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PERU July 2009 04/14/08 PERU July 2009 04/14/08

Customer Tools for Effective Case Management SAM-I, 5/1/09 04/14/08 Customer Tools for Effective Case Management SAM-I, 5/1/09 04/14/08

Customer Tools for Effective Case Management § LOR & Customer Participation in the Process Customer Tools for Effective Case Management § LOR & Customer Participation in the Process § FMS Transparency § FMS Reviews § Financial Management Reviews § Customer Advocate Groups § Personal Contacts-Communicate! § Staying Informed 04/14/08

§ § § Letter of Request Checklist Identification Information § Purpose: § P&A- Price § § § Letter of Request Checklist 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 § § 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 Total Package Approach Special Considerations § § § Memorandum of Understanding (MOU) Offsets Commercial Negotiations Special Reports Interoperability LOR MODULE 04/14/08

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Need LOR preparation help? § DISAM’s LOR Writing Guide § USASAC’S Commodity Specific Checklists 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 Center AFSAC-Air Force Security Assistance Center 04/14/08

§ Letter of Request Checklist Identification Information § Purpose: § P&A- Price & Availability § Letter of Request Checklist 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 § § Support Equipment Facilities Follow on Support Publications Services § § FMS Case Reviews Training DOD/Contractor Services Site Survey Customer Budget Limitations ? ? ? § Funding Source § § Financial Considerations § § Payment Schedule/Initial deposit Financial Waivers Total Package Approach Special Considerations § § § Memorandum of Understanding (MOU) Offsets Commercial Negotiations Special Reports Interoperability DISAM LOR Preparation Guide 04/14/08

Typical DOD System Life-Cycle Cost Operation and Support System Acquisition Production System Research and Typical DOD System Life-Cycle Cost Operation and Support System Acquisition Production System Research and Development 60% 30% 10% 0 I II III Milestones 04/14/08

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Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Costs § LOA Line Item Services § LOA Contracting Process 04/14/08

Purchaser Participation in the LOA Preparation Process SAMM C 5. 4. 6. 2 § Purchaser Participation in the LOA Preparation Process SAMM C 5. 4. 6. 2 § § Purchaser involvement early on in the LOA development process is essential to ensure the final document provides the best “fit” for their requirements. Purchasers should be encouraged to attend meetings and receive correspondence designed to clarify LOR information. As the development of the LOA progresses, there are many instances where purchaser participation and input are necessary. Any unique notes or conditions being considered may be provided to the purchaser for advance review to ensure these special case and/or program-unique needs are addressed 04/14/08

Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Costs § LOA Line Item Services § LOA Contracting Process 04/14/08

LOA Estimated Line Item Costs DSAMS Report # 69 04/14/08 LOA Estimated Line Item Costs DSAMS Report # 69 04/14/08

Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Costs § LOA Line Item Services § LOA Contracting Process 04/14/08

Standard Level of Service § “Standard Level of Service” - What it is § Standard Level of Service § “Standard Level of Service” - What it is § § Administrative Surcharge-funded activities necessary to write, implement, manage, execute, oversee, and close a Foreign Military Sales (FMS) or FMS-like case § An amount of effort estimated up-front and welldocumented in the case - with changes made as the program changes/warrants “Standard Level of Service” - What it is not § It is not the same number of reviews, reports, managers, etc. for every FMS or FMS-like case that is implemented § It is not the same amount of effort expended on each FMS or FMS-like case that is implemented 04/14/08

SAMM Table C 5. T 6. - Manpower Matrix Funding Source (Total Value for SAMM Table C 5. T 6. - Manpower Matrix Funding Source (Total Value for services, includes per diem, salary, travel) # 7 Core Function(s) Case Development Program Element(s) 10 Functions/Activities FMS Admin (Standard Level of Service) Development of an LOA that is “classified” at the request of the purchaser. 1 2 Eliminates use of Program Management Lines 8 9 16 Identifies thresholds for when specific work must be casefunded Case Development 10 Case Development 8 3 Identifies O&Mfunded activities that CANNOT be Case 13, 14, 15, Execution 16 funded by either FMS Admin or FMS Case Processing case-related waivers to USG policies and procedures (e. g. , nonrecurring cost waivers) Determine releasability and disclosure decisions for requested articles and services FMS Case If work to prepare this “classified” LOA is expected to exceed 1/4 work-year or $25, 000 (whichever is greater), a services line on the “classified” case must be used to cover costs incurred or expected to be incurred with preparation and handling outside the DSAMS document preparation capabilities. X Releasability and disclosure activities are not funded by FMS Admin or the FMS case. These activities are funded using Implementing Agency O&M funds. Preparation of reports as requested by the purchaser that are either (1) Requires “incremental” more detailed reporting than covered under costing for certain #12; and/or (2) more frequent reporting Incremental costs above the Standard Level of Support provided in #12. activities that exceed the 4 “Standard Level of Service” 04/14/08

