The Foreign Military Sales Program: In Need of Reform?

An Iraqi army tank commander explains the capabilities of the American-made M1 Abrams battle tank to Iraq army infantry soldiers. Photo: US Army.

An Iraqi army tank commander explains the capabilities of the American-made M1 Abrams main battle tank to Iraq army infantry soldiers. The M1 tank is an example of a complex US military system sold to other nations. Photo: US Army.

After recent attacks in Belgium and Paris, all eyes are on the Western coalition against ISIS. Playing a vital role in this operation are many US allies and gulf nations, whose air forces fly sorties against ISIS in conjunction with the USAF. Regional allies are important, because no nation can tackle every conflict, and the US is no exception.

Unfortunately, many US allies do not have the capabilities to build the advanced military equipment needed for interventions such as the coalition strikes in Syria. As discussed in a previous article, defense equipment tends to be highly costly and resource-intensive to develop. As a result, many US allies lack the capital, expertise, and industrial base necessary to produce their own equipment. Thus, keeping the US’s allies effective and capable in combat operations requires the sale of US-developed weapons to these nations when they cannot furnish their own systems.

There are two ways a foreign nation can acquire defense equipment made by a US contractor. Option one is to purchase these items directly from the company which produces them. This is relatively straightforward way to purchase weapons, but there are some disadvantages. For one, there is little guarantee of on-time delivery, and the US government is not responsible for any issues that arise during the acquisitions process. This method also does not allow for any DoD personnel to assist in the integration of these weapons into the customer nation’s forces, and federal weapons loans are not as likely if the purchase is direct.

The second avenue is through the Foreign Military Sales (FMS) program. As opposed to a private-sector transaction, FMS weapons purchases are mediated by the US government. FMS transfers are mainly managed by the DoD, but the State Department and various other bodies must be conferred with before an FMS sale can take place. With both FMS and direct transfer Congress must be notified if the purchase is large or includes sensitive technologies.

There are a multitude benefits conferred by the FMS program compared to a direct purchase. For one, the US government acts as an intermediary between the contractor and the customer. As a result, the customer does not deal directly with the contractor; this is logistically beneficial as the US government already has a working relationship with most defense contractors and can easily procure equipment. Because the US government is the vendor, the delivery also comes with cost and schedule guarantees. FMS customers also enjoy many perks not necessarily included in a direct transfer purchase, such as government loans and training on the equipment by DoD personnel. The FMS program also allows foreign nations to buy excess or retired US military equipment. In some cases when the customer is a strategic ally or is not able to fund their own programs, the US government may either heavily subsidize an FMS purchase or cover the expenses outright.

However, FMS has many strings attached. Because the US government itself is selling equipment to another nation, decisions are scrutinized extensively. The US government is wary of FMS sales to states which may end up using the equipment aggressively or against their own citizens, which would reflect poorly upon the US. Indeed, FMS is often described as a tool of US foreign policy, and FMS sales are based on the US’s strategic goals as well as the domestic economic benefits. This can lead to some FMS sales becoming tied up in bureaucratic red tape, especially if the sale is deemed low-priority and other more urgent requests are being processed, or the customer in question has a history of misbehavior.

A Royal Saudi Air Force F-15 Eagle approaches a KC-135 Stratotanker for aerial refueling during Operation Desert Shield.

A Royal Saudi Air Force F-15 Eagle approaches a KC-135 Stratotanker for aerial refueling during Operation Desert Shield. The F-15 as well as its AIM-9 and AMRAAM missiles (under wing and inlet, respectively) are US-built.

Calls for Reform:

As a result of its various safeguards, the FMS program has always been rather slow to process requests. As insurgencies rage on in Syria, Iraq, Afghanistan, Yemen, and various regions of Africa and Asia, many are calling for FMS reforms intended speed the process and get crucial military equipment to allies faster. Prominent figures such as Senators John McCain and Kay Granger have come out in support of FMS reform. According to McCain, “These countries deserve a [more rapid] decision . . . [i]f it’s no, it’s no. If it’s yes, it’s yes.” Granger, for her part, called the system “cumbersome, bureaucratic and inefficient.” These sentiments are not uncommon. Recently, Gulf states have also expressed dissatisfaction with the FMS program, especially the speed at which the sale is confirmed. For many of these states, the proposition of waiting indefinitely for the red tape to be cleared prior to a purchase is not acceptable when regional tensions are flaring or an urgent threat needs to be addressed.

Another argument in favor of FMS reform involves the competitiveness of US defense firms. Many worry that US defense equipment, already pricey compared to that of Russia and China, will be at a disadvantage if foreign nations do not feel their purchases are being processed rapidly enough. This could conceivably lead nations to purchase equipment from competitors if rapid delivery is a must, which would hurt sales and damage the US economy.

Nevertheless, it appears rather unlikely FMS reform will occur in the near future. While some purchases are processed slowly, critical ones can be expedited. For example, Gulf states such as Saudi Arabia and the UAE have been kept supplied with crucial precision guided munitions throughout the fight against ISIS despite the normally sluggish speed of FMS sales, demonstrating the ability of the current FMS system to keep up with a rapidly evolving situation if need be.

Many in the State Department and other government agencies also oppose FMS reform because it would reduce oversight. In order to speed up the FMS process, the government would need to remove some of the reviews and deliberations normally associated with FMS, which would lower the scrutiny placed on FMS sales. Some believe that this is not a worthwhile tradeoff, and that nations desiring advanced US equipment should be prepared to wait until the government can make an informed decision.

Others point to indicators that FMS is performing quite well financially despite the gripes many nations have with the system. The program moved over $46 billion worth of defense equipment in 2015, a figure larger than the military budgets of most nations.

It appears that, for now, the FMS process will remain in its current iteration, as Obama’s administration draws to a close and legislators are occupied by other pressing issues. Whether reform will eventually occur remains to be seen; the eventual outcome will likely depend on the outcome of 2016’s presidential and congressional elections as well as the unfolding situation in the Middle East.

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Alex Hempel
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