The International Dimension of Program Management Should You Do This?

1. The International Dimension of Program ManagementShould You Do This? Defense Acquisition University Defense Systems Management College School of Program Managers

2. Objective To define the impacts of international armaments cooperation and sales, both potential and actual, on the Program Manager and the Program Management Office, and identify the most appropriate course of action.

3. Outline • Introduction • Framework for Arms Transfers • Sources of Funding • International Cooperative Acquisition Policy • Acquisition Documentation • Planning for International Involvement • Impacts of an International Approach • Training Opportunities and Assistance

4. Methods of International Defense Transfers/Sales • Government-to-Government (Foreign Military Sales) • Direct Commercial • International Cooperative Acquisition (Armaments Cooperation) • Hybrid - Combining any or all of the above

5. International ProgramsGeneral Definitions • Security Assistance (Foreign Military Sales): Foreign Funds (or U.S. Grants/Loans) to Purchase U.S. Defense Equipment through the U.S. Government. • Direct Commercial Sales: Foreign Funds to Purchase U.S. Defense Equipment Directly from the Contractor with U.S. Government Approval. • International Cooperative Acquisition (Armaments Cooperation): U.S. and Allied or Friendly Foreign Nation(s) Jointly Manage and Share Funds Equitably (may be Commingled) to Cooperatively Research, Develop, Test, Evaluate, Produce and/or Support Defense Equipment.

6. Defense Sales Any Nation U.S. Contracts (FMS) U.S. Manages (FMS) Production & Support DoS or DoC + DoD - USD (Policy) Foreign Initiated Foreign Funds (or U.S. Grants/Loans) Cooperative Acquisition Allied or Friendly U.S., Ally or NATO Jointly Managed All Acquisition DoD - USD (AT&L) + DoS and DoC U.S. and/or Foreign Foreign Funds + U.S. Funds [Equitable] Defense Sales Vs. Cooperative AcquisitionThey Are Different

7. International Activities Associated WithDefense Acquisition Phases Cooperative Production Coproduction Licensed Production Production Sharing Foreign Military Sales Production & Deployment System Development & Demonstration Cooperative Development Intl. Testing NATO & National Forums Info Exchange Programs Staff Talks S&E Exchanges Concept Refinement & Technology Development Technology Opportunities & User Needs

8. How Do Cooperative Projects Arise? • NATO Panels, Sub-Panels, Information Exchange Groups, Project Groups • Five-Power NADs • Senior National Representative (SNR) Meetings • US-Japan, Systems and Technology Forum (S&TF) • US-Korea, Security Consultative Meeting (SCM) • US-Australia, The Technical Cooperation Program (TTCP)(with Canada, New Zealand and The United Kingdom) • Foreign Comparative Testing • Information Exchange Agreements/Annexes or Information Exchange Programs • Industry • “ELEPHANTS”

9. Industry “Europeans will work on Missile Defense: Large Contractors to join Boeing in studying global plan” International Herald Tribune, July 24, 2002 “More agreements with other partners may follow as the company begins to ‘build a constituency of companies throughout Europe’ to work on the project.” President , Boeing Missile-Defense Unit

10. Security Assistance Armaments Cooperation President Dept. Of State Dept. of Defense Economic Assistance Military Assistance FMSFMFPIMETEDA ESFPKO Dept. of Defense Policy Acquisition USD (AT&L) USD (P) ASD (ISA) DIR (I) AI Office DIR (IC) DSCA Service IPOs DAU DISAM

11. The Scope of Defense Cooperation RDT&E Production & Procurement Follow-on Support Information Foreign Military Sales Cooperative Logistics Exchanges Supply Support Engineer & Direct Commercial Sales Mutual Support Scientist Exchanges Exchanges Cooperative R&D Cooperative Production Logistics Support (Joint Funds) Comparative or Coproduction / Licensing Host Nation Support Joint Testing (Foreign Funds) Standardization Reciprocal Procurement Defense Industrial Base The Program Manager’s Focus

12. Notable Success Storiesin International Industrial Cooperation • F-16 Falcon and Mid-Life Upgrade • AV-8 Harrier • T-45 Training Aircraft • CFM-56 Engine • NATO AWACS – Continuing Cooperative Efforts REF: Annual Report to the President and Congress, William S. Cohen, SECDEF, 2001.

13. Other Cooperative Efforts • Medium Extended Air Defense System (MEADS) • Multifunctional Information Distribution System (MIDS) • Joint Strike Fighter (JSF) • Theater Ballistic Missile Defense • NATO Allied Ground Surveillance (AGS) REF: Annual Report to the President and Congress, William S. Cohen, SECDEF, 2001.

