xviii
i

DEFENSE SYSTEMS MANAGEMENT COLLEGE

TRANSATLANTIC

ARMAMENTS

COOPERATION

Report of the

Military Research Fellows

DSMC 1999-2000

Lieutenant Colonel Richard C. Catington, USAF

Lieutenant Colonel Ole A. Knudson, USA

Commander Joseph B. Yodzis, USN

August 2000

PUBLISHED BY THE

DEFENSE SYSTEMS MANAGEMENT COLLEGE PRESS

FORT BELVOIR, VIRGINIA 22060-5565

For sale by the U.S. Government Printing Office

Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328
ii

DISCLAIMER

This book was produced in the Department of Defense (DoD) school

environment in the interest of academic freedom and the advancement

of national defense-related concepts. The views expressed in this book

are those of the authors and do not reflect the official position or policy

of the DoD or those of the United States Government.

References in this report to the DoD 5000 series and life cycle phases

reflect the use of terminology at the time our research was conducted on

existing transatlantic cooperative programs. Our research concluded on

1 May 2000, prior to the release of updated Department of Defense 5000

series acquisition directives and instructions.

ISBN 1-893833-03-8
iii

ACKNOWLEDMENTS

This Report is the result of an 11-months Military Research Fellowship

program sponsored by the Defense Systems Management College.
iv

NOTICE

Copies of this report may be obtained by writing or faxing:

DEFENSE SYS MGMT COLLEGE

ATTN: AS PR

9820 BELVOIR RD, STE G3

FT BELVOIR, VA 22060-5565

Telephone: (703) 805-4366

DSN: 655-4366

Fax: (703) 805-3726
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TABLE OF CONTENTS

Page

Preface ................................................................................................................................. x

Executive Summary ............................................................................................................ xii

Introduction ........................................................................................................................ xiv

PART I – COOPERATIVE PROGRAM POLICIES AND PROCEDURES

Chapter 1 – Harmonization of Requirements and Development

of Program Memoranda of Understanding

Introduction ................................................................................................................... 1-1

Laws/Policies Affecting International Armaments Cooperation ................................... 1-2

Fora/Activities for Harmonizing Military Requirements .............................................. 1-2

Difficulties and Considerations in Harmonizing Military Requirements ...................... 1-4

Development of MOUs ................................................................................................. 1-6

U.S. Laws, Regulations, and Policies ............................................................................ 1-10

International Agreements .............................................................................................. 1-11

Summary ....................................................................................................................... 1-11

Chapter 2 – Security

Introduction ................................................................................................................... 2-1

Security Basics .............................................................................................................. 2-2

U.S. Organizations/Roles .............................................................................................. 2-3

Export Control/Technology Transfer............................................................................. 2-4

Handling of Information................................................................................................ 2-5

Sharing Classified Information ..................................................................................... 2-6

False Impressions .......................................................................................................... 2-7

Disclosure ...................................................................................................................... 2-7

Program Documents ...................................................................................................... 2-8

Visits and Assignment of Foreign Nationals ................................................................. 2-10

Other IAP Security Considerations ............................................................................... 2-11

Significant Differences With Foreign Partners .............................................................. 2-12

Lessons Learned ............................................................................................................ 2-13

Definition of Key Terms ................................................................................................ 2-13

Key Definitions from the ITAR ..................................................................................... 2-14
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PART II – TRANSATLANTIC AND INTRA-EUROPEAN COOPERATION

Chapter 3 – Europe and Transatlantic Defense Cooperation

Introduction ................................................................................................................... 3-1

European Economic and Political Development ........................................................... 3-2

European Defense Cooperation ..................................................................................... 3-6

Consolidation of the European Defense Industry.......................................................... 3-8

Significant Consolidation In Europe, 1997-1999 .......................................................... 3-8

Chapter 4 – Review of Selected Transatlantic Cooperative Programs

Introduction ................................................................................................................... 4-1

Multiple Launch Rocket System (MLRS) Program ...................................................... 4-3

Background.............................................................................................................. 4-3

Harmonization ......................................................................................................... 4-4

Industrial Teaming ................................................................................................... 4-4

Management Structure............................................................................................. 4-5

Technology Transfer ................................................................................................ 4-5

Business Management ............................................................................................. 4-6

Human Dimension ................................................................................................... 4-6

Notes ........................................................................................................................ 4-6

Terminally Guided Warhead (TGW) Development Program ........................................ 4-7

Background.............................................................................................................. 4-7

Harmonization ......................................................................................................... 4-7

Industrial Teaming ................................................................................................... 4-7

Management Structure............................................................................................. 4-8

Technology Transfer ................................................................................................ 4-8

Business Management ............................................................................................. 4-8

Human Dimension ................................................................................................... 4-9

Notes ........................................................................................................................ 4-9

Guided MLRS (GMLRS) Rocket Development ........................................................... 4-10

Background.............................................................................................................. 4-10

Harmonization ......................................................................................................... 4-10

Industrial Teaming ................................................................................................... 4-10

Management Structure............................................................................................. 4-11

Technology Transfer ................................................................................................ 4-11

Business Management ............................................................................................. 4-11

Human Dimension ................................................................................................... 4-11

Notes ........................................................................................................................ 4-12

NATO Seasparrow Surface Missile System .................................................................. 4-13

Background.............................................................................................................. 4-13

Harmonization ......................................................................................................... 4-14

Industrial Teaming ................................................................................................... 4-14

Management Structure............................................................................................. 4-15

Technology Transfer ................................................................................................ 4-15

Business Management ............................................................................................. 4-16
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Human Dimension ................................................................................................... 4-16

Notes ........................................................................................................................ 4-17

Rolling Airframe Missile (RAM) .................................................................................. 4-18

Background.............................................................................................................. 4-18

Harmonization ......................................................................................................... 4-19

Industrial Teaming ................................................................................................... 4-19

Management Structure............................................................................................. 4-20

Technology Transfer ................................................................................................ 4-20

Business Management ............................................................................................. 4-21

Human Dimension ................................................................................................... 4-21

Notes ........................................................................................................................ 4-22

Multifunctional Information Distribution System-

 Low Volume Terminal (MIDS-LVT) ........................................................................... 4-23

Background.............................................................................................................. 4-23

Harmonization ......................................................................................................... 4-24

Industrial Teaming ................................................................................................... 4-25

Management Structure............................................................................................. 4-26

Technology Transfer ................................................................................................ 4-27

Business Management ............................................................................................. 4-27

Human Dimension ................................................................................................... 4-28

Notes ........................................................................................................................ 4-28

F-16 Mid-Life Update (MLU) Program ........................................................................ 4-29

Background.............................................................................................................. 4-29

Harmonization ......................................................................................................... 4-30

Industrial Teaming ................................................................................................... 4-32

Management Structure............................................................................................. 4-32

Technology Transfer ................................................................................................ 4-34

Business Management ............................................................................................. 4-34

Human Dimension ................................................................................................... 4-35

Notes ........................................................................................................................ 4-36

Future Tank Main Armament (FTMA) Program ........................................................... 4-37

Background.............................................................................................................. 4-37

Harmonization ......................................................................................................... 4-37

Industrial Teaming ................................................................................................... 4-37

Management Structure............................................................................................. 4-38

Technology Transfer ................................................................................................ 4-38

Business Management ............................................................................................. 4-38

Human Dimension ................................................................................................... 4-38

Notes ........................................................................................................................ 4-38

Joint Strike Fighter (JSF) Program ................................................................................ 4-40

Background.............................................................................................................. 4-40

Harmonization ......................................................................................................... 4-41

Industrial Teaming ................................................................................................... 4-43

Management Structure............................................................................................. 4-43
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Technology Transfer ................................................................................................ 4-43

Business Management ............................................................................................. 4-44

Human Dimension ................................................................................................... 4-44

Notes........................................................................................................................ 4-45

Summary ....................................................................................................................... 4-46

Chapter 5 – Intra-European Cooperative Programs

Introduction ......................................................................................................................... 5-1

European Motivations ......................................................................................................... 5-1

European Procurement Systems.......................................................................................... 5-4

France .................................................................................................................................. 5-4

Germany .............................................................................................................................. 5-6

U.K. ..................................................................................................................................... 5-7

Intra-European Cooperation Efforts.................................................................................... 5-9

Notes ................................................................................................................................... 5-10

PART III – FINDINGS AND CONCLUSIONS

Chapter 6 – Findings

Time .................................................................................................................................... 6-1

Reputation ........................................................................................................................... 6-3

Harmonization Problems..................................................................................................... 6-4

Difficulty of Cooperative Programs .................................................................................... 6-6

Lack of Incentives............................................................................................................... 6-7

Motives to Cooperate .......................................................................................................... 6-8

Organizational Culture ........................................................................................................ 6-9

Chapter 7 – Conclusions and Recommendations ......................................................... 7-1
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APPENDICES

Appendix A – Guidelines for the Preparation of

Summary Statement of Intent (SSOI) ....................................................... A-1

Appendix B – Summary of Security Procedures for NATO Programs ............................ B-1

Appendix C – National Disclosure Policy Committee Membership ............................... C-1

Appendix D – Sample of NDP-1 Country Charts ............................................................ D-1

Appendix E – DoD Principal Disclosure Authorities ...................................................... E-1

Appendix F – Summary of the Multinational Industrial

Security Working Group (MISWG) Documents....................................... F-1

Appendix G – Technology Control Plan (TCP) ............................................................... G-1

Appendix H – Chronology of European Defense Initiatives ............................................ H-1

Appendix I – Standing up or Joining an International Program Office .......................... I-1

Appendix J – Examples of European Defense Company

Transnational Cooperative Activities ........................................................ J-1

Appendix K – Glossary .................................................................................................... K-1

Appendix L – Interviews and Personal Contacts ............................................................. L-1

Appendix M – Selected Bibliography............................................................................... M-1

Appendix N – About the Authors ..................................................................................... N-1
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PREFACE

This publication presents the results of an intensive 11-month program for three military research

fellows. The Under Secretary of Defense (Acquisition) (USD (A)) chartered the Defense Systems

Management College (DSMC) Military Research Fellowship Program in 1987. The program

brings together selected officers from the Army, Navy, and Air Force for two primary purposes:

first to provide advanced professional and military education for the participating officers; and

second, to conduct research that will benefit the Department of Defense (DoD) acquisition

community.

The fellowship program is conducted in three phases. In the first phase, the three officers meet at

DSMC for four weeks to begin to determine their research goals, define a research plan, consult

with the DSMC faculty, and initiate background research. During the second phase, the fellows

attend the Program for Management Development at Harvard Business School. This comprehensive

ten-week executive education program brings together a diverse group of functional-level executive

and new general managers from over 30 countries to learn state-of-the-art management techniques

and technologies necessary to become successful managers in today’s global marketplace. In the

third phase, the fellows return to DSMC to conduct their joint research, culminating in the

publication of their research report.

This report focuses on transatlantic cooperative programs. Cooperation with Europe was chosen

because of the important political, military, economic, and historical transatlantic ties, but most

important, because America’s relationship with Europe is rapidly evolving. There is substantial

concern about a “Fortress America – Fortress Europe” syndrome. Political leaders and the public

both here and in Europe are attempting to come to terms with the meaning of the NATO alliance

in the post-Cold War era. European assertiveness and unity are clashing with dated perceptions

about Europe held by Americans. Our intended audience is both the U.S. defense acquisition

workforce and policy makers. For the former, we hoped to produce a useful guide that will make

them more effective as members of a cooperative team. For the latter, we attempted to provide an

updated comprehensive view of the salient features of transatlantic armaments cooperation and

some ways in which the context is changing.

In researching our topic, we visited a number of government and commercial organizations in the

U.K., Belgium, Germany, France, and the U.S. We interviewed numerous individuals for their

insights on this fast changing and sometimes emotional area. These interviews were conducted

under the non-attribution policy, unless permission was specifically sought and obtained.
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We would also like to acknowledge with gratitude the help of our colleagues at DSMC as well as

friends outside DSMC. While there are far more people to thank than room permits, we would

like to single out a few for special mention. Richard Kwatnoski, Don Hood, Alberta Ladymon,

Tony Kausal, Frank Kenlon, Charles “Chuck” Wilson, Greg Caruth, Pat Bartlett and Judith Greig

have been particularly helpful in supporting our efforts. Special thanks to our friends overseas,

Gertrud Humily, Trevor Taylor, Colonel Albert Garcia, Lieutenant Colonel Mike Krimmer, and

Lieutenant Colonel Gary Allen, for their assistance in arranging in-country interviews. Thank

you to the faculty, staff, and classmates at the Program for Management Development at Harvard

Business School, whose rich experiences and knowledge sharpened our research perspective.

Finally, thanks to all those we interviewed for taking the time to share their experiences and

insights with us.
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EXECUTIVE SUMMARY

Objective: To provide a comprehensive overview of transatlantic armaments cooperation relevant

to both policy makers and members of the acquisition workforce. Policy makers will find an

assessment of current cooperation, its historical background, future prospects, and suggested

courses of action. Members of the acquisition workforce will find a helpful guide to the unique

aspects of international cooperation in general and transatlantic cooperation in particular.

Background: Transatlantic armaments cooperation, defined as partnerships with two or more

members spanning the Atlantic for the purpose of developing and producing defense articles, has

about a 40-year history. The gains expected from this cooperation include cost savings through

pooling of resources for development and economies of scale for production, and interoperability

among the allies. It is a relationship born out of Cold War realities, a context that has changed

dramatically in a short period of time. Throughout, the amount of cooperation achieved has been

modest and fraught with difficulty.

Discussion: Despite the urgency of the Cold War, the Atlantic Alliance fielded different models

of the same basic equipment types, often not mutually interoperable. Cooperation aimed at overcoming duplication of effort and proliferation of types is hindered by protection of national

industrial bases, labor concerns, security considerations and a lack of harmonization of military

requirements. Though the threat has receded, armaments have become more complex and therefore

more expensive, underlining the need for cooperation. Moreover, the trend is unmistakably toward

coalition operations, boosting the importance of interoperability. At the same time, Western military

budgets are smaller, European unification is well underway, and there is a palpable desire to resist

a perceived U.S. hegemony in culture, economics, and political-military affairs. The need for

cooperation still exists, but the process promises to be as tough as ever.

Conclusions and recommendations:

• Cooperative programs are indeed more difficult, but can be conducted with proper attention

paid to the appropriate areas.

• Motives for cooperation differ between Europe and the U.S.

• Time is working against the prospects for transatlantic cooperation.
xiii

• The U.S. has a reputation as a difficult partner in cooperation.

• The objectives of cooperation are only served by success. Abortive or acrimonious programs

defeat those objectives.

• The transatlantic defense technology gap invites cooperation.

• The U.S. should persist in its support of transatlantic cooperation.

• The U.S. must cultivate an organizational culture supportive of international armaments

cooperation, and...

– emphasize exploration of cooperative opportunities.

– select programs based on long-term prospects.

– work toward funding stability to the extent possible.

– make the export control process more responsive to cooperation.

– avoid giving false impressions to partners.

– educate the acquisition workforce in international cooperation.

– pursue all avenues toward the easing of harmonization.

– select leaders and participants in cooperation with care.

– provide effective incentives for those participants.
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INTRODUCTION

“An unidentified problem has an infinite number of solutions.”

— Robert H. Humphrey

The ability to perceive change, appreciate its implications, and then to chart an appropriate course

are the marks of visionary government. Anti-trust legislation in the era of Teddy Roosevelt, the

Marshall Plan, and Nixon’s rapprochement with China are several examples of such vision at the

national level. U.S. relations with Europe at the close of the 20th Century are in a dynamic phase,

calling attention to the component parts of that relationship. Transatlantic cooperative arms development is not a new idea, but its rationale and the context in which it is engaged have changed,

prompting the need to reassess its place in U.S. acquisition policy.

The contextual changes for transatlantic cooperation are the rapid economic development of

postwar Europe, the continent’s quickening pace of consolidation, the loss of a common threat,

the cultural and political tensions across the Atlantic, unprecedented technical innovation, and

increased emphasis on fighting in a coalition environment.

Despite the compelling reasons for transatlantic armaments cooperation in both the Cold War and

post-Cold War eras, very little has been realized. The reasons for that lack of success are varied

and some are also changing over time. Protection of technology, industrial interests, and political

alignments are considerations that are always evolving. Some obstacles to cooperation are more

mundane, however. The U.S. DoD lacks an organizational culture that is supportive of cooperative

programs. There is also a corresponding lack of knowledge among the implementing management

and workforce and so they tend to avoid these programs.

What is needed is a broad view that provides all involved with an appreciation of the salient

differences that set transatlantic cooperative programs apart, their history, why such cooperation

is important, and how and why it is changing. Members of the acquisition workforce also need

the practical details that relate to the management of a cooperative program. The correct approach,

therefore, is one that addresses both mechanics and the larger context.

Part I (Chapters 1 and 2) covers U.S. policies and procedures for cooperative programs. These

chapters discuss differences between U.S.-only programs and cooperative programs. Three

categories of differences are covered: harmonization of requirements, MOU development, and

security procedures. A discussion of what program managers (PMs) need to know is provided in
xv

these chapters. We found no other single source that provides a useful summary level reference

for this information for the PMs and others in the acquisition workforce who need it.

Part II discusses transatlantic and intra-European programs and their context. The European

environment has changed fundamentally in the last decade and all indications are that the Continent

will continue to consolidate economically and politically over the next ten years. Many of these

changes are significant to transatlantic armaments cooperation. Chapter 3 provides a broad view

of the European environment, important to success in transatlantic cooperation. Chapter 4 provides

a review of selected past and ongoing transatlantic programs. These programs provide many

valuable lessons for those who will be involved in future cooperation, lessons that are summarized

at the end of the chapter. Chapter 5 provides a study of selected aspects of intra-European programs

and explains the significant conditions that promote and facilitate their success.

Findings and conclusions follow in Part III, many of them relevant to PMs and policy makers

alike. The U.S. can unilaterally improve the transatlantic cooperative relationship to make it more

fruitful. Several of these findings and conclusions in Chapters 6 and 7 have been exposed in previous studies of international cooperative programs, but some have not.

This study focuses on international cooperative development programs where there is shared

management of the project with follow-on co-production or at least plans for co-production. The

terms “cooperation” and “collaboration” are sometimes used interchangeably when describing

these types of programs.
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PART I

COOPERATIVE

PROGRAM POLICIES

AND PROCEDURES
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1-1

1

HARMONIZATION OF

REQUIREMENTS AND

DEVELOPMENT OF

PROGRAM MEMORANDA

OF UNDERSTANDING

“There are only three obstacles to Allied Cooperation—

the Americans, the British, and the French.”

— General L. Norstad, Former SACEUR

system, the potential partners must find a way

to interweave all of their individual requirements and priorities in a manner that is satisfactory to all. This is the foundation of any international armaments cooperative program.

Harmonization is usually difficult largely because of the extreme importance that military

equipment has to each nation’s military and to

the nation itself.

Equally important to success in an international cooperative program is harmonization of

the management aspects of the program and

of the expectations of all the cooperative partners. This is normally accomplished through

the development of a comprehensive international agreement called a program MOU. In

Introduction

The basis for international armaments cooperation is to address mutual military needs. But

since each nation has its own process for generating military requirements and its own priorities for fulfilling them, agreeing to common

requirements that conform to the same timetable is hard. It is very unlikely that the military

requirements and priorities of one nation will

precisely align with those of another. Yet, in

many cases, the equipment will perform essentially the same function. In order, therefore, to

develop equipment cooperatively with other

nations, the differences in these military requirements and priorities must be harmonized.

In harmonizing military requirements for a
1-2

international programs, work share—which

equates to jobs and industrial benefits for the

nations involved—is always a major concern,

as are management controls, decision making

processes, and many other program aspects.

These matters are agreed on through the program MOU. The final MOU and the negotiations to reach it must thoroughly address all of

the partners’ concerns and reflect agreement

and harmonization in terms of both program

requirements and expectations.

PMs should be aware of the difficulties inherent

in harmonizing military requirements and

developing MOUs for cooperative programs.

Such awareness is beneficial to gaining an

appreciation of the motivations and priorities

of cooperative partners. The considerations for

and the difficulties associated with harmonization and MOU development are derived

largely from the corporate memory of those

who have trodden the same path in the past

several decades. Historic knowledge will help

avoid past mistakes and achieve future

successes.

This chapter describes the legal and policy basis

for cooperation, discusses the various fora and

activities as well as the difficulties and considerations related to harmonizing requirements and

the development of MOUs.

Laws/Policies Affecting International

Armaments Cooperation

For many years, Congress and the DoD have

emphasized the need for armaments cooperation to improve interoperability and standardization with the North Atlantic Treaty Organization (NATO) and other allied partners, and

to save on weapon systems development, production, and logistics support costs. Congress

has enacted laws and DoD has formulated policies toward this end. PMs and other acquisition

personnel must be aware of these requirements.

They affect most PMs, not just those involved

in international cooperative programs, because

in most U.S. acquisition programs, PMs are

required to consider cooperative opportunities

as part of the program’s acquisition strategy.

This requirement is implemented through instructions in the DoD 5000 series of acquisition

program regulations. A summary of the applicable U.S. laws, regulations, and policies that

provide the basis for and affect DoD cooperative programs is provided at the end of this

chapter starting on page 1-10.

Fora/Activities for Harmonizing Military

Requirements

The U.S. currently maintains several organizations and participates in a number of fora

and activities that support harmonization of

military requirements. Although these fora and

activities have yielded far fewer cooperative

programs in the past than ideally possible, they

continue to provide a means to work toward

cooperation in the future. The most significant

are identified below.

• Conference of National Armament

Directors (CNAD)

The CNAD serves as the primary NATO

forum for discussions on armament cooperation possibilities. Its objective is to

achieve maximize armaments cooperation

among the NATO members. The U.S.

National Armaments Director (NAD) is

the Under Secretary of Defense (Acquisition, Technology, and Logistics) (USD

(AT&L)). The CNAD is structured with

major groups from each of the Services,

termed Army, Navy, and Air Force Armaments Groups, as well as a NATO Industrial Advisory Group. Each of these

major groups has subgroups to facilitate
1-3

discussions at a level of detail necessary

to discern where cooperation is possible.

The members of these groups and subgroups, while mostly drawn from the Military Departments (MILDEPs) or Services

from each nation, are ultimately representatives of the NADs from each NATO

nation.

• International Cooperative

Opportunities Group (ICOG)

The ICOG is an ad hoc forum among the

NADs of the five power nations (U.S.,

U.K., France, Germany, and Italy) on armaments cooperation. ICOG’s charter is to

explore future system-level cooperative

opportunities before national military requirements have been formulated. The

intent is to start very early so that common

military requirements will be developed to

serve as the basis for cooperative programs.

Starting early helps prevent parochial support from developing for a particular nation’s solution or contractor’s design, either

of which then decreases the potential for

cooperation. These discussions are intended to augment the existing Senior National

Representative (SNR) fora (see below),

facilitate the long range programming of

funds by nations, and harmonize military

requirements for potential system-level

cooperative programs.

• Senior Level Bilateral Military Talks

The Services conduct senior level (flag or

general officer level) staff talks with

selected NATO and non-NATO allied

nations. These talks are primarily focused

on doctrine and training issues, but also

serve as a venue for considering areas for

armaments cooperation.

• Senior National Representative (SNR)

Fora

Each Service has a flag or general officer

SNR who meets on a bilateral (or in some

cases, multilateral) basis to discuss armaments cooperation matters associated with

their Service’s research, development, and

acquisition efforts. While past efforts have

been more science and technology cooperation-oriented, SNR activities, in conjunction with the ICOG, are now placing

additional emphasis on the system-level

armaments cooperation area.1

• Mid-Level Discussions

Periodic discussions at middle management level (O–6 level or O–6 equivalent

level) among operational users’ representatives and materiel developers have

been employed by some elements within

DoD to consider cooperative opportunities.

Several branches of the Army hold periodic

bilateral discussions of this type. These

discussions are focused on potential armaments cooperation in specific areas such

as Armor, Field Artillery, and Air Defense.

Notable recent successes between the U.S.

and the U.K. include the harmonization of

the military requirements for the Army’s

Future Scout Cavalry System (FSCS)/Tactical Reconnaissance Armoured Combat

Equipment Requirement (TRACER) and

the Lightweight 155 Towed Artillery

(LW155) Digitization programs.2

• Ongoing Cooperative Program

Management Meetings

Discussions that are held as part of the

periodic management meetings for ongoing cooperative programs have provided
1-4

the genesis for the harmonization of military requirements for follow-on improvements or upgrades to these programs.

Nearly always, these management meetings formally involve mid-level (O-6 level

or O-6 equivalent level) operational users’

representatives as part of the international

program management structure. Participation of the users’ representatives from

all the program’s participants is the key to

the success of harmonization efforts. Several follow-on cooperative programs have

resulted directly from these types of discussions. Examples are the Guided MLRS

(GMLRS), Enhanced Sea Sparrow Missile

(ESSM), F-16 Mid-Life Update (MLU),

and Rolling Airframe Missile (RAM)

Block I programs that are discussed in

Chapter 4.

• Cooperative R&D Organizations and

Activities

Each of the Services has organizations that

are dedicated to international cooperative

research and development (R&D) activities. The Office of the Secretary of Defense

(OSD) International Cooperation Handbook, which is available in the Defense Acquisition Deskbook, provides a summary

of these R&D organizations and activities.

Cooperative R&D efforts can be beneficial

in harmonizing military requirements since

those requirements are usually based on the

technology that is available or thought to

be possible. The more sharing of technology with potential partners, the more

likely that common equipment requirements will be developed. Cooperative

R&D can also serve as an essential building

block for promoting interoperability and

developing standards such as NATO Standardization Agreements (STANAGs) when

the ultimate goal of initiating cooperative

development programs is not achieved.

Difficulties and Considerations in

Harmonizing Military Requirements

Operational users’ representatives, PMs, and

other acquisition personnel involved in harmonizing military requirements and cooperative development activities should be aware of

some of the important factors to consider and

common difficulties that are encountered in

harmonizing military requirements. Inherent in

the difficulties is the importance of military

equipment in protecting each nation’s interests.

Acquiring the best possible equipment in

sufficient quantities as soon as possible from

national industrial assets is the ideal for any

military organization. Budget constraints,

insufficient national capabilities, political

objectives, or military interoperability considerations, however, lead nations to seek

cooperation and harmonization of military

requirements.

Harmonization encompasses a collective

assessment of the threat and agreement on the

timeframe in which new equipment is needed

and can be obtained based on national resources

available. Harmonization then involves agreeing on the functions the new equipment must

perform (i.e., how far it must shoot, how fast it

must go, etc.), the characteristics it must

possess (i.e., weight and size dimensions, etc.),

and the environmental conditions that it must

operate in (i.e., cold, heat, sand, rain, etc.) to

counter the threat. The partners must then cooperatively determine the technical means to

achieve the military performance requirements.

Some of the common difficulties and considerations in achieving harmonization of military

requirements are:
1-5

• Understanding a Potential Partner’s

Military Requirements

Most nations follow a set procedure to

formulate and approve formal military

requirements. The formats in which these

requirements are set forth are not common

between nations, and hence can lead to a

degree of misunderstanding of their commonality. Analysis processes are based on

national modeling and simulations (M&S)

that include many variables. Some of the

most significant of these variables are the

potential threat scenarios, the operational

doctrine of the particular branch of the

military or the nation, and the technological

assumptions about performance characteristics. Each nation’s M&S can generate

different solutions to a common scenario.

Thus, when undertaking to harmonize military requirements, enough details must be

flushed out to ensure there is sufficient

commonality before initiating a cooperative effort. The differences in how the

requirements were derived must be recognized and thoroughly accounted for to fully

achieve harmonization.3

• Timing

A fundamental principle of harmonizing

requirements is that all the participants

should have a common timeframe for when

the equipment is needed. The amount of

time available in a development program

is one of the most significant drivers for

the technological solutions pursued. So

partners that need equipment at the same

time are more likely to agree to the technical approaches and to be more willing to

reach mutually agreeable technological

compromises, if necessary, later in the

program.

• Gold Plating

The tendency in harmonization is for the

potential partners not to budge from any

of their original requirements, which leads

to partners adding on to their original

requirements the requirements of the other

partners. This is termed “gold plating.” The

more rigorous the national requirements

generation process, the less likely that that

potential partner(s) is going to be willing

to compromise. In general, gold plating

drives up both development and production

costs and adds technological complexity.

• National Variants

When harmonization cannot be reached by

compromise, and gold plating is deemed

unsuitable, an alternative is to develop

national variants. A common base system

is produced upon which each nation then

makes individual or (with a subset of the

program’s participants) collective modifications to meet their national needs. National variants dilute some of the potential

cost advantages, resulting in increased

development cost and production unit

costs.

• Key Performance Parameters (KPPs)

and Cost As an Independent Variable

(CAIV) Objectives

An important part of the harmonization of

military requirements in a cooperative

program is to decide which requirements

cannot be compromised and those where

compromises will be considered. During

harmonization, the partners should agree

on the KPPs and CAIV objectives. Identification of KPPs and CAIV objectives

during harmonization provides the baseline

for making difficult decisions, if necessary,
1-6

later in the program. Currently, KPPs and

CAIV objectives are normally identified in

U.S. acquisition programs. However, the

principles of KPPs and CAIV objectives

may not be familiar to foreign partners. In

order to form acceptable compromise

solutions during the development process

with its attendant technological uncertainty,

the U.S. and its partners should lay the

groundwork by reaching agreement on

KPPs and CAIV objectives.

NOTE: The U.S. Requirements Generation

System, as specified by the Chairman of the

Joint Chiefs of Staff Instruction (CJCSI)

3170.01A, dated 10 August 1999, requires that

the potential for inter-Service or allied cooperation be discussed in paragraph 4, Potential

Materiel Alternatives of the Mission Need

Statements (MNSs). However, this is the only

reference to allied cooperation in CJCSI

3170.01A and consequently, efforts to harmonize requirements with our allies are not

emphasized in the generation of U.S requirements. On the other hand, CJCSI 3170.01A,

places heavy emphasis on the harmonization

of U.S. requirements among the DoD components for the purpose of generating joint

programs. CJCSI 3170.01A requires standardized formats across the DoD components

for the MNSs, Capstone Requirements Documents (CRDs), and Operational Requirements

Documents (ORDs) which are the formal

documents used in the requirements generation process. It states that “this standardization instills discipline in the process and

provides both the validation and approval

authorities, and the acquisition management

system, with efficient and consistent information to use in reviews, certifications, and

decision deliberations.”4

Development of MOUs

When harmonized military requirements are

achieved through the fora and activities

discussed above or by some other means, the

PM must then harmonize programmatic requirements, normally through the development

of an MOU. A program MOU is an international agreement (IA) and U.S. participants

involved in developing an MOU must follow

DoD’s rigorous approval process. PMs should

seek expert assistance and advice from their

respective Service’s international program

organization in developing MOUs.

The roles of the most significant Office of the

Secretary of Defense (OSD) level organizations

and non-DoD organizations in the MOU

approval process are listed below.

• OSD General Counsel – Reviews the

MOU for U.S. legal and OSD policy considerations, including the legal requirements for equitability.

• OSD Comptroller – Reviews the MOU

for compliance with DoD financial management policies, availability of U.S.

funding requirements, equitability both in

terms of financial and nonfinancial contributions (i.e. background information

including technical data, manpower,

facilities, equipment, hardware, software,

etc.) of the participants, and compliance

with U.S. fiscal law.5

• Deputy Under Secretary of Defense

(DUSD) Policy – Reviews the Summary

Statement of Intent (SSOI) and MOU for

all policy, information security, and

technology transfer considerations.
1-7

• Director, Defense Procurement –

Reviews the MOU for contracting

considerations including work share and

industrial teaming arrangements with particular attention to how these arrangements will affect competition in contracting

activities of the program.

• Director, International Cooperation –

Processes the SSOI and MOU through

DoD-interagency staffing.

• Department of Commerce – Reviews the

SSOI and MOU for impacts on the U.S.

industrial base.

• Department of State – Reviews the MOU

for foreign policy, technology security, and

regional stability impacts.

A plan of action and milestones for a typical

MOU scenario for a cooperative development

program are shown below in Figure 1-1.6

Calendar Actions and Milestones

Days

0 Statement of Intent (SOI)

0-30 Formation of exploratory team

30 Arrangements for initial exploratory or technical discussions meeting

45 First exploratory or technical discussions (more sessions may be held if

necessary)

50-60 Preparation of Request for Authority to Develop (RAD) and SSOI

50-60 Formation of negotiation team

60-81 Submission and staffing of RAD

65 Meet with OSD to resolve RAD comments if necessary

85 Receipt of authority to develop and prepare to negotiate

60-85 Preparation of the MOU

115-200 Negotiation Sessions (number of sessions needed depends on the

complexity of the program and the number of partners involved)

140 Briefing to OSD

200-260 Request for Final Authority (RFA) i.e., to conclude and staffing of RFA;

Congressional notification (if required by the Section 27 of the Arms Export

Control Act)

270 Signature of MOU

Figure 1-1. Actions and Milestones
1-8

For cooperative development programs, the

MOU process formally begins when the Service component prepares and submits a Request

for Authority to Develop (RAD) to the OSD

Director of International Cooperation. However, before this step is reached, exploratory or

technical discussions will have been held with

the potential partner(s). Exploratory discussions determine the viability of a cooperative

program and can take place prior to DoD’s approval. During this phase, reasonable program

alternatives can be explored but no commitments can be made. However, draft MOUs, no

matter if prepared by the U.S. or the potential

partner(s), may not be presented or discussed

until OSD (or in some cases, MILDEP) approval to begin negotiations has been granted.7

This is a commonly made mistake during

exploratory discussions.