Manpower & Travel Data Sheet (MTDS) SAMM C 9. F 1 § LOA service Manpower & Travel Data Sheet (MTDS) SAMM C 9. F 1 § LOA service lines require justification to DSCA as part of the counter signature process § MTDS correlates services to the manpower matrix in SAMM C 5. T 6 04/14/08

LOA Manpower Services Manpower Travel Data Worksheet- MTDS 04/14/08 LOA Manpower Services Manpower Travel Data Worksheet- MTDS 04/14/08

Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Transparency in the FMS Process? § LOA in Development § LOA Estimated Line Item Costs § LOA Line Item Services § LOA Contracting Process 04/14/08

Customer In Contract Process DFARS 225. 7304, SAMM C. 6. 3 § § FMS Customer In Contract Process DFARS 225. 7304, SAMM C. 6. 3 § § FMS Customer may: § Request sole source prime and subcontractors § Propose additional sources but cannot eliminate and specific source At contracting officer discretion, customer can participate in discussions with industry on: § Technical Specifications § Delivery Schedules § Price/Performance Tradeoffs § Other Requirements Unique to FMS Purchaser 04/14/08

Customer Tools for Effective Case Management Security Assistance Reviews 04/14/08 Customer Tools for Effective Case Management Security Assistance Reviews 04/14/08

Security Assistance Reviews § § § § Bilats- Bi-lateral discussions SAWG-Security Assistance Working Group Security Assistance Reviews § § § § Bilats- Bi-lateral discussions SAWG-Security Assistance Working Group SAR-Security Assistance Review PMR- Program Management Review FMR-Financial Management Review CMR-Country Management Review SAMR-Security Assistance Management Review LMR-Logistics Management Review 04/14/08

FMS REVIEW POLICY TENETS DSCA 00 -19, 02 -48 & SAMM C 6. 5 FMS REVIEW POLICY TENETS DSCA 00 -19, 02 -48 & SAMM C 6. 5 Review Agenda Topics § § § § Program/Delivery Status Case Closure Contract Status Discrepancy Status Billing Issues Previous Review Action Items Financial Status § Current Issues § Commitment, obligations, expenditures § Payment Schedules § Unprogrammed funds 04/14/08

FMS REVIEW POLICY TENETS DSCA 00 -19, 02 -48 & SAMM C 6. 5 FMS REVIEW POLICY TENETS DSCA 00 -19, 02 -48 & SAMM C 6. 5 Planning for a Review! § Specify types of review and appropriate scope of each. (Policy/Country/Service/Program/Internal reviews) § Each review must add value & have clear objectives and deliverables § Identify review objectives & goals and attendees § • § Country, SAO, Contractor, DFAS, DSCA, MILDEP Specify USG review attendee responsibilities: § § have distinct and active role be fully prepared be knowledgeable be empowered to make on-the-spot decisions Reduce the number of reviews § § § Usually yearly, Must be case funded if more then one a year PMR’s require mandatory LOA note & schedule 04/14/08

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Customer Tools for Effective Case Management DSCA Financial Management Review Program (FMR) 04/14/08 Customer Tools for Effective Case Management DSCA Financial Management Review Program (FMR) 04/14/08

