WASHINGTON, February 04, 2015 - The Department of State and the Defense Security Cooperation Agency (DSCA) have announced an initiative to consider proposals for lead-nation procurements from NATO member countries and NATO organizations – purchases by a lead nation or international organization on behalf of others, through Foreign Military Sales (FMS). Proposals for lead-nation procurements involving NATO organizations and NATO member countries will be considered on a case-by-case basis during a two-year test period. Lead-nation procurements will be supported by retransfer arrangements designed to permit flexible sharing among the identified group of participants while maintaining accountability and adhering to statutory reporting requirements.
NATO Allies are seeking mutual cost sharing both within and outside of NATO to maximize their defense budgets. NATO Smart Defense initiatives, as well as pooling and sharing initiatives among European countries, envision interdependent defense capabilities where countries cooperatively develop, acquire, and maintain shared capabilities at the national level to undertake core tasks. In furtherance of the U.S. commitment to support NATO and NATO members in the types of procurement envisioned by Smart Defense initiatives, the Departments of State and Defense will consider proposals for lead-nation procurements.
The response to accepted proposals will include FMS Letters of Offer and Acceptance (LOAs) specifically structured to support sales to a NATO organization or NATO lead nation with subsequent retransfer to an identified group of NATO participant countries. The lead nation or NATO organization will be the sole purchaser with full financial responsibility. The LOA will also be signed by each of the transferees, who will agree to the LOA Standard Terms and Conditions regarding their obligations related to the end-use, retransfer, and security of the defense articles in question. The U.S. will provide defense articles in a configuration approved as appropriate for use in common by the lead nation and all identified and accepted transferees.
The Department of State will provide the lead nation and the identified participating nations a blanket retransfer authorization establishing the requirements for periodic, after-the-fact reporting of transfers amongst the participating nations of the defense articles sold through the lead-nation LOA. Any retransfers outside the identified and approved group, or which trigger congressional reporting requirements, will require prior authorization from the U.S. Department of State.
Proposals for lead-nation procurements should be submitted to DSCA or Political-Military Bureau, Office of Regional and Security Affairs (PM/RSAT) and will be reviewed for acceptance on a case-by-case basis. Lessons learned during the two-year test period will inform the potential development of more permanent policies by the Departments of State and Defense to govern such transactions.
This initiative addresses a key objective of DSCA’s Vision 2020 – keeping FMS competitive by adapting the FMS process to changing business practices and purchaser requirements with innovative business models and more accommodating business rules.
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The Defense Security Cooperation Agency is the Department’s lead agency for the execution of Security Cooperation programs. DSCA subject-matter expertise spans the gamut of Security Cooperation activities to include policy, financial, legal, legislative, programmatic, and weapons systems experts. For questions regarding this press release and DSCA, please call 703-601-1646 or email info@dsca.mil. Visit our website at http://www.dsca.mil/.