14. The Framework forArms Transfers

15. Responsible Department FMS and Direct Commercial Arms Sales Dept. of State + Defense Dual Use Direct Commercial Dept. of Commerce + Defense Cooperative Acquisition Dept. of Defense + State & Commerce

16. LegalAuthority FMS Arms Export Control Act Dual Use Direct Export Administration Act Commercial Cooperative Acquisition Arms Export Control Act Sec 27 R&D + Production Title 10 USC 2350a or 2358 R&D Only

17. Arms Export Control Act3 Key Provisions No Defense Article or Defense Service May Be Sold or Leased … Unless: • Recipient agrees not to transfer title or possession. • Recipient will not use or permit use for purposes other than those for which furnished. • Recipient shall agree to maintain security and provide substantially the same security as the United States.

18. Guidance Security Assistance Management Manual Financial Management Regulation International Traffic in Arms Regulations FAR / DFARS FMS Dual Use Direct Commercial Export Administration Regulations International Traffic in Arms Regulations Cooperative Acquisition DoD Directives/Instructions/Manuals FAR / DFARS

19. Control List FMS and Direct Commercial Arms Sales U.S. Munitions List Dual Use Direct Commercial Commerce Control List Both Cooperative Acquisition

20. Implementing Documents FMS Letter of Offer & Acceptance (LOA) + MOU/MOA (?) Direct Commercial Sale Export License Cooperative Acquisition Memorandum of Understanding/ Agreement (MOU/MOA) Contracts

21. When / Why Is An MOU Needed In An FMS Transfer? • Desire of Other Nation: Political or Practical • U.S. Industry Desire for Government Commitment • Very Large, Complex or Multilateral Program • No Existing Umbrella Arrangement (i.e. Security) • Need for Extraordinary U.S. Government Control

22. Some Sources of Funding for International Cooperative Projects

23. Some Sources of Funding for International Cooperative Projects • International Cooperative R&D Program (ICR&D) • Coalition Warfare Program (CWP) • Foreign Comparative Testing (FCT) Program • Project Funds

24. International Cooperative R&D Program [Nunn Funds] • Congress urged and requested cooperation in R&D, and production of conventional defense equipment (FY86) • Restrictions • Requires signed international agreement (MOU/MOA) • Funds must be spent in the U.S. • Must be jointly managed and funded equitably • Current funding (Total for Services): Apx. $25M • Primarily seed money to begin cooperation early

25. International Cooperative R&D Program  The Nunn legislation applies to NATO, NATO organizations, NATO nations, major non-NATO allies, and …. • Japan • Korea • Australia • Israel • Egypt • Jordan • Bahrain  Allies may not use Security Assistance Funds +

26. International Cooperative R&D Program The Nunn legislation now applies to friendly foreign countries (as of March 14, 2002) • Argentina • Brazil • Bulgaria • Finland • New Zealand • Singapore • South Africa • Sweden • Ukraine

27. International Cooperative R&D ProgramSelected Projects • AV-8B Harrier II Plus Program/APG-65 Radar (IT/SP) [Saved $110M] • Guided MLRS (FR/IT/UK) [Improve Range and Accuracy] • Lightweight 155mm Towed Field Howitzer Systems (IT/UK) [Meet USMC and USA light forces requirement] • Fighting Vehicle Propulsion Technology Using Ceramic Materials (JA) [Low fuel consumption – Saved $13M] • Rolling Airframe Missile (GE)

28. Coalition Warfare Program • Defense-wide effort to assist the CINCs, Services, and Agencies in inserting coalition-enabling solutions into existing and planned US programs. • New Start FY01 (OSD only): Apx. $6M annual appropriation • Initial focus: Interoperability Issues • Logistics • Intelligence • Surveillance • Reconnaissance • Command, Control and Communications

29. Coalition Warfare ProgramActive Projects • Coalition Aerial Surveillance and Reconnaissance (CAESAR) (UK/GE/FR/NO/CA/NE/IT) • Coalition Asset Tracking (UK) • Air Common Operating Picture/Air Tasking Order (SA) • Coalition Readiness Integrated Management System (AT/UK/CA/NE)

30. The Foreign Comparative Testing Program • Purpose: Test and Evaluation of Foreign NDI Military Equipment that Demonstrates Potential to Satisfy U.S. Service Requirements. • Not Restricted to Allied Participation; Many Nations Participate (22), but mostly Allies (UK/GE/FR/IS/SW). • Funding: Stable Annual Funding of Around $30M. • Numerous Procurements - 121 out of 200 successful evaluations (439 total projects since 1980). • $5.4B spent on FCT procurements. • Substantial Savings in RDT&E – over $4B (764M spent).