Financial Management Reviews (FMRs) SAMM C 9. 14 § § § Chaired by DSCA Financial Management Reviews (FMRs) SAMM C 9. 14 § § § Chaired by DSCA Tri-Service/MND level Objective: Review current and forecasted posture of purchasers FMS program. § § § Reconcile financial records. Review case financial records. Identify cases for intensive financial management. SAMM Table C 9. F 7 - provides mandatory format for a FMR preparation Format: § § § Executive Session -- general financial issues, macro FMS program financial status, FMS reinvention, updated policies, readout of current financial topics Case-Level Session -- review of open FMS cases Side Meetings -focus on logistical, programmatic, operational issues. Duration: usually, one week Frequency: As required Location: usually alternates between DSCA and host country 04/14/08

Customer Tools for Effective Case Management § FPG-Foreign Procurement Group § ICUG-Int’l Customers Users Customer Tools for Effective Case Management § FPG-Foreign Procurement Group § ICUG-Int’l Customers Users Group § Defense MOU Attachés Group 04/14/08

Foreign Procurement Group Charter § 1. The Foreign Procurement Group (FPG)-The customer focal point, Foreign Procurement Group Charter § 1. The Foreign Procurement Group (FPG)-The customer focal point, recognized by the DOD FMS community, as part of the Deputy Secretary of Defense's initiative for FMS re-engineering. § The FMS customer focal point to consider DOD proposals for changes in FMS arrangements and procedures. § It will additionally consider and propose to DOD other changes to FMS considered of benefit to the customer community § Countries participating in the FPG will be free to pursue, separately with the DOD § 2. The FPG will hold meeting about once a month with DSCA and other key S. A. organizations. § 3. Membership will be open to all members of the MOU Attachés Group, and to other countries as may be agreed by existing members of the FPG. Representatives will be knowledgeable and experienced FMS practitioners able to contribute to the FPG's deliberations and conclusions from their national view point and in pursuit of improvements of general benefit. 04/14/08

FPG Top 10 Priorities §-Transparency in FMS Charges/Standard Level of Service §-Other Admin Surcharges FPG Top 10 Priorities §-Transparency in FMS Charges/Standard Level of Service §-Other Admin Surcharges §-Transparency in Delivery listing §-Transportation §-FMS as a commercial alternative/quantify and define the value added of FMS §-Annual Authorizations/Blanket Approvals §-Country Specific cost and schedule performance measures §-Payment Schedules §-Commercial Accounts and s §-Access to Contracting Documentation tail on de ity es are o” tab r §-Processing Times ut nf prio I PG g min rtner F tin a “P ee m SCIP the 04/14/08

FPG Member Nations § § § § Argentina Australia Austria Belgium Brazil Canada Chile FPG Member Nations § § § § Argentina Australia Austria Belgium Brazil Canada Chile Denmark Egypt Finland France Germany Greece Indonesia Israel Italy § § § § Japan Korea Netherlands New Zealand Norway Pakistan Poland Portugal Singapore Spain Sweden Switzerland Taiwan Turkey UK Yemen May 2009 04/14/08

FPG Points of Contact § Chairman – Dr Jennifer Stewart (Canada) § Secretary – FPG Points of Contact § Chairman – Dr Jennifer Stewart (Canada) § Secretary – SQNLDR Stephen Hall stephen. [email protected] mil. nz 04/14/08

International Customer User Group (ICUG) § Comprised of customer ILCO representatives § Primary responsibilities: International Customer User Group (ICUG) § Comprised of customer ILCO representatives § Primary responsibilities: § Enhance the FMS logistical process § Provide unified customer position FMS issues and § computer systems development/ enhancements Receive & disseminate automation information Meets on a quarterly basis; at least one joint annual meeting with the FPG 04/14/08

International Customer User Group (ICUG) Priorities § Develop tri-service solution for SCIP access to International Customer User Group (ICUG) Priorities § Develop tri-service solution for SCIP access to EMALL & EFTS § Integration Issues with SCES § Develop formal list of ICUG objectives 04/14/08

