Whether Foreign Military Sales Or Direct Commercial Sales PDF Download

This study explored the considerations underlying a foreign country's choice between Foreign Military Sales and commercial sale in acquiring a major weapon system and, in the process, identified various issues and problems that can confront the DOD in supporting a commercial sale. A case study of the commercial sale of the E-3 to the United Kingdom was employed to investigate the proposition that there are advantages and disadvantages to each acquisition approach. The Defense Security Assistance Agency's brochure, 'A comparison of Direct Commercial Sales & Foreign Military Sales for the Acquisition of U.S. Defense Articles and Services' was used as a backdrop in analyzing the UK E-3 sale. Six specific considerations were evaluated including (1) the ability to negotiate and administer a contract, (2) logistics and training needs, (3) the need for DOD personnel assistance, (4) contract price, (5)delivery schedule, and (6) the need for contacting flexibility. The study revealed that comparative price, delivery schedule, and contracting flexibility were primary considerations in the UK's decision to acquire the E-3 through direct commercial sale. However, the study also revealed numerous drawbacks that the arrangement had for both the UK and the DOD. Finally, the study provided valuable lessons learned which can be applied to future sales of the E-3.