Congress Pushes for Much-Needed Reforms of the Foreign Military Sales Process

The U.S. is still the arsenal of democracy, providing well over $150 billion in security cooperation assistance to some 58 countries in 2021. One of the main avenues for providing friends and allies with needed military capabilities is the Foreign Military Sales (FMS) process. Unfortunately, this process is overregulated and under-resourced, resulting in significant delays in the delivery of vital defense items. Recognizing that such delays are unacceptable given growing near-term threats, the Senate Armed Services Committee (SASC) has stepped in to propose the first significant reforms to the FMS process in decades. Some Republicans have gone even farther, proposing a package of reforms under the Speeding the Execution of Arms Deliveries for Allies and Securing Trust (STEADFAST) Act that would transform how this country provides allies and friends with the means to defend themselves.

Arms transfers through the FMS process require review and approval by both the State Department and Department of Defense, plus notification to Congress. Despite the fact that arms transfers are a major tool in U.S. foreign and security policy, the FMS process can be extremely cumbersome and protracted. According to a coalition of defense and aerospace industry groups, the FMS process is “opaque, inconsistent and lengthy.” Cases can languish in the bureaucracy or in Congress for months or even years.

The case of Taiwan is illustrative. There are growing concerns that China may seek to seize the island in the next few years. Yet there is presently a $19 billion dollar backlog of unfulfilled arms transfer requests by Taiwan.

Defense Secretary Lloyd Austin recently announced a series of reforms intended to speed up the process. The State Department also announced its FMS 2023, intended to retool foreign military sales for an age of strategic competition. Both departments’ reform efforts focus on improving workforce training and removing impediments to the FMS process.

Unfortunately, the reforms proposed by the Departments of Defense and State are mostly promises of change rather than concrete actions. There are no specific streps proposed that would reduce backlogs or speed up transfers.

This year, Congress decided to step in. The House created a bipartisan task force to develop FMS reform proposals. Likewise, the SASC draft of the FY2024 National Defense Authorization Act (NDAA) directs the defense department to take several concrete actions. Most significantly, it directs the Secretary of Defense to establish specific timelines for the completion of steps in the FMS process and would permit the prioritization of Foreign Military Sales within the Defense Priorities Allocation System. It also recommends a provision that would require the Secretary of Defense to develop a plan to realign the Defense Technology Security Administration under the Assistant Secretary of Defense for Industrial Base Policy. This change would, in theory, support enhanced industrial collaboration with allies.

SASC Republicans took an even bolder step with the STEADFAST Act. A leader in this reform effort is Alaska Republican Senator Dan Sullivan. Although the proposed legislation could not make it through the Democrat-controlled committee and into the NDAA, it was filed separately by proponents in order to show what true FMS reform looks like and promote discussion.

The STEADFAST Act lays out concrete timelines for the defense department to process FMS requests. A response to a letter of request must be generated in 45 days for the most straightforward requests but no longer than 150 days for requests involving extenuating circumstances. Specific deadlines for responses are established for eligible foreign purchasers with special designations, such as members of the national technology and industrial base (NTIB), NATO members, or major non-NATO allies such as Israel, Japan, the Republic of Korea, and New Zealand. In addition, the act directs that an application of a defense industry provider for a license to release sensitive technology as part of foreign military sales negotiations must be addressed within 120 days after receipt.

The STEADFAST Act also takes steps to harmonize the FMS process with critical national security relationships. It directs the Secretary of Defense to establish a path within the FMS process that gives priority for rapid technology release review and rapid acquisition to a set of allies and close partners. The act also seeks to speed up the actual arms delivery process by granting U.S defense companies permission to enter into agreements with providers of government-furnished equipment prior to signing a commercial contract or letter of offer and acceptance. In addition, the act would transfer the Defense Technology Security Administration to the Defense Security Cooperation Agency, ensuring that technology transfer and FMS policies are better aligned. Finally, the act also calls for better training for the security assistance workforce.

Reforming the way the defense department processes FMS cases is an important step in streamlining the security assistance system. But it is only one step. It is just as important to speed up the approval process at the State Department and to ensure that the Congressional notification system does not become a black hole for FMS cases. Ultimately, reducing the time it takes to get an approved acquisition on contract would benefit the U.S. military as well as foreign buyers.

Dan Gouré, Ph.D., is a vice president at the public-policy research think tank Lexington Institute. Gouré has a background in the public sector and U.S. federal government, most recently serving as a member of the 2001 Department of Defense Transition Team. You can follow him on Twitter at @dgoure and the Lexington Institute @LexNextDC. Read his full bio here.