MOU negotiations cannot begin until the

RAD is approved by OSD. MOU negotiations

are defined by DoD 5530.3, International

Agreements, as:

Communication by any means of a

position or an offer, on behalf of the

United States, the Department of

Defense, or on behalf of any officer or

organizational element thereof, to an

agent or representative of a foreign

government, including an agency,

instrumentality, or political subdivision thereof, or of an international

organization, in such detail that the

acceptance in substance of such position or offer would result in an international agreement. The term “negotiation” includes any such communication even though conditioned on

later approval by the responsible

authority. The term “negotiation” also

includes provision of a draft agreement

or other document, the acceptance of

which would constitute an agreement,

as well as discussions concerning any

U.S. or foreign government or international organization draft document

whether or not titled “agreement.” The

term “negotiation” does not include

preliminary or exploratory discussions

or routine meetings where no draft

documents are discussed, so long as

such discussions or meetings are conducted with the understanding that the

views communicated do not and shall

not bind or commit any side, legally

or otherwise.8

When the RAD is submitted to OSD it must

include an SSOI. The guidelines for preparing

an SSOI are contained in Appendix A. Items

of particular interest in the SSOI will be potential industrial base impacts, funding availability, equitability and cost share arrangements

including nonfinancial contributions (i.e.,

background information including technical

data, manpower, facilities, equipment, hardware, software, etc.), justification of any nonequitable cost sharing (if applicable), and

technology transfer issues.

A summary Technology Assessment/Control

Plan (TA/CP) and Delegation of Disclosure

Letter (DDL) as discussed in Chapter 2, page

2-9, must be prepared prior to the SSOI to

provide the basis for the information security

and technology transfer proposals. In the SSOI,

an explanation and justification must be

provided for any section of the MOU where

the DoD IA Generator is not expected to be

followed in the MOU. Equitability must be

specifically justified in the SSOI unless one of

the standard calculations contained in Volume

12, Chapter 9 of the DoD Financial Management Regulation provides an unambiguous

quantitative basis (e.g., equal cost share) for a

program equitability determination.9

 The
1-9

Department of Commerce will review the

potential U.S. industrial base impacts that are

identified in the SSOI.

With RAD approval by OSD, the MOU

negotiations can begin. The MOU will cover

all aspects of the program such as cost shares,

work shares, industrial teaming arrangements,

technology sharing, data and patent rights uses,

security arrangements, management and

organizational structure, etc. Depending on the

individual Service, the PM may or may not

determine the make up of the MOU negotiating

team. However, even though the PM may not

determine the team composition or serve as the

chief negotiator, he/she performs a key role in

the negotiation process and should be

thoroughly familiar with the MOU provisions

since the MOU serves as the foundation for

execution of the cooperative program. The U.S.

negotiating team must be knowledgeable of the

DoD positions on all standard MOU issues. The

negotiators from potential partner(s) may be

very experienced negotiators relative to their

U.S. counterparts; therefore the U.S. team must

be thoroughly prepared to be effective. The

other participants’ negotiators will probably

also have considerably more flexibility since

they are not severely bound by laws, regulations, and policies, as are the U.S. negotiators.10

The DoD IA Generator is a tool that greatly

assists in developing MOUs. The IA Generator

language must be tailored for the specifics of

the program. For standardized sections such as

security, customs, duties, and taxes, liabilities

and claims, etc., the IA Generator provides

guidance and suggested text. For projectspecific sections of the MOU, the IA Generator

provides general guidance. Deviations from the

IA Generator must be justified and approved

by OSD either as part of RAD approval or later

in the MOU process. Every sentence and word

in the final MOU will receive great scrutiny

during the OSD review and consideration for

approval. Use of other than the IA Generator

language is likely to cause delays in staffing

the final negotiated MOU.

MOU negotiations are delegated to the Services

and OSD representatives will not normally

participate in the actual negotiations. Throughout the negotiations, therefore, the PM should

seek OSD staff advice on potentially controversial areas in the MOU. The amount of experience on the negotiation team is an important

factor to consider. The more inexperienced the

negotiation team, particularly regarding the

legal nuances of MOUs, the more advice should

be sought from either the Service international

program organization or OSD experts. This

advice can come from briefings, discussions,

or reviews of draft MOU language. The PM

should ensure that affirmative OSD feedback

is received before proceeding with the MOU

negotiations and resolve any differences with

the OSD staff as they arise. PMs should not

expect to receive favorable resolution with the

OSD staff experts without considerable effort,

or even at all, in disagreements that exist on

the final MOU because of the U.S. national

policy implications of MOU provisions. Each

MOU serves as precedent for future MOUs.

The OSD staff’s emphasis, therefore, is to

ensure that bad national policy precedents are

not established. The effects on the current program under review are of much lesser concern

than are the effects on the overall U.S. policy.

Finalizing MOU negotiations with the potential

partners without informal OSD staff approval

can set up a very embarrassing situation if OSD

does not concur with the final draft MOU

during the formal RFA step. If this occurs, the

PM can expect to encounter considerable

delays in resolving the disagreements or may

have to re-open negotiations in order to arrive

at an MOU that is acceptable to OSD.
1-10

When negotiations are completed, the Service

component sends the RFA to OSD. When OSD

completes staffing and approves the MOU, it

is sent to the Department of State for forwarding to Congress with the required certification

statement (if applicable). OSD will provide the

Service proponent authority to conclude upon

completion of the congressional notification

process (if applicable). The MOU is then formally put into effect by the signature of each

participant. Based on the typical MOU timeline, the entire MOU development process is

expected to take at least 270 days but has often

taken 18–24 months. For this reason, program

funding, contract award dates, and start of work

packages are usually planned based on the

expected MOU signature date. Significant

delays in the MOU approval/signature process

can jeopardize time-sensitive national funding

from all the participants for a given fiscal year.

Likewise, contracts that have been negotiated

on the basis of a cooperative program cannot

normally be put into effect until all the parties

have signed the MOU. So delays in the MOU

approval and signature process are likely to

delay program initiation and PMs should

make contingency plans in the event that MOU

delays occur.

U.S. Laws, Regulations, and Policies

Below are the U.S. laws, regulations, and

policies that provide the basis for and affect

DoD cooperative programs.

Section 27 of the Arms Export Control Act

(22 USC 2767) provides the authority for DoD

to enter into cooperative acquisition programs with NATO countries and friendly nonNATO countries.

Title 10 USC 2350a (Nunn) provides the

authority for DoD to enter into cooperative

R&D projects with major U.S. allies. This law

also requires the preparation of an arms

cooperative opportunities document for all

acquisition programs subject to review by the

Defense Acquisition Board and any new project

for which a MNS is prepared. This document

must include:

• identification of similar development efforts or production of similar equipment

by U.S. allies;

• an assessment as to whether or not an allied

system could meet or be modified to meet

U.S. requirements;

• an assessment of the advantages and disadvantages with regard to program timing;

development and life cycle cost; technology sharing; and Rationalization, Standardization, and Interoperability (RSI) of

cooperating on the project with U.S. allies;

and

• a recommendation on whether or not to

explore a cooperative program with U.S.

allies.

DoD Regulation 5000.2-R, 15 March 1996

(Incorporating Change 1, 21 May 1999),

Para 3.3.6.2, implements the above legal

requirements by requiring a discussion of

cooperative opportunities in the program’s

acquisition strategy.

DoD Directive 5000.1, 11 May 1999 (Includes

Change 4), Para 4.2.2, specifies a hierarchy

of materiel alternatives as: (1) the procurement

(including modification) of commercially

available systems or equipment, the additional

production (including modification) of alreadydeveloped U.S. military systems or equipment,

or Allied systems or equipment; (2) cooperative

development program with one or more Allied

nations; (3) new joint Service development
1-11

program; and (4) a new Service-unique

development program.

12 March 1997 DoD Memorandum on International Armaments Cooperation Policy

signed by Secretary Cohen directs that DoD

apply maximum efforts toward cooperation to

include:

• engagement of allies in discussions at the

earliest possible stages on harmonization

of requirements;

• designation of appropriate defense acquisition programs as international cooperative programs;

• emphasis on favorable technology transfer

decisions to allied cooperative partners;

• adequate training for acquisition personnel

on policies and procedures pertaining to

cooperative acquisition programs; and

• funding priority for initiating cooperative

programs.

International Agreements

Case Act (Title 1 USC section 112b) provides

that in most cases “the Secretary of State shall

transmit to the Congress the text of any international agreement, other than a treaty, to which

the United States is a party as soon as practicable after such an agreement has entered into

force with respect to the United States but in

no event later than sixty days thereafter.” It also

provides that an international agreement, such

as a cooperative program MOU, may not be

signed or concluded on behalf of the United

States without consultation with the Secretary

of State.

DoD Directive 5530.3, 11 June 1987

(Incorporating Change 1, 18 February 1991)

International Agreements establishes DoD

procedures for establishing an IA.

NOTE: Deputy Secretary of Defense and the

OUSD (AT&L), have issued various streamlining memoranda to provide detailed procedures that supplement DoD Directive 5530.3

procedures for IAs under OUSD (AT&L)

cognizance.

DoD Financial Management Regulation,

Volume 12, Chapter 9 provides requirements

for determining equitability in international

agreements, including funds provided, as well

as nonfinancial contributions (i.e., background

information, manpower, facilities, equipment,

hardware, software, etc.).

Summary

The harmonization process to initiate international cooperative programs is not an easy

undertaking. It is the alignment of defense

priorities of two or more nations, and is the

test of whether the basis for cooperation exists.

PMs must be cognizant of the many issues,

laws, and policies related to armaments cooperation and development of MOUs in order to

be effective and proceed with confidence.

Chapter 2 will outline in further detail security

requirements, export controls, and technology

transfer considerations for all international

cooperative programs.
1-12

ENDNOTES

1. Interview with Frank Kenlon, Office of Under

Secretary of Defense (Acquisition, Technology &

Logistics)/ International Cooperation, by authors

(May 00).

2. Interviews with multiple officials involved in harmonization discussions for Army Field Artillery and

Armor systems by the authors (Jan–Mar 00).

3. Challands, Guy, Sense About Europe: Affordable

Interoperable Arms Procurement Through Collaboration, December 1999, Oxford University, pp.

28-36.

4. Requirements Generation System, Chairman of the

Joint Chiefs of Staff Instruction (CJCSI) 3170.01A,

10 August 1999, p. B-8.

5. Financial Management Requirements for International Agreements, Office of the Under Secretary

of Defense (Comptroller), Briefing Slides, pp. 1-9.

6. Guidance for Preparation and Negotiation of International Armaments Cooperation, Memoranda of

Understanding (MOU), Volume 2, Defense Systems

Management College Press, Fort Belvoir, VA, p. III19 with modifications by Frank Kenlon, OUSD

(AT&L/IC).

7. International Armament Cooperation Handbook,

Office of the Deputy Under Secretary of Defense,

International and Commercial Programs, June 1996,

pp. 5-4 – 5-5 and the Kenlon interview.

8. International Agreements, Department of Defense

Directive 5530.3, 11 June 1987 (Incorporating Change

1, 18 February 1991), Enclosure 2, paragraph E2.1.2.

9. Financial Management Regulation, Department of

Defense, Volume 12, Chapter 9, pp. 9-9 – 9-10.

10. Guidance for Preparation and Negotiation of

International Armaments Cooperation, Memoranda

of Understanding (MOU), Volume 2, Defense

Systems Management College Press, Fort Belvoir,

VA, p. III-29.
2-1

2

SECURITY

“Nations do not have friends. Nations have interests.”

— Henry Kissinger

The security aspects of an IAP are very important and can be quite involved. Failure to handle

them in the planning phase can lead to program

delays or disruptions. Compliance is, however,

a PM responsibility. Therefore, PMs should

manage IAP security aspects as they do other

important parts of their program. Specialists

will usually handle the day-to-day details;

nevertheless, the PM must be aware of the

basics to ensure that the appropriate emphasis

is applied and that security does not become

an impediment to program progress.

As discussed in Chapter 1, IAP PMs must also

plan for and manage the role that the Department of State and Department of Commerce,

OSD, and Service-level participants will have

in program decisions and execution. Additionally, foreign governments and contractor

officials will have a large role in the security

aspects of IAPs.

Introduction

This chapter is a summary of the securityrelated requirements for an International Acquisition Program (IAP). An IAP is defined as

armaments cooperation that includes co-development followed by co-production. The information presented is the “delta” or additional

requirements that the PM of an IAP must deal

with as opposed to a U.S.-only program. However, as security requirements are frequently

updated, the reader should always refer to the

most current directives. The primary DoD security directives that apply to IAPs are DoD

Directive (DoDD) 5230.11, DoDD 5230.20,

and DoDD 5000.39. Technology transfers are

governed by the International Traffic in Arms

Regulations (ITAR) and DoDD 2040.2.

Industrial security policy is set forth in the

National Industrial Security Operating Manual

(NISPOM).

This chapter was co-authored by Charles C. Wilson, a former Director of International Security Programs in the Office of the Secretary

of Defense (Policy Support) (ODUSD[PS]). The information presented is condensed from the International Programs Security

Requirements Course offered by the ODUSD(PS), the Defense System Management College (DSMC) International Security and

Technology Transfer/Control Course, and the International Programs Security Handbook published by the DUSD(PS).
2-2

The definitions of terms that are typically

associated with security aspects of IAPs are

found at the end of this chapter, starting on page

2-13.

Security Basics

IAP security can be thought of as what (information and articles) can be released to whom

and under what conditions. There are several

basic concepts and common terminology that

all persons involved in an IAP should know

and remember. They are provided below in

bulletized 1-2-2-3-3 summary form. Each is

explained in greater detail later in this chapter.

• 1. False Impressions: Don’t create expectations with international partners that

aren’t/can’t be fulfilled.

• 2. The first 2 represents the two fundamental security considerations.

– Access: Is providing access to information and defense articles in the best

interests of the U.S.?

– Protection: Can the information be

adequately protected by the recipient

within the definition of U.S. protective measures.

• 2. The second 2 represents the two activities that govern release of U.S. classified

information.

– Disclosure Decisions: Who will have

access to what U.S. classified information and is it authorized for release

by the appropriate official in compliance with applicable disclosures

policies?

– Government-to-GovernmentTransfer: Classified information exchange

must be conducted through official

channels or other channels that are

agreed upon in writing by the sending

and receiving governments.

• 3. The first 3 represents the three security

conditions needed for disclosure/export.

– Transfer: Recipient agrees not to

transfer to a third country, government, person, or other third country

entity without U.S. approval.

– Use: Recipient agrees to use only for

the purpose furnished unless approved otherwise by the U.S.

– Protection: Recipient agrees to provide substantially the same degree of

security as the U.S. would provide.

• 3. The second 3 represents the three basic

documents that provide legal and policy

basis for international program security.

– Arms Export Control Act (AECA):

Governs the export of defense articles

and defense services (i.e., technical

data); forms the legal basis for security requirements in most DoD

international programs.

– Executive Order (EO) 12958: Establishes the Executive Branch’s U.S.

Classified National Security Information Program.

– National Security Decision Memorandum (NSDM) 119: Establishes

the National Disclosure Policy

(NDP), which is the basis for making
2-3

decisions on the foreign disclosure

of classified military information.

An additional security basic isteamwork. There

are a lot of resources available to assist PMs in

properly handling the security aspects of an

IAP. Security aspects of an IAP should be

handled using an integrated product team (IPT)

approach, just as IPTs are used for other important aspects of the program. It’s imperative

that PMs ensure that the program Security IPT

is staffed with the appropriate expertise and that

it receives the management emphasis required

to perform its vital role in the program. Alternatively, security and technology transfer specialists can be integrated in another program

IPT.

U.S. Organizations/Roles

The implementation of security and export

controls within IAPs involves many different

U.S. Government organizations both within and

outside of DoD. Their roles are outlined below.

• The Department of State administers the

AECA. The Department of State controls

the export of defense articles and services

and related technical data through the

Office of Defense Trade Controls (ODTC).

The OTDC administers the International

Traffic in Arms Regulations (ITAR), which

implements the AECA. The Department of

State, therefore, is a key player in all DoD

IAPs.

• The Defense Threat Reduction Agency

(DTRA) coordinates DoD positions on

export license applications submitted under

the ITAR. DTRA also coordinates the DoD

position on the export of ”dual use” items

(see below).

• The Department of Commerce overseas

U.S. industrial interests and promotes U.S.

jobs. The Bureau of Export Administration

(BXA) within Department of Commerce

administers the Export Administration Act

(EAA) concerning export of “dual use” and

commercial items, through the Export Administration Regulations (EAR). The Department of Commerce evaluates all proposed IAPs for impacts on U.S. industry

and makes export decisions on “dual use”

items.

• The ODUSD(PS) is responsible for security policy of DoD international programs.

This responsibility includes security policy

and arrangements for international programs, international security agreements,

the National Disclosure Policy, and NATO

security policy.

• The Assistant Secretary of Defense

(Command, Control, Communications

and Intelligence) (ASD(C3I)) is responsible for domestic security programs,

including industrial security policy, and

staff supervision of the Defense Security

Service (DSS). The ASD (C3I) also provides technical security support for acquisition program protection planning.

• The Director, DSS is responsible for assuring industry’s compliance with the

NISPOM and thus for implementation and

oversight of the international security

policy within industry.

• The Defense Contract Management

Agency (DCMA), by agreement with the

Office of the Under Secretary of Defense

(Policy), carries out important international

program security functions for DSS and the

military departments in locations where

DSS representatives are not available.
2-4

Export Control/Technology Transfer

In an IAP, the responsibility for obtaining U.S.

export licenses normally resides with the

contractors involved in the program. However,

the PM has to take an active role in ensuring

that the export control system is responsive to

the program’s MOU work share requirements

or goals and objectives. Excessive delays with

the U.S. export control system can be very frustrating to the foreign partner(s) and detrimental

to the overall program, as well as to future

programs. Key elements of export control/

technology transfer are explained below.

• The Arms Export Control Act (AECA)

governs the export of defense articles and

defense services (i.e., technical data) to foreign countries and international organizations, and covers both commercial and

government programs. It authorizes a list

of controlled articles, the U.S. Munitions

List (USML), which is contained in the

ITAR published by the State Department.

This act forms the legal basis for the security requirements of most DoD international

programs. The Act states that foreign sales

(i.e., access) should be consistent with U.S.

foreign policy interests, should strengthen

the security of the U.S., and should contribute to world peace. The Act also requires

the President to give Congress assurances

that the proposed recipient foreign government has agreed to certain security conditions regarding the protection of the articles or information. Listed below are the

three security-related conditions that must

be satisfied to provide export controlled

defense articles and information to a foreign country or international organization.

1. The recipient country or organization agrees not to transfer title or

possession of the articles or related

technical data to anyone who is not

an officer, employee, or agent of the

country or organization without

prior U.S. Government consent.

2. The recipient country or organization agrees not to use the articles or

related technical data or permit their

use for other than the purpose for

which they were furnished without

prior U.S. Government consent.

3. The recipient country or organization agrees to maintain security and

provide substantially the same

degree of protection as the U.S.

Government.

• The EAA governs items not on the USML

that have a “dual use,” or both civil and

military use. The EEA is implemented by

the Export Administration Regulations

(EAR) administered by the Bureau of Export Administration (BXA) in the Department of Commerce. The EAR contains

significantly more detailed procedures than

the ITAR—procedures such as the Commerce Control List (CCL), which identifies

the controlled items, and the Country List,

which is used in conjunction with the CCL

and other guidance to determine export

authorization requirements. IAPs (and

other programs) must obtain export

approval for “dual use” items.

• ITAR Exemptions. The ITAR contains

several exemptions that may apply to an

IAP, and which can greatly facilitate

execution of an IAP. A long-standing ITAR

exemption has been available for U.S.-

Canadian defense trade. This exemption is

currently being renegotiated. The Executive Branch has approved the expansion

of the Canadian exemption to cover other
2-5

nations in order to facilitate defense exports. Although not targeted specifically to

IAPs, these types of exemptions could

make it significantly easier to execute an

IAP.

Any IAP implemented by an IA may

receive an exemption from licensing

technical data (including classified) under

Part 125.4(b)(11) of the ITAR. This type

of ITAR exemption must be approved in

writing by the ODTC. If granted, the

exemption may be limited to certain forms

of technical data. This type of exemption

can significantly reduce the management

complexity (and cost and schedule) for an

IAP. Other ITAR exemptions may be applicable and should be considered. Requests

for ITAR exemptions should be submitted

by the appropriate contractor(s) early in the

program so that execution plans can be

made based on whether the exemption is

granted or not. Modifying the acquisition

plans in IAP based on denial of an ITAR

exemption request can create significant

problems because of the expectations of

the partner nations.

• Executive Order (EO) 12958 establishes

the Executive Branch’s Classified National

Security Information Program. It provides

for levels of U.S. classified military information: Confidential, Secret, and Top

Secret. It directs that access may be granted

only when required to perform or assist in

a lawful and authorized governmental

function. Further, persons authorized to

disseminate classified information outside

the Executive Branch shall assure the

protection of the information in a manner

equivalent to that provided within the

Executive Branch. The EO also states that

classified information cannot be transferred

to a third party without the consent of the

originator. It also requires the protection

of foreign government information.

• National Security Decision Memorandum (NSDM) 119 comprises the basic

national policy governing decisions on the

disclosure of classified military information (CMI) to foreign governments and

international organizations. It governs

disclosures of CMI under both government

and commercial programs. NSDM 119

reiterates the basic requirements of the

AECA and EO 12958. It emphasizes that

classified military information is a national

asset and the U.S. Government will not

share it with a foreign government or international organization (i.e., permit access)

unless its release will result in a clearly

defined benefit to the United States and the

recipient government or organization will

provide substantially the same degree of

protection.

Handling of Information

Proper handling of information must be emphasized in IAPs. IAPs are likely to encounter

requirements to handle types of information

normally not found in U.S.-only programs.

Below are requirements and considerations for

the handling of such information in IAPs.

• For Official Use Only (FOUO). Although

not unique to IAPs, FOUO handling procedures in an IAP must be an area of management emphasis because of the involvement of foreign persons. FOUO information must be secured in a manner that precludes unauthorized access (e.g., locked in

a desk drawer, file cabinet, or room to

which access is controlled). It must be

transmitted using secure voice, fax, or

email, or encrypted (unless the originator

waives this requirement). It may be mailed
2-6

using first class or parcel post. It should be

destroyed by shredding or tearing into

small pieces so that reconstruction is difficult. Unauthorized disclosure of certain

FOUO information can result in criminal

or administrative sanctions.

• Controlled Unclassified Information

(CUI). CUI (see definition on page 2-13)

when used in international programs will

be marked to identify its “in confidence”

nature. An example of CUI is unclassified

technical data in an IAP. The data may not

be lawfully exported without an export

authorization/license.

• Foreign Government Information (FGI).

FGI (see definition on page 2-14) must be

classified under EO 12958 in order to receive protection equivalent to that provided

by the originating government or organization. In the U.S., foreign RESTRICTED

and CUI must be marked with the foreign

government marking (in English) and is

normally marked “CONFIDENTIALModified Handling Authorized.” It is

generally handled following the same

procedures as FOUO. The basic three security conditions discussed earlier for U.S.

information (transfer, use, and security)

apply to U.S. handling of FGI.

• NATO Programs/NATO Information.

For NATO programs (see definition on

page 2-14), NATO security regulations apply to the protection of NATO information

(see definition on page 2-14). U.S. acquisition personnel in an IAP that is an official

NATO program must, therefore, know and

follow the NATO security regulations as

well as U.S. security regulations. One

important aspect of NATO programs is that

program information from them is normally available to all NATO members unless

the program documentation specifies

otherwise. Information involved in NATO

programs that originated from other than a

NATO civil or military body remains the

property of the originator, but the medium

containing the information is to be protected under NATO policy. See Appendix

B for a summary of the NATO security requirements and instructions for U.S. personnel. (Note that IAPs involving NATO

member nations are often mistaken for

NATO programs when they are not.)

• Classified Information is handled in the

same manner as classified information in

U.S.-only programs. The next section describes the procedures for sharing classified

information.

Sharing Classified Information

The two fundamental security considerations

that must be addressed prior to participation in

a program involving the sharing of classified

U.S. defense articles or information with

another country or international organization

are access and protection. The fundamental

questions that must be asked when considering

providing classified defense articles or information to a foreign government or international

organization are: is access in the best interest

of the U.S.?; and will adequate protection be

provided?

To satisfy the above two considerations, the

government-to-government principle is applied

to the actual disclosure or export decision and

to the transfer of classified articles and data.

First, disclosure decisions (based on the

AECA, EO 12958, and NSDM 119) are decisions on whether the U.S. Government will

release classified information to another

Government or International Organization.

If the answer is yes, then the transfer must be
2-7

made through official “government-to-government” channels (e.g., military postal service or

government courier service) or other channels

approved by the responsible governments (i.e.,

government-to-government transfer). This is

necessary so that government accountability

and control can be maintained until custody is

officially transferred and the recipient government assumes responsibility for the custody

and protection of the articles or information

pursuant to bilateral security agreements and

the provisions of the applicable program

agreement.

False Impressions

It is imperative that personnel involved in IAPs

do not create false impressions of the U.S.

Government’s willingness to release classified

information. Therefore, in considering possible

participation in an international program, the

highest level of classified information required

for participation must be determined before any

commitment is made. Before any information

can be released, a favorable disclosure decision

by a designated disclosure authority is required

regarding the highest level of information to

be involved. An exception to the National Disclosure Policy may be required if disclosure

authority has not been delegated, or disclosure

does not meet other foreign disclosure criteria

and conditions. This applies to contractors as

well. PMs should monitor program contractors

in this regard. There have been many occasions

when false impressions have been created in

the past involving personnel at all levels. These

situations are embarrassing to all involved (the

U.S. Government, DoD, parent organizations,

and the direct participants). Creating false

impressions hinder not only the current IAP

involved, but also will be remembered by our

international partners when considering future

international programs of any type with the

U.S. Government.

Disclosure

The National Disclosure Policy (NDP)

governs the disclosure of CMI to foreign

governments and international organizations.

The NDP is based on NSDM 119 and is

implemented by the NDP-1 document. The

NDP-1 is updated annually by the NDP Committee (NDPC) (see Appendix C for NDPC

membership). Delegation of authority charts

are annexes to NDP-1 and provide the basis

for making disclosure decisions on a country

by country basis (see Appendix D for an example NDP-1 chart). A Principle Disclosure

Authority or Designated Disclosure Authority within DoD commands, agencies, and major

staff elements make disclosure decisions in accordance with the NDP. Appendix E provides

a list of the DoD Principal Disclosure Authorities. In addition to the classified information

being within the levels specified in the charts

(i.e., delegated disclosure levels), a decision to

disclose CMI must satisfy each of the following

conditions:

1. disclosure is consistent with U.S. foreign

policy;

2. disclosure is consistent with U.S. military

and security objectives;

3. the recipient will protect the information

in substantially the same manner as the

U.S. would;

4. disclosure will result in benefits to the U.S.

at least equivalent to the value of the

information disclosed; and

5. the information disclosed must be limited

to that which is necessary to fulfill the

purpose of the disclosure.
2-8

If a disclosure is deemed to be in the best

interest of the U.S. but is not consistent with

the delegated disclosure levels and the five

criteria above or the NDP-1 policy statements,

or if another Department or Agency that owns

or has an interest in the information does not

support the disclosure, a request for an exception to the NDP can be submitted. NDP exceptions will normally be sponsored by the NDPC

member from the Department or Agency that

is to initiate a program involving the disclosure

of classified military information. Contractors

have no direct input into a request for an

exception to the NDP. The information required

for a request for exception to the NDP is

covered in the OSD International Programs

Security Handbook. Exception requests will be

forwarded through channels to the NDPC and

a decision will be made within ten days so long

as unanimous agreement can be reached. When

unanimity cannot be reached, there are procedures for obtaining a decision, including,

ultimately, an appeal to the Secretary or Deputy

Secretary of Defense.

All disclosure decisions (including denials) are

required to be recorded in the Foreign Disclosure and Technical Information System

(FORDTIS) database. The primary purpose of

FORDTIS is to assist disclosure authorities in

making future disclosure decisions. In urgent

situations, the Secretary or Deputy Secretary

of Defense may be asked to render a disclosure

decision as an exception to policy. PMs should

also be aware that the disclosure of certain

categories of information are governed by

separate laws, regulations, and policy (i.e., SCI,

COMSEC, Nuclear, etc.). Therefore, PMs must

be cautious not to create false impressions

about the disclosure of this type of information

until disclosure authorization has been obtained

from the responsible agency.

Program Documents

The following security-related documents are

normally required for an IAP. These documents

must be written early and tailored for the

specific program in order to be useful for

program execution.

Program Protection Plan (PPP). The PPP

requirement is not unique to an IAP; however,

in an IAP the PPP will have added importance

because of the inherent foreign involvement.

The purpose of the PPP is to protect defense

items and technical information from hostile

collection efforts and unauthorized disclosure.

DoD Regulation 5000.1R requires all acquisition programs to identify sensitive information

and technologies or Critical Program Information (CPI) early in the acquisition cycle and

then to prevent inadvertent or unauthorized

disclosure on a continuing basis. The program

Security Classification Guide identifies classified information within the program. The PM

is responsible for obtaining approval of the

Security Classification Guide and ultimately

determining the classification of all program

information. PPP policy and procedures are

contained in DoDD 5000.39.

TA/CP. The TA/CP is a critical part of the PPP

for an IAP. The purpose of the TA/CP is to:

1. assess the feasibility of foreign participation in the program from a foreign disclosure and technology security perspective;

2. assist in preparing negotiating guidance;

3. identify security arrangements for the program;

4. assist in drafting the delegation of disclosure letter (DDL);
2-9

5. support the acquisition decision process;

and

6. assist in making decisions on foreign military sales (FMS), commercial sales, and

co-production or licensed production of the

system.

A TA/CP has four parts:

1. Program Concept;

2. Nature and Scope of the Effort and Objective;

3. Technology Assessment; and

4. Control Plan.

Parts 1 and 2 provide general program information to help provide a context for users of

the TA/CP.

Part 3, the Technology Assessment, identifies

and analyzes the critical military capability or

technology that requires protection. Emphasis

should be placed on the value of the technology

and system in terms of military capability, susceptibility to compromise, foreign availability,

and likely damage in the event of compromise.

For any type of foreign involvement, the assessment must provide a risk-benefit analysis. It

must consider phasing the release of classified

and unclassified information. It must answer

“how” the U.S. achieves operational and technological benefits from foreign involvement in

the program.

Part 4, the Control Plan, must identify “how”

to minimize the potential risks and damage to

the U.S. The control plan for an IAP should

consider phasing release of information to

match program needs, release of information

to foreign nationals working U.S. facilities and

U.S. persons working at foreign facilities.

Delegation of Disclosure Authority Letter

(DDL) explains classification levels, categories, scope, and limitations on information

that may be disclosed to a foreign recipient.

For an IAP, it is based on the TA/CP. The DDL

is approved by the Milestone Decision Authority (MDA) in close coordination with the Principal or Designated Disclosure Authority, and

must be kept current throughout the acquisition

phases and with changes in the program. DDLs

provide guidance for personnel who make

disclosure or licensing decisions on the program. A DDL should be prepared as soon as

foreign participation is anticipated. Failure to

prepare a DDL early can result in program

delays and political embarrassment, and

possibly jeopardize future cooperation on the

program. DDL’s are normally “U.S.-Only” and

may be classified.

Multinational Industrial Security Working

Group (MISWG) Documents. The MISWG

is composed of the NATO countries, less

Iceland. The MISWG documents contain

common security procedure guidelines that the

countries have collectively agreed to use, thus

reducing the burden of developing program

specific security procedures. See Appendix F

for a summary of the MISWG documents. The

MISWG documents should be used as the basis

for developing the Program Security Instruction

(PSI) for any bilateral or multinational IAP with

U.S. involvement (including IAPs with nonMISWG countries). In order to use the MISWG

documents effectively, they must be tailored for

the specific IAP.

PSI. A PSI is usually required by the program

MOU for an IAP to document special security

procedures for handling and controlling access

to program information (e.g., CMI and CUI).

A PSI rationalizes the security requirements of

the participating governments and establishes

standard security procedures for the program.
2-10

Its preparation must involve all program

participating countries and any contractors. The

PM must provide guidance on its content.

Guidance should take into consideration the

possible use of each of the other MISWG documents (in general, not all will be used, so only

those for which a use is anticipated should be

in the PSI); any special security requirements

identified in the Program Protection Plan or TA/

CP; and requirements identified by other participating countries or by participating contractors. It is advisable to form a security working group, subordinate to the steering committee or head of the joint program office, to formulate the requirements for the PSI. Security

specialists from all participating countries

should comprise the working group, and advice

should be sought from participating

contractors.

Visits and Assignment

of Foreign Nationals

International visits account for more transfers

of CMI/CUI than all other transfer mechanisms

combined. They are also a necessary aspect of

IAPs and must be planned for properly. While

they are necessary, they also present significant

security risks. It is imperative, therefore, that

personnel involved in IAPs know and

understand the procedures for obtaining

authorization for international visits, as well

as the security requirements. The visit request

process serves three important functions:

• It provides a means for consideration of

disclosures of information related to the

visit.

• It is the means for the requesting government to provide security assurances on the

visitors and their firms and if needed,

authorize the visitors to receive CMI on

its behalf.

• It serves to facilitate administrative arrangements associated with the visit.

All foreign national visits (including foreign

contractors) that involve U.S. or foreign

government classified information must be

requested through government channels and

must follow the procedures set forth in DoDD

5230.20 and the DoD Foreign Clearance Guide

(DoD 4500.54-G), and, for contractors, the

NISPOM. Visit requests (to the U.S.) must

normally be received 30 calendar days prior to

the visit. Requests for documentary information

must normally be submitted though the visitor’s

embassy; if a visitor is to take custody of classified information, the pertinent visit request

must specify that the visitor is authorized by

the requesting government to act as a courier,

and the visitor must possess courier authorization documents. Each Service has unique

(although similar) procedures for processing

visit requests. There are three types of international visits.

• One Time Visits. Single, short-term visit

(less than 30 days), for a specific purpose.

