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Foreign Military vs. Financing Security ii. Direct Commercial. Any required notifications to Congress are jointly sponsored by the US DOD and the State Department. This may create difficulties for the Customer. VA Use on contracts for foreign military sales shall be on a rent-free basis. A key difference between Foreign Military Sales (FMS) and Direct Commercial Sales (DCS) is that: Unlike FMS, with DCS the purchaser must communicate with the US Government . NDIA provides a platform through which leaders in government, industry and academia can collaborate and provide solutions to advance the national security and defense needs of the nation. Defense technology transfers equip our international friends and allies with capabilities needed to address regional and global security concerns. 22201 WHETHER FOREIGN MILITARY SALES OR DIRECT COMMERCIAL SALES: A CASE STUDY OF THE UK E-3 AWACS THESIS Larry L. Brown, GS-13 AFIT/GLM/LSM/90S-6 Approved for public release; distribution unlimited . Foreign governments buy billions of dollars of defense equipment and services through the U.S. Defense Department's foreign military sales program. Munitions List (USML), pursuant to the International Traffic in Arms Regulations (ITAR). Under the AECA, there are three main authorities through which the United States can provide defense articles or services to another country: government-to-government Foreign Military Sales (FMS); licensed exports of direct commercial sales (DCS); and the lease of defense articles. A direct commercial sale requires an export license, which is issued by the Office of Defense Trade Controls at the State Department's Bureau for Political-Military Affairs. DCS is regarded as a more flexible process, as the purchaser consults directly with industry about specific products and services it needs. (Basically, both DCS and FMS require the same type of notification). U.S. Defense companies have two main avenues for selling on the international market: Direct Commercial Sales (DCS) and Foreign Military Sales (FMS). Customer – the Customer refers to the Foreign Government purchaser of the U.S. defense products. U.S. Defense companies have two main avenues for selling on the international market: Direct Commercial Sales (DCS) and Foreign Military Sales (FMS). Vendor – the Vendor refers to the U.S. defense company seeking to sell their product overseas. The United States Government benefits directly and indirectly from transfers of military technologies or systems to foreign governments or end users. As part of this diverse network, over 1,560 corporate and 63,800 individual members are actively developing best practices, initiatives, technology, and products in defense with continued guidance and feedback from key stakeholders. The NDIA Chapters are the foundation of the Association. also read. Foreign Military Sales vs Direct Commercial Sales Economic Overview U.S. aerospace and defense exports (1) sustain a domestic workforce in the manufacturing sector, (2) support national security programs through the foreign military sales (FMS) and direct commercial sales (DCS) processes, and (3) narrow the U.S. trade deficit gap. These activities represent overhead management costs to the Customer. Like the FMS program, DCS advances interoperability between the U.S military and its allies. Policy staff regularly meets with key policy stakeholders, and manages Congressional interaction with NDIA Chapters and Divisions. There are various DOD offices involved in the FMS process. With State Department blessing, the Defense Security Cooperation Agency notifies Congress of major arms sales under the Foreign Military Sales program, starting a clock (typically 30 days) during which Congress can block a sale by passing a resolution to do so in both the House and Senate. In the U.S. foreign arms sale, there are two modes, “Foreign Military Sale (FMS)” and “Direct Commercial Sale (DCS)”. The Vendor negotiates with the Customer. While the U.S. government contracts out to the defense industry on a competitive or sole-source basis, it may also sell directly from its own stockpiles. DCS has the added benefit of giving customers options to purchase more non-standard systems that are mission specific, and designed to tackle readiness challenges. These methods help to increase standardization and interoperability between the U.S. and its Allies. Follow the links to learn more about activities, missions, and contacts. Authorized by the State Department, and administered through DSCA, FMF funding is a non-repayable loan legally granted to strategic countries – most notably Israel, Egypt, Afghanistan, and Iraq. This adds value for customers by ensuring that they have the same contract benefits and protections that apply to the U.S. military’s acquisition of its own defense articles and services. LMDefense, LLC is a registered broker for defense articles and services. An essential course for manufacturers, exporters and their executives, and legal and financial advisors....Learn More Now A sale of defense articles or defense services made under a Department of State issued license by U.S. industry directly to a foreign buyer, and which is not administered by DoD through FMS procedures. FMF funds purchases are made through the Foreign Military Sales (FMS) program, which manages government-to-government sales. The U.S. government takes on more of the contractual risk than the customer in the short run, and supports the sustainment of the defense system in the long run. U.S. Government’s Foreign Military Sales (“ FMS ”) program and similar mechanisms, and Direct Commercial Sales (“ DCS ”) negotiated directly between the contractor and the foreign customer. Growth in Foreign Military Sales — Fluke or Long-Term Trend? The FMS program’s overriding purpose is to build relationships with foreign countries by contracting on their behalf with industry providers. Join a local chapter and get plugged in to NDIA. However, they must carry more risk and administrative burdens. Abstract : The transfer of arms from the U.S. to other countries under the Security Assistance Program is done in two basic ways: government-to-government Foreign Military Sales (FMS), and contractor-to-government Direct Commercial Sales (DCS). This chart explains the main differences between Foreign Military Sales (FMS) and Direct Commercial Sales (DCS). 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