen 2

The user enters applicable LOR data on this screen, then clicks ‘Continue’ to proceed to the next screen. Edits will ensure user completes all required fields. Note that the user requested P&A data in this LOR Submission example.

Multi-line phase allows the user to select one or more materiel/services.

The user enters applicable LOR data on this screen, then clicks ‘Continue’ to proceed to the next screen. Edits will ensure user completes all required fields. Note that the user requested P&A data in this LOR Submission example.

Multi-line phase allows the user to select one or more materiel/services.

SelectingSelecting

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U.S. EmbassyCombatant Command

ImplementingAgency

ImplementingAgency

Channels of Request

Prepare LOA

LetterOf

RequestLOR

PROCEED

DSCAState

CongressCongress

BandariaBandaria

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[22 CFR 120-130]

International Traffic in Arms Regulations (ITAR)

Provides registration / licensing requirements for the commercial export of defense articles, services, and related technical data.

Includes the United States Munitions List (USML) Identifies “Significant Military Equipment” (SME)

SME requires special considerations because of “Their capacity for substantial military utility or capability”

SME also defined in §47(9), AECA

Identified by an Asterisk (*) on the Munitions List

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Helicopters

AH-1S Cobra (with T-53-L-703 Engine) System without C-Nite

AH-1W Super Cobra (with 2 T-700-GE-401 Engines)(N)

AH-1Z (H1 Helicopter upgrade) with two T700-GE-410 Engines

AH-64 Apache Helicopter System (with 2 T-700 Engines) (A)

AH-64 (New) Apache Helicopter System with 2 T-700 Engines

CH-47D Chinook (without T-55 Engines) (A)

OH-58D Kiowa with one T-703 engine (with Mast Mtd Sights) (A)

SH-2G (with 2T-700-GE-401 Engines) (N)

UH-1Y (H-1 Helicopter Upgrade) with two T700-GE-401C Engines

ApprovedCharge

$147,604

$326,461

$897,452

$1,045,566

$1,328,033

$144,279

$663,082

$607,149

$761.197

EffectiveDate

11 May 89

18 Jun 90

28 Nov 01

30 Dec 83

23 Feb 00

7 Aug 91

10 Aug 93

3 Jun 91

28 Nov 01

MDE List- SAMM Appendix-1

aa

Major Defense Equipment List

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SME=Significant Military Equipment MDE=Major Defense Equipment

“Country Team Assessment”

for SME/MDE LOR’s (SAMM C5.T1)

U.S. Embassy/SCO Must Address: Reason nation desires articles/services Effect on recipient's force structure Reaction of neighboring nations Purchaser's ability to maintain, operate and

support Economic impact and source of financing Human rights considerations Should USG approve purchase

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Defense Security Cooperation Agency Responsibilities

Charter-Administer FMS Policy (SAMM) Congressional Input FMS Country Program &

Financial Management FMS Administrative

Budget Credit Program (FMFP) Training Program (IMET) FMS Trust Fund Mgt Waiver Authorities

Memoranda of Understanding Security Cooperation Office

Mgt. Computer System

Development & Management Security Assistance Metrics Payment Schedules/Special

Bills Case Closure Lean Six Sigma (LSS) Teams Security Cooperation Non-FMS Functions

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Under Secretary for Arms Control & International Security Bureau of Political-Military Affairs:

Regional Security and Arms Transfers (RSAT)

Director for Defense Trade Controls (DDTC)

Department of StateArms Transfer Points of Contact

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U.S. EmbassyCombatant Command

ImplementingAgency

ImplementingAgency

Channels of Request

Prepare LOA

LetterOf

RequestLOR

PROCEED

DSCAState

CongressCongress

BandariaBandaria

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Preliminary Definition &

Request

Preliminary Definition &

Request

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Optional slides