• Extended Visits. Single visit, for an extended period (up to one year), in support

of a government approved program or

contract.

• Recurring Visits. Intermittent, recurring

visits covering a period up to one year in

duration in support of a government approved program or contract. Recurring visit

approvals for personnel involved in an IAP

can provide flexibility for short notice visits

and reduce associated visit administrative

burdens. To be effective, recurring visit

authorizations must be put in place as early

as possible.
2-11

A Country Clearance is required for U.S.

government visits to overseas government or

cleared contractor facilities. Requests must

normally be submitted at least 30 days in

advance. The Country Clearance request must

be approved by the host government. In

addition, a Theater Clearance is required for

visits to U.S. military facilities. The request for

visit authorization is used to obtain Country

and Theater clearances. Again, guidance is

contained in DoDD 5230.20 and the DoD

Foreign Clearance Guide.

The assignment of foreign nationals in support

of an IAP is common. Foreign nationals will

normally be assigned as either Liaison Officers

(National Representative) or Cooperative Program Personnel. In either situation, the following access and control requirements must be

followed.

• Unique passes to identify the person as a

foreign national must be worn on the outer

clothing.

• The DDL covering the assignment must

specify information access limitations,

identify a contact officer, and include any

special instructions.

• A contact officer must be appointed who

is responsible for supervising the activities

of the foreign national. The contact officer

must be experienced and familiar with DoD

disclosure and visitor policies, and the

DDL provisions.

• Non-escorted access to DoD facilities for

foreign nationals is possible as long as the

above provisions are followed; there is reciprocity by the other government; there is a

frequent need for access for official purposes;

access controls can be established at the facility; and a DoD sponsor provides justification.

Technology Control Plan (TCP)

The ITAR and NISPOM require a TCP when

foreign nationals are assigned to a cleared contractor facility on an extended visit authorization and for foreign nationals who are employed by the contractors. Minimal requirements for a TCP are contained in Appendix G.

Other IAP Security Considerations

• NISPOM. The NISPOM (see definition on

page 2-14) contains, in addition to industrial security procedures for an IAP, the

security clauses that must be placed in

international contracts that entail the transfer or production of classified information.

Chapter 10 of the NISPOM contains

procedures that are applicable to IAPs.

• Foreign Ownership, Control, or Influence (FOCI). The purpose of the FOCI

process is to protect U.S. classified information that is held by U.S. companies under FOCI. There are five different FOCI

arrangements that have been developed to

accommodate various levels of foreign

involvement. These arrangements are:

– a voting trust agreement/proxy agreement;

– a board resolution;

– a special security agreement;

– security control agreement; and

– limited facility clearance.

These FOCI arrangements are explained in the OSD International Program Security Handbook. Although

implementation of FOCI arrangements

are the responsibility of the Defense
2-12

Security Service, IAPs that have industrial involvement from companies with

FOCI arrangements and possible access

limitations should be aware of these

arrangements and ensure they are

considered in program management.

• Committee on Foreign Investment in the

U.S. (CFIUS). The 1988 Exon-Florio

Amendment to the 1950 Defense Production Act gives the President of the United

States the authority to intervene in certain

foreign acquisitions and mergers involving

U.S. companies when there are national

security concerns. Responsibility for investigating the acquisitions and mergers and

preparing recommendations for the President was assigned to the CFIUS.

• General Security Agreements (GSA).

Also called General Security of Information Agreements (GSOIA) and General

Security of Military Information Agreements (GSOMIA). These are bilateral

agreements between the U.S. and a foreign

government on the protection and security

of information. When in place these GSAs

provide the basis for implementing the

three basic security conditions from the

AECA (transfer, use, and protection).

• Industrial Security Agreements. Industrial security agreements have been negotiated with those governments with which

DoD has entered into agreements involving

defense-industrial cooperation. These

agreements, which are annexes to the GSA,

contain procedures for handling classified

information in industrial operations that

will apply to IAPs.

Significant Differences

With Foreign Partners

PMs should be aware of IAP differences with

foreign partners.

• Foreign Person – in the European Union

(EU) persons from another EU country are

not considered foreigners with regard to

job availability. They may, however, be

foreign persons in terms of U.S. export

control policies. When negotiating IAP

agreements, it should be determined if any

of the foreign participant countries or their

contractors will be employing nationals

from a non-participating country. If this

possibility exists, procedures for handling

such situations must be worked out prior

to conclusion of the program agreement.

• Export control – in some countries, including some of the NATO allies, oral or

visual disclosure to a foreign individual is

not considered an export. Moreover, an

export does not occur unless material items

that are controlled leave the country. These

facts should be considered in connection

with the above point, and if necessary,

handled by provisions in the program

agreement.

• Security – the security programs for many

foreign governments are based on laws that

give the government significant control

over any person who has access to classified and, in some cases, unclassified official

information. Such governments also have

a hand in the appointment of company

security officials. Many NATO countries

have adopted NATO security policies by

law. U.S. security programs are for the

most part based on an Executive Order and

depend on detailed procedures, albeit U.S.

record and accounting requirements are
2-13

often less stringent than those of many

allies. As a consequence, the U.S. operates

parallel security programs for national and

foreign government information.

Lessons Learned

PMs must be cognizant of the many security

aspects within their IAPs. Some of the past

mistakes that have been made are listed below.

• Visitors not wearing distinctive badges and

poorly controlled, leading to embarrassment for all concerned;

• Emergency visit requests made and denied

because they were routine in nature and

should have been planned ahead of time;

• Faxing, e-mailing, or other transmission of

FOUO and foreign government RESTRICTED information by non-secure means;

• Transmission to a foreign person of Controlled Unclassified Information by telefax,

e-mail, or telephone without appropriate

disclosure/export license or authorization;

• Agreeing to establish a program as a

“NATO Program” without realizing the

implications;

• Failure to establish government-to-government transfers and obtain receipts for

international transfers;

• Failure to establish recurring visit authorizations early;

• Failure to prepare security documentation

(TA/CP, DDL, etc.) early and in sufficient

detail;

• Failure to properly identify type of program

(NATO or multi-national non-NATO) and

applicable governing laws and/or policies;

and

• Failure to plan early enough for acquisition

of appropriate equipment for secure communications among program partners and

contractors.

Definition of Key Terms

Below are definitions of terms typically associated with IAPs:

Classified Military Information (CMI) is any

information lawfully and properly classified

IAW EO 12958 or successor orders and developed by or for the DoD or is under its control

or jurisdiction. For an IAP, this information

should be detailed in the program Security

Classification Guide (which the PM establishes

and publishes).

Controlled Unclassified Information (CUI)

is unclassified information to which access or

distribution limitations have been applied in

accordance with applicable national laws or

regulations. For the U.S., CUI is official government information that is unclassified, but

that has been determined by designated officials

to be exempt from public disclosure under

FOIA including certain export controlled

information as described in DoDD 5230.25.

“Deemed Export” is the oral or visual disclosure IAW the ITAR “Export” provisions below.

Disclosure Authorization refers to a decision

by a designated authority that is required prior

to the disclosure of classified information to

foreign nationals.
2-14

For Official Use Only (FOUO) information

is unclassified official U.S. government information that is exempt from public release when

its withholding is approved by an appropriate

DoD official.

Foreign Government Information (FGI) is

information that has been provided by a foreign

government or international organization, or

jointly produced, with the expectation that the

information will be treated “in confidence.” The

information may be classified or unclassified.

In addition to TOP SECRET, SECRET, and

CONFIDENTIAL, many foreign governments

have a fourth level of security classification,

RESTRICTED, as well as CUI.

International Traffic in Arms Regulation

(ITAR) is a regulation that implements the

Arms Export Control Act (AECA) and governs

the export of defense articles and services.

NATO Information is information provided

to NATO by a member nation, a non-NATO

nation or international organization, or which

originates in NATO civil or military bodies.

NATO Programs are those programs that

NATO officially designates as NATO programs

and are managed by a NATO agency under

NATO regulations. They normally are commonly funded.

NISPOM is the National Industrial Security

Program Operating Manual, which contains

U.S. industrial security procedures.

Public Domain Information is information

that is published and generally available to the

public through subscriptions, journals, etc.

Security Assurance, for the purpose of visits

by foreign nationals representing or sponsored

by their governments, is a written certification

provided by a foreign national’s government

that the person is representing or is sponsored

by the government and has the requisite level

of security clearance, and that the government

will be responsible for classified information

that is provided to the foreign national. (A

security assurance on a facility is a certification

that they have the requisite security clearance

and storage capability for classified information. A security assurance on a national seeking

employment and access to classified information in another country is a certification that

the individual could be cleared to a stated level.)

U.S. Munitions List (USML) is a part of the

ITAR that contains the defense articles (including related technical data) that are controlled.

Key Definitions from the ITAR:

Defense Article means any item identified on

the USML. The State Department designates

the items on the USML with the concurrence

of the DoD. An article or service may be

designated a defense article or service if it is

specifically designed, developed, adapted, or

modified for military application and has

significant military or intelligence applicability

such that ITAR controls are necessary.

Defense Service means:

1. The furnishing of assistance (including

training) to foreign persons whether in the

U.S. or abroad in the design, engineering,

development, production, manufacture,

assembly, operation, testing, repair, maintenance, modification, demilitarization or

use of defense articles.

2. The furnishing to foreign persons of any

technical data controlled under Paragraph

120.10 of the ITAR (see below), whether

in the U.S. or abroad.
2-15

Export generally means:

1. Sending or taking a defense article out of

the U.S. in any manner;

2. Transferring registration, control, or ownership to a foreign person of any aircraft,

vessel, or satellite covered by the USML,

whether in the U.S. or abroad;

3. Disclosing (including oral or visual disclosure) or transferring in the U.S. any

defense article to an embassy, any agency

or subdivision of foreign government;

4. Disclosing (including oral or visual disclosure) or transferring technical data to a

foreign person, whether in the U.S. or

abroad; or

5. Performing a defense service on behalf of,

or for the benefit of, a foreign person,

whether in the U.S. or abroad.

Foreign Person generally means any natural

person that is not a U.S. citizen or U.S. national,

a lawful permanent resident alien, or otherwise

protected individual. It also means any foreign

corporation, business association, partnership,

trust, society or any other entity or group that

is not incorporated or organized to do business

in the U.S., as well as international organizations, foreign governments, and any agency or

subdivision of foreign governments (e.g.,

diplomatic missions).

License means a document bearing the word

license issued by the Director, Office of Defense Trade Controls or his/her authorized

designee, which permits the export or temporary import of a specific defense article or

defense service.

Technical Data means:

1. Information, other than software, that is

required for the design, development, production, manufacture, assembly, operation,

repair, testing, maintenance, or modification of defense articles. This includes,

for example, information in the form of

blueprints, drawings, photographs, plans,

instructions, and documentation;

2. Classified information relating to defense

articles and defense services;

3. Information covered by an inventory

secrecy order; or

4. Software directly related to defense articles.

Note: The Department of Commerce’s definition of technical data is slightly different.
2-16
2-17

PART II

TRANSATLANTIC

AND

INTRA-EUROPEAN

COOPERATION
2-18
3-1

3

EUROPE AND TRANSATLANTIC

DEFENSE COOPERATION

TRANSATLANTIC ARMS COOPERATION

SINCE WORLD WAR II

“A day will come in which you, France; you, Italy; you,

Great Britain—all you nations of the continent—will be

united in close embrace, without losing your identity or

striking originality...A day will come in which markets

open to commerce and minds open to ideas will be the

sole battlefields.”

—Victor Hugo

The next step was coproduction of U.S.

designed and developed equipment. The 1950s

saw Italian and Canadian production of the

F-86 Sabre Jet, followed by the addition of

The Netherlands, West Germany, and Belgium

in the production of the F-104 Starfighter.2

There are many other examples of European

production of U.S. designs and a degree of

coproduction continues today.

Several factors contributed to a movement

toward codevelopment on a transatlantic basis

in the 1960s. Europe had developed a range of

indigenous weapons systems by that time and

their industries were naturally eager to maintain

their local markets. NATO forces, expected to

Introduction

America’s European allies in the immediate

postwar era were armed almost exclusively

with war surplus equipment, mainly of British

or U.S. manufacture. Indeed, the French First

Army that raced across Southern Germany in

1945 used Sherman tanks, M-1 Garands, G.I.

steel pots, and U.S. half tracks and trucks.

Because of the enormous quantity of materiel

remaining after the war and the rising menace

posed by the Soviet Union, military equipment

was simply granted by the U.S. To some degree

this continued through the 1950s. During the

1960s the U.S. moved away from grants and

toward sales of arms to its European Allies.1
3-2

fight together in a potential conflict, fielded a

number of different models of the same equipment, including tanks, anti-tank weapons,

trucks, and artillery. Warsaw Pact forces were

largely standardized with Soviet equipment,

giving them an inherent edge in interoperability

and logistics. Early in the history of the alliance,

this issue was recognized and addressed by the

formulation of NATO Basic Military Requirements (NBMRs), which, though meant to be

mandatory, were not complied with.3

An early example of a codevelopment initiative

is the MBT-70 program between West Germany

and the United States. Thanks largely to the

support of then Defense Secretary Robert

McNamara, agreement was reached in 1963

between the two nations to jointly develop a

main battle tank. Unfortunately, rising costs and

technical problems caused the partners to go

their separate ways, resulting in the German

Leopard II and the U.S. M-1 Abrams. In 1973,

however, cooperation between these two projects led to the adoption of the German 120mm

smoothbore gun by the U.S.4

To facilitate a broader NATO effort of codevelopment, the CNAD was established in 1966

and is still active today. The National Armaments Directors (NADs) or their representatives

(NADREPs) are assisted and advised by a

number of specialized groups including the

NATO Industrial Advisory Group (NIAG) and

one group for each Service component, as

discussed in Chapter 1. These fora provide the

opportunity for member states of NATO and

their industries to explore potential areas for

cooperation, by taking into consideration

participants’ requirements, economic and labor

considerations, and technology concerns.5

 An

early success of the CNAD and the associated

Naval Armaments Group (NAG) was the NATO

Seasparrow, of which more is written in

Chapter 4.

The first major piece of U.S. legislation designed to promote cooperation with the goals of

interoperability and standardization was the

Culver-Nunn amendment to the 1976 Defense

Authorization Act. It established as U.S. policy

that American forces should be equipped with

standardized—or at least interoperable—equipment for enhanced effectiveness when fighting

alongside allied forces. The legislation further

allowed for the purchase of foreign-manufactured arms where the goals of standardization

and interoperability are served.6

 The NunnWarner amendment of 1986 was aimed at aiding cooperative development through the provision of seed money for such projects. These

two pieces of legislation were followed by the

Quayle amendment of 1986, which removed

statutory impediments to cooperation, and the

McCain amendment of 1997, which provided

discretionary authority to waive protectionist

provisions impeding cooperation.7 However,

the sum of meaningful codevelopment and

common procurement achieved by NATO

remains modest, and interoperability in many

battlefield areas has not been achieved.

European Economic and

Political Development

Many Americans still see Europe as it was in

the postwar era—politically troubled and

economically prostrate. This contributes to the

perception that European technology is broadly

inferior to that of the U.S., and that European

nations have no choice but to cooperate or buy

American if they want top-shelf equipment.

This mostly inaccurate view is not helpful to

transatlantic defense cooperation. One European official summed up the U.S. attitude in

the former transatlantic arms relationship as,

“You buy from us and shut up.”8

It is not unusual for perceptions to lag reality,

but in the case of European development, events
3-3

have moved particularly rapidly and America’s

view of Europe has been slow in adjusting.

Immediately following World War II, the U.S.

accounted for 55 percent of the planet’s Gross

Domestic Product (GDP). America dominated

the world scene economically, militarily, and

politically. That frame of reference was not

difficult for Americans to become accustomed

to and they did. The problem is that it was an

artificial situation brought about by war and

within a decade, balance was beginning to be

restored. By the mid-fifties, the German economy was rapidly reawakening along with that

of several other European nations. This was not

the universal experience in Europe as the

example of the U.K. shows, but the overall trend

toward a modernized, competitive, industrial

economy was unmistakable.

Today, Europe lags the U.S. in per capita GDP,

but the gap has closed substantially since 1950

when the average “Old World” citizen’s share

of GDP was only half that of his U.S.

counterpart. In 1998, U.S. per capita GDP was

$32,328 compared to $26,217 for Germany,

$24,034 for France, and $23,692 for the United

Kingdom. The Eurozone average was $22,428.9

Depending on the mix of countries that are

included, Europe is a little behind or ahead in

aggregate GDP. For the first time in its 30-year

history, Airbus achieved more orders in 1999

than Boeing. Nokia is the darling of the global

telecommunications industry, and Arianespace

is a competitive launcher of commercial satellites. Most European cities have a remarkable

aura of prosperity, superb public transport, and

a communications infrastructure second to

none.

Concomitant with this growing prosperity were

political developments aimed at creating the

environment to make possible further economic

growth. Europe has always envied the large

unified market enjoyed by the U.S. and their

steps to emulate it have a long history. The

Organization for European Economic Cooperation (OEEC) was founded in 1948, closely

followed by the formation of a customs union

by Belgium, The Netherlands, and Luxembourg (BENELUX). The European Economic

Com-munity (EEC) came into being with the

Treaty of Rome in March of 1957. The three

and a half decades that followed were not a

story of unmitigated growth for the European

Community, but in 1992 a free trade zone was

achieved within Europe. In that time, Britain’s

commitment was uneven and there were (and

still are) significant disagreements over issues

such as fishing rights and agriculture. These

setbacks were misinterpreted as signs that the

realization of a unified European market was a

pipe dream. Events have proven otherwise.

Following the achievement of a unified market,

the next big test facing the European Union

(EU) was monetary union. The five criteria that

each member nation had to attain prior to

admittance were agreed upon at Maastricht in

1993. Briefly, these criteria derived from limits

on national debt, budget deficits, and inflation

rates that needed to be roughly aligned so that

national currencies could be fixed to the new

benchmark, the euro, for a period prior to being

phased out.10 The advantages are obvious and

equally obvious were the political difficulties

attendant to reaching the Maastricht criteria.

These difficulties gave rise to another wave of

“Euroskepticism” in the mid-nineties, fueled

by French strikes, a negative referendum in

Denmark, and close votes elsewhere.

The dawn of the new millennium has seen most

of that skepticism erased. Germany powered

through the toughest years of financing reunification, France reined in its powerful public

sector unions, and Italy summoned considerable national will in meeting the Maastricht

criteria. These developments surprised all but
3-4

the most optimistic and proved the existence

of a powerful pan-European will to realize a

closer union.

What was missed by the doubters was the

emotional and psychological attraction of union

to an enthusiastic core of adherents. A sense of

collective European identity, Euronationalism,

is emerging particularly among the young, a

notion that is unappreciated by American

observers who are more accustomed to a strong

traditional nationalism. The past century has

dampened that traditional nationalism for many

Europeans. Germans and Italians are self-conscious about waving their flags two generations

after World War II. France witnessed the ignominious fall of the Third Republic in 1940

followed by the loss of its colonial empire in

the next two decades. Throughout the continent,

patriotism carries a different, less reverential

meaning than that understood in the U.S.

Britain alone retains a form of nationalism

familiar to Americans and this may explain her

reluctance to commit herself to the EU more

fully.

The generational change in Europe is marked.

Germany’s new political class and the grassroots sentiment that sustains it are well described by Frederick Kempe, in Father/Land: A

Personal Search for the New Germany. The

emerging cohort of Germans who found their

voice in the election of Gerhard Schroeder and

his ministers view themselves as citizens of the

world and share deeply the collectivist tendencies of their EU partners. Where their

parents may have admired the U.S. for what

they saw and experienced in the Marshal Plan,

the Berlin Airlift, and a benign occupation,

younger Germans are open in their disagreements with America, as Greeks, French, and

Italians have been for years. In this sense, theirs

was an easy transformation into “citizens of

Europe.”

Germany is not the only example of Europeans

seeking to redefine themselves. The phenomenon can be seen from Gibraltar to the Baltic.

What is significant for relations with the U.S.

is that Europeans are more certain of what they

are not (Americans), than of what they are. This

is understood at different levels and in different

ways, such as a rejection of what is viewed as

a “McDonalds culture” or predatory capitalism.

Euronationalism does not necessarily equate

to anti-Americanism. Indeed, part of the motivation for the creation of the EU was to emulate

the U.S. market, as previously noted. It would

be a mistake however, not to recognize that a

significant element of the European movement

is the desire to emerge from a perceived U.S.

cultural, economic, political, and military hegemony. This notion, in turn, is fueled by what

was termed “an accumulated resentment” by

Owen Harries, editor of the influential Washington-based journal, National Interest. Harries

concluded that “...it is not unreasonable to

suppose that such resentment will find its way

into differences of policy.”11

Along with the impetus toward European

economic and political unity was the same shift

of public (and public policy) focus that the U.S.

experienced with the end of the Cold War. Freed

of immediate security concerns, Europeans

turned to domestic issues such as joblessness,

the environment, and social welfare. This shift

in focus ushered in a Europe-wide wave of

electoral victories for Social Democrats, the

rough equivalent of the U.S. Democratic Party.

The reticence of these Social Democratic

parties—often coalitions of Greens (environmentalists), labor, and other left-of-center

elements—to spend substantially on defense

explains why Europe will have difficulty in

rectifying the shortcomings in military

capability revealed in Kosovo. Figures 3-1 and

3-2 contrast overall defense spending and
3-5

Figure 3-1. Defence Spending in NATO and non-NATO Western Europe,

1995–1999

280,000

240,000

200,000

160,000

120,000

80,000

40,000

0

274,624

189,295

271,739

181,778

257,975

166,745

253,423

163,415

252,379

151,132

U.S. European

1995 1996 1997 1998 1999

(Constant 1997 US$million)

40,000

35,000

30,000

25,000

20,000

15,000

10,000

0

U.S. European

1995 1996 1997 1998 1999

(Constant 1997 US$million)

36,597 35,722 36,404 36,469 35,324

12,296 11,803 10,319 9,750 9,230

5,000

Figure 3-2. Research and Development (R&D) Spending in NATO and

non-NATO Western Europe, 1995–1999

Source: The International Institute for Strategic Studies, The Military Balance – 1999-2000
3-6

spending on R&D between Europe and the U.S.

between 1995 and 1999.

European Defense Cooperation

Parallel with the development of European economic integration in the form of the OEEC was

a similar movement to address collective security. It should be recalled that at the close of

World War II, the U.S. Army demobilized and

left a skeleton force in Europe, while the Soviet

Union maintained a wartime force, heavy in

offensive mobility and firepower. In reaction

to this menace, Belgium, France, Luxembourg,

The Netherlands, and the U.K. signed the

Brussels Treaty in 1948, the main feature of

which was a commitment to mutual defense.

(See Appendix H for a timeline of European

defense initiatives.)

Perhaps the most significant effect of the

Brussels Treaty was to convince the U.S. that

Europe was serious about a collective defense

effort. The creation of NATO followed in 1949.

When General Eisenhower was named Supreme Allied Commander Europe (SACEUR),

the Brussels Treaty signatories merged their

military structure into NATO.12

By the early 1950s there was growing sentiment

that the former Axis partners should be brought

into the collective security arrangement of

Europe. France led an attempt to create the

European Defense Community (EDC), which

would have included West Germany, but the

French National Assembly refused to ratify the

treaty. Support for the idea persisted and in

1954, the Paris Agreements were signed

creating the Western European Union (WEU)

and bringing both Italy and West Germany into

Europe’s security arrangement.13

The profile of the WEU has been uneven since

its creation. The Union did ease the reintegration

of the Saar into Germany and acted as a liaison

between the U.K. (a member of the WEU but

not of the EC) and the EC until the former

joined the latter in 1973, but was overshadowed

by NATO.14

The first European organization outside NATO

dedicated to armaments cooperation was

created in 1976, with the name Independent

European Program Group (IEPG). The word

“independent” was inserted at French insistence

to underline the group’s independence from

NATO. The IEPG comprised all European

NATO members with the exception of Iceland,

and championed the idea of a centralized procurement organization. However, France possessed a good measure of arms-producing autonomy and was loath to cede any procurement

authority. Similarly, Britain feared a loss of

sovereignty and had the additional concern of

the IEPG becoming a forum for anti-U.S.

sentiment.15

After several fits and starts, leading European

defense ministers decided in 1992 to coordinate

arms development within the framework of the

WEU.16 What emerged was the Western European Armaments Group (WEAG), a forum for

arms cooperation. WEAG’s governing principles include increased efficiency through the

harmonization of requirements, the opening of

national defense markets to cross-border competition, cooperation in R&D, and the strengthening of Europe’s defense technological and

industrial base.17

The mid-90s were important years for Europe.

From the Maastricht Treaty in 1993 to the

creation of a joint armaments agency in 1996,

that period saw European unity in the realm of

defense make substantial progress. France and

Germany, with the former usually taking the

lead, were the principal players in this movement. The joint armaments agency’s name was
3-7

Organisme Conjoint de Coopération en Matière

d’Armement (OCCAR), participated in at the

outset by France, Germany, the U.K., and Italy.

Soon thereafter, the Western European Armaments Organization (WEAO) was formed with

broad participation among European nations.

The charter of that organization is to improve

coordination of collaborative defense research

through the creation of a single contracting

entity.

OCCAR can be seen as emblematic of European efforts to reach collective solutions, to

address both economic and security concerns,

and to gain a measure of independence from

the U.S. It is emblematic because OCCAR was

a French initiative formed around a FrancoGerman axis. From the early postwar years,

France has been the intellectual and political

engine for European unity, readily embraced

by Germany (sometimes described as Europe’s

economic engine) for historical reasons.

OCCAR acts to consolidate program management for several programs contributed by

member nations, including the Tiger helicopter

and the Roland antitank missile. The organization eases the way for long-term planning in

Figure 3-3. Organizations Addressing European Armament Policy Issues

EU: European Union

NATO: North Atlantic Treaty Organization

WEU: Western European Union

NOTES: (1) Associate Members of WEU

(2) Observers of WEU

(3) Associate Partners of WEU

(4) Invited to begin accession negotiaitons with NATO GAO/NSIAD 98-6

Oct 97 Defense Trade

“European Initiatives to Integrate the Defense Market”

Belgium

Denmark (2) France

Germany Greece Italy

Luxembourg The Netherlands

Portugal Spain

United Kingdom

Czech Republic (3,4)

Poland (3,4)

Hungary (3,4)

Iceland (1)

Norway (1) Turkey (1)

Bulgaria (3) Estonia (3)

Latvia (3) Lithuania (3)

Romania (3) Slovakia (3)

NATO

Austria (2)

Sweden (2)

Ireland (2)

Finland (2)

Slovenia (3)

EU

WEU

Canada

USA
3-8

that requirements can be addressed over a

longer period and work share can be leveled

among several programs over time.18 OCCAR’s

administrative offices are in Bonn and other

nations can be expected to join in the near future. OCCAR has the potential to develop into

a European armaments agency. Should such an

agency evolve, it could serve as a single European entity for partnership with the U.S. in

armaments development and procurement.19

Working against transatlantic and European

movements to join more effectively for armaments cooperation are the fractured political

and military organizations to which the U.S.,

Canada, and European nations belong (see

Figure 3-3). The expansion of OCCAR and

similar entities inevitably leads to a confrontation between competing allegiances,

particularly between NATO and the EU.

Consolidation of the

European Defense Industry

Europe’s defense industry has undergone

fundamental evolution in the postwar era, the

most important changes occurring in the last

several years.

For most of the past 50 years, national champions dominated the defense industry landscape

in Europe. These corporations typically had a

monopoly within their respective nations and

were at least in part publicly owned. Into the

1970s this arrangement survived, augmented

by a heavy dose of foreign military sales (FMS)

from the U.S. Several currents eventually

forced a change. Weapons systems became

increasingly complex, demanding a broader

base of capability and expertise. Additionally,

these national champions lacked a sufficient

market to be viable and were forced into foreign

sales where they were often uncompetitive.

Finally, consolidations within the U.S. put

European industry at a further disadvantage

while political pressure mounted to become less

dependent on American equipment.

In the later 1990s, a confluence of events made

possible a consolidation of the European defense industry in response to U.S. dominance.

The overarching context of this change was

globalization. Growing European interdependence through economic and political integration set the stage for governments to loosen

their grip on their national champions in defense. Against a backdrop of privatization,

unchallenged, and in some cases encouraged,

by the Social Democratic parties that came into

power in the 90s, closer ties were allowed

between European defense manufacturers.

Significant Consolidations In Europe,

1997-1999:

• British Aerospace acquisition of Marconi

Electronic Systems to form BAe Systems

• Germany’s DaimlerChrysler Aerospace’s

(DASA) merger with Aerospatiale Matra

of France and CASA of Spain to form the

European Aeronautic Defense Space

Company (EADS)

• Formation of Astrium, a pan-European

satellite company consisting of Matra

Marconi, DASA, and Alenia (Italy)

• A pan-European missile company, Matra

BAe Alenia20

To put these developments in context, BAe

Systems will control 90 to 95 percent of the

U.K.’s defense market, and combined with

EADS will account for roughly 75 percent of

all European defense and aerospace sales.21, 22
3-9

These companies are capable of head-to-head

competition with the American aerospace and

defense giants across the spectrum of products.

Figure 3-4 below illustrates how the European

defense industry teamed to produce aircraft and

missiles prior to the creation of EADS and BAe

Systems.

Figure 3-4. European Consolidation by Industry: Aircraft and Missiles

Aerospatiale (38%)

BAe (20%)

DASA (38%)

CASA (4%)

Dassault (51%)

Aerospatiale (49%)

BAe (33%)

DASA (33%)

CASA (13%)

Alenia (20%)

DASA (30%)

Aerospatiale (70%)

Agusta

Westland

Aerospatiale

Matra BAe Dynamics

DASA LFK

DASA acquires CASA –

Commercial

increases share of Airbus to 42%

Aircraft

Airbus

DASA acquires CASA –

increases share of Eurofighter to 46%

Dassault Fighters

Eurofighter

Tactical

Aircraft

Eurocopter

Agusta

Westland

Helicopters

Aerospatiale Missiles

Matra BAe Dynamics

LFK (30% Matra BAe owned)

AMS acquires 50% of Matra BAe

Missiles

(Reprinted with the permission of Margo Anderson, GEIA. Slide 14 of 30 from the GEIA site: www.geia.org/vision99/Defense./99D_IndOutlook/

sld014.htm, dated September 1999.)
3-10

ENDNOTES

11. Michael Elliott, “Goodbye to All That,” http://www.

newsweek.com/nw-srv/printed/special/emu/

emu5_4, pp. 3-4.

12. “About Western European Union, The Birth of the

EU,” http://www.weu.int/eng/info/1948.htm.

13. Ibid.

14. “About Western European Union, WEU From 1955

to 1984,” http://www.weu.int/eng/info/1955.htm.

15. Guy Challands, Sense About European Defence:

Affordable Interoperable Arms Procurement

Through Collaboration?, Fellowship Paper, St

Antony’s College, Oxford 1999, pp. 38-39.

16. Defense Trade, European Initiatives to Integrate the

Defense Market, United States General Accounting

Office, GAO/NSIAD-98-6 (October 1997), p.4.

17. “Western European Armaments Group,” http://

www.weu.int/weag/eng/info/weag.

18. Defense Trade, p. 7.

19. Challands, p. 45.

20. Jeffrey P. Bialos, “The Transatlantic Defense Industry on the Eve of the 21st Century: Cooperation in

the Face of Consolidation,” speech delivered at

Toulouse, France (December 6, 1999).

21. Ibid.

22. Felix Rohatyn, speech on U.S.-European Defense

Industry Issues, http://www.usis.it/wireless/

wf990415/99041511.htm (April 15, 1999).

1. Farr, Charles Michael, An Investigation of Issues

Related to Success or Failure in the Management of

International Cooperative Projects. Diss. University

of North Carolina 1985, p.19.

2. Ibid, pp.27-28.

3. Management of Multinational Programs; A Handbook for Managers Entering the World of International Acquisition, 2nd Ed. (Ft. Belvoir, VA: DSMC

Press 1987), p.3-4.

4. Collaborative Development of Main Battle Tanks:

Lessons from the U.S.-German Experience, 1963-

1978, Defense Technical Information Center technical report (Alexandria, VA, February 1984).

5. Conference of National Armaments Directors,

NATO Research and Technology Organization,

http://www.rta.nato.int/CNAD.htm, p.1.

6. The Management of Security Assistance, 18th Ed.

(Wright-Patterson AFB, OH: Defense Institute of

Security Assistance Management, June 1998), p.439.

7. Frank Cevasco, Slide: Armaments Cooperation –

The Congress (McLean, VA, Hicks & Associates).

8. Interview with a European national armaments

representative at NATO headquarters (February 28-

29, 2000).

9. GDP per capita, 1998, National Accounts of OECD

countries, Main aggregates, Volume 1, http://www.

oecd.org/std/gdpperca.htm, p.1.

10. Werner Antweiler, “The Euro,” http://pacific.

commerce.ubc.ca/xr/euro/euro.html
4-1

4

REVIEW OF

SELECTED TRANSATLANTIC

COOPERATIVE PROGRAMS

“Trying to make things work in government is sometimes like trying to sew a button on a custard pie.”

— ADM Hyman Rickover

weapon system with multiple partners. Regardless of the cooperative program’s size and complexity, the PM will still have to be concerned

with all of the characteristics addressed in this

chapter.

This review looks at seven different cooperative

programs (nine including the updates to the

multiple launch rocket system) involving all

U.S. military services and their counterparts

from multiple European partners. These programs are the Multiple Launch Rocket System

(MLRS) including the basic MLRS, the Terminally Guided Warhead (TGW), and the Guided

MLRs (GMLRS); the NATO Seasparrow Surface Missile System (NSSMS); the Rolling

Airframe Missile (RAM); the Multifunctional

Information Distribution System-Low Volume

Terminal (MIDS-LVT); the F-16 Mid-Life

Update (MLU); the Future Tank Main Armament (FTMA); and the Joint Strike Fighter

(JSF).