INTERNATIONAL CUSTOMER USER GROUP (ICUG) Mr. Larry Glasco DLA J 3/J 4 Director of INTERNATIONAL CUSTOMER USER GROUP (ICUG) Mr. Larry Glasco DLA J 3/J 4 Director of Logistics Operations and Readiness 8725 John J. Kingman Road Fort Belvoir, Virginia 22060 -6221 July 09, 2008 ICUG - FREIGHT INSPECTION AND TRANSPORT CONCERNS Sir, The International Customer Users Group (ICUG) exists to enhance the relationship and communication between DLA, Defense Security Cooperation Agency (DSCA) and the Foreign Military communities from all three International Logistics Control Offices (LCO’s). The membership, representing 33 countries, meets on a quarterly basis to review and discuss ongoing issues and initiatives affecting Foreign Military Sales (FMS) logistics processes. The ICUG members provide liaison with DSCA, the FMS Management Information Systems (MIS) Program Managers and their contractor support staff on behalf of their fellow ILCO customer representatives and in-country counterparts. The primary responsibility of ICUG members is to receive and disseminate MIS and logistics-related information and provide appropriate feedback to DSCA. During our meeting of 3 -4 June 2008, ICUG members expressed concerns over a recent DLA policy to delay items destined to foreign customers, in order for DLA to effect secondary inspections on outgoing shipments. This policy is causing significant delays on high priority (MICAP/NMCS and Priority 3) demands being shipped to our soldiers (many serving in-theatre on the Global War on Terrorism (GWOT)). While we understand the necessity for oversight, the lack of an announced policy is causing consternation with regards to how long this policy will be in place. The question being submitted from the ICUG Membership is: Would it be possible for the Foreign Military Customer to be made formally aware of the new DLA policy which implemented a secondary inspection regime, and how long will this policy be in place? Secondly, is there any defined metric outlining the new shipment timelines so that we may better advise our countries on whether or not FMS requisitioning through DLA remains a viable option on high priority requisitions (versus direct commercial). Lastly, would it be possible to provide information on the inspection timeframe and metrics to show the progress for the MICAP/NMCS and high priorities? Your review and consideration of this request for clarification is greatly appreciated by the ICUG Membership. Regards, Major Chris Dann (Canadian Liaison Officer) Chairperson - International Customer User Group 04/14/08

Customer Tools for Effective Case Management Personal Contacts. Networking & Communication 04/14/08 Customer Tools for Effective Case Management Personal Contacts. Networking & Communication 04/14/08

Customer Tools for Effective Case Management Personal Contacts § Know who they are & Customer Tools for Effective Case Management Personal Contacts § Know who they are & where they are: § SAFR/FLO § Country Representative at Systems Command § SCO/ODC/OMC § Case Manager § US Country Program Director (CPD) § Know their roles and responsibilities, know what they can do for you-or not 04/14/08

Customer Tools for Effective Case Management § Communicate Effectively § Messages & Info. Addresses Customer Tools for Effective Case Management § Communicate Effectively § Messages & Info. Addresses § Information Overload-be concise § Subject Line § Talk to DSCA (when necessary!) CPD or CFD 04/14/08

Continual Improvement-the customer is part of that process! DSCA Strategic Plan Goal #4* DEPSECDEF Continual Improvement-the customer is part of that process! DSCA Strategic Plan Goal #4* DEPSECDEF Guidance directs “how” – CPI through Lean Six Sigma *Ref: DSCA Strategic Plan 2006 -2011 dtd 13 Feb 2006 04/14/08

Tell DSCA what your thinking!!!! 04/14/08 Tell DSCA what your thinking!!!! 04/14/08

DSCA Director Guidance § Establish a Continuous Process Improvement (CPI) capability at DSCA using DSCA Director Guidance § Establish a Continuous Process Improvement (CPI) capability at DSCA using Lean Six Sigma (LSS) methodology § Leverage the improvement efforts underway within DSCA and across Do. D – phased accelerated deployment § § Replicate best practices and project work from MILDEP LSS implementations Synchronize with OSD CPI / LSS requirements and Do. D Performance Plan Identify strategic performance gaps (e. g. FMS cold war process vs. GWOT requirements) across functions, organizations, and command structures and recommend solutions to close the gap This isn’t the next “thing” – it will help change our culture and the way we work Communicate your Ideas to DSCA ! 04/14/08

Customer Tools for Effective Case Management § Read, Web Surf & Keep Informed § Customer Tools for Effective Case Management § Read, Web Surf & Keep Informed § Know current policy and procedures § Know key web sites § DSCA, DISAM, ETC § Know how to do web searches! 04/14/08

