Defense Daily International - September 28, 2001

DSCA Forms 'War Room' To Speed Allied

Arms Requests; Unveils 10 Reforms

The Defense Security Cooperation Agency (DSCA) has established
a "war room" to quickly process arms requests from nations allied with
the United States in what is expected to be a prolonged campaign against
global terrorism that has been dubbed Operation Enduring Freedom,
according to a top official. "An Enduring Freedom Response Cell has been formed
to put on a fast track weapons requests from our allies," Air Force Lt. Gen.
Tome Walters, the DSCA director, told Defense Daily International during
a wide-ranging interview on Wednesday. "If you're an allied country,
let's say it's Uzbekistan, and you need radios, we will do whatever we
can to get the job done. The fences around our technology will be higher,
but they will be around far fewer things. I have asked the services, the Army,
Navy and Air Force to establish similar structures because they're the
guys who track requests on a daily basis." Walters disclosed the new cell
during DSCA's Security Cooperation 2001 conference conducted on Wednesday
and Thursday in Arlington, Va. Willard Mitchell, the deputy undersecretary
of the Air Force for international affairs, added that companies that have
not yet formulated plans to ramp up production should do so and should be
prepared to act quickly to fill spare parts and munitions orders to
support impending military operations. Following deadly terrorist attacks
against the World Trade Center and the Pentagon on Sept. 11, the entire
U.S. government has been mobilized for a protracted campaign against
global terrorism starting with the perpetrators of attack that have killed
more than 6,000 Americans. To fight its multifaceted anti-terror war the
Bush administration has been diligently building a massive international
coalition that is expected to include NATO, which the day after the
attacks for the first time in its history voted that the strikes against
the United States constitute an attack on the alliance. The importance of
arms transfers to building and maintaining the coalition over the
long-term is one reason why reforms to the U.S. export control and Foreign
Military Sales (FMS) system are being accelerated, according to government
officials and executives. Access to U.S. arms is one of a broad number of
incentives the administration is using to attract allies to its cause,
including lifting sanctions against a number of nations including
Pakistan, India and Indonesia. The U.S. government froze arms sales to
Pakistan and India in protest of the two countries' nuclear weapons
programs, while Indonesia faced sanctions over human rights concerns. The
State Department, which under law has overall responsibility for U.S.
weapons exports, also has formed a "war room" to handle a flood of
incoming equipment requests. Priority requests, as well as furious
diplomatic activity to secure allies briefly sidelined export control
reforms launched during the Clinton administration to streamline the
licensing as well as FMS systems that allies have long-complained
complained are unresponsive. Walters said he fashioned the new DSCA cell
to mirror an structure he established during NATO's air campaign over
Kosovo as the top uniformed officer in the Air Force's international
operation. The Air Force unit was formed, Walters said, to allow the
service to quickly respond to emergency equipment requests from allies.
"The system has been criticized as being slow and cumbersome, but it can
move remarkably quickly," Walters said. During the Kosovo campaign, the
Netherlands asked the Air Force for precision weapons, Walters said,
adding that 21 days later Dutch jets equipped with LANTIRN pods launched
Maverick missiles against Serbian targets. Reforms over the past two years
have dramatically improved the system, and changes will continue to be
pressed over the coming years, Walters said. Yesterday, he unveiled 10
reforms to the FMS system under his charge, the majority of which adapt
commercial business practices to fashion a system that not only operates
more quickly, but also will offer future customers more flexibility. The
changes fall into four areas: personnel and training, finance, partnering,
and business processes. The 10 reforms are: team international, standby
Letter of Credit in lieu of Termination Liability Payments, improved
payment schedule methodology, greater customer participation in
FMS-related contract processes, a customer satisfaction index, electronic
Letter of Acceptance coordination, web-based Security Assistance Customer
Handbook, electronic "how to" guide for Letter of Request Preparation,
improved Case Closure and Reconciliation, as well as civilian workforce
improvement initiatives. Under one of the FMS reforms, nations seeking to
purchase U.S. weapons from DoD were required to deposit in cash the full
amount that the country would be liable for if the project were
terminated. Instead, countries will be permitted to post commercial bonds
for the amount. This will free up capital for cash-strapped countries.
Walters also said that computerizing the FMS process also will save time.
"We have to move from a system based on trees to ones and zeroes," he
said. "It's a big job, but we are making steady progress, and have made
gains that people tend not to give us credit for. A big problem has been
IT (information technology)...We have lagged behind in that area, and
everyone has a different system. We are dealing with that in a
comprehensive way." Requests on paper that took 18 days to process are now
being cleared in a few days using a computer system, Walters said. For his
part, State export control chief Linc Bloomfield said that export control
reforms would press ahead including a comprehensive review of the
Munitions List that specifies 9,000 products and technologies that require
close government scrutiny before transfer overseas. The Pentagon recently
completed its review of the first quarter of the Munitions List that is
now being assessed by State. Bloomfield added that he also is reviewing
the Defense Trade Security Initiative, an overarching 17-point plan
implemented by the Clinton administration. John Hamre, the former deputy
defense secretary who championed export control reform while in office
before becoming the president and CEO of the Center for Strategic and
International Studies, has said that Munitions List should be pruned to
cover only a few hundred critical technologies. Hamre and other reform
advocate maintain licensing officers should ease strictures on close
allies, particularly for mundane items, allowing them to pay closer
attention to preventing key systems and technologies from finding their
way to potential foes. Lockheed Martin [LMT] Chairman and CEO Vance
Coffman told the DSCA audience that reforms to the export control and FMS
systems have improved the business prospects of defense contractors, but
also added that more must be done to address industry and allied concerns.
Robust weapons exports are critical, fueling production with sufficient
volume that in turn allows companies to offer better pricing to the U.S.
government, he added. The need for reform is particularly important in the
wake of recent attacks as the United States seeks to battle terrorism
using a transnational coalition, Coffman said. Better and more fluid
allied cooperation also will be critical in realizing the major
collaborative programs such as the Joint Strike Fighter (JSF) that will be
developed on a multinational basis. Lockheed Martin is competing against
Boeing [BA] for the JSF development and production contract. The winner
will have to work with a multinational industrial team to develop three
versions of a common stealthy, supersonic strike aircraft that can meet
ambitious U.S. and overseas military requirements at an economic cost.
Dirk Habig, the Netherlands' defense cooperation attache to the United
States, complimented U.S. officials for the progress made to date, but
also warned that more progress is needed to keep from alienating close
allies. The Netherlands as among the countries that in 1997 signed a
letter to former Secretary of State Madeleine Albright charging the U.S.
government export and FMS systems as an irritant to transatlantic
relations. According to Dutch officials, while their small country is
thankful the U.S. government has expedited arms requests--such as quickly
furnishing a Maverick capability during Kosovo--humiliating episodes
continue. For two years, the Netherlands have sought to purchase surplus
U.S.-made munitions from Canada, but the two close U.S. allies and NATO
members have yet to succeed in satisfying American third-party arms
transfer concerns. Unless the United States adopts a more open
posture--particularly toward its allies--multinational armaments
cooperation will prove difficult, Habig said. He also issued a warning
that a U.S. failure to do so could undermine relations with allies. For
his part, Walters said he is open to constructive criticism that leads to
better and more responsive processes. "The Dutch have been tough critics,
but they have been fair and have helped us become better," Walters said.
"But I have to say I am frustrated with critics who criticize for its own
sake. We've made a lot of progress, and we are not going to stop until
we're done. How long will that take? Three or four years? But we're going
to finish it."

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