Introduction

Transatlantic cooperative programs are normally much more complex than single service or

even joint programs. A review of selected recent

programs shows that despite the increased difficulties, these undertakings are indeed manageable and the extra effort can be rewarding to

the participants. While policies and regulations

on cooperative programs abound, as discussed

in Chapters 1 and 2, the PM has strikingly little

in the way of systematic analysis of recent programs available to assist in developing effective

plans and strategies. A look at selected successful programs reveals common characteristics

that should prove useful to the PM and policymaker alike in anticipating the challenges

faced in international cooperation. Of course,

every program has unique aspects that must be

taken into consideration. A bilateral program

for a system upgrade is likely to be significantly

less complex than a program to develop a new
4-2

Each of these programs will be assessed against

several common characteristics, some of which

were discussed in Chapters 1 and 2. Key to

accommodating the various players’ needs is

the concept of harmonization—working to

establish common ground in terms of both military and programmatic requirements. Industrial teaming describes how industry participates and works together in these cooperative

efforts. The program’s management structure

provides the mechanism to arrive at often difficult decisions. Technology transfer aspects are

significant in most cooperative programs and

require close and careful attention. Cooperative

programs are inherently more complex and call

for business management efforts that are not

needed in national programs. Finally, each

program has a human dimension—the “glue”

that builds trust, binds, and motivates the team

and provides the means to work through

problems as they arise.

Following a discussion on each program, a

summary table of relevant features is included

in Figure 4-1 on page 4-49.
4-3

MULTIPLE LAUNCH ROCKET

SYSTEM (MLRS) PROGRAM

(MOU) with the Federal Republic of Germany,

France, and the U.K. for the cooperative continuation of the ongoing U.S. MLRS development

effort. This agreement specified that the U.S.

would receive assistance from its new MOU

partners in terms of financial and engineering

support for the development effort, but that

there would be no major changes in the design,

contractors involved, and scheduled completion

dates to the U.S.-only project that was ongoing.

The U.S. awarded Validation Phase contracts

to two U.S. competitors, Vought and Boeing1

,

in September 1977 while the MOU negotiations were ongoing. In May 1980, Vought was

selected and entered the Maturation/Initial

Production Phase.2

 Vought began initial production of MLRS launchers and rockets in 1980

followed by full rate production in 1983.3

A M270, Multiple Launch Rocket System (MLRS)

Background

The MLRS program is one of the oldest successful transatlantic cooperative programs. For

over two decades, the MLRS program has

evolved and matured and continues as an excellent example of cooperation between the U.S.

and its international partners. MLRS is the only

system of its type within NATO, making it a

rare exception to the norm of having multiple

systems with similar capabilities within NATO.

MLRS is used within nine NATO and four nonNATO nations.

MLRS began as a U.S.-only program in 1976.

The system consisted of a self-propelled launcher and free flight rockets with a range of 32

kilometers. In 1979, the U.S. reached agreement

and signed a memorandum of understanding
4-4

European production did not start until 1987,

although it was planned to start soon after the

start of U.S. production.4

The two MLRS follow-on cooperative efforts,

the Terminally Guided Warhead (TGW) and

the GMLRS rocket development programs, are

covered later in this chapter. Although these

efforts were completed as MOU supplements

to the 1979 basic MOU, they are distinct in

many aspects.

Harmonization

In 1977, Germany, France, and the U.K. entered

discussions with the U.S. about possible

cooperation on MLRS. These countries all had

a military requirement for an MLRS-like system. The common requirement stemmed from

the need to provide large volumes of rocket

artillery fire to counter Soviet artillery.

There was strong Congressional emphasis at

the time for rationalization, standardization and

interoperability (RSI) within NATO. The Culver-Nunn Amendment to the Defense Appropriation Authorization Act for FY77 in 1976

directed the Services to minimize diversity of

high consumption systems in the NATO alliance. MLRS was a high ammunition consumption system and was deemed a key system used

to promote RSI goals. The objective was to

deploy the MLRS as a standard or at least an

interoperable weapon system. Following Congressional guidance, the OSD directed that

MLRS become a cooperative development

program. A memorandum dated July 25, 1977

from the Director, Defense Research & Engineering (DDR&E) directed that the MLRS PM

assume single point management responsibility

for international cooperative efforts.5

An essential step to initiating the MLRS cooperative effort was harmonizing the design

requirements. Very early in the U.S. MLRS program the diameter of the MLRS rocket design

was increased to harmonize with the known

German requirements. Germany had already

started developing a scatterable anti-tank mine,

the AT-II, which needed a larger diameter rocket

than the U.S. had originally planned. This was

the only significant modification that was made

to the U.S. program.6

OSD directed the U.S. chief negotiator to use

the guiding principle of “get it done and make

it fair” for MLRS basic MOU negotiations.7 In

July 1979, after two years of negotiations and

national staffing, Germany, France, the U.K.,

and the U.S. signed the MOU. The MOU stated

that the MLRS hardware, except for the communications equipment, would be standard for

the four nations. The MOU also served as the

basis for future MOU Supplements for cooperation on production and support, development

of future munitions, system improvements, and

the addition of partners.

Industrial Teaming

During the MLRS development effort there was

not significant international industrial teaming.

As agreed, the U.S. prime contractor Vought

continued as the prime contractor for the development effort after the MOU was signed. Based

on the MOU, there were no work share requirements that would mandate involvement of

industry from the European partners. Likewise,

Germany continued the AT-II mine MLRS

submunition development using its national

contractors.

During the production phase, two production

lines were established, one in the U.S. and one

in Europe. The U.S. prime contractor, Vought,

operated the U.S. production line. The European line was operated by the European Production Group (EPG). The EPG consisted of
4-5

national contractors from each of the European

participants. The Europeans expected to begin

production at nearly the same time as the U.S.

did in 1983. However, due to many difficulties

in resolving the EPG work share arrangements

and production start up problems, European

production did not start until 1987.8

Since the U.S. production line started much

sooner than the EPG line and produced far

greater quantities, it was always significantly

less expensive than the EPG line for third party

sales. Later in the production program, the U.S.

production line became even more attractive

for third party sales because it incorporated a

new deep attack capability into the MLRS

launchers, unlike the EPG launchers. Consequently, third parties who wanted these features

found it even more desirable to buy the less

expensive U.S. system with these additional

features. Hence, the EPG’s original projected

third party sales eventually were filled from the

U.S. production line.9 This frustrated the European partners because they did not achieve the

quantities and, therefore, the savings from

economies of scale they had planned.10 However, since the European partners only established one production line (not four different

lines) in Europe, it is likely some economies

of scale savings were achieved by consolidating

European production.

The MLRS MOU Production supplement

established the MLRS International Corporation (MIC) to consist of the U.S. prime contractor and the EPG. It had several purposes,

one being to balance third party production

between the U.S. and European lines. However,

this still proved ineffective. The MIC did prove

to be effective in advertising MLRS in publications and at trade shows. Vought-based marketing representatives working with the MIC

were responsible for the proliferation of MLRS

worldwide. The MIC also served as an agency

for collecting and distributing development cost

recoupments to the MLRS MOU partners.11

Management Structure

The basic MOU defines the management structure for the program. A Joint Steering Committee (JSC) with a senior member (General Officer level) from each participant makes program

decisions by unanimous consent and gives

direction to the Executive Management Committee (EMC). The EMC consists of the National Project Manager (O-6 level) from each

participant. The U.S. Project Manager is designated the Program Coordinator and chairs the

EMC. A representative (O-6 level) of the

operational user from each participant is also a

member of the EMC.

Technology Transfer

Throughout the development, the U.S. maintained sole control of the design configuration

and the preparation of the technical data package (TDP). The TDP was prepared primarily

in the metric system—a first for a major U.S.

weapon system—to facilitate future European

production efforts. The European partners provided engineering support to the development

program. The European engineering participation allowed them full knowledge of design

and other program decisions. This European

engineering support was essential for the

European production preparation.12

The basic MOU provided the terms for the

transfer of technical data from the development

program to all the participants for use in production by their national contractors. The

program utilized an exemption clause in International Traffic in Arms Regulation (ITAR) that

is available for cooperative programs. This

ITAR exemption facilitated the export of technical data to the EPG national contractors
4-6

involved in MLRS production. It greatly

reduced the time and effort required for the

export of controlled data.13

Business Management

The U.S. funded the majority of the MLRS

development costs but there were also contributions from the other partners. The most

significant development cost sharing were the

following. Germany completed (primarily with

its national contractors) the development effort

required to integrate the AT-II mine into the

MLRS rocket and make the results available

to the other participants. The U.K. and France

paid $15 million each, although no specific

work share was provided to national contractors

from the U.K. or France as a result of their

development cost sharing. Additionally, as

noted above, each of the other partners provided

engineering support to the U.S. for the

development effort as part of their contribution.

The basic MOU made provisions for other

NATO member governments to join the program. Italy joined the MLRS program as a full

participant in 1982 and paid $10 million for

MLRS development costs. A computation

method for the recoupment of the imbalances

of the development costs (since the U.S. had

borne the majority share) was specified in the

MOU based on the expected production offtake of each country.

Human Dimension

Care exercised by all of the MLRS leaders

relative to the human dimension led to a strong

bond of trust among the partners. This trust held

the basic MLRS program together during

difficult times such as the U.S. withdrawal from

TGW development later in the program. The

success of MLRS can be attributed in large part

to the participant leaders understanding the

national motives, politics and user requirements

of all the participants.14 This has been particularly important for the U.S. leaders because

of the overall leadership role the U.S. has had

in the program.

Notes

The basic MLRS development program demonstrated that a cooperative program could

achieve system acquisition performance, cost,

and schedule goals.15 Even with the complications inherent in cooperation—(although clearly a U.S. led cooperative effort) MLRS was

fielded to the U.S. Army six years after initiation of the development effort.16 This is a

comparatively short period for development of

a major weapons system. The MLRS program

has proved that armaments cooperation can

work over a very long period of time. Throughout the life of the program production support

activities (engineering changes) and logistics

support activities have been completed cooperatively, allowing the partners to achieve significant savings. The singular proliferation of

MLRS throughout the NATO nations provides

an example of the operational and logistical

benefits of transatlantic cooperation.
4-7

TERMINALLY GUIDED WARHEAD (TGW)

DEVELOPMENT PROGRAM

beginning of the basic MLRS program. In

September 1979, shortly after signing the basic

MLRS MOU, the original MLRS partners

(U.S., U.K., Germany, and France) agreed on

the military requirement for TGW. All the partners subsequently agreed, through MLRS

MOU Supplement 1, on a cooperative TGW

program definition phase. Following successful

completion of the definition phase, the TGW

Development Phase Supplement to the basic

MLRS MOU was signed in December 1983.

By then Italy was a full partner in the basic

MLRS program but chose not to participate in

the TGW effort.

Industrial Teaming

The work share arrangements for the program

were managed by the MLRS TGW Joint

Venture, MDTT, Inc. This joint venture consisted of a national contractor from each participant. The national contractors were Martin

Marietta (U.S.), Diehl GmbH (Germany),

THORN EMI (U.K.), and Thompson CSF

(France). MDTT was a separate corporate

entity wholly owned by the four national

contractors. Each national contractor provided

members to staff MDTT. Martin Marietta performed the system integration responsibilities

as the prime contractor.19

Initially, MDTT was not successful in meeting

cost and schedule requirements as a result of a

lack of resource commitments from the parent

companies. To address this problem, the development contract was restructured to provide

additional incentives for the MDTT to meet

program requirements and severe penalties for

not meeting requirements. After the contract

Background

TGW was a cooperative development program

that involved advanced technology for smart

weapons. It was a major development effort that

was estimated to cost a total of $557 million

(1984 dollars) and was planned over a nineyear period. It was, and still is, one the largest

and most complicated true codevelopment

efforts undertaken by the U.S. The program

faced significant challenges in the sharing of

advanced technology, division of work shares

among the national contractors involved, and

the management of cooperative development

over a long period of time.

At the end of the validation phase in 1993, TGW

achieved its technical goals. However, because

of reduced post-Cold War defense budgets, the

U.S. withdrew from the program. In 1990, Congress directed that MLRS TGW and two other

target-sensing submunitions be reviewed and

that a single option be selected. In 1991, the U.S.

Army selected the “BAT” submunition (versus

TGW), which had been developed in a “black”

program concurrent with TGW. To avoid breaking an international agreement by withdrawing

before completion of the current MOU phase

and incurring termination costs, the U.S. remained in the program until the end of the MOU

phase in 1993.17 When the U.S. withdrew from

the program, so did the U.K. and Germany.

France continued for a short period on its own

but then also terminated the program.18

Harmonization

The TGW development program for a smart

MLRS submunition was envisioned from the
4-8

restructure there were no more cost and

schedule problems.20

Management Structure

The government management structure was

similar to the basic MLRS program with the

EMC and JCS as the decision-making bodies.

However, these were separate for the ongoing

basic program because Italy was not a TGW participant. Although at the JCS level all decisions

were unanimous, there were many difficult

issues to resolve and TGW decision-making

was often contentious and slow.21

Technology Transfer

The most significant issues that TGW faced

concerning technology transfer were not centered on what to share but on what technology

would be worked on by each partner. This quality of work issue complicated work share balancing. TGW also had some issues concerning

the technology the partners would share. The

U.S. General Accounting Office (GAO) raised

concerns about the possible U.S. release of

Microwave Millimeter Wave Monolithic Integrated Circuit (MIMIC) technology into the

program. The primary concern was that MIMIC

design and manufacturing processes would be

provided to the TGW partners.22 Despite these

concerns, TGW was successful at sharing advanced technology. Ultimately, the program’s

technological achievements represent a significant and successful effort in transatlantic

technology sharing.

Business Management

The cost sharing arrangements were: U.S. 40

percent; and U.K., Germany, and France 20

percent each. The TGW MOU Supplement

specified program work share objectives that

did not match the program cost share requirements. The work share objectives were not

more than 34 percent of the work for the U.S.’s

prime contractor, and not less than 22 percent

each for the subcontractor(s) of each of the

other nations. However, in addition to just managing the work share percentages, the program

also had to accommodate national desires to

work on the more complicated or higher quality

technologies involved in the program. This

resulted in work share arrangements that were

not always based on which contractors were

best qualified to perform the work. In some

cases, contractors inexperienced in the work

assigned them had to learn at the expense of

the program in terms of both cost and schedule.

Hence, work share balancing was a significant

challenge and imposed inefficiencies on the

program.23

To reduce the exposure of the program to

changing economic conditions of each of the

participants, separate bank accounts were established in each country. Each participant

deposited the majority of its TGW funding

requirements (in its national currency) into

these accounts and then paid for work done in

its country from these accounts. In this way,

work performed within particular countries was

billed and paid for in their respective national

currencies.

Additionally, to reduce funding uncertainties

related to differences in currency exchange

rates/economic conditions, the program’s cost

and work share arrangements were established

using the currency exchange rates/economic

conditions on January 31, 1984. The January

31, 1984 reference date turned out to be period

of relative strength for the U.S. dollar. Throughout the eight-year program the dollar significantly declined in comparison to the European

partners’ currencies. As a result, the Europeans

had to contribute more of their currency to meet
4-9

their annual funding requirements than if a

more equitable currency exchange, such as an

average over a ten-year period, had been used

for the program. Additionally, as the dollar

weakened against the European currencies

(some more than others) the national work loading had to be adjusted to match the program’s

work share objectives.24

Human Dimension

TGW had many contentious decisions related

to work shares, quality of work, initial problems

with the MDTT joint venture, exchange rates,

etc. Throughout the program, it was the human

dimension of seeking understanding of the

partners’ differences that led to achievement

of the technical goals.25 Without leaders that

cared and were willing to work toward resolving differences over long periods of time

(more than eight years) TGW could very easily

have failed to reach its technical objectives. The

ultimate demise of TGW was not because of

the human dimension within the program, but

rather U.S. funding choices made at a higher

level.

Notes

TGW was a very large and difficult transatlantic

cooperative development effort that achieved

its technical requirements but fell victim to

defense budget cuts at the end of the Cold War.

The U.S. withdrawal cast doubt on the U.S.’s

reliability as a partner and was particularly frustrating to the Europeans. TGW is cited as a classic example of one the significant problems with

transatlantic cooperation. DoD was simultaneously funding a “black” program, BAT, for a

similar military capability. With the end of

TGW, the Europeans felt frustrated that they

were essentially left with nothing while the U.S.

continued with its previously black U.S.-only

BAT submunition program.26 A contributing

factor to TGW’s demise was probably the

relatively small U.S. industry involvement and

resulting political support for the program as

compared to the alternative BAT program.

Would TGW have been killed if the U.S. had

larger cost and work shares, and consequently,

U.S. industry had a significantly greater interest

in TGW?
4-10

GUIDED MLRS (GMLRS)

ROCKET DEVELOPMENT

incorporation of the Global Positioning System

(GPS) to aid the guidance system. Both of these

add-ons provided operational benefits to the U.S.

for a relatively small increase in production costs.

The GMLRS MOU Supplement was negotiated

and staffed for national approval concurrent

with the harmonization of requirements and

program organization efforts during the period

1996 through 1998. The U.S. wanted the earliest possible start of the development program.

After a six-month delay caused by national

staffing problems, the MOU was signed by all

participants in September 1998. In total, the

MOU negotiations and national staffing took

over two years to complete.

Industrial Teaming

From an industrial work share standpoint, the

GMLRS development effort is significantly

different from the previous TGW development

effort. TGW employed a joint venture company

as the prime contractor, with industry participation from all the nations involved. In

GMLRS, the prime contractor, Lockheed Martin Vought System (LMVS), has responsibility

for selecting subcontractors on a best value

basis. No requirements equating work share and

cost share have been established. However,

reaching work share and cost share equity is a

secondary program aim. Despite agreement on

the best value subcontracting approach, when

European subcontractor candidates have not

been selected in key component selections, the

Europeans have expressed concerns about the

best value selection process and whether the

U.S. prime contractor was biased towards U.S.

subcontractors.28

Background

The latest cooperative activity with MLRS is

the GMLRS rocket development program,

initiated in 1998 and still ongoing. GMLRS

provides double the range (60 kilometers plus)

and much greater accuracy as compared to the

MLRS basic rockets.

This codevelopment effort includes all the basic

MLRS partners (U.S., U.K., Germany, France,

and Italy). A U.S. technology demonstration

proved that a guidance system using off-theshelf technology could be incorporated into an

MLRS rocket to significantly increase its

accuracy. The increased operational capabilities

that GMLRS provided were so great and the

technical risk relatively low that the U.S. rapidly made plans to start a GMLRS development

program in 1998 and to initiate the program

with or without the European partners.

Harmonization

This program evolved into a cooperative development program primarily from discussions

and information exchange on future system

improvements during the semi-annual EMC

and JSC meetings as part of the ongoing basic

MLRS program. A key element leading to harmonization of the GMLRS requirements with

the European partners was the operational user

participation in the EMC meetings.27

To harmonize requirements with the European

partners, the U.S. agreed to add-on requirements—a new rocket motor (versus U.S.-only

plans to use the proven, but less capable,

Extended Range MLRS rocket motor) and
4-11

Management Structure

The GMLRS management structure uses the

existing MLRS EMC and JSC structure.

GMLRS also has co-product managers (O-5

level); one is always U.S. and one rotates

among the European participants. The coproduct managers coordinate and manage the

day-to-day activities of the program.

The GMLRS program has implemented a series

of Integrated Product Teams (IPTs) to improve

management efficiency consistent with U.S.

acquisition reform initiatives. These IPTs include dedicated functional experts from each

of the participants and enable program decision-making down to the lowest level possible.

Additionally, the program uses a web site to

post key program information and has all members connected through commercially available

e-mail systems. These measures mitigate the

time zone differences and distance separation

aspects of running a transatlantic program.

Technology Transfer

The GMLRS European partners thus far have

been frustrated by the U.S. export control system. European industry has not been able to

participate in GMLRS development to the

degree expected because of the significant

amount of time it takes to process U.S. export

licenses. Often, by the time the export licenses

are approved, the bid cutoff date has passed. In

order to meet program schedule requirements,

these cut-off dates cannot be extended. Hence,

many European subcontractor candidates are

shut out of the subcontract competitions.

Efforts by the program to obtain an ITAR

exemption approval from the Department of

State to facilitate the transfer of necessary

technical data have so far been unsuccessful.29

The GMLRS production plans are not yet

finalized. However, the primary objective is to

have single source component and subassembly

production capability and simultaneous dual

integration capability for the same items in the

U.S. and in Europe. Dual subassembly production capability may be considered for work

share reasons. The MOU Supplement contains

provisions for a commercially prepared Product

Definition Data Package (PDDP) by the prime

contractor to facilitate the transfer of technical

information to contractors not involved in the

development program if a second source is used

during production.

Business Management

The cost sharing arrangement is 50 percent for

the U.S. and 12.5 percent each for the four

European participants. This cost sharing is

equitable because the U.S. is expected to have

more than 50 percent of the production offtake.

The cooperative development was estimated to

cost approximately double the planned U.S.-

only effort. The increase in development costs

resulted from the required add-ons and the

added costs of the cooperative development

effort, as well as, perhaps, low initial estimates

for the U.S.-only program.

Since the contracted development work is

performed through the U.S. prime contractor,

LMVS, the GMLRS Supplement specifies that

all of the partners’ payments will be made in

U.S. dollars. Unlike TGW, currency exchange

rates were not fixed in the MOU Supplement.

Human Dimension

Within the GMLRS program, long-standing

human relationships have continued. There are

several new people involved but the trust and

willingness to work through differences that

have developed over many years of MLRS
4-12

cooperation continues. The GMLRS program,

through strong and determined leadership, resolved the difficult problems that developed

with the approval process for the MOU Supplement. The human dimension holds the partners

together despite continued frustration with the

U.S. export control system.

Notes

The latest cooperative follow-on effort,

GMLRS development, is an extension of, and

builds on, the previous MLRS cooperative

experiences. The ongoing MLRS JSC and

EMC meetings continue to serve as an effective

forum to address and foster future cooperative

MLRS activities like GMLRS.
4-13

NATO SEASPARROW SURFACE

MISSILE SYSTEM (NSSMS)

arrangement. Originally, there were only four

participants: Denmark, Italy, Norway, and the

U.S. Currently, there are 13 active participants

as Belgium, Canada, Germany, Greece, The

Netherlands, Portugal, Spain, Turkey, and

Australia have joined in the intervening years.

This runs counter to the conventional wisdom

that in order for a cooperative program to be

effective, only two or three partners can be

engaged.

The concept dates to 1966 when the U.S.

approached the CNAD with a proposal for a

shipboard self defense system to counter the

anti-ship missile threat. The NATO Naval

Armaments Group (NNAG) established Project

Group 2 (PG2) to evaluate the feasibility of a

cooperative program in November of that year.

Background

The case of the NSSMS is distinctive in several

ways. It is the oldest and largest cooperative

project in NATO that is active today. Of the

four significant cooperative development

projects contemplated by the U.S. in the late

1960s, NSSMS was the only one standing by

1970. The program was conceived at a time

when U.S. dominance of the alliance was more

obvious and less questioned than in the recent

past. Despite the economic and technological

preeminence of the U.S., the European partners

have made valuable contributions from the

project’s inception.1

The evolution of the NSSMS project has proved

the flexibility and durability of its cooperative

The NATO Seasparrow Surface Missile System (NSSMS)
4-14

In May of 1967, NNAG approved the PG2

recommendations to use the existing Sparrow

Missile as the basis for development and to

utilize a guided missile fire control system and

a trainable launcher.2

 Almost propitiously, on

21 October 1967, the Israeli destroyer Elat was

sunk near Port Said by two Egyptian Komar

missile boats firing Styx missiles. These events

led to the signing of an MOU in June 1968 by

the original four participants in the NSSMS

project.

The initial MOU was followed in 1977 by an

MOU for cooperative support. The next agreement was an addendum for the cooperative

engineering and manufacturing development

of the Evolved Seasparrow Missile (ESSM)

signed in 1995. The last MOU concerned the

cooperative production of ESSM (1997). NSSMS

project MOUs are clear and straightforward.

The substantive articles, including cost share/

work share, exchange of technical information,

third party sales, the accession of new members,

and termination, occupy only 30 pages in a

large typeface. All four MOUs (including the

addendum) followed the same format and

streamlined approach. Changes to the elements

that are shared (management, security, work

share, etc.) between the four are few, endowing

the project with a valuable consistency.

Harmonization

As the original missile was based on the AIM7 Sparrow, harmonization of requirements did

not become an issue for NSSMS until an upgrade was contemplated. By the mid-1980s, the

U.S. Navy concluded that anti-ship missiles

launched from Soviet submarines and those that

remained passive until a late stage demanded

that NSSMS be more responsive. Some of the

NSSMS partners felt the same need because

of their operations in coastal areas where an

air threat can materialize rapidly. In addition,

the 1980s saw NSSMS employed from three

different launchers, the Mk 29 trainable launcher, the Mk 48 vertical launcher, and the larger

Mk 41 Standard Missile launcher, all of which

could be modified for NSSMS. At the same

time, requirements for the now-defunct NATO

Anti-Air Warfare System (NAAWS) were

formulated. Those requirements provided the

baseline for what was to become the ESSM.

The close of the 1990s saw NSSMS challenged

by having to integrate into six different combat

systems and four different guidance methods.

Coordination of requirements among so many

participants is no small matter, and trust within

the NATO Seasparrow Project Office (NSPO)

was credited with the reaching of a consensus.

The NATO Seasparrow Project Steering Committee (NSPSC) provides overall project guidance. The U.S. member and chair of the

NSPSC was specifically credited with addressing the concerns of each participant and thereby

creating the atmosphere for success.3

Industrial Teaming

The formal relationship between Raytheon and

the European industrial partners was governed

by a series of Technical Assistance Agreements

(TAAs).4 The TAAs specify what kind of work

was to be performed in the cooperative effort.

The U.S. Navy was empowered to name a

prime contractor and remains the contracting

agent for ESSM production. Raytheon acted

as the prime contractor and established an

effective working relationship with its industrial partners. This is particularly noteworthy

since Raytheon was responsible for the observance of national work share distribution in

NSSMS contracting, an arrangement that has

been successful to date. The human element

was critical. Raytheon assigned managers to

the program who built trust with their partners
4-15

over time, preempting the friction and mistrust

that often characterizes similar relationships.5

The issue of work share was addressed in the

initial MOU on a cost share basis, a consistent

theme through subsequent documents. Latitude

in planning was provided by a cushion of plus

or minus 20 percent of national contributions.

Should the NSPO not be able to work within

those boundaries, the NSPSC would intervene

to satisfy national work share concerns.

Management Structure

The management arrangement, cited as a key

to the success and durability of the NSSMS

project, survived the past three decades basically unchanged. Overall guidance for the program was vested in the NSPSC and consisted

of one member from each participating nation.

Those decision areas requiring unanimous

consent were put forth in each MOU. Examples

include annual budgets for shared costs and

major schedule changes. For all other decisions,

the initial document specified that votes be

weighted according to cost share, which

implied a lopsided influence for the U.S.

Subsequent MOUs specified simple majorities.

Subordinate to the NSPSC was the project

manager appointed by the U.S. This position

was typically filled by an active duty U.S. Navy

captain.6

 He was charged with direct management of the program and is assisted by a deputy

and one officer from each of the participating

nations (Belgium is represented by the Dutch

officer). National representation among the

officers was initially based on cost share, but

this was changed at the same time as proportional voting rights were introduced in the 1977

support MOU. The project manager and team

work in the NSPO in Arlington, Virginia.

Technology Transfer

The preeminent role of the U.S. does emerge

in some NSSMS arrangements. That the U.S.

disclosure and arms transfer process is different

(to be generous) was recognized in the ESSM

production MOU. Third party sales and transfers of the ESSM, as well as components and

information developed cooperatively or individually, are addressed in Section 13. “U.S.

Unique Items” is a term that has no equivalent

for the other participants. They are defined as

“those items for which U.S. national disclosure

policy prohibits dissemination of design and

manufacturing data to the (other) participants.”

For equipment and information related to U.S.

unique items, the U.S. need only consult the

other participants prior to third party sale. It is

significant because it includes equipment that

is cooperatively developed. An exception is

made for X-band guidance capability, which

requires the approval of those who contributed

to its development prior to sale.

Though the technology transfer and third party

sales provisions of the production MOU may

seem too U.S.-specific and tedious, they serve

an important purpose. These areas are potentially the source of friction and disappointment

so the more clearly they are addressed at the

outset, the better the chance of preempting

misunderstandings. The NSSMS project has

notably lacked these problems.

Apart from the aforementioned, guidelines governing third party sales and technology transfer

are logical and consistent. Generally, that which

is cooperatively developed requires the approval

of the engaged participants prior to sale. Participants must be consistent in their positions in

that if they would approve sale to a particular

government on their own behalf, they must

approve sale to that same government when

requested by another participant. Recoupment
4-16

costs may be waived in part or in whole when

a sale is negotiated, as desired by each participant. From the point of view of the non-U.S.

partners, recoupment should always be required

in full to prevent freeloading. The U.S. Foreign

Military Sales (FMS) system involves a surcharge that could be considered an indirect

method of recovering sunk costs.

Business Management

Financial administration has remained consistent throughout the life of the project. The

12 non-U.S. participants deposit their annual

financial commitments into a Bank of America

trust account in U.S. dollars. Withdrawal of

funds from the trust account is managed by the

NSPO as required to execute steering committee-approved activities within approved

budgets. The NSPO is subject to an annual audit of trust account transactions by the U.S.

government.7

Human Dimension

This factor, though important in any collective

undertaking, may be a critical advantage for

the NSSMS project.

The NSSMS management arrangement, combined with the large number of participants,

creates pressure to reach a consensus on matters

beneath the purview of the NSPSC. The collegial environment of the project office, primarily

composed of O-4/O-5 level officers, fosters

cooperation and no small amount of give and

take. This is aided by an arms-length relationship with the NSPSC, which meets semiannually and is concerned primarily with larger

questions of national interest, sometimes preempted through cooperation at the NSPO.8

The value of these interpersonal relationships

was a recurrent theme in interviews with NSPO

personnel. Trust was cited as the key element

in overcoming many of the difficulties inherent

in an international cooperative project.9

 When

the addendum to the support MOU for engineering and manufacturing development of

ESSM was negotiated, teams of legal experts

and bureaucrats from the participating nations

argued for tighter control by national partners.

There was a fear within NSPO that a new MOU

would derail the project. Fortunately, the national representatives made the point that flexibility was critical to the project’s success, and

their judgement carried the day. This shared

perspective within NSPO was a product of the

trust developed by the project leadership and

by daily interaction, often outside work, among

the national representatives who normally serve

for three years.10

An insight is gained by the thoughts of the

current Deputy Project Manager, Captain Kees

DeVries, Royal Dutch Navy. Captain DeVries

cultivates a position of strict neutrality in national issues, referring to himself as “perfectly

purple.” The interests of The Netherlands are

represented by a separate Dutch officer. Captain

DeVries believes that it is critical to maneuver

toward win-win situations and that the project’s

requirement for unanimous voting is important.

He considers that the project has enjoyed success because national representatives have built

trust through reliability. The NSPO leadership

carefully builds a consensus prior to meetings

of the Steering Committee. National representatives then offer a unified view to their respective steering committee members, preempting disagreements. According to Captain

DeVries, the greatest threats to this harmony

are careerism and a short-term perspective.

Another view is offered from within DoD.

NSPO has succeeded where other cooperative

programs have failed because the project was

blessed with a succession of project managers
4-17

(U.S. Navy captains) who were content to

maintain a low profile and eschewed careerism

for the common good.11 Both of these views

acknowledge the success of the project and the

importance of the interpersonal or human

element in that success.

If there is a problem peculiar to Americans in

the maintenance of an atmosphere of cooperation, it is the mindset of “we are the biggest.”

The literal truth in that phrase is the reason why

it is difficult to curb the underlying sentiment.

As a larger organization, the U.S. Navy faces a

bigger challenge in education.12

Notes

Few would dispute the success of the Seasparrow Consortium, though proof of cost

savings in any cooperative program is elusive.

Undeniably, unity within the alliance has been

well served and an effective weapons system

with a uniformly high state of readiness has

been produced. The NSSMS project has been

praised on both sides of the Atlantic. NATO

Secretary General Javier Solana noted the

success enjoyed by the Seasparrow Consortium

on the occasion of the 50th anniversary of

NATO, and Vice President Al Gore presented

the project the Hammer Award for “doing it

faster, smarter, cheaper.” The Vice President

recognized the missile’s re-architecture program where off-the-shelf components were

employed.13
4-18

ROLLING AIRFRAME MISSILE

(RAM)

economic developments in Europe favor cooperation on a more equitable basis, thereby

drawing attention to RAM as a model.

The RAM program was initiated in the early

1970s when a mission need statement (MNS)

was approved and designation as an acquisition

category (ACAT) II was conferred. At the beginning of the advanced development phase in

1976, the cost share arrangement was agreed

to with Denmark (initially party to the program)

paying two percent and Germany and the U.S.