DISAM/DSCA Web Site Resources http: //www. disam. dsca. mil/ http: //www. dsca. mil/ to DISAM/DSCA Web Site Resources http: //www. disam. dsca. mil/ http: //www. dsca. mil/ to uc str r In n k a As 04/14/08

Customer Tools for Effective Case Management M A IS ? ? ? M T Customer Tools for Effective Case Management M A IS ? ? ? M T E D 04/14/08

Customer Tools for Effective Case Management 04/14/08 Customer Tools for Effective Case Management 04/14/08

§OPTIONAL SLIDES 04/14/08 §OPTIONAL SLIDES 04/14/08

Role of Policy Coordination Office § § Coordinate decisions within purchaser’s government Central point Role of Policy Coordination Office § § Coordinate decisions within purchaser’s government Central point of contact for American organizations Nucleus of expertise about American programs Liaison between other government agencies and U. S. offices 04/14/08

Logistics Management Skills § Maintain a system to track requisitions and material deliveries. § Logistics Management Skills § Maintain a system to track requisitions and material deliveries. § Follow-up on old requisitions § Respond to shipment status notifications § Prepare requisitions in the Military Standard Requisitioning and Issue Procedures (MILSTRIP) format for FMS blanket order and CLSSA cases 04/14/08

Logistics Management Skills § Select a freight forwarder and manage its performance § Keep Logistics Management Skills § Select a freight forwarder and manage its performance § Keep the Military Assistance Program Address Directory (MAPAD) current § Prepare Supply Discrepancy Reports (SDRs) when necessary § Monitor the end-use of U. S. -provided defense items. Obtain U. S. approval prior to transferring items to other countries 04/14/08

Education and Training Administration Skills § § Identify education and training needs § Oversee Education and Training Administration Skills § § Identify education and training needs § Oversee the proper use of in-country English language laboratories Identify and screen candidate students Ensure students meet English Language Training (ELT) and other (e. g. , human rights) criteria for selected U. S. courses 04/14/08

Education and Training Administration Skills § Manage budgets for FMS education and training programs Education and Training Administration Skills § Manage budgets for FMS education and training programs § Use the Internet-based International Security Assistance Network (I-SAN) to manage country’s training program § In conjunction with SAO’s Training Management System (TMS) that tracks FMS and IMET training 04/14/08

Location of Policy Coordination Office § § Depends on desires of purchasing government Since Location of Policy Coordination Office § § Depends on desires of purchasing government Since involves purchase of weapon system, may be in acquisition directorate of Ministry of Defense May also be in planning and programming directorate of Ministry Could be in U. S. at embassy or liaison office 04/14/08

Priorities of the Foreign Procurement Group February 2009 62 04/14/08 Priorities of the Foreign Procurement Group February 2009 62 04/14/08

FPG Top 10 Priorities Priority 1. 4. Transparency in FMS charging/Standard Level of Service FPG Top 10 Priorities Priority 1. 4. Transparency in FMS charging/Standard Level of Service Transparency in delivery listings Other Administrative Surcharge changes Processing times 5. Third party transfers 2. 3. Stakeholders § DSCA/MILDEPs § § DSCA/MILDEPs/FPG Metrics WG State § 63 04/14/08

§ § 1. Transparency and Standard Level of Service An objective of the Administrative § § 1. Transparency and Standard Level of Service An objective of the Administrative Surcharge changes has been increased transparency This builds on past initiatives (e. g. , increased customer participation in LOA preparation) The implementation of the new policy on Standard Level of Service (SLS), including the replacement of hidden program management lines with well-defined LOA lines, goes a long way towards meeting this objective Increased visibility is leading to savings – some customers are already seeing differences in the bottom-line of certain cases 64 04/14/08

1. Transparency and SLS (cont’d) § § However, the application of SLS has raised 1. Transparency and SLS (cont’d) § § However, the application of SLS has raised new issues which need to be resolved Chief among these is the need for greater clarity and consistency among the MILDEPs in terms of what activities are covered under SLS and what are “incremental” costs – to be customer funded 65 04/14/08