31. FCT Program Contributions toOperation Enduring Freedom • Real Time Imagery from Eagle Vision (commercial satellite imagery receiving and processing system) • BOL Chaff/Flare Dispenser (aircraft protection from missile threats) • MH-53 Sea Stallion Engine – Erosion Resistant Coating for Compressor Blades (double operational life) • High-Pressure Air Generators (replace nitrogen bottles) • Automatic Chemical Agent Detector Alarm The FCT Program FY01, Mar 2002, USD (AT&L)

32. Other FCT Successes • Chemical-Biological Detection and Protection • Safe Escape from Disabled Submarines • Aircraft Emergency Arrestment • Air Cargo Handling • Intrusion Detection • Hostile Gunfire Detection • Specialized Firepower • Critical Engineer Capabilities • Emergency Arrestment of Aircraft

33. International CooperativeAcquisition Policy

34. DoD’s International Armaments Cooperation Policy • Armaments cooperation continues to be a key element of DoD’s acquisition and technology efforts to field the most capable force possible. • Armaments cooperation programs have added greatly to the operational capability of the U.S. and its allies over the past decade and have facilitated deeper cooperation in other areas. REF: Annual Report to the President and Congress, William S. Cohen, SECDEF, 2001.

35. Principles of a Renewed Transatlantic Cooperation (April 10, 2002) • USD (AT&L) and National Armaments Directors from FR, GE, IT and UK • Common Vision: To Define, Develop, and Build Interoperable Defense Systems • Declared Intent to Improve Defense Equipment Cooperation through 12 Principles

36. SECDEF Memo, The Defense Acquisition System Interoperability Interoperability. Interoperability is the ability of systems, units, or forces to provide data, information, materiel, and services to and accept the same from other systems, units, or forces, and to use the data, information, materiel, and services so exchanged to enable them to operate effectively together. Interoperability shall apply within and among United States forces and U.S. coalition partners. Mission-area-focused, integrated architectures shall be used to characterize these interrelationships. DoD policy for interoperability and supportability of information technology, including National Security Systems appears in DoD Directive 4630.5.

37. SECDEF Memo, The Defense Acquisition System Hierarchy of Acquisition Program Alternatives The DoD Components shall work with users to define requirements that facilitate, in preferred order: 1. Procurement/modification of commercially available products, services, and technologies, from domestic or international sources, or the development of dual-use technologies; 2. The additional production/modification of previously-developed U.S. and/or Allied military systems or equipment; 3. A cooperative development program with one or more Allied nations; 4. A new joint Component or Government Agency development program; or 5. A new DoD component-unique development program.

38. Key Documents • Acquisition (Required) • Acquisition Strategy • Program Protection Plan • Other Documents (Some, but not all, are required) • Information/Data Exchange Annex • Export License Approval • National Disclosure Policy Exception • LOA • MOU/MOA • A Myriad of Exceptions, Notifications, Justifications, and Permissions

39. Planning for International InvolvementMilestone B and Subsequent Milestones • Acquisition Strategy -- Why an International Strategy? • Acquisition Policy • Affordability (Reduced R&D or Unit Cost) • Access Technology • Increased Competition • Interoperability • Program Protection Plan -- Identify Critical Program Information and Address International Security Considerations • Technology Assessment/Control Plan • Prior to commitment to foreign sale or involvement (Consider export version) • Summary TA/CP prior to negotiation of international project agreement • Counter Intelligence Support Plan

40. Political - Alliances Cost Savings Schedule Accelerated Performance Improvement Less U.S. Manpower More Supportable - Standardization Political - Protectionism Cost Increases Schedule Delays Performance Compromises More U.S. Manpower Less Supportable - Foreign Dependency More Documents (i.e. LOA, MOU, TA/CP) “It Depends!”

41. Where Do I Get HELP?Use the Service IPOs • ARMY: ODASA Defense Exports & Cooperation Tel:(703) 588-8088 • NAVY: NAVIPO/03 Tel:(202) 764-2385 • AIR FORCE: SAF/IAPQ Tel:(703) 588-8990

42. OSD & DSMC Can Help Also • Director, Armaments Cooperation Atlantic Tel: (703) 602-8063http://www.acq.osd.mil/ic/aca.html • Director, Pacific Armaments CooperationTel: (703) 602-5853http://www.acq.osd.mil/ic/pac.html • Manager, Coalition Warfare ProgramTel: (703) 697-1130Website: http://www.acq.osd.mil/ic/cwp.html • Manager, Foreign Comparative Testing Program Tel: (703) 602-3740Website: http://www.acq.osd.mil/sts/fct/ • Offices of Defense Cooperation in all major allied capitals • Managers, DSMC International Acquisition Courses Tel: (703) 805-4592/4593http://www.dsmc.dau.mil/international/international.htm

43. Training Opportunities • International Cooperative Acquisition: Defense Systems Management College (3 one-week courses) • Multinational Program Management Course (PMT 202) • International Security & Technology Transfer/Control Course (PMT 203) • Advanced International Management Workshop (PMT 304) • International Acquisition/Procurement Seminars - Atlantic/Pacific http://www.dsmc.dau.mil/international/international.htm • Security Assistance: Defense Institute of Security Assistance Management (Various courses)http://disam.osd.mil/ • Regional Courses: Air Force Special Operations Schoolhttp://www.hurlburt.af.mil/usafsos/or MIT Japan Institutehttp://web.mit.edu/mit-japan/