Background

The case of the RAM is an interesting contrast

to NSSMS. Both systems are missiles designed

to defeat anti-ship cruise missiles, though

NSSMS does so at a greater distance. RAM is

a bilateral program while NSSMS is multilateral in the extreme. The most significant aspect

of the RAM program, however, may be that it

is much closer to an equal sharing (in absolute

terms) of development costs and work than

NSSMS or most other programs. Political and

A MK 31 Rolling Airframe Missile (RAM)
4-19

each 49 percent. Denmark ended its financial

contribution in May 1985 as the Danes felt that

their ships were too small even for the RAM

launchers envisioned at that time. Thereafter,

Denmark’s participation was reduced to

observer status.1

Harmonization

Harmonization of requirements, while not a

major issue at the program’s inception, became

a concern for the upgraded RAM Block I (the

most recent, improved version of RAM). The

German Navy needed RAM to be capable of

defeating all air threats to the missile patrol

boats that employed the system. Therefore, a

capability against slow aircraft and helicopters

was sought. The U.S. Navy needed a weapon

to defeat small boats, such as those operated

by the Iranian Revolutionary Guards in the Arabian Gulf. By chance, the primary enhancement

offered by the Block I was an image scanning

capability in the seeker that allows the missile

to defeat targets based solely on their infrared

signatures. This same capability, combined

with software changes, will satisfy the requirements of both the U.S. and German navies.2

Industrial Teaming

The principal U.S. contractor and the prime

contractor for the missile was Raytheon (General Dynamics at the program’s inception). On

the German side, a consortium of four firms

under the umbrella name of RAMSYS was

created, consisting of Daimler-Benz Aerospace

AG (DASA), Lenkflugkorpersysteme GMBH,

Diehl GmbH, and Bodenseewerk Geratetechnik.3

 RAMSYS was essentially an office where

those responsible for RAM within each of those

participants coordinated the German industrial

contribution to the program. RAMSYS assumed duties as the prime contractor when the

missiles were assembled in Germany, as was

the case for the first production missiles

destined for the German Navy.4

The 21-cell launcher for the RAM was initially

produced by a joint venture company named

TRANSLANT, composed of the same participants that produced the missile. The reason

for this change of relationship was an analysis

that showed a 25 percent cost saving when a

joint venture is formed, versus a prime contractor/subcontractor arrangement, primarily

due to pass-through costs, the administrative

handling of money.5

The RAM program had to conform to the

realities of the defense contraction in the wake

of the fall of the Berlin Wall. Perhaps with some

irony, the greatest effect in this program was

felt by the U.S., whose missile requirement was

reduced from roughly 7,000 to 2,000, compared

to a reduction by Germany from 1,700 to 1,150.

The initial production MOU, signed in the halcyon year of 1987, envisioned two separate production lines, one German, one U.S., with open

competition for combined German/U.S. orders.

With the new reality of reduced production

runs, a single integrated production line was

agreed upon with each contractor building

specific subassemblies. With Germany receiving the first production missiles, RAMSYS was

initially responsible for final assembly. The

single production line was a significant change

made possible by the mutual realization by

Raytheon and RAMSYS that a solution needed

to be negotiated between them. This came about

through what was termed a “Cooperative Production Agreement” (CPA) signed by RAMSYS

and General Dynamics in June of 1992. The

Steering Committee acknowledged the CPA

(which is not the same as approval) thus circumventing the lengthy process required to

modify the production MOU.6
4-20

The CPA provided a specific answer to the

dilemma that emerged from the move to a

single production line—the issue of industrial

work share. Perhaps surprisingly, work share

was not directly addressed in previous agreements. The cooperative production MOU

signed in 1987 simply states in its Principles

for Cooperation section that both German and

U.S. industry would have a fair chance to

compete on a dual-source basis. The CPA specified a 50/50 arrangement which was successfully implemented. The significant lesson from

the CPA is that a departure from the bureaucratic structure can be necessary to move ahead,

something that was indeed done successfully

in the case of RAM. In fact, the CPA has been

the governing arrangement for production of

RAM from its drafting to the present.7

Germany has remained a steadfast and valuable

partner through the quarter century of the program’s history. At one point in the early 1990s,

the U.S. portion went unfunded for 18 months,

and the program subsisted solely from the German contribution until U.S. funding was restored. Those missiles went directly to satisfy German requirements. The CPA and the previously mentioned relationship between the industral

partners laid the foundation for the successful

passage through this difficult period.8

RAM has recently come into favor in the U.S.

Navy and orders have increased dramatically.

At the same time, the German defense budget

has come under pressure, reducing the German

share of the development costs for the Block 1

missile to about 35 percent.9 These developments changed the context of the work share

arrangement arrived at in 1992, at least in the

U.S. view. The American side is pushing to

revisit the issue in light of the disproportionate

share of missiles going to the U.S. Navy.

Germany, naturally, wants to continue the 50/

50 arrangement agreed to in the CPA.10 There

is no resolution at this time.

Management Structure

The management of the RAM program shares

some features with that of NSSMS. A U.S.

Navy Captain is the PM and the deputy is a

German civil servant. Unlike NSSMS, and reflecting the relative parity between the participants, the latter has authority nearly equal to

the former. The PM must consult with his German deputy on issues that affect both participants and the latter has veto power over some

program issues.11 The RAM Steering Committee is composed of one flag-level officer or

civilian equivalent from each country. The

German representative is a senior civil servant

and the U.S. representative is the Program

Executive Officer for Expeditionary Warfare

(PEO EXW), appointed by a Navy International Programs Office (IPO) memorandum.12

That memorandum sets forth the limits of the

U.S. representative’s authority, specifically

proscribing the disclosure of RAM information

to Germany not previously agreed to, commitments to third parties, and changing work share

arrangements. Anything beyond the authority

granted in the memorandum must be referred

to IPO for adjudication and coordination

with the appropriate agencies.13 As in the

NSSMS program, RAM is administered from

a Washington-based program office (RAMPO).

Technology Transfer

Though eminently successful, the German-U.S.

partnership that produced RAM was, and continues to be, plagued by some familiar problems. Third party sales are a serious issue. Germany desires that they be conducted on a direct

commercial basis while the U.S. Navy position

is that as ordnance, RAM missiles must be sold
4-21

through FMS. For the time being, a compromise is in effect allowing customer choice of

direct commercial sales or FMS to the original

13-nation NATO and treaty allies. Related is

the issue of recoupment of non-recurring and

development costs, which Germany would like

to include in the sale price. The U.S. seeks to

derive its benefit from the FMS surcharge

(currently 2.5 percent) and economies of scale

inherent in larger production runs.14 Precisely

because the program has been such a balanced

partnership, these disagreements have sometimes been sharp. Germany does not feel like a

supplicant and resents any treatment as such.

The rules governing data transfer are clearly

stated in the 1987 production MOU. One participant cannot transfer or disclose to a third

party, equipment, data, or software that was

provided by the other participant or that was

jointly developed without the written consent

of the other participant. National security concerns are the only basis for refusal. Within the

program all information and equipment is

shared and can be used by either participating

government for defense purposes.

Business Management

Differences in business practices are significant. German firms work on a strictly firm

fixed-price basis for R&D work, whereas the

U.S. side allows for some cost-plus contracts.15

These practices have been successfully accommodated to date through fixed price contracts

where necessary. U.S. contracting procedures

are employed as Naval Sea Systems Command

(NAVSEA) is the contracting agent for the

program and Raytheon, as previously noted, is

the prime contractor. Obligations between the

prime contractor and sub-contractors are

delineated in the CPA.

The method by which payments are made

within the RAM program differs from the

NSSMS model, perhaps due to the relatively

balanced bilateral relationship. German funds

never pass through a U.S. accounting system,

such as the Treasury.16 Instead, they are held in

an interest-bearing account in a bank chartered

in both the U.S. and Germany.17 Obligations

are satisfied directly from this account, avoiding the delays (and frustrations) attendant on

an arrangement whereby the funds pass through

an official U.S. Government account.

As is the case with any international program,

the RAMPO is buffeted by currency fluctuations, since obligations are incurred to the German and U.S. industrial partners in deutchmarks and dollars respectively. Due to currency

fluctuations in FYs 1994 and 95, the currency

risk was passed to the industrial partners in the

contracts let in FY 98.18 Unlike NSSMS, the

introduction of the euro will not have the effect

of simplifying financial management, since

only two currencies are involved, though currency risk management within the program may

change again. The first year of the euro’s existence showed clearly that currency stability is

by no means guaranteed.

Human Dimension

The human element in the creation of the CPA

was critical. The RAMSYS leadership and the

RAM director at General Dynamics developed

a solid working relationship in the years

previous to the CPA, which paid dividends in

the reaching of an agreement.19

Cultural differences are present within the

program but do not seem to impede cooperation. Germans are reluctant to coordinate

through e-mail, a method of communication

that has become second nature to Americans.
4-22

Europeans are also accustomed to a different

work schedule with regard to vacations, holidays, and the workweek.20 Though English is

the official language of the program, the German participants enjoy an advantage in the

sense that they are typically fluent in English,

and their sidebar conversations in German

during negotiations cannot be understood by

their American opposites.21

Notes

Germans involved in the RAM program take

pride in it because it is a true partnership that

produced an excellent product.22 The last point

should not be overlooked. Field tests of the

RAM system have been impressive and the

missile offers the best hope in either fleet today

of an effective defense against certain cruise

missiles. The principal source of pride for the

German participants, however, is the equal

stature that they enjoy, not only through

balanced burden sharing, but also through

significant technical contributions. The

craftsmanship of the molded fiberglass endpiece of the launcher made by Diehl was lauded

by the U.S. side as a critical component that

would have been extremely difficult, if not

impossible, to produce anywhere else in the

world. The image-scanning seeker and the

associated complex image processing that

endows the Blk 1 RAM with capability against

non-radio frequency radiating threats was

developed by Germany.23
4-23

MULTIFUNCTIONAL INFORMATION

DISTRIBUTION SYSTEM LOW VOLUME

TERMINAL (MIDS-LVT)

MIDS-LVT is being developed for employment in a wide variety of U.S. and Allied tactical aircraft, maritime, and ground applications

using the “Link-16” networked communications system. Platforms planned for MIDS-LVT

installation include the F/A-18, F-16, EA-6B,

Airborne Laser, Rafale, Eurofighter Typhoon,

aircraft carriers and cruisers.1

Background

MIDS-LVT is a multinational cooperative

development program with participation by

France, Germany, Italy, Spain, and the U.S. The

MIDS-LVT program was initiated to satisfy a

requirement for small-volume, lightweight

tactical information system terminals and

associated equipment.

The Multifunctional Information Distribution System Low Volume Terminal (MIDS-LVT)
4-24

Link-16 enables secure, jam-resistant, digital

communication of data and voice for command

and control, relative positioning, identification,

and navigation. Link-16 is a significant force

multiplier. The system enables onboard and offboard sensor data to be exchanged with all network participants and greatly enhances cooperative tactics. The system also helps minimize

duplicate mission assignments or missed

targets.2

A key MIDS-LVT program requirement is

interoperability with earlier Link-16, Joint

Tactical Information Distribution System

(JTIDS) Class 1 and 2 equipment. Additionally,

MIDS-LVT is intended to overcome a key

JTIDS shortfall—compatibility in size and

weight with highly space-constrained tactical

aircraft at total ownership cost more affordable

than JTIDS.3

The MIDS-LVT program has evolved from

earlier Link-16 and JTIDS efforts. The Link16 communication standard originated from

fusion of two NATO STANAGS involving

sophisticated frequency hopping waveform and

digital message formats. Earlier generation

JTIDS terminals have been fielded on U.S. and

Allied systems, including E-3 Airborne Warning and Control System (AWACS), Patriot missile system, F-14 fighter aircraft, carriers, cruisers, submarines, and the NATO Air Defense

Ground Environment (NADGE).4

Harmonization

Harmonization of requirements quickly

emerged as a recurring issue in this program.

For example, numerous different platforms

demanded markedly different interface requirements, such as power, volume, cooling, and

electromagnetic interference. The French

wanted to operate MIDS-LVT at multiple and

very low power levels to accommodate their

unique operational purposes. Further, the U.S.

decided to integrate Tactical Air Navigation

(TACAN) within MIDS (to eliminate the need

for a separate TACAN black box). Additionally,

the Federal Aviation Administration (FAA) imposed maximum transmission power limitations, complicating the design of an effective

system.5

The MIDS-LVT was originally conceived as a

pre-planned product improvement (P3I) to the

older JTIDS Class 2 terminal. MIDS-LVT was

proposed to NATO as a cooperative development program in 1986. Senior DoD officials

outlined a number of objectives they believed

could be best accomplished through a MIDS

cooperative development program. First, the

U.S. hoped for expanded NATO implementation of Link-16, paving the way for more effective command and control (C2) interoperability

crucial to successful coalition warfare. Second,

program cost sharing would reduce overall cost

for development of a new compact Link-16

terminal for U.S. tactical aircraft with limited

equipment space. A third objective was bolstering U.S./European political and economic

ties, demonstrating U.S. willingness to cooperatively develop and manufacture a major

Allied defense system.6

Interested European allies expressed similar

cooperative development objectives. They also

desired to share costs to achieve a state-of-theart, affordable C2 system to improve interoperability with U.S. forces. The Europeans

sought technology transfer, including the

sharing of the technology, design, and manufacturing experience that the U.S. gained

through development of JTIDS and other

similar systems. An additional European goal

was an equitable distribution of quantity and

quality of work sharing. The European allies

sought development and manufacturing

activities divided based upon the participating
4-25

nation’s cost share and proportional technical

challenge.7

In the Spring of 1986 the U.S. Under Secretary

of Defense for Research and Engineering proposed a NATO cooperative development of

JTIDS low volume Class 2 terminal. Under this

proposed arrangement, participating nations

and their industries would cooperatively define their terminal requirements and interfaces. In 1987, the U.S. and seven other nations—France, Germany, Italy, Spain, plus

Canada, Norway, and the U.K. (which later

dropped out)—initiated the MIDS-LVT project

definition phase.8

The project definition phase spurred effort to

achieve greatly increased U.S./NATO interoperability. This phase lasted seven years, with

delays driven by efforts to harmonize requirements, adjustments from loss of three of the

partners, and difficulties with U.S. and European program approval and funding.9

 During

this period the program MOU and the Steering

Committee structure were established. Focus

items during this phase included the difficult

task of refining harmonized requirements, risk

reduction/prototyping, development of financial management procedures for Engineering

and Manufacturing Development (EMD),

development of a Request for Proposal (RFP),

proposal evaluation and negotiation of the

EMD contract, and preparation for the U.S.

Defense Acquisition Board (DAB).10

In 1994 the U.S., France, Germany, Italy, and

Spain entered into the cooperative funding and

management of the EMD phase of MIDS. The

program was an early acquisition streamlining

candidate. During the first six months of its

existence, the EMD program was significantly

restructured to be consistent with emerging

acquisition reform initiatives such as cost and

schedule reduction, open/modular architecture,

use of industrial parts, and commercial practices. The MIDS program also transitioned to

joint status with the addition of a U.S. Army

MIDS variant and the USD(AT&L) direction

to develop a reduced function MIDS for the

United States Air Force (USAF) F-15 fighter

aircraft.11 The program is now in limited rate

production with anticipated eventual procurement of over 5,000 U.S. and allied terminals.12

Industrial Teaming

The EMD program developed unique industrial

arrangements with the percentage of work share

defined by each partner. Supposedly to avoid

the tax and legal implications inherent in a U.S.

partnership and limit capital assets to one

million U.S. dollars, the partners agreed to form

“MIDSCO,” a unique single-program, joint

venture corporation chartered in the U.S. to

manage industry efforts.13 MIDSCO’s five

member companies were ENOSA, GECMarconi Hazeltine, MID SpA (formerly Italtel),

Siemens, and Thomson-CSF.14

One of the key problem areas was accommodating the unique MIDSCO international

consortium structure to the Federal Acquisition

Regulation (FAR) requirement for a contractor’s level of responsibility. During project

definition studies in 1987/88, the national companies developed principles upon which they

would organize.15 The principles included

establishment of a separate entity to avoid

national prime contractors having to subcontract to each other, maximization of work

share, and limitation of liability. MIDSCO startup costs would be provided through member

company loans, and staff would be composed

of non-dedicated members contractually

assigned from member firms.16

When the Navy assumed program leadership

in 1990, Space and Naval Warfare Systems
4-26

Command (SPAWAR) contracting personnel

questioned this approach. After much wrangling, the parties agreed to use an irrevocable

letter of credit issued by a U.S. commercial

bank (essentially a type of performance guarantee from the governments). This compromise

arrangement is inferior to the more traditional

joint and several liability for contract performance used on other international industrial partnerships such as the MLRS-TGW

program.17

Cost allowability issues also arose. None of the

costs MIDSCO incurred prior to contract award

were allowable and as an alternative, the government developed special earned value incentives that MIDSCO could earn early in the

contract.18

Management Structure

Between 1987 and 1989 MIDS-LVT technical

implementation and concepts were managed by

an eight-nation industrial team. Later, from

1990 through 1993, the nations separately

funded their industries to perform risk reduction

activities in support of the design goals outlined

in the project definition phase. A separate IPO

was established in Washington D.C. (later

relocated to San Diego, California) in September 1993 to oversee the EMD phase. The IPO

is staffed by members of the five participating

nations and performs routine program management functions. The U.S. has provided about

half the IPO manpower in EMD, consistent

with the international agreement.19

The PM, a U.S. Navy Captain, reports to an

international steering committee chartered by

the MIDS international agreement. The U.S.

representative and chair is the Program Executive Officer, Space, Communications and

Sensors (PEO-SCS), and is chartered with all

host nation responsibilities, including program

contract management and oversight. Members

of the Steering Committee have an equal vote

and all decisions must be unanimous. The PM

also receives considerable functional support

from a number of agencies such as the PEOSCS, SPAWAR, Defense Contract Management Command, MITRE Corporation, Draper

Laboratory and other government engineering,

logistics, and test centers.20

As a major ACAT ID U.S. acquisition program,

the MIDS PM also reports to the USD(AT&L)

through the PEO-SCS and the Assistant

Secretary of the Navy (Research, Development,

and Acquisition). Oversight of the U.S. joint

program is provided by U.S. Army, U.S. Navy,

U.S. Air Force, and Joint Chiefs of Staff

through a Program Executive Council chaired

by PEO-SCS.21

The MIDS program team makes extensive use

of multi-disciplinary IPTs. These IPTs manage

the technical, cost, and schedule aspects based

on the principles of earned value management.

With a large, diverse IPO, the PM, early in

EMD, pressed to push decision-making authority to the lowest level consistent with effective

management. These procedures were captured

in a Program Management Plan and approved

by the Steering Committee.22

MIDSCO, the U.S. chartered, international

joint venture company and prime contractor,

has employed a similar multinational management structure to manage activities of the

various national industries. The U.S. President

of MIDSCO sits on the Board of Directors

(BoD), which is made up of vice presidents

from the five member companies from each

nation. The MIDSCO PM, also charged with

chief operating officer duties, works day-to-day

industrial responsibilities on the program and

reports to the BoD.23
4-27

Technology Transfer

Prior to EMD, industry efforts focused on harmonization of requirements for software and

hardware interface, study of specific technology areas, and risk reduction efforts to support release of the solicitation. In EMD, an

“Integration Process” followed conventional

engineering processes where components were

furnished from each contractor. Examples of

industrial participation include the integration

of radio frequency modules by Thomson-CSF

in Paris and integration of digital units by GECMarconi Hazeltine in New Jersey. GEC (USA)

will build and test the power amplifier developed by Siemens (Germany). MIDSCO and

GEC will train MID SpA (Italy) to integrate

and test MIDS terminals. A two-way flow of

limited technology transfer occurred with some

technology advancement seen in both the U.S.

and Europe.24

The push to abandon military standards in favor

of commercial parts and practices has probably

benefited all.25 The MOU and contract provide

for a TDP to be delivered to all participating

nations. This TDP allows nations to either

procure and/or manufacture MIDS-LVT

terminals, but offers no unique advantages to

the Europeans.26

Future technology transfer efforts will focus

on software changes driven by threat and

mission requirements, and associated software

maintenance. Software development and

associated testing proved to be a challenging

area on this program.27 Aside from European

unease over tight U.S. control of a governmentfurnished encryption device, handling and

protection of technologies has generally not

emerged as a program issue.28

Business Management

To manage the unique and complex financial

management requirements, the program uses a

financial management board composed of

senior national representatives (SNRs) from

the IPO. The IPO works with the PEO and

SPAWAR to manage a network of various

international financial and banking transactions

and assure even payment of program expenditures. This network allows accurate and

secure reporting of the European nations’

deposits and electronic disbursements and

enables participants to deposit funds in their

own currencies. Currency exchanges are not

routinely used, except where required to pay

program bills. The board generally targets

payments to each participant’s national currency. U.S. bills are paid in U.S. dollars from

the U.S. Treasury. These financial arrangements

have served the MIDS program exceptionally

well.29

The program also effectively employed other

innovative business management practices. The

program has accommodated a host of requirement changes and successfully implemented

acquisition reform initiatives such as open

architecture, use of industrial parts, CAIV,

IPTs, and the Single Process Initiative. The program team developed and employed innovative

logistic support concepts. For example, a contractor logistic support approach was developed

where the contractor payment was based not

on system repairs but system availability on

the F-15. This approach was designed to provide a strong incentive to design and build in

reliability and availability.30

The IPO employed innovative contracting

techniques using oral presentations as well, and

thereby improved past performance evaluation

practices. Notably, despite significant program

change and reform, the highly focused program
4-28

team was still able to compress the original

EMD schedule presented at the Milestone II

DAB by six months.31

Human Dimension

The program benefited from a continuous

stream of highly skilled and dedicated program

personnel. For the MIDS program, issue resolution and harmonization have been effectively

accomplished with smaller, focused, workinglevel organizations. Small international working groups were also used to resolve differences

over the Interface Control Document. An International Test and Interoperability working

group was recently created to oversee complex

multinational testing issues.32

Over its life the program has also enjoyed a

high level of interest, support, and commitment

from the participants at all levels. This is due

to the program’s significant potential value and

the perception that common objectives are

being generally satisfied. The difficulty of the

MIDS undertaking and its relative high success

have been warmly regarded. U.S. Secretary of

Defense William S. Cohen recognized the program as a 1997 David Packard Excellence in

Acquisition Award. The program was also a

recipient of a 1997 U.S. Department of Defense

Value Engineering Award. First production

samples were accepted at an elaborate Pentagon

rollout ceremony in March 1998 attended by

high level dignitaries from each nation.33

Notes

Several lessons have been learned from the

MIDS program to date. First, a core of common

objectives and perception of exceptional gain

are vital ingredients to overcome the heavy

resistance of multinational, multi-service, and

multi-agency coordination and management.

Significant time and effort are required to work

joint and international programs and time

should be allotted for the increased complexities. Additionally, as in the case of MIDS-LVT,

partners may not be aware of or convinced of

the rationale for acquisition reform initiatives,

and extra time and effort will most likely be

required to win over all partners. Proposed industrial organizations may not meet contracting

and legal requirements and should be reviewed

early in the acquisition and contracting strategy

development. Dedicated, high quality staff and

effective, tailored management and business

practices are crucial, with decision-making

pushed to lowest practical level. Finally, a compelling need and commitment at all levels must

be present to sustain the program through

international negotiations, program initiation,

and execution.
4-29

F-16 MID-LIFE UPDATE (MLU)

PROGRAM

a more capable F-16 replacement aircraft was

available (2010 timeframe). Thus, in 1989, the

EPG and U.S. decided to initiate development

of the MLU avionics upgrade.1

 This successful

transatlantic cooperative effort is noteworthy

as a result of the combination of a versatile

MOU and flexible, committed partners.

The F-16 MLU program is an avionics and

cockpit upgrade that brings the earlier model

F-16A (single seat) and F-16B (two seat)

fighter aircraft up to the current F-16C (single

seat) and F-16D (two seat) “Block 50” standard

and greatly improves interoperability with

newer generation F-16s.2

Background

When the F-16 multi-role fighter was first

deployed among the original F-16 partners (the

European Participating Governments (EPG) of

Belgium, Denmark, The Netherlands and Norway, and the U.S.) in 1979, a replacement aircraft was envisioned around 2000. The partners

considered various replacement alternatives in

the mid 1980s. The EPG evaluated near-term

alternative fighter aircraft such as the French

Rafale and new F-16 variants. The high replacement cost of these aircraft compared to the

marginal effectiveness improvement led to

serious consideration of an upgrade option until

A MLU-equipped F-16/B Multi-Role Fighter
4-30

Program objectives are outlined in the multinational MLU agreement appended to the original 1975 F-16 Multi-national Fighter Program (MNFP) MOU: “The objective of the

F-16 MLU Program (also referred to within

this document as the “Program”) is to increase

the defense capability and to maintain the

capabilities of the Parties’ air forces well into

the 21st century. The Program will be a multiphased activity to design, develop and procure

the F-16 MLU kit. Throughout the Program,

the Parties will seek an optimum mix of defensive effectiveness, technical, cost, schedule, and

commonality in avionics factors.”3

Harmonization

Early MLU development was initiated in

March 1989 with approval of Steering

Committee Arrangement (SCA) #44 to the

Basic F-16 MOU entitled “Agreement for

Predevelopment Phase of F-16 Derivative

Program.” This “Predevelopment Phase” was

a two-year study to explore the “feasibility of

upgrades to the F-16 aircraft (production and

retrofit) which will consider avionics, propulsion and aerodynamic improvements.”4

 This

phase covered preliminary design effort, evaluation of industrial teaming arrangements for the

various countries, evaluation of potential sales,

and release and exchange of technical data. The

total cost of this phase was limited to $12.5

million (U.S.), with costs split proportionally

based on the anticipated number of modified

F-16A/Bs (less forecast loss of aircraft). Based

on this formula the U.S. share amounted to over

60 percent. Cost sharing for subsequent program phases was determined on a similar prorata basis.

Full Scale Development (FSD) began in May

1991 with SCA #45 to the MOU entitled

“Multi-national Agreement for the F-16 MNFP

Mid-Life Update Program.” Activities covered

under FSD included design, development,

manufacture of prototypes, and test and evaluation to establish the detailed final design of

the MLU kit. The phase also included “post

design service” and integrated logistic support

planning.5

 An FSD contract was awarded in

June 1991 to General Dynamics, now Lockheed

Martin Aeronautical Company (LMAC), Fort

Worth, Texas, the F-16 prime contractor. Development of the MLU kit continued until 1997.6

During initial production planning, the U.S.

requirement was 130 full MLU kits for its fleet

of F-16A/Bs. This number was reduced because

of the end of the Cold War and the “BottomUp Review” (BUR) force structure report,

where the USAF decided to retire its F-16A/B

fleet early. The U.S. maintained its full role in

the MLU development phase and redefined its

production participation as 223 newer F-16C/

D Block 50 aircraft which the MLU-common

components, including the new Modular

Mission Computer, were based on. The events

and difficulties leading up to this redefinition

are significant and underscore the value of

creativity and commitment.7

One must remember that the Cold War ended

in 1990 and all U.S. Services were reeling from

new force structure decisions and the realities

of a new domestic budget strategy created by

this change. In 1992, based on the first BUR

Report, a recommendation was made to move

all F-16A/Bs to the Air National Guard (ANG)

and populate the Active Duty and Air Reserve

Components (ARC) with as many F-16 C/D

aircraft as possible. Not knowing what the final

numbers and costs were going to be, and

considering the new policy restricting aircraft

modification within five years of retirement,

the USAF was forced to reassess its participation. The U.S. announced to the EPG in

June 1992 plans to participate in the MLU

development phase but not production.8
4-31

This decision was politically unpalatable to

each of the European partners who wished to

remain common with the U.S. F-16 fleet. In

September 1992, U.S. MLU representatives

briefed then Secretary of Defense, Richard

Cheney, on the USAF’s plan to divest from the

MLU production program. Secretary Cheney

requested the team search for alternative

solutions. Four weeks later the System Program

Director (SPD)-led team briefed the Secretary

again, presenting the solution that coupled the

MLU kits to the 223 Block 50D avionics upgrades. This briefing was followed with briefings to congressional staffers, EPG Chiefs of

Staff, two NATO Ministers of Defense, and the

U.S. Ambassador to NATO. Each of these

briefings was met with acceptance that enabled

the partnership to continue.9

The MLU retrofit kit included advanced cockpit features such as up-front controls, color

multifunction displays, a wide-angle head-up

display with forward-looking infrared video

capability, night vision goggle compatibility,

and a countermeasures management system.

Additionally, the kit enhanced the F-16A/B’s

avionics suite. New MLU components included

a next-generation Modular Mission Computer,

the APG-66(V)2 multi-mode radar upgrade, an

advanced Identification-Friend-or-Foe interrogator/transponder, a GPS, a ring laser gyro

inertial navigation system, a digital terrain system, and a data link. The MLU kit also added

new weapon capabilities, including provisions

for the Advanced Medium Range Air-to-Air

Missile, laser-guided bombs, and high offboresight short-range air-to-air missiles. There

were provisions that allowed for a later addition

of a helmet-mounted cueing system and a

reconnaissance pod system.10 Kit features

created a substantially more effective and

interoperable F-16 fleet. MLU standardization

and common training was clearly valuable. For

example, a Belgian F-16 pilot could quickly

and easily operate a Dutch F-16 if necessary.11

SCA #45 also defined the production phase of

program, including a 1993 amendment to

accommodate the U.S.-requested production

redefinition. A production contract was awarded to LMAC in August 1993. Approximately

363 MLU kits have been firm-ordered to date

(110 for Belgium, 136 for The Netherlands, 61

for Denmark, and 56 for Norway).12 Recently,

Portugal initiated discussions to become the

sixth full MNFP partner in accordance with

flexible provisions in the original MOU allowing expanded NATO member participation.

Portugal recently signed a Letter of Offer and

Acceptance for 20 MLU kits along with 25 used

USAF F-16A/B aircraft. Additionally, several

other F-16A/B users are also considering the

MLU modification.13 As a side note, Taiwan is

buying 150 F-16A/B Block 20 aircraft (a new

F-16 with an MLU-based production kit

installed at the factory).14 MLU kit deliveries

began in October 1996 and based on current

orders are expected to continue through at least

2003.15 The F-16 MLU Cockpit
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Initial operational capability was declared with

the modified aircraft in 1998. The first MLU

F-16s began flying peacekeeping missions over

Bosnia in January 1999, and the MLU kit

capabilities enabled the EPG F-16s to achieve

vastly greater interoperability with newer

USAF F-16s.16 The kit production program

continues essentially on track, meeting targets

for product performance, cost, schedule, and

quality. 296 MLU kits have been delivered and

aircraft are being modified on schedule with

approximately 140 completed to date.17

Industrial Teaming

The MLU program has involved extensive

coproduction among aerospace and electronics

industries in the four EPG countries and the

U.S. LMAC, as the MLU prime contractor,

coordinates activities of the participating

European industries. The MLU agreement

stipulated that “Industries of the Parties shall

have the opportunity to compete for development and production work under this program.”18 The agreement also provided that any

commitment for European industrial participation associated with MLU will result from

separate agreements between U.S. industry and

the EPG. U.S. Government policy would not

allow the government to be a partner to these

industrial agreements, a major departure from

the complex and management-intensive offset

arrangements of the earlier F-16 coproduction

program. LMAC was therefore charged with

the difficult task of working out an agreeable

competitive industrial participation program,

without the involvement of the U.S. government, which they eventually did. Completed

individual components for the MLU kits are

shipped from the various industrial partners to

the Société Anonyme Belge de Constructions

Aéronautiques (SABCA) F-16 production

facility in Belgium. At SABCA the components

are merged into full MLU kits and shipped for

installation at aircraft modification depots in

each country.19

Management Structure

The MLU participants are also parties to the

original Secretary of Defense-level 1975 F-16

MNFP MOU under which the MLU program

is governed. The MNFP Steering Committee,

a multi-national body created to assist the U.S.

F-16 SPD in managing the EPG/U.S. F-16

programs, also oversees the MLU program. The

Steering Committee chair is the U.S. Principal

Deputy Assistant Secretary of the Air Force for

Acquisition, a Lieutenant General. Major

General-level national prime members and

designated alternates represent each of the five

countries. The Steering Committee chair, while

a U.S. officer, in practice must act as an international neutral, letting national prime members work out differences, and arbitrating issues

in a fair and impartial matter.20

To maintain continuity and provide administrative support, the Steering Committee maintains a Permanent Secretariat office in Brussels,

Belgium. Assigned there are the Secretary General (normally a Belgian Air Force Colonel),

the Permanent Secretariat (normally a Royal

Netherlands Air Force Major), and a clerical

staff.21

Three functional subcommittees support the

Steering Committee. These are the Operational

& Logistics (OSC/LSC) Subcommittee, the

Contractual & Financial (C&F) Subcommittee,

and the Subcommittee on Industrial Matters

(SCIM). Subcommittees are chaired by Colonellevel officers or civilian equivalents and assisted

by Colonel-level national primes. Leadership

of subcommittees and the Secretary General functions are equitably divided among participating

governments.22
4-33

Steering Committee and supporting subcommittee meetings are held at least semi-annually,

rotating locations between the U.S. and an EPG

country, but can be held more frequently to

cover special topics. These meetings cover F16 sustainment, software updates, and MLU

concerns, but since the start of the MLU program, MLU concerns have dominated the

agenda. The sometimes unglamorous “roll-upthe-sleeves”-level effort performed by the subcommittees has been highly valuable in resolving issues on the program. Discussions are

frank and open, and often contractor participation is invited. There is a strong drive toward

harmonization, consensus, and resolution at the

subcommittee level. Individual subcommittees

report on progress and issues at each Steering

Committee meeting. Those relatively few issues unable to be resolved in the subcommittees

are referred to the Steering Committee with

options and recommendations.23

Throughout its 25 years of existence, the subcommittee structure has been able to resist the

inevitable bureaucratic inertia and has proved

fairly flexible. As the F-16 program has matured, the focus today has shifted from design

and production to sustainment and selected

upgrades. Accordingly, the SCIM, an extremely

active body during the program’s early and

middle years, is now dormant.24

With the emphasis on sustainment and Integrated Weapon System Management (IWSM),

the separate OSC/LSC were successfully

merged into a single entity, reflecting the close

link between operational requirements and

supportability. This merged subcommittee has

had the difficult job of maximizing harmonization of disparate requirements and schedules

to lower overall cost. In the case of MLU,

perfect consensus was not always required. The

program was structured to accommodate some

kit differences for each customer, such as

options for electronic warfare and weapons

provisions. The MOU allows for flexible cost

sharing arrangements between participants and

also has provisions for those participants with

unique requirements. The U.S. prime operational representative to this key Subcommittee

has been for many years the Chief of Fighter

Requirements at the USAF Air Combat Command. This has been a major plus in providing

needed support through the dynamic U.S.

requirements and budget process and aiding

other national primes with operational background on that committee. The existence of

color cockpit displays in the MLU kit can be

credited largely to the persistence of an influential Dutch pilot representative on this subcommittee, who questioned the display’s prohibitively high development cost and worked

with LMAC to research affordable alternatives.