1. Transparency and SLS (cont’d) § Other issues to be resolved include: § Incidences 1. Transparency and SLS (cont’d) § Other issues to be resolved include: § Incidences of “double billing” – i. e. , charging § § § customers for services that should be covered under SLS Examples of countries being denied information Complaints from staff in the MILDEPS that they are not receiving Admin funding for SLS activities Perception that the SLS is being eroded (e. g. , cancellation of Navy CRRs) 66 04/14/08

2. Transparency in delivery listings § § Need to relate invoiced amount to delivered 2. Transparency in delivery listings § § Need to relate invoiced amount to delivered items/services in current delivery listings Currently not the case: § § One line in the delivery listing may include a number of different services rendered Can easily take 6 to 9 months before a delivery gets invoiced on the delivery listing Impossible to verify charges made on an FMS case against received deliveries and ensure financial control Requisite information is available in the various US systems; this information needs to be made available to the customer 67 04/14/08

3. Other Administrative Surcharge initiatives § Small Case Management Line § Fee should be 3. Other Administrative Surcharge initiatives § Small Case Management Line § Fee should be waived when USG says “no” to a country’s proposed consolidation § Case writing consolidation § Concerns that this consolidation has led to increased processing times appear unfounded and will be addressed under Priority # 4 68 04/14/08

4. Processing times § § Except for OIF and OEF requirements and requirements from 4. Processing times § § Except for OIF and OEF requirements and requirements from smaller agencies (NGA, NSA), the target of 120 days from LOR to LOA 80% of the time is often not being met Important to have a reliable estimate to manage expectations of our capitals - but the solution should not be a longer timeframe Recognize work underway throughout the community in general, and in the Security Cooperation Business Forum in particular, to examine LOA milestones and identify causes of delays; Metrics Working Group developing recommendations on how the customer can help reduce these delays Need a plan and timeframe from DSCA for resolution 69 04/14/08

5. Third Party Transfers • § § § Reality of outsourcing needs to be 5. Third Party Transfers • § § § Reality of outsourcing needs to be better addressed in FMS agreements Existing FMS case terms provide rights to transfer and use intellectual property and materiel to customer government and/or its agents Agents are freight forwarders only. Contractors are not considered as agents Given increased reliance on outsourcing – government employees working with a contingent workforce of contractors – the FPG has been advocating since 2004 to change the FMS definition of agent to include licensed, in-country contractors 70 04/14/08

5. Third party transfers (cont’d) § In May 2007, The Department of State (Dave 5. Third party transfers (cont’d) § In May 2007, The Department of State (Dave Quinn of PM-RSAT) briefed the FPG on his proposed initiative underway to modify the definition of agent § § Developed in consultation with an FPG working group FPG strongly supported Proposal has since been under “final” review by DOS Legal Counsel (but taking an “infinite” time) Need DSCA support and State attention to finalize and implement 71 04/14/08

6. 1. FMS as a commercial alternative § § § Major issue = how 6. 1. FMS as a commercial alternative § § § Major issue = how to level playing field so an FMS proposal can compete with a direct commercial sales proposal How to provide for firm delivery dates, fixed prices and performance guarantees, when required by a country's competitive procurement regime These are not included in the FMS framework 72 04/14/08

6. 1. FMS as a commercial alternative (cont’d) § Past solutions involve approval for 6. 1. FMS as a commercial alternative (cont’d) § Past solutions involve approval for a § waiver or a hybrid (part DCS, part FMS), where the contractor "underwrites" FMS The Foreign Commercial Procurement Group will take on this issue, determine methodologies for comparing/competing FMS and DCS alternatives and report back to the FPG and DSCA 73 04/14/08

6. 2. Quantify and define the value-added of FMS § § This is part 6. 2. Quantify and define the value-added of FMS § § This is part of the business case for comparing DCS and FMS DSCA has provided a paper on benefits of using the FMS process in general terms Need specifics related to individual cases for a true DCS/FMS business case analysis Will be studied by the FCPWG and a more specific list of requirements presented to the FPG and DSCA 74 04/14/08

7. Transportation § § § Good progress has been made by the Interagency Working 7. Transportation § § § Good progress has been made by the Interagency Working Group in identifying documents required for repair and returns, upgrades and modifications and classified shipments Still issues with export seizures but improved communication flow between Customs and DSCA results in quicker resolutions Still a need formal guidance to be documented, released and published in the SAMM 75 04/14/08

