Security Assistance Programs: A Guide for the Perplexed.

• Author: Clark, Samantha L.

* Each year, the U.S. government authorizes billions of dollars' worth of security assistance to friendly foreign countries to support ongoing defense cooperation and in pursuit of security and diplomacy goals. In fiscal year 2018 alone, it authorized defense exports totaling $192.3 billion, an increase of 6 percent from the preceding fiscal year.

The prodigious 2018 sum is composed of $55.66 billion in foreign military sales, a security assistance program administered by the Pentagon's Defense Security Cooperation Agency. The remaining sum of $136.6 billion was authorized through direct commercial sales, an acquisition route for both private and government purchasers that is administered principally by the State Department's directorate of defense trade controls.

The Defense Department's inspector general March 19 announced that an audit was about to commence on the FMS agreement development process. The audit will assess how the DSCA, military departments and other stakeholders coordinate foreign government requirements for defense articles and services and whether the Defense Department makes appropriate use of the results of the FMS agreement development process. The House Armed Services Committee mandated the audit in response to congressional concern over the "slow, cumbersome and complicated" FMS program, with its uncoordinated acquisition processes that do not necessarily support U.S. national security objectives or the U.S. defense industrial base. Recommendations from audits often become legislative initiatives in the following year's annual defense policy bill.

The Arms Export Control Act of 1976 authorizes the president, with approval from the secretary of state, to sell, lease and grant defense articles and services to friendly foreign governments and to international organizations. This presidential authority has been delegated to the State Department and to the Defense Security Cooperation Agency.

Under the program, foreign government purchasers acquire defense articles or services directly from the U.S. government, which in turn fulfills the foreign government requirements either from military stocks or through private sector procurement. By contrast, a direct commercial sale exists when, pursuant to Defense and State Department approval, a foreign government makes a purchase directly from a private contractor, oftentimes after internal negotiations over the country-specific requirements that need to be integrated into the items being acquired.

Typically, these two transactions must be financed completely by the foreign government purchaser. However, in the pursuit of U.S. national interests and...