The USAF is now retrofitting its newest F-16s

with this MLU-developed display, enhancing

pilot situational awareness and improving

avionics utility.25

The C&F Subcommittee also benefited from

well placed and dedicated staffing. This subcommittee faced numerous difficulties with

national budget processes working at differing

cycles, and an acute, ongoing interest from the

various national audit bodies. Committee members devoted substantial time to answering inquiries from and briefing multiple international

audit and inspection agencies. Part of the effort

was spent in educating auditors on national

laws and policies, vital in maintaining collective governmental confidence in this multibillion dollar program. Despite this level of

attention, problems arose on occasion. For example, European auditors had different interpretations of U.S. legal requirements for protection of certain financial information LMAC

considered proprietary. Often there were

practical workarounds to audit issues. The U.S.

GAO performed an unusual role in providing
4-34

oversight for European audit bodies on those

areas involving U.S. proprietary information.

The C&F subcommittee was also instrumental

in developing MOU provisions such as a flexible currency management program, which

eased financial management burdens and simplified accounting on the program. In addition,

this subcommittee performs national staffing

of significant changes to MOU agreements.26

Overall F-16 and MLU program management

responsibility is assigned to the U.S. Colonellevel SPD at the F-16 System Program Office

(SPO) located at Wright-Patterson Air Force

Base, Ohio. An MLU PM, a U.S. Lieutenant

Colonel, assists the SPD. SNRs and small

national staffs are assigned to the F-16 SPO to

participate in regular IPT meetings, facilitate

day-to-day management, and foster open

communication.27

Even before IPTs and IWSM were management standards within the USAF, the tight

schedule and heavy pressure for success drove

the MLU program team to quickly harmonize

differing positions. SOWs were jointly drafted

in multiple working meetings with LMAC and

EPG customers at the table. SPO project managers pushed to resolve differences and keep

constant open communication with numerous

formal and informal meetings with EPG SPO

representatives and joint teleconferences with

LMAC. Full program reviews were held three

to four times a year with all participants.28

Technology Transfer

While there is significant U.S. industrial participation, LMAC relies on avionics components

furnished or coproduced by a host of suppliers

in each of the EPG nations to supply the estimated 60,000 parts in each MLU kit. The knowledge exchange from involvement in design,

manufacture, installation, test, and support of

this complex avionics upgrade is significant,

both at industrial and government level.29

LMAC conducted an exhaustive competitive

evaluation, selection, and qualification of numerous suppliers from each country. These

MLU kit parts are shipped to and accumulated

at SABCA in Belgium, where they are reassembled into 4x4x8 foot crates for further shipment

to Air Force depots in each country for installation.30 For the initial MLU “Trial Verification

Installation” (TVI), each Air Force sent one F16 to LMAC’s Fort Worth, Texas facility. Depot

technicians from each country participated in

initial training, installation and test of the five

TVI kits. Aircraft panels and avionics were

removed, miles of wiring and hundreds of harnesses installed, and new avionics and radar

components installed.31

Following TVI emphasis then shifted to further

training and preparation for the first “Lead the

Fleet” (LTF) in-country installations at the

overseas Air Force depots. Beyond kit installation, each country actively participated in

developmental testing at Edwards AFB, California, and operational test and evaluation,

at Leeuwarden Air Base, The Netherlands.32

Country participants also aided in the generation and test of various aircraft software

upgrades required for MLU.

Business Management

The MLU program developed a number of

unique business management practices. For

example, the C&F subcommittee developed a

relatively simple but concise “Groundrules for

Financial Procedures” agreement. This steering

committee arrangement outlined specific responsibilities and procedures for currency management, including establishment of fixed exchange rates, mitigation of currency exchange

risk, and provisions for sharing associated
4-35

management costs. The C&F subcommittee

also helped educate and encourage adoption of

various aspects of acquisition streamlining and

reform. Briefings and discussions were conducted to inform and win support for use of

award fee incentives, a contractual tool not

normally seen in European contracting.33

Contractual processes were cleverly combined

and synchronized. In October 1989, the MLU

EMD contract was known to be on the horizon.

However, FMS contracting actions could not

proceed until a Letter of Acceptance (LOA) was

signed by all EPGs. This presented a unique

problem in that each country had its own budget

cycle and none of them matched. However,

members of the C&F subcommittee developed

a schedule that attempted to meet the intent of

the parties. The juggling act centered on ensuring that kit availability would match known

kit installation schedules at the various aircraft

depots. This created a tight fit for some of the

countries due to aircraft airframe hours and

other competing depot needs. To meet the schedule required a new contracting philosophy to

ensure EMD schedules would produce appropriate training, supply and kit components for

development kit installations.34

A plan was worked out with LMAC, MLU

program management, and the contract pricing

and review communities to initiate as much upfront work where possible to get ahead of the

game. Additionally, the development effort for

the kits, support equipment, training, technical

orders, and developmental supplies were all

contracted for by one contracting entity in a

single negotiation, versus three entities and

separate contracting actions.35

Human Dimension

The MLU program is indeed one of only a

handful of transatlantic armaments cooperation

efforts widely regarded as a success. We asked

current and former program officials about

major contributors to the program’s success.

Maximum interoperability among NATO participants was cited as the primary driver behind

the MLU program. A second significant driver

was affordability. Each nation could not afford

to take on the program on its own. National

costs on the program could therefore be effectively limited through a set cost sharing principle, even though total program costs were

higher. Each nation was in practice regarded

as an equal partner, even though national cost

shares were based on differing numbers of

MLU kits. A third factor for cooperation was a

solid, well thought out MOU.36

The basic 1975 F-16 MOU structure had served

the MLU program well and remained largely

intact except for a few relatively minor changes.

Logical hierarchies of amendments to the F16 MOU were developed facilitating flexibility

and easing MOU staffing burdens, and this

flexibility was exploited on the MLU program.

Significant modifications to the MOU were

captured in a numbered series of documents

known as Technical Agreements. Less significant revisions were captured in numbered

Steering Committee Arrangements, and minor

procedural and administrative revisions were

included in a series of Steering Committee Decisions. The MLU agreements allowed use of the

existing F-16 System Program Office management and facilities, avoiding duplication.37

Also highlighted as significant to program

success were the strong personal relationships

and deep trust developed over the many years

of the F-16 and MLU programs. The MOU

was a high level agreement between governments and not just Air Forces. This level of

agreement added stability and commitment to

working issues on the program. The MOU

envisioned flexibility toward future expansion
4-36

and specifically allowed the accession of

additional NATO members, with Portugal to

be added under the terms of this original

provision.38

The subcommittees have been largely instrumental in program success, often helping define

the way forward. As replacement of the F-16

is not being considered until the 2010-2015

timeframe, the OSC/LSC subcommittee has

developed a roadmap of operational requirements five to eight years out, specifically looking to harmonize future upgrades and supportability requirements. This forward look

helps greatly in the national budgeting process.

Many of the experienced F-16 operators sitting

on the OSC/LSC subcommittee help develop

and influence their national budgets, and this

underscores the immense value of having the

right people who are empowered to make

decisions working on the team.39

Maintaining cost targets was important in

maintaining program commitment. Overall, the

F-16 and MLU programs did very well in this

area, again building trust. Like many cooperative programs, quantitative savings resulting

from the MLU program have proven difficult

to capture, but several subjective factors indicate MLU has been a substantially cost-effective venture. In the case of the Belgian Air

Force, earlier F-104 and Mirage aircraft lasted

approximately 15 to 18 years, with their operational quality steadily declining versus the

threat. The F-16 MLU kit brings operational

capability of older F-16s up to the latest F-16

standards at a fraction of the $20-30 million

cost of a comparable replacement aircraft,

enabling a forecast aircraft life of 35-40 years.

In essence, MLU has enabled European partners the option to skip a much more expensive

aircraft replacement cycle and the associated

support cost “tail.”40

Overall, the program has been relatively issuefree. The program did encounter a few disclosure-related issues in the areas of weapons

integration and software but these were successfully resolved over the course of several

meeting cycles. There was some early frustration with LMAC’s European work share

proposals and the U.S. government nonparticipation in offset arrangements, but these concerns were eventually mitigated and resolved

and did not disrupt the program.41

Notes

The F-16 MLU program has made a strong

contribution to increasing the capability of all

the participants’ Air Forces and thereby bolstering NATO power, a prime program goal.

The forward-looking, flexible MOU provisions

and adaptive management structure set the

stage for the program. A huge benefit to the

MLU program was the transfer of many years

of an existing culture of trust, equity, and

partnership developed on the F-16 program.

Capable, committed team members at all levels

have enabled the program to work through

difficulties and maintain challenging cost and

schedule goals. These factors make the MLU

program a valuable example of successful

transatlantic cooperation.
4-37

FUTURE TANK MAIN ARMAMENT

(FTMA) PROGRAM

maximum component length, etc.2 In 1990 the

U.S., U.K., France, and Germany all signed an

MOU to officially begin the FTMA cooperative

program. A common threat picture, which each

national system must be able to defeat, was

jointly defined by the SNR(A) group.3

The EMC meets at least semi-annually to determine future national work efforts based on military priorities, technological capabilities, national desires, funding availability, value of

work packages, and cost equitability. Each

nation then contracts and executes its assigned

work packages individually, with the work to

be conducted cooperatively, and the technical

data and results shared equally.4

Industrial Teaming

At the request of the FTMA governments, an

industrial consortium was formed to support

the FTMA program in 1993. Each nation

designated a national contractor that was

primarily responsible for executing its assigned

work. The companies in the consortium are

General Dynamics (U.S.), Royal Ordnance

(U.K.), Rheinmetal (Germany), and GIAT

(France). These companies have developed an

industrial Cooperation Agreement to effectively

coordinate the execution of the national work

efforts determined by the EMC. The agreement

facilitates the sharing of technical information

within the consortium consistent with the

agreement in the government MOU. In addition

to the direct work they are contracted to

perform, the industrial partners benefit by

exposure to the technological developments of

the partners and potential access to each other’s

markets.5

Background

The FTMA effort was started in 1988 before

the end of the Cold War. It was an effort to

harmonize the tank main armament systems

(tank main guns, breeches, recoil systems, and

related components) among the largest NATO

defense nations, the U.S., U.K., France, and

Germany. The ultimate objectives of the program were the codevelopment and production

of a common FTMA system that was capable

of overmatching the projected threat for the

year 2000 and beyond.

Phase I, the demonstration phase, entailed work

completed individually by each participant to

demonstrate a tank armaments system that

complied with the parameters (140mm, etc.)

of a 1988 Harmonization Agreement. By the

time the initial Phase I study was successfully

completed by each nation, the end of the Cold

War had eliminated the urgency of developing

a 140mm tank weapon system. Instead, in

1995, the partners agreed to extend the Phase I

effort within the scope of the existing MOU—

essentially, continuing as a cooperative R&D

project. The future effort would focus on caliber

neutral activities and would be mutually beneficial to future tank armament developments

of all the partners.1

Harmonization

An FTMA Harmonization Agreement was

signed by the Senior National Representatives,

Army, (SNR(A)s) of the U.S., U.K., France,

and Germany in 1988. This agreement included

a list of harmonized parameters for the FTMA

such as caliber (140mm), gun design pressure,
4-38

Management Structure

The FTMA management structure consists of

a JSC which is formed by the SNR(A) from

each of the participants and the EMC, which is

composed of the national project managers (O6 level) from each participant, as discussed in

Chapter 2. The JSC provides direction on program execution to the EMC and resolves all

issues referred to it from the EMC. A Military

Working Group with O-6 level representatives

from each nation provides the military priorities

for work efforts to the EMC. In addition, the

EMC has created a Legal Working Group to

advise them on legal issues, and a Technical

Working Group to execute their technical

programs.6

Technology Transfer

The Phase I national level system demonstrations used several different technical solutions and generated significant technological

data exchange. Demonstration of several

different technical solutions reduced the overall

program risk for Phase II, the development

phase.7 At the end of Phase I, even absent continuation to Phase II, at a minimum there would

be a basis for each nation to produce 140mm

interoperable and interchangeable tank cannon

and ammunition in the future.

The MOU required sharing of technical performance data among the participants throughout Phase I. The data sharing requirements

included the “capability in terms of lethality,

rate of fire, probability of hit, reliability, and

safety information”8

 as well as other basic

design information. However, the partners were

not required to share detail designs and manufacturing know-how, except through licensing

agreements. Each participant agreed to provide

the other participants, under fair and reasonable

licensing terms, with any technical information

that was generated as a result of the Phase I

work. However, the participants were not

required to provide this data until Phase II.

Business Management

Each nation’s initial work packages for Phase

I were determined by its technological capabilities and funding availability. U.S. Phase I

efforts were funded by cooperative R&D Nunn

funds. Although the Phase I work packages for

each nation were substantially different, they

were deemed to be equitable. The MOU required equitable financial contributions from

all the partners. These types of arrangements

have continued throughout the program with

each nation contracting for and funding its own

efforts. Therefore, work share equal to cost

share concerns are automatically handled by

the arrangement on national work packages.

Currency exchange rates and economic conditions are also factors that are automatically

handled by the national work packages.9

Human Dimension

For over a decade, the FTMA leadership from

all participants has demonstrated flexibility and

a willingness to continue to work together

despite many changes in the program. The participants reach agreement every year on new

work packages and openly share the data to

the extent called for in the MOU.

Notes

Although the FTMA program has not produced

a common tank main armament as originally

planned, by continuing the program as a cooperative R&D effort there has been significant

technology sharing among the participants. The

governments and industries have all gained

technological information in gun tube wear

reduction coatings, high pressure recoil seal
4-39

design, and lightweight composite gun barrels.

The partners have agreed to continue their

cooperative research in advanced tube wear

reduction coatings, new sabot design and materials, and advanced propellant charge systems.

The FTMA program has essentially four structural pillars for planning, managing, executing,

and coordinating the cooperative R&D activities: 1) JSC (SNR(A)s) to provide top level

direction/ dispute resolution; 2) Military Working Group (O-6 level) to set military priorities;

3) EMC (National PMs) to determine technical

work packages; and 4) Industrial consortium

to execute R&D work, and provide technical

data. It also provides a forum for exploration

of future cooperation, such as development of

electro-thermal and/or electro-magnetic based

armament systems among NATO’s largest

members.

The FTMA program with its four structural

pillars perhaps provides a model that could

effectively be used to manage and execute other

multinational R&D efforts. Although when

judged against its original lofty objectives, this

program has languished because of both a lack

of urgent need based on the current armored

threat and defense budget constraints, it nonetheless provides a good example of how to conduct cooperative R&D activities. With the likelihood that defense budgets will remain severely constrained, the U.S. and its partners

must find ways to get the most return on their

R&D investments. Effective cooperative R&D

programs, like the FTMA program, are one of

the bedrocks of armaments cooperation. Sharing technical data and developing common

technologies are likely to lead to formulation

of common military requirements, which are

the foundation of all codevelopment/coproduction programs.
4-40

JOINT STRIKE FIGHTER (JSF)

PROGRAM

be delivered from around 2008 through the

2020s.1 The JSF Concept Exploration program

emerged in 1994 from the merger of the earlier

Joint Advanced Strike Technology (JAST) and

Advanced Short Take-Off Vertical Landing

(ASTOVL) technology demonstration programs.2

 The JSF program is currently in the

Program Definition and Risk Reduction

(PDRR) phase. Concept Demonstration contracts were competitively awarded in November

1996 to two teams, Boeing, and Lockheed

Martin Aeronautics Company (LMAC), with

Pratt and Whitney providing propulsion hardware and engineering support for both teams.

These teams are developing competing aircraft designs and first flights are expected

in 2000. Selection of the winning team and

Background

The JSF program, although relatively new in

its program life cycle, is an unusual and interesting example and may be indicative of the

direction future transatlantic cooperative programs are headed. The program will develop

and field a highly common family of next generation, multi-role strike fighter aircraft for the

Navy, Air Force, Marine Corps, the U.K.’s

Royal Navy and Royal Air Force, and a growing

number of allies. Foreign interest in the program is high and this participation is expected

to increase.

The JSF is currently the world’s largest tactical

fighter program, with over 2,800 aircraft to

Artist’s Rendition of Boeing’s Navy Version of the Joint Strike Fighter
4-41

initiation of the EMD phase is expected in

2001.3

The original program partners have refined

their requirements for their JSF family variants.

The U.S. Navy requires a multi-role stealthy

strike fighter to complement the F/A-18E/F.

The U.S. Air Force will use JSF as a multi-role

(primary-air-to-ground) fighter to replace the

F-16 and A-10 and complement the F-22

fighter. The U.S. Marine Corps will employ JSF

to fulfil the need for a multi-role, short takeoff vertical landing (STOVL) strike fighter to

replace the AV-8B and F/A-18A/C/D. The

Royal Navy and Royal Air Force require supersonic STOVL aircraft to replace the Sea Harrier

and GR-7 respectively. The growing list of

allies is in the process of defining similar

requirements.4

The current PDRR phase focuses on three

distinct objectives as a sound basis for transition

to EMD in 2001. The first objective is facilitation of the development of fully validated,

affordable operational requirements. A second

objective is lowering risk by investing in and

demonstrating key leveraging technologies that

lower the cost of development, production and

ownership. Finally, PDRR will demonstrate

operational concepts.5

A significant and visible part of the current

phase is the Concept Demonstration Program.

This multi-year $2.2 billion JSF effort commenced in November 1996 with competitive

contract awards to Boeing and LMAC. These

competing contractors are building concept

demonstrator aircraft for flight demonstrations

in 2000, conducting relevant ground demonstrations unique to their designs, and developing and refining appropriate weapon system

concepts for proposal in the next phase. The

aircraft demonstrated in this phase will not be

production representative aircraft and will have

minimal avionics and other mission systems.

The program office will use limited but fundamental demonstration requirements to assess

the contractors’ proposed concepts. The demonstration aircraft will be evaluated on their

commonality and modularity, STOVL hover

and transition capabilities, and low speed

handling qualities.6

These flight demonstration results, along with

the proposed weapon system designs and

related technology maturation work will be

considered in selecting the winning contractor

for EMD and production. The JSF Alternate

Engine Program, working with General Electric

Aircraft Engines, is continuing the development of an alternate engine for production.7

Harmonization

The JSF Program has attracted substantial

foreign interest. Several agreements have been

signed for the current phase of the program with

more expected. The JSF program has developed

a unique structure for international participation

in the Concept Development Phase, with requirements influence tailored to the level of participation. This structure includes four levels

of participant involvement, governed through

a negotiated Memorandum of Agreement

(MOA)/MOU.8

The highest level of participation is known as

“Collaborative Development Partnership.” This

level of participation affords a significant ability

to influence requirements. The U.K. is a full

collaborative development partner for the

current Concept Demonstration Phase.

The second level of participation is the “Associate/Limited Partnership.” This level provides

for participation in specific technologies or the

core program but with a more limited ability

to influence requirements. Further, associate/
4-42

limited partners are provided access to JSF

project information needed to better understand

and evaluate how they might best use their JSF

aircraft. Denmark, Norway, and The Netherlands have entered the program as associate

partners.

The next level, the “Informed Partner,” is also

allowed access to JSF project information to

assess the utility of the JSF for their application.

However, these participants are unable to

influence requirements. Canada and Italy have

entered the program as informed partners.

The final level, the “Major Participant,” participates as a FMS customer and is provided

program insight through JSF studies, technical

assistance and access to predetermined data.

There is no ability to influence requirements

at this level. Singapore, Turkey, and Israel have

signed on as major participants. Further

participation is expected in the EMD phase.

The Services, with selective input from higher

level partners, are using an iterative process to

define requirements, seeking to balance system

capability with life cycle cost (LCC). Industry

teams receive each iteration of requirements,

evolve their designs, and in turn provide updated cost data to the warfighters. Costs and

appropriate trades are then decided for the next

iteration. This process produced the Joint

Interim Requirements Document (JIRD) in

1995, 1997, and 1998. Continued refinements

using this process led to approval in March

2000 of the Joint Operational Requirements

Document (JORD) to support the decision to

enter EMD. In parallel, the industry teams

continue to evolve and update the configuration

of their respective weapon system concepts for

submittal with their EMD proposals.9

The JSF Program is significant in its approach

to accommodating “jointness,” international

requirements, and maximizing commonality.

The program has developed a novel “family of

aircraft” concept toward affordably meeting the

warfighters’ tactical aviation mission needs.10

Three different designs are in work, each with

high cost commonality. The three designs will

use common high-cost components such as

avionics, engines and significant structural

components.11 Notably, past attempts at similar

joint aircraft programs such as the 1960s-era

F-111 development effort, were largely unsuccessful in adapting a single design to meet

differing user requirements.12 The Services,

with selective input from the partners, continue

to work together to develop joint and common

requirements.13

The contractor teams are using trade studies

extensively to determine an appropriate level

of commonality. Where logical, some commonality is sacrificed to meet unique Service needs

such as vertical take-off. The three highly common JSF variants will be assembled using

flexible manufacturing technology on the same

production line. This flexible manufacturing

approach combined with common components

will allow significant economies of scale and

associated cost benefits.14

Estimated cost commonality for the three designs is in the range of 70-90 percent with an

emphasis on commonality in the higher-priced

components. Besides manufacturing cost reductions, other savings accrue through increased

commonality. Common depot maintenance, common logistic support, as well as increased Service and coalition interoperability all lower operating cost. The JSF program office estimates

development savings from the family of aircraft

approach at nearly 40 percent compared to three

stand-alone programs. Further, this approach

is expected to generate significant total LCC

savings compared to historical programs.15
4-43

Industrial Teaming

Two contractor teams led by Boeing and

LMAC are competing in the current Concept

Demonstration Phase, down-selected in 1996

from three teams in the earlier Concept Development Phase.16 For production, Boeing’s JSF,

the X-32, would be assembled at facilities in

St Louis, MO. LMAC’s JSF, the X-35, would

be fabricated at the Fort Worth, TX plant.17

Primary propulsion for all three variants will

be provided by a derivative of the F-22’s F119 engine developed by Pratt and Whitney.

General Electric Aircraft Engines, under the

JSF Alternate Engine Program, is continuing

the development of an alternate engine for

production, based on the F-120 engine design.18

Opportunities exist for significant foreign

industry participation at the subcontractor and

vendor level. In a departure from traditional

combat aircraft development programs, the JSF

program does not require a second, U.S.-based

source for foreign supplied components. Use

of open systems architecture will make integration of foreign supplied avionics far easier.

While there is markedly increased opportunity

for foreign participation, ground rules for

selection will be significantly different from

past programs. Foreign suppliers will have to

compete based on price and quality factors;

selection will not be based on the past practice

of specified work share targets. Further, industries will have to become more tightly integrated with the U.S. primes’ team than previous

programs.19

Foreign industry is already actively involved.

For example, several U.K. contractors are major

players. On both teams, Rolls-Royce is contributing its significant expertise with vertical

lift propulsion technologies. BAE SYSTEMS

is a major partner on the Lockheed Martin

team.20 Dutch industry is pressing hard for a

share of the EMD phase. A group of companies

under the Dutch Stork Aerospace Group (SAG)

are involved with current technology demonstrator contracts for both Boeing and LMAC.

For example, A SAG company, Fokker Elmo,

supplied all wiring for Boeing’s X-32 demonstrator aircraft.21

Management Structure

The JSF Program is an ACAT ID joint program,22 staffed by Air Force, Navy, Marine

Corps, and international personnel. A dedicated

IPO is co-located within the JSF program office

and reports to the JSF program director.

National deputies from each partner country

reside within the IPO. There is no designated

lead service on the JSF program. The program

director position, currently a Marine Corps

Major General, alternates between the Departments of Navy and Air Force, and reports to

the Service Acquisition Executive (SAE) of the

other Service. The deputy program director

position is currently an Air Force Brigadier

General.23

The program office relies heavily on IPTs and

is organized by teams to handle the numerous

facets of the program. The program director,

deputy program director, and their staffs reside

in the JSF Program Directorate and oversee a

number of subordinate directorates. These include the two Concept Demonstration Teams

as well as functional areas such as Systems Engineering, Business and Financial Management,

Requirements, Contracts, Plans and Programs,

Security, Propulsion Systems, Autonomic

Logistics, JAST, and EMD Planning.24

Technology Transfer

The opportunity for meaningful technology has

been a driver for significant international interest. Technology transfer occurs at a number
4-44

of levels and is tailored to the needs of the participant. All international participants are provided access to JSF program information to

assist in assessing their national requirements

for a strike fighter. This can include use of

modeling and simulation (M&S) tools to facilitate their requirement validation. Participation

provides a channel for foreign industry to engage U.S. industry on possible future partnerships in future phases of JSF (e.g., EMD and

Production).25

Participants at the higher levels of involvement

are afforded the opportunity to participate in

and influence the final design.26 This has included both governmental and industrial involvement as in the case of the U.K. The Royal

Navy, Royal Air Force, and British industries

such as Rolls-Royce and BAE SYSTEMS have

provided substantial design expertise in the development of JSF vertical lift systems and other

aeronautical systems. Other European vendors

are also participating in the current phase, performing such tasks as developing aerostructure demonstration articles using alternate

manufacturing processes and materials.27

It appears widely recognized that the window

of opportunity for maximum technological participation will rapidly diminish as the JSF program progresses and the design stabilizes.

Accordingly, further interest is rapidly growing

for those participants wishing to gain a foothold

in this relatively early phase of the program.28

Business Management

A key JSF Program tenet is affordability—reducing the development, production, and ownership cost. The program incorporated acquisition streamlining principles from the beginning, and has emphasized jointness and tailored

international partnerships. Early on, attention

was focused on technology maturation, concept

demonstrations, and early use of cost-performance trades in evolving weapon system

requirements.29

This evolutionary JSF requirements definition

process, using CAIV guidelines, is markedly

different from earlier acquisition programs.

Technology maturation is an area of major

focus. The JSF program concentrated on lowering cost and risk by maturing and demonstrating key technologies early—before the

EMD phase. This atypical JSF strategy resulted

from recommendations of a variety of panels

on acquisition reform.30

Human Dimension

Individuals we spoke with in the U.K. were

quite supportive of the program overall, particularly at the vendor level.31 The feeling is

that getting even ten percent of a U.S. program

is big business and worthwhile for the U.K.32

U.K. Ministry of Defence officials were quite

positive about the program, and felt JSF was

not an “American airplane” and that the U.K.

was able to significantly influence requirements.33 Further, there was a good atmosphere

of trust and good flow of work, which should

carry forward to work future EMD challenges.34

Also cited as beneficial is the inclusion of a

nine-man U.K. team in the JSF Program Office.

These individuals have been there for some

time and provide the U.S. good access to U.K.

perspectives.35 However, there remain lingering

concerns over timely processing of TAAs, U.K.

industrial content, and costs of U.K. production

and support.36 Access to stealthy technologies

is viewed as “tricky, but workable,”37 while frustrations remain with U.S. export of technology

laws in the area of engine development.38
4-45

Notes

Joint and international interests are high and

the government and industry teams are highly

committed to making this unusual program

succeed. The JSF program uses a number of

new approaches in developing an affordable,

mission-effective tactical aircraft.

The JSF family of aircraft variants will be

highly common designs built on the same

production line with flexible manufacturing

technology. The acquisition strategy is also

new, with early and close involvement between

warfighter and developer and major emphasis

on risk reduction. Requirements are refined

through an iterative process, working a balance

of capability and affordability. International

partners, when they desire, are given significant

voice in defining their unique requirements and

have an attractive opportunity for technology

transfer and substantial industrial participation.

The program is maturing key technologies up

front to reduce both costs and risks. Demonstration flights in 2000 will provide valuable

data on basic aircraft performance, lowering

risk as the program transitions to EMD.

Artist’s Rendition of Lockheed Martin’s Air Force Version of the Joint Strike Fighter
4-46

SUMMARY

GMLRS, TGW, RAM Block I, and

ESSM. The management structure of

the existing program was instrumental

in harmonizing the system upgrades.

– Cooperation can be successfully achieved with many partners as in the

case of NSSMS, MLRS and MIDSLVT but due to the number of factors

involved in harmonization, it is easier

to achieve with fewer.

• Industrial Teaming

– Industry has great capacity to solve

problems and well thought out industrial arrangements can greatly enhance

government-to-government agreements. For example, in the RAM program, it was independent action on the

part of Raytheon and RAMSYS that

produced the CPA, thus overcoming the

impasse over a single production line.

In MIDS-LVT, the cooperative efforts

of industrial participants helped define

the early principles for management and

sharing of work that would be proposed

for subsequent program phases. In the

F-16 MLU program, the difficult issue

of program offset arrangements was left

completely to the industrial partners to

solve, a marked difference from the

tough government-to-government

brokering that occurred on the basic F16 program.

– As exemplified by industrial issues that

arose from the MIDS-LVT and TGW

joint ventures, the PM should carefully

These transatlantic cooperative programs

represent some of the most complex program

management challenges anywhere. They are representative of the wide variety of transatlantic

programs in general. While there is certainly

no one-size-fits-all cookbook approach to transatlantic cooperative program management, this

review reveals that while difficult, proper attention to a set of common characteristics makes

these programs manageable. Each has incorporated tailored structures and processes to accommodate the partner’s needs and expectations.

Lessons Learned

The review of selected transatlantic programs

reveals several lessons of interest to the PM.

These lessons learned are grouped below by

common characteristics.

• Harmonization

– In programs we reviewed, the original

harmonization of requirements did not

result from a single pattern, and did not

follow an orderly, systematic process.

For example, harmonization on the

NSSMS and MIDS-LVT programs was

fostered by NATO CNAD working

group discussions, whereas the MLRS

development was the result of OSD

direction to find cooperative partners.

Further, FTMA resulted from a strong

desire of the partners to collectively over

match the future Soviet armored threat

with a common tank armament.

However, within cooperative programs,

there is good likelihood of future cooperative upgrades, such as F-16 MLU,
4-47

consider proposed industrial structures

and contractual arrangements to ensure

compliance with legal and regulatory

requirements and responsiveness to the

program’s needs.

• Management Structure

– All programs employed an adaptive,

responsive management structure. Most

used a senior level steering committee,

supported by functional subcommittees

or working groups, to support the program office. Day-to-day program execution and resolution of most issues

were overseen by mid-level (0-6 level

or equivalent) managers.

– Equitability must be perceived within

the management structure by all the

participants. For each program, what is

perceived as equitable by the participants will be different, but it is the

perception of equitability that is essential. We found this in all cases reviewed.

– Programs successfully tailored their

organizations as the program matured.

For example, the MIDS-LVT program

restructured several times due to changes

in partner composition, physical location, and U.S. Service leadership. F-16

MLU contained provisions for future

addition of NATO members. Portugal

was easily added to the program using

this feature.

– Appendix I contains a “lessons learned”

perspective on early considerations in

developing an international program

office. Retired USAF Colonel Alan E.

Haberbusch, in his article, “Standing Up

or Joining an International Program

Office? Some Nitty Gritty Details You

Might Need to Know,” (reprinted from

DSMC’s January-February 2000 Program Manager magazine), outlines a

number of personal experiences as the

Modular Stand-Off Weapon Program

Director standing up a new international

organization.

• Technology Transfer

– Program MOUs addressed key technology transfer provisions in programs

we reviewed. In several cases, the cooperative efforts did not involve full sharing of U.S. technology, but these cases

were made clear in the development of

the program and the harmonization of

expectations of the partners. False

impressions were not created.

– Both quantity and quality of high technology work were always important

considerations for the participants.

• Business Management

– While the introduction of the euro has

simplified matters somewhat, procedures will nonetheless be needed to

handle the complexities of multiple

currencies and economic conditions.

– Currency fluctuation can be a significant issue. For instance, in the TGW

program, the currency exchange rate

was fixed at the beginning of the program when the dollar was strong. When

the dollar weakened significantly over

the eight-year effort, the other partners’

cost share contributions were still based

on the rate that favored the U.S., causing

distress among the other partners.
4-48

• Human Dimension

– Selection of leadership is vital. Leaders

that were willing to consider the ideas

of others, work through differences, and

effectively deal with program ambiguities led programs to success. Conversely, an autocratic, dictatorial style

is unlikely to succeed in an international

cooperative program environment.

– Great care should be exercised in building consensus for use of new acquisition

initiatives. For example, a rather sudden

implementation of U.S. acquisition

reform on the MIDS-LVT program

caused significant high level rancor

among some of the partners, and required additional effort to rebuild shaken confidence. Further, use of unfamiliar contracting approaches on the F-16

MLU program took considerable explanation to win the partners’ acceptance.