§ § 8. Country specific cost and schedule performance At the Security Cooperation Business § § 8. Country specific cost and schedule performance At the Security Cooperation Business Forum, members are briefed on cost and schedule performance at an aggregate level Need to have this data at a country specific level – at least for major FMS cases – to be able to report on whether a case is: § Tracking to budget § Reflecting a financial overrun of <5% of case value 76 04/14/08

 § 8. Cost and schedule performance (cont’d) § Reflecting a financial overrun of § 8. Cost and schedule performance (cont’d) § Reflecting a financial overrun of >5% of case § § § value Meeting the agreed (LOA) schedule Reflecting a schedule slip of <3 months Reflecting a schedule slip of >3 months Caveats/issues to resolve § Required information must be collected § manually Perhaps can leverage Financial Management Review process 77 04/14/08

9. Access to contracting documentation § Need to gain better insight into the final 9. Access to contracting documentation § Need to gain better insight into the final form of contract between the US and the Vendor § Requested to better understand the performance obligations of the vendor for things such as warranty provisions, transportation clauses and price sensitivities in support contracts 78 04/14/08

10. Blanket export authorizations § § Defined as: pre-clearing of nations, or communities of 10. Blanket export authorizations § § Defined as: pre-clearing of nations, or communities of US military system users, for certain categories of requirements, or securing "blanket" export authorization for lower risk defense articles Would streamline the procurement process and speed up approvals, particularly for urgent operational requirements 79 04/14/08

10. Blanket authorizations (cont’d) Examples: § Broadened existing blanket end-use and retransfer assurances § 10. Blanket authorizations (cont’d) Examples: § Broadened existing blanket end-use and retransfer assurances § § to provide for transfers among user communities of US military systems – suggested by Belgium A blanket case waiver for certain routine, in service munitions requirements - suggested by New Zealand Blanket export authorization for CF-18 system support and munitions - suggested by Canada; could also be applied to other US military systems § A provision in the “Defense Trade Controls Performance Improvement Act of 2007” - HR 4246 (introduced into the House 15 Nov 07, but never passed) would have allowed US manufacturers to export spare and replacement parts without a license to the governments of NATO allies, Australia, New Zealand Japan, for defense articles that were previously lawfully exported 80 04/14/08

10. Blanket authorizations (cont’d) § “If the Departments of State and Defense have approved 10. Blanket authorizations (cont’d) § “If the Departments of State and Defense have approved the export of a major defense article to one of our closest allies, why are we requiring licenses for nuts, bolts and brackets to keep these items working? ” § Representative Don Manzullo (R-IL), Chairman of the Congressional Export Controls Working Group and one of the bill’s sponsors. 81 04/14/08

LOR COMPLETION TIME 1 Oct 06 – 30 Jun 08 Source: DSAMS 11 Jul LOR COMPLETION TIME 1 Oct 06 – 30 Jun 08 Source: DSAMS 11 Jul 08 04/14/08

LOA in Development. Team International-DSCA Policy § § There is a recognized need to LOA in Development. Team International-DSCA Policy § § There is a recognized need to bring the relevant parties in an export sale together at the earliest possible time to better define program requirements and influence program execution. By developing a true partnership among the US government, the foreign customer, and US industry, the overall export sales and transfer process will be improved through greater understanding of each other’s needs, expectations, and limitations Team International is best suited for programs that: § § § Introduce a weapon system into a customer’s inventory. Integrate a weapon system on a nonstandard or non-U. S. platform. Involve more than one military department. 04/14/08

Team International can be formed for any of the following reasons: § Respond to Team International can be formed for any of the following reasons: § Respond to a customer’s preliminary and formal requests for information, release of technical data, pricing, procurement, and delivery schedules regarding a potential acquisition of US platforms, weapons and/or major military systems and services. § Promote increased participation by key stakeholders in the development of Letters of Request (LOR)/Letters of Offer and Acceptance (LOA) or other documentation and the supporting contract. § Assist the customer in identifying or refining requirements for an acquisition, systems support, or systems upgrade program. 04/14/08