– Cultural and communications differences are significant even among Europeans, as exemplified by the widely

diverse NSSMS program. NSSMS leadership cultivates a culture of cooperation

and frequent social interaction. This

approach helps mitigate differences and

build team cohesion.
4-49

MULTIPLE LAUNCH

ROCKET SYSTEM

(MLRS) SYSTEM

MLRS

GUIDED MLRS

(GMLRS)

MLRS TERMINALLY

GUIDED WARHEAD

(TGW)

NATO SEASPARROW

SURFACE MISSILE

SYSTEM (NSSMS)

HARMONIZATION INDUSTRIAL

TEAMING

MANAGEMENT

STRUCTURE

TECHNOLOGY

TRANSFER

BUSINESS

MANAGEMENT

• Common requirement• US increased rocket

diameter to matchGerman requirements

• MOU standardized

hardware, exceptcommunicationequipment

• US and European

production lines

• US prime for development; US & Euro

prime for production

• Joint US/European

marketing organization

• Joint Steering

Committee

• Balanced representation• 0–6 level EMC chaired

by US ProjectManager

• Operational Users’

Representatives onEMC

• US controlled TDP• European engineering

support for development

• ITAR exemption to

facilitate export oftechnical data toEuropean partners forproduction

• US funded bulk of

development

• MOU corrected thi

imbalance throughrecoupment inproduction

• MOU allowed for f

NATO growth, withrecoupment

• US agreed to “add-on”

requirements toaccommodatepartners

• Existing MLRS

management structurefacilitated harmonization

• US prime• International

subcontracting on“best value” basis

• No firm MOU work

share = cost sharerequirements, butprogram goal

• Similar to MLRS• US & European

government coproduction managers(0–5 level)

• US export provisions

frustrating to partners,no ITAR exemption asin MLRS

• Production Data

Package fortechnology transfer toEuropeans

• Based on US curre

no fixed exchange 

• US funds 50%; oth

12.5% each

• Smart submunition

planned frombeginning of MLRS

• End of Cold War and

reduced funding led toUS pullout; othersfollowed

• JV Company w/

national representationfor development

• Difficulties in balancing

work shares based onquality of work

• Similar to MLRS • Advanced technologies shared

• Up front decisions on

technology transferminimize problems

• US funded 40%;

others 20% each

• Fixed currency

exchange rate atbeginning of progr

• Actual currency

fluctuations requireworkload adjustme

Figure 4-1. Comparison of Selected Transatlantic Programs

• Initially, common

requirement based onAIM-7 Sparrow

• Later, some partners

wanted upgradedcapabilities

• Complex integration,

multiple launchers,platforms, guidance

• US prime• International

subcontracting, primeresponsible for workshare targets

• Work share based on

cost share, +/–20%

• Program Steering

Committee

• Initially membership

and voting proportionalto cost share, laterchanged to equalbalance

• Guidelines on transfer/

export of items clearlyspecified in MOU

• Specific provisions for

US “Unique Items” andX-band technology

• Consistent currenc

management

• Annual financial

commitmentsdeposited in US $s trust account
4-50

HARMONIZATION INDUSTRIAL

TEAMING

MANAGEMENT

STRUCTURE

TECHNOLOGY

TRANSFER

BUSINESS

MANAGEMENT

Figure 4-1. Comparison of Selected Transatlantic Programs (continued)

ROLLING AIRFRAME

MISSILE (RAM)

MULTIFUNCTION

INFORMATION

DISTRIBUTION

SYSTEM-LOW

VOLUME TERMINAL

(MIDS-LVT)

F-16 MID-LIFE

UPDATE (MLU)

• Initially, common

requirement

• Upgrade requirement

diverged; however newtechnology able tosatisfy needs of bothparticipants

• US prime developer• Single integrated

missile line

• German consortium

acts as prime forGerman missile items

• JV for Launcher w/

same participants

• Program Steering

Committee

• Equal representation

and voting

• US-based project

office

• Clear MOU guidelines

for technology sharingand usage

• Some issues over third

party sales; US prefersFMS, Germany prefersDCS. Compromiseresolution; certaincustomers have choice

• German firms use

Firm Fixed Pricecontracts exclusiveUS allows some cplus contracts

• German funds don

pass through USaccounting systemdeposited in bankchartered in bothcountries; arrangement is faster

• Proposed as NATO

cooperative follow-onto earlier JTIDSprogram

• Significant effort to

accommodatenumerous platformvariances andoperational concepts

• JV Company w/

national representationfor development

• Unusual nature of JV

required letter of creditprovision to complywith FAR “responsiblecontractor” guidelines;workarounds for earlycost allowability

• International Steering

Committee

• Equal representation

and voting, unanimousdecisions

• US-based Internatinal

Program Office

• Two-way flow of limited

technology transfer

• Advancement seen in

both US and Europe

• TDP delivered to all

participants

• Complex financial

arrangementsoverseen by FinanManagement Boar

• Tailored network

handles financialtransactions

• Acquisition Reform

techniques usedextensively

• Common requirement

among original F-16partners

• US redefined

production participation based on end ofCold War and reducedaircraft requirement

• Provisions for

additional NATOmembers (Portugaladded)

• US prime contractor• Competitive

subcontracts toEuropean industry

• European JV to

manage Europeanindustry effort

• Installation at F-16

Depots in fourEuropean countries

• Steering Committee

with functionallyoriented subcommittees

• Equal representation

and voting

• US based System

Program Office withintegrated International ProgramsDirectorate

• Two-way flow of limited

technology transfer;component coproduction and kitinstallation by all

• Advancement seen in

both US and Europe

• Complex financial

procedures coveremultilateral agreem

• Highly streamlined

flexible contractingprocedures

• Acquisition strateg

accommodated socustomer kit varian

• No work share targ

subcontracts awaron best value
4-51

FUTURE TANK MAIN

ARMAMENT (FTMA)

JOINT STRIKE

FIGHTER (JSF)

HARMONIZATION INDUSTRIAL

TEAMING

MANAGEMENT

STRUCTURE

TECHNOLOGY

TRANSFER

BUSINESS

MANAGEMENT

• Early Harmonization

Agreement onstandardizedrequirements

• Harmonized

requirements includedin program MOU

• Industrial consortium

w/ designated nationalcontractor participation

• Industrial Cooperation

Agreement to manageMOU provisions

• Joint Steering

Committee

• Balanced representation• EMC supported by

Military, Legal, andTechnical WorkingGroups

• 0–6 PMs form EMC,

rotating chairmanship

• Significant exchange

of technical and basicdesign data for tankarmaments

• US and partners

gained significantamount of technology

• Work packages

determined bytechnical capabilitiand funding; differbut equitable

• Each nation funds

and contracts forworkshare – nocurrency issue

• US Joint Program with

tailored foreignparticipation

• Some foreign partners

can influencerequirements, ifdesired

• Two competing US

prime-led teams forConcept Demonstration Phase

• International

participation basedon best value

• US-based Joint

Program Office withInternationalrepresentation

• International

participation in EMC

• Significant exchange

of technical and basicdesign data, modelingand simulation tools

• Europeans contributing expertise in vertical

lift and aerostructuretechnology

• Evolutionary

requirementsdevelopment

• Emphasis on

affordability usingCAIV techniques

• Early technology

maturation

Figure 4-1. Comparison of Selected Transatlantic Programs (continued)

CAIV = Cost As an Independent Variable

EMC = Executive Management Committee

FAR = Federal Acquisition Regulation

JTIDS = Joint Tactical Information Distribution System

JV = Joint Venture

MOU = Memorandum of Understanding

TDP = Technical Data Package
4-52

ENDNOTES

20. Ibid.

21. Ibid.

22. GAO/NSIAD 92-55 (21 April 1992), pp. 21-22.

23. MLRS program official interviews.

24. Ibid.

25. Ibid.

26. Europeans interviews.

27. MLRS program official interviews.

28. Europeans interviews.

29. MLRS program official interviews.

NSSMS

1. Robert T. Williams, Technology Service Corporation

(February 3, 2000). Interview by authors.

2. Raymond Blackburn, III, Slide presentation: NATO

Seasparrow Surface Missile Project, (January 6,

1999), slide 6.

3. Interview with European armaments official.

4. Interview with official associated with the NATO

Seasparrow Project Office (NSPO)(JanuaryFebruary, 2000).

5. Williams interview.

6. Raymond Blackburn, III, “The NATO Seasparrow

Project,” printed in 50 Years of NATO, (1999), p. 46.

7. Williams interview.

8. NSPO interview.

9. Ibid.

10. Williams interview.

11. Interview with DoD official.

MLRS

1. Multiple Launch Rocket System Lessons Learned,

Defense Systems Management College (DSMC)

Report (Fort Belvoir, VA, July 1980), p. B-5.

2. Ibid, p. B-8.

3. Multiple Launch Rocket System (MLRS), Fiscal Year

1993 Historical Summary published by the MLRS

Program Office, p. 1.

4. Interview with MLRS prime contractor, Lockheed

Martin Vought Systems (LMVS) representative

(March 2000) by authors.

5. MLRS DSMC Report, pp. D-1 – D-2.

6. Multiple interviews with MLRS program officials

(December-March 2000) by authors.

7. Ibid.

8. LMVS interview.

9. MLRS program official interviews.

10. Interviews with European armaments officials

(March 2000) by authors.

11. LMVS interview.

12. MLRS program official interviews.

13. LMVS interview.

14. MLRS program official interviews.

15. MLRS DSMC Report, p. viii.

16. MLRS Historical Summary, p. 2.

17. U.S. General Accounting Office, National Security

and International Affairs Division Report GAO/

NSIAD 92-7 (Washington D.C., 31 October 1991),

p. 2.

18. Europeans interviews.

19. MLRS program official interviews.
4-53

12. Williams interview.

13. NSPO interview.

RAM

1. The Rolling Airframe Missile (RAM) International

Cooperative Acquisition Program, case study

(DSMC, Fort Belvoir, VA, August 1998), p. 3.

2. Interview with associates of the RAM Program

Office (RAMPO)(January 2000).

3. RAM case study, p. 3.

4. RAM case study, pp. 5 and 8.

5. RAM case study, p. 5.

6. RAM case study, p. 12.

7. RAMPO interview.

8. RAM case study, p. 12.

9. RAMPO interview.

10. RAM case study, p. 13.

11. RAMPO interview.

12. RAMPO interview.

13. RAM case study, Exhibit B.

14. RAM case study, p. 15.

15. RAMPO interview.

16. Ibid.

17. Case study, p. 14.

18. Ibid.

19. RAMPO interview.

20. Ibid.

21. Case study, p. 11.

22. Interviews with German armaments officials (March

7-8, 2000).

23. Ibid.

MIDS-LVT

1. FY98 Annual Report, Multifunction Information

Distribution System Low Volume Terminal (MIDSLVT), U.S. Department of Defense, Office of the

Secretary of Defense, Director of Operational Test

& Evaluation, http://www.dote.osd.mil/reports/

FY98/navy/98navymids.html, p. 2.

2. “Data Link Solutions Completes MIDS-LVT

Production Readiness,” Aviation Week’s Show News

Online, http://www.awgnet.com/shownews/paris1/

pressr26.htm (June 15, 1999).

3. Norman S. Bull, Multifunctional Information

Distribution System Low Volume Terminal (MIDSLVT), A Case Study Providing a History of the MIDSLVT Program (DSMC, Fort Belvoir, VA, November

1998), p. 1.

4. Ibid.

5. Ibid, pp. 11-12.

6. Ibid, pp. 1-2.

7. Ibid, p. 2.

8. Ibid.

9. Interview with a former associate of the MIDS

International Program Office, (April 2000).

10. Bull, pp. 6-7.

11. Ibid, pp. 22-26.

12. Collie J. Johnson, “Gansler, International Partners

Accept Initial Delivery of MIDS-LVT at Pentagon

Ceremony,” Program Manager Magazine (Fort

Belvoir, VA, DSMC Press, May – June 1998), p. 10,

13. Bull, p. 14.

14. Johnson, p. 6.

15. Bull, pp. 13-15.
4-54

16. Ibid, pp 13-14

17. Ibid, p. 15.

18. Ibid, pp. 14-15.

19. Johnson, pp. 4-7.

20. Ibid, pp. 5-6.

21. Ibid, pp. 4-5.

22. Ibid, pp. 5 and 8.

23. Ibid, pp. 6.

24. Bull, pp. 28-29.

25. Johnson, pp. 9-10.

26. Bull, p. 29.

27. Ibid, p. 29.

28. Interview with a former associate of the MIDS

International Program Office, (April 2000).

29. Johnson, p. 7.

30. Ibid, pp. 7-8.

31. Ibid, pp. 8-10.

32. Ibid, pp. 4, 6-7.

33. Ibid, pp. 2-3.

F-16 MLU

1. F-16 Mid-Life Update Background, http://

home.wanadoo.nl/tcc/rnlaf/mlu_back.html, p.1.

2. Lockheed Martin Aeronautics Company, Press

Release, Lockheed Martin Receives Order for

Additional F-16 Upgrade Kits (February 15, 1999),

http://www.lmtas.com/News/Press/F16/

f16990215.html.

3. Steering Committee Arrangement No. 45, Multinational Agreement for the F-16 MNFP Mid-Life

Update Program (January 21, 1991), Amendment

to Memorandum of Understanding between The

Government of the United States and the Governments of Belgium, Denmark, The Netherlands,

and Norway Relating to the Procurement and

Production of the F-16 Aircraft, (June 10, 1975).

4. Steering Committee Arrangement No. 44, Agreement

for Predevelopment Phase of F-16 Derivative

Program, (March 31, 1989), Amendment to Memorandum of Understanding between The Government

of the United States and the Governments of Belgium, Denmark, The Netherlands, and Norway

Relating to the Procurement and Production of the

F-16 Aircraft, (June 10, 1975).

5. Steering Committee Arrangement No. 45.

6. F-16 Mid-Life Update Background, http://home.

wanadoo.nl/tcc/rnlaf/mlu_back.html, p.1.

7. Multiple interviews with Colonel(s) Steven A.

MacLaird, SAF/AQQX, Pentagon, Washington,

D.C. (April 2000). Colonel MacLaird was the F-16

International Contracting Branch Chief and MLU

Development Procurement Contracting Officer

(PCO) October 1989 through July 1992 and was

transferred to the Pentagon, SAF/AQPF, and

assigned as the F-16 Program Element Monitor

(PEM) August 1992 through October 1994. In those

positions, he prepared contracting strategy, executed

strategy, and acted for and on behalf of the U.S.

Principal to the C&F Committee.

8. Ibid.

9. Ibid.

10. Lockheed Martin Aeronautics Company, Press

Release, Portugal To Expand Its F-16 Fleet

(December 4, 1998), http://www.lmtas.com/News/

Press/F16/f16pr_62.html.

11. Multiple interviews with Multinational Fighter

Program officials (February – March 2000).

12. Multiple interviews with F-16 System Program

Office officials (April, 2000).
4-55

13. Lockheed Martin Aeronautics Company, Press

Release (February 15, 1999).

14. F-16 Mid-Life Update Background, p. 3.

15. Lockheed Martin Aeronautics Company, Press

Release,(February 15, 1999)

16. Ibid.

17. Multiple interviews with F-16 System Program

Office officials (April 2000).

18. Steering Committee Arrangement No. 45.

19. Lockheed Martin Aeronautics Company, Press

Release (February 15, 1999).

20. Multiple interviews with F-16 System Program

Office officials (April 2000).

21. Ibid.

22. Ibid.

23. Ibid.

24. Ibid.

25. Ibid.

26. Ibid.

27. Ibid.

28. Ibid.

29. Lockheed Martin Aeronautics Company, Press

Release, First F-16 Production Upgrade Kits

Delivered Ahead of Schedule (November 12, 1996),

http://www.lmtas.com/News/Press/F16/

f16pr_4.html.

30. Ibid.

31. F-16 Mid-Life Update Background, p. 4.

32. Ibid, pp. 4-5.

33. Multiple interviews with F-16 System Program

Office officials (April 2000).

34. MacLaird interview.

35. Ibid.

36. Multiple interviews with F-16 System Program

Office and Multinational Fighter Program officials

(March-April 2000).

37. Ibid.

38. Ibid.

39. Ibid.

40. Ibid.

41. Ibid.

FTMA

1. Interviews with Future Tank Main Armament

(FTMA) program officials by authors (JanuaryMarch 2000).

2. Memorandum of Understanding between France, the

Federal Republic of Germany , the United Kingdom,

and the United States for a Cooperative Program for

Harmonized Future Tank Main Armament (16 May

1990), Annex A.

3. FTMA program official interviews.

4. Ibid.

5. Interviews with a program official from U.S. industry member of the FTMA industrial consortium,

General Dynamics, by authors (January-March

2000).

6. FTMA program official interviews.

7. Ibid.

8. FTMA MOU, p. 8.

9. FTMA program official interviews.
4-56

JSF

1. David Mulholland, “Debate Widens Over JSF

Contest.” Defense News (March 13, 2000), p. 1.

2. Joint Strike Fighter Master Plan, Joint Strike Fighter

Program Office, (Arlington VA, Update as of

December 15, 1998), Section 1., http://www.jast.mil/

html/body_mpsection1.htm.

3. Joint Strike Fighter White Paper, Joint Strike Fighter

Program Office, (Arlington VA, Update as of

December 2, 1999) http://www.jast.mil/html/

body_jsfwhitepaper.htm.

4. Michael Hough, Major General, U.S. Marine Corps,

The Affordable Solution – JSF, Joint Strike Fighter

Program Office (Arlington VA, Undated), Briefing

posted on the Joint Strike Fighter website. http://

www.jast.mil/html/progbriefs.htm.

5. Joint Strike Fighter White Paper

6. Ibid.

7. Ibid

8. Joint Strike Fighter Program Office Organization,

International Directorate, Joint Strike Fighter

Program Office, (Arlington VA, Undated), Posted

on the Joint Strike Fighter website. http://www.

jast.mil/html/ipo.htm.

9. Joint Strike Fighter White Paper

10. Ibid.

11. Ibid

12. John Pike, F-111, Federation of American Scientists

Military Analysis Network, (Update as of December

24, 1998), http://www.fas.org/man/dod-101/sys/ac/

f-111.htm.

13. Joint Strike Fighter White Paper.

14. Ibid.

15. Ibid.

16. Joint Strike Fighter Master Plan

17. Joris Janssen Lok, and Bill Sweetman, “Making

More Room For Partners, JSF Collaboration Is Good

Business, But Not Without Its Problems,” Jane’s

International Defense Review (Coulsdon, Surrey,

UK, March 2000), pp. 52-53.

18. Joint Strike Fighter White Paper.

19. Lok and Sweetman, pp. 53-55.

20. Hough, The Affordable Solution – JSF.; Douglas

Barrie, and David Mulholland, “JSF Negotiations

Pivot On Technology Access.” Defense News

(December 20, 1999), p. 1.

21. Lok and Sweetman, p. 55.

22. FY1998 RDT&E Budget Item Justification Sheet

(R-2 Exhibit),Program Element 0603800F, Defense

Technical Information Center (Fort Belvoir, VA,

February 1997) p.5. http://www.dtic.mil/cgi-bin/

fulcrum_main.pl.

23. Joint Strike Fighter Program Office Organization,

Program Directorate, Joint Strike Fighter Program

Office, (Arlington VA, Undated), Posted on the Joint

Strike Fighter website http://www.jast.mil/html/

progdirect.htm.

24. Joint Strike Fighter Program Office Organization,

Joint Strike Fighter Program Office, (Arlington VA,

Undated), Posted on the Joint Strike Fighter website

http://www.jast.mil/html/organization.htm.

25. Joint Strike Fighter Program Office Organization,

International Directorate

26. Ibid.

27. Lok and Sweetman, pp. 53-55.

28. Ibid, p. 55

29. Joint Strike Fighter White Paper

30. Ibid.

31. Interview with British defense industry representative in London, U.K. (March 9, 2000).

32. Ibid.
4-57

33. Interview with British MoD representative in London, U.K. (March 10, 2000).

34. Ibid.

35. Ibid.

36. Interview with British defense industry representative in London, U.K. (March 9, 2000).

37. Interview with British MoD representative in London, U.K. (March 10, 2000).

38. Interview with British defense industry representative in London, U.K. (March 9, 2000).
4-58
5-1

5

INTRA-EUROPEAN

COOPERATIVE PROGRAMS

“Good judgement comes from experience.

Experience comes from bad judgement.”

— Mark Twain

limiting partnership in a program to their side

of the Atlantic. An obvious example is the introduction of the euro, which, while not yet universal (there are currently 11 nations in the euro

zone), is now an advantage for intra-European

cooperation. In many combinations on the

continent currency fluctuation is no longer a

consideration.

It is a widely held view among European defense officials that the U.S. is a problematic

partner in cooperative armaments programs.

The particulars of this view are treated in some

detail in Chapter 3, while examples are shown

in the various transatlantic programs discussed

in Chapter 4. The current environment in

Europe makes it possible to avoid these issues

altogether through forming an exclusively

European team. With the recent experience in

the Balkans, there is also a sense that European

military teamwork will be put to the test in

future conflicts, or potentially so. Consequently, interoperability with other Europeans

holds more urgency than with the U.S.1,2

Introduction

Transatlantic armaments cooperation is greatly

affected by the experience of Europeans in pursuing cooperation among themselves, both

within and independent of NATO. Examining

their motivations, procurement systems, and

history of cooperation will aid the U.S. in gaining an understanding of current or prospective

European partners. Most of the following focus

is on France, the U.K., and Germany, as collectively they account for about 85 percent of

European procurement.

European Motivations

Much of the impetus for arms cooperation

among European partners is rooted in factors

discussed in Chapter 3. Europe desires to

strengthen the framework of its developing

political and security institutions and emerge

from the shadow of the U.S. Beyond historical

and political considerations, there are compelling practical reasons in European eyes for
5-2

It has been observed that U.S. arms are inextricably linked to U.S. doctrine. A prospective

European partner may find that its military

doctrine is incompatible to that of the U.S.,

diminishing the potential for cooperation.

Through a common environment, policies that

are more closely aligned, and a common

historical experience, Europeans are more apt

to use their equipment in a similar manner and

thus agree more readily on requirements.

European warships are generally smaller than

those of the U.S. Navy, leading to wide use in

Europe of the U.K.’s Lynx helicopter, smaller

and lighter than the U.S. SH-60. The German

perspective in the abortive MBT-70 program

illustrates the historical point. German

experience in World War II taught the value of

a low silhouette, high mobility, and effective

engagement at close-range. Further, the weight

of the proposed new tank needed to conform

to the limitations of Germany’s secondary road

network, whose bridges were designed for

loads no greater than 50 tons.3

Political systems and movements as well as

budget processes and realities are generally

better aligned on the continent than across the

Atlantic. Most of Europe is governed by parliamentary democracies and the prevailing mood

precludes substantial increases in military

spending. There are some significant differences, however. France enjoys a national consensus in security affairs while in Germany

there are substantial conflicts between left and

right regarding the military and its role.

While it cannot be said that Europe has

achieved anything like a common export policy

for armaments (for example, the Greens of

Germany’s ruling coalition are much more restrictive than the French government) European partners share assumptions on the subject

and the related issue of third party transfer.4

There is generally much less political interest

in what a partner does with equipment that was

cooperatively produced. It is treated as a

national decision as long as all the partners’

commercial interests are protected.5

 Germany

and Italy did not veto the U.K.’s sale of Tornadoes to Saudi Arabia, for example. In

European eyes, cooperation with the U.S.

carries the risk of being tied to the caprices of

American foreign policy and the associated

ponderous decision-making process when sales

are considered.

Expectations regarding technology transfer are

better aligned among European partners.

According to European officials, intra-European programs are much less restrictive regarding technology than transatlantic programs.

Europeans tend to cede technology transfer

decisions to industrial teams, thus protecting

industrial interests.6

 European partners believe

that technology transfer is one of the rationales

for cooperation, and indeed, the issue does not

seem to be a significant obstacle in European

programs.

In both export controls and technology transfer,

six European nations (U.K., France, Germany,

Italy, Spain, and Sweden) are currently working

to completely harmonize their policies. If this

be accomplished, it should significantly ease

armaments cooperation in Europe.7

In most of Europe, once the ruling party or coalition commits to a program, the program funds

are virtually guaranteed, even in the out-years.

While it is true that the lower houses in the

principal European nations review the budget,

it is unlikely and would be highly unusual for

substantial changes to be made, particularly in

international cooperative programs.8

 Most of

these legislatures have their seats apportioned

proportionally by party vote, which reduces the

tendency toward “pork barrel” legislation. Moreover, continental timelines for procurement are
5-3

consistently stretched due to budget pressures.

These similarities contribute to a mutual level

of comfort and predictability that foster

European partnerships.

Related to the above is the disparate practice

of contracting on either side of the Atlantic.

For development programs, Europeans generally use firm, fixed price contracting and the

U.S. typically contracts on a cost plus basis. In

the view of one European armaments official,

cost plus contracting “amounts to industry

solving their problems with our money.”9

 The

European practice is better suited to advancing

existing technology, which carries less risk, as

opposed to the large-scale application of new

technology typically pursued by the U.S. This

difference has been worked around in

successful transatlantic programs, but remains

a persistent hindrance.

Europeans place a great deal of public emphasis

on equality among partners as a contributing

factor toward the success of a cooperative

program. In most transatlantic cases, the U.S.

stake is disproportionate, reflecting the needs

of a much larger force. This leads to the

assumption that the U.S. will dominate the program and ignore the smaller partners’ concerns.

It is much easier to find continental collaborators prepared to cooperate on a more or less

equal basis. A by-product of the rough equivalency in European cooperation is that the loss

of one or two partners does not necessarily

doom the project. When France ceased participation in Eurofighter or the U.K. exited from

Horizon Frigate, both programs continued. The

loss of the U.S. in a cooperative program is

normally fatal. Similarly, the exchange of

proprietary information, an important goal in

European cooperation, is served when partners

are of the same stature in terms of technology

and capabilities.

Industrial teaming within Europe has matured

based on past cooperative efforts. These experiences provide Europeans with a big advantage

in future efforts because industrial partners have

already built trusting relationships and know

who to team with for what. Commercial rules

that apply equally to the defense industry in

the European Union (EU) require that contracts be open to all EU members, yielding

efficiencies gained through competition.10

An obvious but perhaps overlooked advantage

of intra-European programs is time and distance. Despite all the opportunities to communicate afforded by technology, face-to-face

meetings are still a major factor in doing business. Many meetings within Europe require no

more than a few hours on a fast train as opposed

to the eight to eleven hours needed to fly to the

U.S.11 The workdays are also nearly eclipsed

by the time difference making real-time

telephone conversations difficult to achieve.

To the extent that Europeans share a common

culture distinct from that of the U.S., there may

be a greater level of comfort among Europeans

in working together. An active effort to develop

social contacts on the part of the NSPO helped

neutralize culture as an issue in the Seasparrow

program, but the Medium Extended Air

Defense System (MEADS) was plagued by an

“us versus them” mentality between European

partners and the U.S.12 Language, paradoxically, may also favor intra-European programs

as it is easier to communicate in a third language (English) than between native speakers

and non-native speakers.

Finally, the U.S. often conducts more elaborate

testing of new systems than is generally the

case among European nations.13, 14 This and the

other contrasting policies and habits across the

Atlantic cited above do not imply automatic
5-4

success for exclusively European cooperative

programs, nor do they doom those that span

the Atlantic. Even in Europe, national programs

are easier than cooperation. They do, however,

imply an advantage for intra-European over

transatlantic partnerships independent of

technical or economic merits, an advantage that

may grow with time.

European Procurement Systems

A full and useful description of the primary

European procurement systems can be found

in A Comparison of the Defense Acquisition

Systems of France, Great Britain, Germany and

the United States, edited by Tony Kausal of

the Defense Systems Management College.15

No attempt is made to replicate that work here,

but rather to provide an outline of the salient

features and perhaps some insight into

European acquisition management.

The acquisition processes employed are not

greatly changed to accommodate a cooperative

program, mostly because a large proportion of

European development is done on that basis.

France and Germany, in particular, approach

acquisition from a cooperative perspective, and

cooperation is part of their organizational

culture.

France

The Délégation Générale pour l’Armement

(DGA) is the branch of the French Ministry of

Defense responsible for armaments development and acquisition. The other two branches

are the Joint Armed Forces Staff and the

Secretariat for Administration. The DGA was

reorganized in 1997, partly to anticipate the

emerging realities in Europe, and expressly

promotes European cooperation. DGA is now

organized along functional lines (program

management, industrial activities, testing, etc.)

rather than operational environment (land, air,

sea, and space).

DGA is directed by a senior civil servant and

its personnel have a hierarchy that is closely

akin to military rank. The incumbent is JeanYves Helmer, who was an automotive executive

and launched the 1997 reorganization of DGA.

He emphasizes competitive bidding for prime

contracts and competitive selection of suppliers

of subsystems and components by the prime,

perhaps a result of his background.16

French defense equipment is categorized under

eight “Systems of Forces” such as Long-Range

Strike Capacity, Deterrence, and Communication. Each system has a senior member of the

DGA assigned who bears the designation of

Systems Architect (ASF). Each development

program within the system is assigned a DGA

program director who is assisted by functional

specialists. These specialists remain within their

functional areas though they are formally

evaluated by the program director.

The program director occupies a critical position, equivalent to the PM in U.S. acquisitions.

They are products of a formal and specialized

education, expressly intended to produce armaments engineers with a broad base of technical

and management expertise. Each has graduated

from a school that is in the upper echelon of

French higher education (Grandes Ecoles) and

that reflects French excellence in, and emphasis

of, science and mathematics. Typically, they

have experience in several programs, including

international cooperative ones.

The stages in France’s new acquisition process

are illustrated in Figure 5-1. The Preparation

Stage is driven by meeting the requirements of

a long-term (30 year) plan. The means of doing

so are weighed, including purchase, updating

legacy systems, and cooperation. The last
5-5

alternative is always emphasized. Reasons not

to seek a cooperative solution must be thoroughly explained before a solely national program is approved. The Design Stage sees the

birth of the program in that the Minister of

Defense makes the decision to commence, the

program team takes shape, and industrial

partners are selected. At this point, the crucial

work of cost determination occurs. At the beginning of the Development Stage the decision

to continue with the program is taken and a

plan to test and validate the equipment at

various points is executed. The final step is the

Utilization Stage, when the uniformed service

takes possession of the equipment, normally

after adequate support and maintenance

systems are in place.

The uniformed services share responsibility for

armaments development and procurement with

DGA. This can be seen in the symmetry between the two in program management. The

military counterparts for DGA’s ASF (responsible for a Systems of Forces) are an Operational

Coherence Officer (OCO) and a Corresponding

Coherence Services Officer (OCEM). The

OCO is appointed by the Joint Staff and the

OCEM represents one of the Service components. The working level counterpart for

DGA’s program director is a uniformed program officer. The term coherence refers to

avoiding duplication of effort and the maximizing of synergy between the Service components. This is reflective of French emphasis

on joint warfighting in an era of limited

resources devoted to the military.

Thus the French employ an IPT approach to

program management, involving DGA technical and management specialists and uniformed officers in consultation with industry.

The roles of each change through the life cycle

of a program. Long-range forecasting and the

preparation stage are the province of the ASF,

OCO, and OCEM. They retain oversight

through the design, realization, and utilization

stages, though it is the lower level integrated

team of DGA, the Service staff and industry,

that move the program forward through those

later stages.

Figure 5-1. The French Acquisition Process

Development

Industrialization

Production

Realization Stage Utilization Stage

Feasability Definition

Preparation

Design Stage

Integrated Team – DGA/Service Staff/Industry

Architect of

Force Systems Program Director with

the Program Officer

Service In

Use

The 30-Year Forecast Plan
5-6

Germany

The German acquisition system’s top level is

the Directorate General of Armaments, an organization divided into eight functional areas.

One of these, the Armaments Planning and

Control Office, has administrative control of

the Federal Office of Military Technology and

Procurement (BWB), responsible for research

and technology, development and procurement

of defense material. Three of the remaining

offices of NAD perform oversight of the land,

sea, and air programs managed by BWB.

The BWB itself has three support divisions and

seven technical divisions, each devoted to a

category of equipment. These are more straightforward than those evident in the French System of Forces concept. Included are information technology, aircraft, weapons and missile

systems, communications, ships and naval

equipment, motor vehicles, and general equipment. It is within these divisions that the PMs

are assigned, supported by technical and

administrative personnel from the support

divisions.

PMs typically have technical degrees from

civilian universities before beginning their

careers at the BWB. While Germany does not

have a series of specialized institutions for

armaments design and development, there is

formal training for the acquisition workforce.

A one-to-two year course, depending on the

seniority of the student, intended to provide

basic acquisition education is conducted at the

Federal Academy for Defense Administration

and Military Technology.

Germany categorizes its acquisition programs

in a manner analogous to that of the U.S. For

programs with development costs over $10

million (at 2000 exchange rates of approximately two deutschmarks to one dollar) and

production costs over $25 million, a category

1 is assigned and Bundestag (the lower house

of the Federal German legislature) approval is

needed. Category 2 begins at $1 million and

$2.5 million respectively and can be approved

by the Armed Forces Command. Category 3

programs are beneath those thresholds. Major

programs are either category 1, or involve

international cooperation.

The life cycle of a German armaments program

begins with a series of strategic documents that

culminates in the Bundeswehr Plan, which puts

forward equipment requirements. This is then

integrated into the budget and if approved, the

program continues in a phased development

process illustrated in Figure 5-2.

Figure 5-2. German Systems Development Phases

Development

Phase

PrePhaseDefinition

Phase

Procurement

Phase

In-Service

Phase
5-7

Briefly, the phases begin with the pre-phase,

initiated by the military identifying a requirement. Then, along with industry and BWB,

alternative methods of satisfying the requirement are explored. Should Germany favor new

production, cooperative development is heavily

emphasized, a reason why 70 percent of Germany’s acquisition is done in concert with other

nations.

The definition phase follows incorporation into

the Bundeswehr Plan and is the point where

project management responsibility passes to the

BWB. Specifications are detailed and the

management team is established to include the

assignments of BWB’s PM and a project officer

from the uniformed Services. PMs are supported by the division that hosts the appropriate

subject matter experts. As in the French approach, there is close collaboration between the

BWB and the appropriate Service component

in system development. The Germans do not

subscribe to IPTs, however, but rather seek

consensus within a hierarchical structure.17

The development phase sees the selection of a

prime contractor and concludes with the Service component certifying the system’s logistics support and conducting operational testing.

Once these are satisfactorily concluded, an

“Approval for Production” document sets the

stage for the procurement phase. In this phase,

the contractor for production is selected and

the equipment delivered. The in-service phase

is primarily the responsibility of the uniformed

Service, though BWB will continue to provide

engineering and logistical support. Training and

maintenance schemes are developed to sustain

effective system operation in the field.

U.K.

The acquisition procurement function of the

British armed forces is fulfilled by the Defence

Procurement Agency (DPA), whose chief executive is the Chief of Defence Procurement.

The DPA is part of the Ministry of Defence

(MoD) and is overseen by the Minister of State

for Defence Procurement. There are some 90

Integrated Project Teams in the DPA. Just as

under the French DGA, there are 11 groupings

of systems, according to type and without

regard to Service, that are managed by Executive Directors or Support Directors. These are

referred to as peer groups and within them work

the project managers for individual programs.

The Labour government of Prime Minister

Tony Blair initiated a comprehensive review

of defense policies in 1998 termed the Strategic

Defence Review. Part of this review was focused on procurement and resulted in the Smart

Procurement Initiative. This initiative brought

three substantial changes to the manner in

which defense procurement is conducted:

• Identification of an empowered “customer”

within the MoD;

• Adoption of the IPT approach;

• A streamlined approval process.

Up to this point, international cooperation has

not been built into the organizational culture

of the DPA or the MoD. The decision to enter

a cooperative effort has been based solely on

the individual merit of each case in the absence

of top-level emphasis on cooperation as in

France and Germany. It remains to be seen

whether the recent changes will stimulate more

cooperation.

The Equipment Capability Customer within the

MoD both develops requirements and provides

funds for the program. This is a departure from

past practices and is designed to encourage

trade-offs between cost and capability. It also
5-8

increases the incentive to find partners with

which to share costs.18

The program life cycle has also been simplified

and is illustrated in Figure 5-3. It begins with

the Concept Phase in which different options

to fulfil a given mission identified by the MoD

are considered. The best of these options are

then assigned estimated costs (on a throughlife basis) by an embryonic IPT and submitted

along with a User Requirement Document for

“Initial Gate” approval. This step approves the

funds necessary for the Assessment Phase.

In the course of the Assessment Phase the best

technical option is chosen, with consideration

given to the trade-offs between cost, performance and time. Only designated key performance parameters are non-negotiable. More

detailed estimates for life cycle costs are

prepared along with a plan to manage the

remaining technical risk.

At the completion of the Assessment Phase the

“Main Gate” is reached, the second of the two

decision points in the U.K. development

process. The MoD Equipment Capability

Customer and the IPT leader jointly submit

recommendations along with firm development

costs, life-cycle costs, in-service target dates,

and performance requirements. These are

significant as the failure to meet them in the

course of development could cause the decision

to continue with the project to be revisited. The

decision to pass the Main Gate is made based

on the merits presented.

The Demonstration Phase includes the selection of the prime contractor for remaining

development and production. Design to cost

and performance trade-offs are the features of

this process. An early form of trials is carried

out with models, computer simulations, or

prototypes. Equipment trials against acceptance criteria are conducted during the Manufacture Phase. Once successfully accomplished,

production commences.

There are two turnovers that remain to be

performed at this stage. Throughout development, the MoD Capability Manager acted

as customer; once the equipment becomes

available to the appropriate force and support

is in place, the relevant frontline commander

Figure 5-3. British Procurement Phases

Concept Assessment Demonstration Manufacture In

Service

Initial

Gate

Main

Gate

Acceptance

Contract ISD
5-9

assumes that responsibility. The base of the IPT

passes from the DPA to the Defence Logistics

Organisation with the completion of development, technical risk reduction, and acceptance into service. The point at which this takes

place varies considerably with the type of

equipment in question. It should be noted that

the IPT itself is substantially transformed to

conform to the needs of in-service equipment.

However, the clear intention is that IPTs should

have one continuous existence until the

Disposal Phase is completed.

Intra-European Cooperation Efforts

There have been significant intra-European

cooperative programs over the past four decades and the experience is instructive. Despite

the inherent advantages in limiting the team to

Europe, there are some familiar themes in the

difficulties encountered along the way. See Appendix J for examples of European cooperative

programs and the associated industrial teaming.

Harmonization of requirements has been far

from easy in a variety of areas. Geography,

history, national aspirations, and equipment

replacement cycles all have contributed to

diverse requirements among European nations.

When France and Germany collaborated on the

Transall military transport in the early 1960s,

nobody dreamt of the possibility of German

troops going as far afield as Somalia. France

had the requirement for military transport to

West and Central Africa, so Germany ended

up with transport capabilities that they did not

need.19 The Jaguar was developed between the

U.K. and France as a light fighter-bomber/

trainer in the late 1960s. For the U.K., the

Jaguar was to be an attack aircraft first and a

trainer second. The French held the opposite

view.20 The U.K. prevailed and France had an

expensive aircraft with more capability than it

desired. In fact, the cost overruns for France

were enormous—over 300 percent.21 Throughout, efforts to collaborate on tactical aircraft

have been complicated by the fact that some

European nations have aircraft carriers (some

Short Take-Off Vertical Landing, France

conventional) and the rest do not.

Most recently, the U.K. withdrew from the

Horizon Frigate program in part because the

Royal Navy did not need the ship until 2008

rather than 2005, the date projected for France

and Italy. This disparity in replacement schedule among the partners led to a lack of common

ground for the technical approach to ship

design.22

In the vein of common requirements, it should

be borne in mind that European nations have

in their present inventories a wide variety of

aircraft purchased in the 1960s and 1970s. The

dates at which these need to be replaced vary,

another complication to aircraft collaboration.

An advantage held by the U.S.-led Joint Strike

Fighter (JSF) in seeking collaborative partners,

by contrast, is that it is a timely replacement

for all the nations that coproduced F-16s, a very

successful program. (See Chapter 4 for details.)

Some types of equipment lend themselves more

easily than others to accommodating different

variants and thus, differing requirements. The

NH-90, a helicopter being cooperatively developed between The Netherlands, Germany,

France, and Italy will have two mission variants

that will satisfy the naval and ground forces

needs of all the partners with plenty of capacity

for further individual tailoring. The NH-90 will

have an all composite hull and be the first

operational helicopter to use fly-by-wire.23

The long lead times of European procurement

programs, often a result of budget constraints,

have created other problems in cooperation. A

good example is the Eurofighter, whose origins
5-10

can be traced to the early 1970s. Over such a

long period of time, circumstances inevitably

change, causing arrangements to be adjusted

accordingly. Eurofighter followed the typical

arrangement of tying work share to off-take.

In 1986, when the project first took the form

that is recognizable today, the shares were the

U.K. 33 percent, Germany 33 percent, Italy 21

percent, and Spain 13 percent. Nine years later,

all four partners had reduced their orders by

different proportions. However, it was not

possible to reformulate the work share strictly

by the new numbers for technical industrial

reasons at that stage of development. After

some difficulty, a new work share arrangement

of 37/30/20/13 was agreed to when Germany

committed to 40 additional aircraft.24

Production of the Eurofighter was also delayed

by the complexity of the consortia arrangement

by which development was conducted. The four

national airframe manufacturers (BAe, DASA,

Alenia, and CASA) and engine manufacturers

(Rolls-Royce, MTU, FiatAvio, and ITP)

formed Eurofighter GmbH and EuroJet Turbo

GmbH respectively. The principle of unanimity

governs their decision-making, making it

difficult to reach flexible, disinterested

solutions to the problems that inevitably arise.25

Focus on work share can lead to absurd outcomes as the case of the 27mm cannon for the

Panavia (Germany, U.K., and Italy) Tornado

illustrates. Each nation had its own assembly

line for the aircraft. The cannon was manufactured by Mauser in Germany, assembled and

tested, dismantled, then shipped as a kit to

England where it was reassembled for installation in the U.K. production line.26 Hence,

work was duplicated solely to meet work share

requirements.

Quality of work is a factor that both complicates work share negotiations and causes

inefficiency. European national champions

involved in collaboration typically bid for work

that will give them valuable experience in a

new area, rather than accept an assignment

based on comparative advantage. In the Tornado program, Germany insisted on developing

the center section of the fuselage which

included the mechanism for the variable geometry wing, work for which the U.K. partner

was clearly more competent.27 Quality of work

concerns will be reduced if the more ambitious

vision of OCCAR is realized and national

stakes are spread across programs. Thus, a

country that receives less than its normal fair

share of work in one program will be compensated for this difference in other programs.

Intra-European cooperation does not take place

in a vacuum. European partners often have

significant relationships with firms in the U.S.

and Asia. Because of those ties, some of the

technology that they possess may not be

transferable within Europe. One area in which

the U.S. holds a generally acknowledged lead

is stealth technology. Because of the special

relationship between the U.K. and the U.S. in

recent decades, there has been a considerable

amount of sharing of this information.

(Discussion of U.S. security procedures, export

controls, and technology transfer can be found

in Chapter 2.) Consequently, in the process of

laying the foundation for collaboration, it has

become an issue between France and the U.K.

to develop a stealthy, long-range strike aircraft.

The U.K. MoD instructed BAe not to share any

stealth research with the French, constituting

an early stumbling block in the program.28

Notes

Cooperation in Europe is evolving. Concern

over work share is said to be diminished in the

Franco-Italian Horizon Frigate Program, ushering in a new era for the EU. Horizon is also
5-11

maximizing off-the-shelf equipment and minimizing that furnished by the government.29

According to Peter Watkins, Finance and Secretariat Director for the Eurofighter and Tornado programs, artificial industrial consortia

are being discouraged in European cooperation

in favor of one company from one country

taking a leading role and acting through subcontracting or a joint venture arrangement.30

European industrial consolidation promises to

make this easier. OCCAR’s (see Chapter 3)

future as a vehicle for intra-European cooperation is not yet clear as the organization is

only a few years old. Certainly the concept is

sound in that it addresses some key challenges

such as work share. At present, however, no

significant new programs have been consigned

to it. Finally, a reduction of funds committed

to new programs and those already in existence

is likely to retard arms cooperation within

Europe generally.
5-12

ENDNOTES

16. Robert P. Grant, “Transatlantic Armament Relations

Under Strain,” Survival, Vol. 39, No. 1, International

Institute for Strategic Studies, Oxford University

Press (Spring 1997), p. 126.

17. Interview with a European national armaments

representative at NATO headquarters (February 28-

29, 2000).

18. Interviews with U.K. armaments officials (March

9-10, 2000).

19. Mark Lorell and Julia Lowell, International Weapons Procurement Collaboration (Santa Monica,

CA: National Defense Research Institute, Rand

Corporation, 1995), pp. 26-27.

20. Ibid, p.25.

21. Ibid, p.18, table 1.

22. French interviews.

23. French interviews.

24. “Eurofighter Typhoon,” http://www.pso-online.

businesswebworks.com/aircraft/Eurofighter/history.

html.

25. Peter Watkins Speech at European and Transatlantic

Armaments Cooperation Symposium (Fort Belvoir,

VA: DSMC, June 11, 1996).

26. Guy Challands, Sense About European Defence:

Affordable Interoperable Arms Procurement

Through Collaboration?, Fellowship Paper, St

Antony’s College, Oxford (December, 1999), p. 15.

27. Lorell and Lowell, p. 14.

28. Nick Cook“Europa,”http://pollux.com/defenseweb/

1996/may96/europa.htm.

29. French interviews.

30. Watkins speech.

1. Interview with a U.S. officer assigned to armaments

liaison in Europe (March, 2000).

2. Interviews with German armaments officials (March

7-8, 2000).

3. Collaborative Development of Main Battle Tanks:

Lessons from the U.S.-German Experience, 1963-

1978, Defense Technical Information Center technical report (Alexandria VA, February 1984).

4. German interviews.

5. Interviews with French armaments officials (March

2-3, 2000).

6. German and French interviews.

7. Douglas Barrie, “European Giants to Unify

Industrial Policies,” Defense News, Vol. 15, No. 15.

(April 17, 2000).

8. German and French interviews.

9. German interviews.

10. French interviews.

11. Ibid.

12. Interview with a U.S. acquisition official (April

2000).

13. French interviews.

14. Alan Childress and James Larson, “A Case for

International Cooperative Acquisitions,” Acquisition

Review Quarterly (Fall 1998), p. 366.

15. Gertrud Humily, Peter Roller, and Trevor Taylor, A

Comparison of the Defense Acquisition Systems of

France, Great Britain, Germany, and the United

States, ed. Tony Kausal (Fort Belvoir, VA: DSMC

Press, September 1999).
5-13

PART III

FINDINGS

AND

CONCLUSIONS
5-14
6-1

6

FINDINGS

“Success is not final, failure is not fatal;

it is the courage to continue that counts.”

— Winston Churchill

relations with the U.S. and they have assumed

power in the EU in the wake of the fall of the

Berlin Wall and diminishing security consciousness. This is an environment where arguments for cooperation based on interoperability

or a gesture of transatlantic solidarity will carry

less influence.

The current generation of European leaders is

more marked by the anti-war movement of the

late 1960s than by U.S. aid in the immediate

postwar era. Additionally, the status of the U.S.

as the sole remaining “superpower” has raised

fears and suspicions. French Foreign Minister

Hubert Védrine refers to the U.S. as a “hyperpower,” which is not to be understood as a

compliment.1 Indeed, France often exercises its

leadership within the EU at cross purposes to

the U.S. Felix Rohatyn, U.S. Ambassador to

France, recently said that European anxiety

over American power “negates the notion that

our interest is also in their interest. It creates

the totally opposite point of view—that only

the weakening of America can be good for

them.”2

 Less dramatically, but perhaps equal

in importance is a diminishing commitment to

Time

Time is working mostly against the prospects

for meaningful transatlantic cooperation. Despite some countercurrents, there are significant

trends in evidence that could mitigate against

the U.S.’s initiating new cooperative programs

with European partners.

Perhaps the most powerful single trend is

European consolidation in the form of the

European Union (EU). This should be viewed

as not just an economic and political phenomenon, but a cultural one as well. The European

movement (or project as it is often termed)

draws a great deal of emotional energy from

the notion of a shared identity, distinct from

that of the U.S. Though not unanimous, it is a

sentiment shared from the man on the street to

the highest levels of government. Transatlantic

disputes, particularly those with a moral component such as hormone-enhanced meat or

trade relations with developing countries,

resonate in the European public. The political

coalitions that give those concerns voice have

traditionally been more skeptical of military
6-2

atlanticism among mid-level officials in Europe. Within most European professional military establishments, there is still a preference

for strong transatlantic ties including armaments cooperation, but it is countered by strong

political pressure to go European.3

It could be argued that the economic rationale

for armaments codevelopment remains, albeit

the mutual political impulses and military justifications are somewhat weakened. However,

with the continuing integration of Europe and

its defense industry, partnering among Europeans promises to become easier for the reasons

set forth in the previous chapter. Though the

track record of intra-European cooperation to

date is uneven and the continent’s military

R&D spending is only a fraction of that spent

by the U.S., it is undeniable that the continent

is overall becoming more technologically and

industrially capable. The world’s growing fleet

of Airbus airliners, produced by a consortium

of aerospace companies from four European

nations, proves that. The example of Airbus,

subsidized by its parent European nations, is

likely to be seen in the short run as a lesson

that a cost will have to be paid to foster European capabilities. Hence, future cooperation

with the U.S. may have to be significantly more

attractive than an exclusively European alternative to overcome the impulse to nurture

Europe’s own capabilities. Currently, programs

that provide technology transfer from the U.S.

to Europe are still attractive. (See Chapter 4.)

Despite growing European technical and

industrial capabilities, there is a significant gap

in defense technology that was demonstrated

in the Balkans.

The Atlantic alliance was built specifically to

counter the Soviet threat. Allied forces were,

therefore, oriented and equipped to counter

heavy, mechanized forces in intense ground

combat. With the dissolution of the Soviet

Empire, there has been a divergence of strategic

orientation within the alliance. Since World War

II, the U.S. has maintained significant deployable forces designed to deal with worldwide

contingency operations, although its ground

forces only recently moved to strengthen their

ready reaction capability. France maintains

some force projection capability and plans to

move further in that direction with the goal of

being able to deliver and sustain a force twice

the size that she put into place during the Gulf

War.4

 The U.K. is planning the construction of

new conventional aircraft carriers in a move to

improve its own global reach. In both cases,

unfortunately, progress will be severely constrained by resources. Other European nations

are unlikely to pursue power projection as a

goal. In the midst of such a divergence of

missions, the likelihood of finding common

requirements (the basis for cooperation) is

diminished. The transatlantic gap in power

projection capability revealed by the Balkan

conflict might have prompted Europeans to

seek closer alignment with the U.S. Rather,

performance in the Balkans is viewed as proof

of the need for an independent European capability as set forth at St. Malo in 1998. The recent

NATO Defense Capabilities Initiative (DCI)

has the potential to provide common ground

for defense equipment initiatives. However,

within some European circles DCI is viewed

as yet another U.S. attempt to promote the

development and procurement of equipment

that will primarily benefit U.S. industry.

Cooperative R&D can set the technological

base for cooperation and development and

establish the dialogue to go forward. Recent

trends in downsizing cooperative R&D organizations, in conjunction with overall DoD downsizing due to budget pressure, will potentially

reduce future armaments cooperation. With

fewer people available to explore and coordinate these activities, resulting development
6-3

programs will correspondingly diminish. This

outcome seems likely in the context of defense

spending trends on both sides of the Atlantic.

There continues to be some high level support

within the U.S. DoD for increased transatlantic

cooperation and there is some reason for hope,

given developments such as the recent Declaration of Principles for Defense Equipment and

Industrial Cooperation between the U.S. and

the U.K. Individuals on both sides of the Atlantic are alarmed at the prospect of a split between

the two camps and the formation of militaryindustrial “fortresses,” with newly created defense giants on both sides exacerbating the

competition for sales in the developing world.

More ominously (for some), the resulting friction could seriously undermine the NATO Alliance. With the end of the Cold War and continuing high unemployment in Europe, however,

the transatlantic dialogue over arms increasingly assumes the form of a conventional trade

dispute. Moreover, Congress lacks the champions of internationalism who at one time were

able to gather bipartisan support for transatlantic initiatives. Taken together, an environment

is created that is not conducive to cooperation.

Reputation

The U.S. has acquired a reputation as a difficult

partner in armaments cooperation. This is a

view held nearly universally among European

PMs and other officials in acquisition circles,

though the impression is stronger for some than

for others.

The difference in scale between U.S. and

European partners leads to U.S. dominance in

most transatlantic cooperative programs.

European partners often have less influence because of much smaller production shares. Consequently, European interests are sometimes

ignored or inadequately addressed. In the same

vein, it is also widely felt that the U.S. is unwilling to compromise in the important area of

military requirements.

Technology transfer and third party sales are

problematic aspects of cooperation with the

U.S. that have no equivalent in intra-European

collaboration. Europeans see the U.S. as unduly

restrictive in both areas, and a sharing of technology is an important result of cooperation

for them. Europeans feel that they should no

longer accept “black boxes” from the U.S. and

should insist on treatment as full partners with

unrestricted access to technology involved in

the program. Third party sales are a desired

method of recouping costs and the U.S. exercise

of veto power over those sales is deeply resented. This same control at the component

level causes concerns over security of supply.

The admonition of Manfred Bischoff, CEO of

DASA, to find European suppliers to back up

U.S. components is widely referenced.5

The bureaucratic process by which export licenses and TAAs are generated is roundly criticized. “The State Department is the problem;

even the U.S. suffers from it,” according to one

official.6 The time it takes for approvals is seen

as a major obstacle to smooth cooperation.

Aggravating the aura of unpredictability in a

transatlantic cooperative program is the uncertain and convoluted U.S. budget process and

the penchant for Congress or the military services to reduce or cut funding for a program

with little or no regard to what are seen as international obligations. The recent funding cut of

the FSCS/TRACER program by the U.S. Army

is the most current example. Europeans consider commitments made in cooperative programs as contractual and are vexed by the

uncertainty of U.S. funding.
6-4

Europeans often perceive a difference between

what they hear from high ranking U.S. officials

and the attitudes of lower ranking personnel in

program management. They readily quote

senior members from the DoD, but say the

grass-roots effort rarely matches the rhetoric.

One official put it thus: “We are tired of hearing

about interoperability. We want to see some

results.”7

Europeans cite an attitude among Americans

that Europeans are underfunded, unprepared,

and unable to make meaningful contributions.8

This contributes to the suspicion that cooperative programs are often paralleled by black

programs. The fear is that if a black program

succeeds, the U.S. then withdraws from cooperation. The MLRS TGW and BAT programs are

a case in point. (See Chapter 4.) Europeans

consequently lack confidence that a cooperative

effort undertaken with the U.S. will be followed

through in good faith.

The U.S. is seen as unpredictable and sometimes inscrutable. During recent collaborative

development of the GMLRS rocket the reasons

for the U.S. prime contractor’s rejection of EU

subcontractor bids never became clear to the

European partners.9 There was a similar reaction to the lack of explanation for the modifications the U.S. “mandated” for the MIDS.10 Generally, the U.S. is seen as not understanding

the European viewpoint.

Harmonization Problems

The difficult process of harmonizing requirements does not promise to become any easier

without significant changes. Even after political

and economic concerns are satisfied, the very

foundation of cooperation, addressing a common need, remains. The successful programs

examined closely in this study reveal the extent

of this challenge.

A fundamental problem of requirements

harmonization is that each nation has a unique

history and set of circumstances and hence,

differing military requirements. This fact is

reflected in tactical doctrine. The example of

the abortive MBT-70 program (discussed in

Chapter 3) shows how two different doctrines

are sometimes not reconcilable in a collaborative project. German notions of firepower were

built on the assumption (based on experience)

of intense engagements at relatively short

range, which clashed with the U.S. desire to prevail at longer ranges. Armament was thus a

source of disagreement, significantly contributing to the program’s demise.

Moreover, the national process by which military requirements are agreed upon is often

lengthy and difficult, involving much high-level

dialogue. Those officials who discuss and consider requirements with potential partners are

generally not the same national authorities that

approved them in the first place. There is, therefore, reluctance to go back to the drawing board

and refer issues back to the original authority.

The tendency is to avoid compromise.

In reality, unless two or more parties are perfectly in agreement, compromise is essential

in cooperation. Some situations are easier than

others. Undoubtedly, the ubiquitous cruise

missile threat that emerged in the late 1960s

gave not only a sense of urgency, but also an

advantage in harmonizing requirements to

both the NATO NSSMS and the RAM programs. (See Chapter 4.) The participants faced

the same threat in the same environment (salt

water). Naturally, additional desired capabilities and differing platforms needed to be

taken into consideration, but those challenges are not the same as trying to reconcile

several different missions or several different

doctrines.
6-5

Attempts so far—aimed at systemically improving the harmonization process—have not

been very successful. The CNAD has facilitated

some scattered efforts, but given the composition of NATO and the threat faced prior to

1990, the full potential was—and still is—far

from realized. The lines of communication

between allied armaments authorities have been

kept open but CNAD lacks the authority to

induce armaments cooperation. It remains to

be seen whether the recent NATO Armaments

Review and the fallout from the Kosovo crisis

will enable CNAD to realize a greater degree

of collaboration in allied armaments. The

NATO Armaments Review is expected to provide a top-down focus on priority areas for

armaments cooperation, improve coordination

of cooperative opportunities at NATO headquarters, and increase the visibility of those

opportunities through an expanded database of

allied military requirements. These efforts are

aimed at easing the harmonization problem

preemptively.

ICOG’s purpose is similar to that of the CNAD,

though its membership is limited to the largest

NATO nations in terms of defense spending,

the U.S., France, U.K., Italy, and Germany. It

has been in existence for four years, perhaps

not enough time for a fair trial of its ability to

promote cooperation. Nothing substantial has

been achieved so far.

All three military services have maintained

international cooperative R&D offices that have

been only minimally effective in spurring the

give and take essential to harmonizing requirements. Recent reductions in staffing of cooperative R&D offices only make the prospects for

progress in harmonization more remote.

The progress that can be made in ongoing

projects within program offices is evident. The

NATO Seasparrow Project Officer (NSPO) and

RAM Project Office (RAMPO) are both headed

by U.S. Navy captains with staffs at the O4-

O5 level. The day-to-day working relationships

in those offices have often produced the tradeoffs essential to success. The follow-on programs that developed out of the MLRS and

F-16 programs are also examples. (Further

discussions can be found in Chapters 4 and 5.)

Perhaps the most successful harmonization

efforts have been selective mid-level discussions. Examples include the agreements

reached in the FSCS/TRACER and LW155

howitzer digitization programs. At the U.S. (or

U.S.-equivalent) O-6 level, participants have

the right combination of experience, specific

expertise, and influence to understand

challenges encountered, to propose harmonized

solutions, and to realize them. Colonels or their

equivalents are the most senior officials

normally dedicated full-time to an individual

program, so close working relationships form

and trust is established. Though these professionals cannot normally bind their respective

governments, they can determine if the military

requirements of their nations are common

enough to justify a cooperative program. At the

mid-level career plateau there is often field

experience with similar equipment and a degree

of follow-through. Some officers have worked

on the program in earlier stages, acquiring

technical expertise, and are often in a position

to influence harmonization decisions favorably

through their credibility. The personal commitment to make the extra effort required to

earnestly pursue international cooperation has

often been the crucial factor in reaching

common requirements.

Standardization of the format by which

requirements are set forth, at least on a NATO

basis, can render similarities and differences

more clear and aid in identifying areas for cooperation. The U.S. has mandated that all DoD
6-6

components follow a standard format for

requirements documents. (See Chapter 1.) It is

hoped that this will aid harmonization among

U.S. Service components and smooth the path

toward the creation of joint programs. The

methods by which requirements are determined

can also be standardized. Modeling and

simulation could be aligned as well as the set

of assumptions (threat, munition effects,

environment, etc.) from which requirements are

derived.

The fact that harmonization is a difficult process

mitigates against an Airbus scenario for

Europe’s defense industry. Airbus is able to

produce airliners that are competitive with

those produced by Boeing because the effort is

supported by a large global market with

common requirements. European national

defense requirements are still different enough

to preclude the development of a standardized

product line that meets the needs of all nations.

Though harmonization generally presents a

difficult problem in cooperation, there are

programs that deal with it successfully. Yet the

potential to reach mutually agreed-upon requirements has not been realized. An exchange

of ideas is inherent in the process and a degree

of compromise is usually required to arrive at

common requirements.

Difficulty of Cooperative Programs

Cooperative programs are hard but achievable.

It is obviously easier to serve one master than

to have to accommodate the needs, business

practices, and personalities of several different

nations. However, given strong shared objectives, these and other obstacles can be

overcome.

Harmonization is addressed above and in

Chapters 1 and 4. All the forms of consensus

decision-making are more time consuming and

difficult. A key component to success, and one

that cannot be over emphasized, is the human

dimension—the right people in the right positions. Failure or success is often the result of

leadership since a special quality of that attribute must be exercised in a situation where the

lines of authority are ambiguous. It is essential

to international cooperation that people who

are flexible enough to see the value in compromise be led by those with the skills to build

a consensus. (See Chapter 4.) NSSMS is one

example, but the point is that even with needs

perfectly aligned and an ideal management

arrangement, the program will fail without

mature, dedicated leadership.

Program security is always a challenge and

requires extra effort in a cooperative program.

The boundaries need to be clearly set forth in

the program’s governing documents and the

procedures outlined in Chapter 2 adhered to.

The key is to start the security process early

and to ensure that the rules are communicated

to all concerned.

Export licenses and disclosure authority should

be similarly approached. (See Chapter 2.)

Although time-consuming, there is a designated path and it eventually produces results.

Smoothing the export license process has been

described as the “number one thing in the

DoD,” so there may be improvement in the near

term.11 Great care must be exercised not to give

cooperative partners false impressions regarding the technology to be released and the

timing.

Although industrial teaming is not unique to

international cooperation, it can sometimes

take on some added dimensions. The objective

is to form a more responsive and efficient

relationship. There are nearly always the issues

of work share, industry benefits, and the politics
6-7

associated with them. Over the years, certain

conventions have been formed (work share

equal to cost share, etc.) and the arrangements

should be clearly defined in the governing

document. Examples of industrial teaming

arrangements are provided in Chapter 4.

Differences in contract types (fixed price vs.

cost plus) and acquisition systems (phase, IPTs,

performance specifications) must be accommodated, as discussed in Chapter 5. In the

successful programs examined, each had to

tailor an approach to fit the circumstances.

There are developments that may ease some of

the challenges of international cooperation. The

introduction of the euro will help address

currency fluctuations for programs with several

European partners even if it does not eliminate

the problem. (Further discussion in Chapters 3

and 5.) In addition, some bureaucratic initiatives may bear fruit. The new acquisition phases

introduced by the proposed update of the DoD

5000 series of acquisition regulations, if

approved, will be more flexible and permit

better alignment with international partners.

Nevertheless, international cooperation will

always present a unique set of problems that

only an early and thorough approach can

successfully address.

Accepting that the cases cited in Chapter 4 were

largely successful, their treatment of potential

problem areas bears recapitulation. Military

and programmatic requirements were successfully harmonized. Industrial teaming was

an attention area in all cases, usually aided by

thoughtful leadership and an ethos of teamwork. An adaptive, responsive management

structure anticipated and enabled resolution of

tough issues. Technology transfer aspects were

thought out largely in advance and benefited

from unambiguous treatment in the program

MOU. Creativity in developing the unique

business management practices for cooperative

programs led to functional financial and

contracting processes. Industrial partners were

often a resource to solve tough problems.

Cooperation is indeed doable, if entered into

with all partners fully informed of the potential

problem areas that must be anticipated.

Lack of Incentives

While there is generally high-level support for

armaments cooperation, the military services

and PMs lack incentives to seek that route. This

is a clear difference across the Atlantic in many

countries and perhaps the major reason that the

U.S. engages in so few projects of this kind.

Interoperability and coalition building are

persuasive arguments in the abstract, but it is

hard to quantify and measure progress at any

level.

There is no carrot, and neither is there a stick.

Although consideration of international opportunities is required by law (see Chapter 1), the

possibility is not emphasized at program decision reviews. Only in rare instances does a PM

have to seriously defend the proposition that

the program would not benefit from international cooperation. The 1996 Defense Science

Board recommended that “administrative

procedures that require acquisition executives

and program managers to demonstrate attention

to international opportunities should be

required.”12 There is no evidence to date that

this recommendation has been effectively acted

on and the proposed update of DoD 5000 series

of acquisition regulations places even less

emphasis on international cooperation.

In an era of budget consciousness, the military

services are particularly diligent in seeking

savings in all stages of the acquisition process.

The problem with cooperative programs is that
6-8

the actual savings are difficult to quantify. Even

though cooperative development programs cost

more in total than solely national development

efforts, dividing development costs among

partners normally produces at least some

savings for each participant. The exceptions are

when one partner pays for the majority of the

effort, as the U.S. has sometimes done, or when

excessive gold plating of requirements dramatically drives up the program’s cost. Promised

production cost savings based on greater

economies of scale have almost always been

negated by government-driven national work

share apportionment and less than optimal

industrial arrangements. Recently, life cycle

logistics costs have been given more attention

in DoD, but it remains to be seen what this will

portend for international cooperation. Hence,

the significance of whatever cost savings are

expected must be carefully weighed against the

difficulties that cooperation will bring.

From the PM’s perspective there is little

incentive to expose him or herself to the added

difficulties of an international program. PMs

are evaluated by the cost, schedule, and performance of the programs they manage. Cooperative programs inherently take longer for

reasons already discussed. The likelihood of a

schedule slip due to technical or industrial

problems is greatly increased with additional

contributors. Additionally, despite the potential

for cost savings, international cooperative

programs carry a greater risk of baseline cost

increases. Finally, there is likely to be greater

difficulty in meeting performance parameters

in order to satisfy all concerned. Cooperative

programs are not recognized as a distinct case,

however and while the PM involved in a cooperative program usually has significantly less

of the control enjoyed in a national undertaking,

he or she is evaluated by the same criteria.

Correcting the structure of incentives for cooperative programs will require a substantial and

coordinated effort. The DSB recommended

career incentives for the best in the field, much

as is the case for joint assignments in the Services, and public awards for those who succeed

internationally. Assignment of personnel with

international experience is also advocated,

though the development of that particular pool

of talent, given the low rate of cooperation, will

be difficult. Perhaps even more challenging will

be to endow U.S. participation in international

cooperative programs with the same funding

stability enjoyed by intra-European partners.

Finally, PMs need the assurance that their

performance will be judged by criteria relevant

to an international program.

Motives to Cooperate

U.S. participants should recognize that in many

cases their motives for cooperating with an

international partner may be very different from

those of their partner(s). Development cost

savings are always a reason to cooperate, but

for U.S. programs it is really only a motive if it

is a low priority effort. This is probably not the

case with international partners. In most

instances, the only way they can afford even

their highest priority programs is through

cooperation. Political reasons, such as furthering NATO unity, may be a strong reason

for collaboration from the U.S. point of view,

but probably will not carry as much weight for

Europeans. Conversely, political reasons are

one of the strongest drivers of intra-European

cooperation. Technology is the principal attraction for many Europeans to cooperate with

the U.S. Each program will have its own

particular set of motivations on either side and

the PM who is aware of them will be much

more effective.
6-9

Organizational Culture

The U.S. does not have an organizational culture that is conducive to international collaboration. As noted above, these programs face

difficult challenges, including harmonization

of requirements (especially in the current era

of an uncertain threat) and cooperative program

management. An ineffective organizational

culture combined with these challenges has

aggravated the bad reputation of the U.S. as a

cooperative partner, as discussed earlier. Much

of the organizational culture problem lies

within DoD, particularly in the lack of effective

emphasis on or incentives for cooperative

involvement. Although DoD officially has policies that are fully supportive of cooperative programs, they are not rigorously pursued. As one

OSD official explained, “There is lots of cheerleading for cooperative programs but very little

championing of cooperative programs within

OSD.”13 Another OSD official stated that

although the U.S. says it wants maximum cooperation publicly, in most cases it really doesn’t

want or need to cooperate.14

Any cooperative venture adds complications

and to some degree ties the hands of the U.S.

on future prioritization decisions. In the past,

the DoD and the Services have not always been

supportive of cooperative programs when

difficult funding prioritization decisions were

required. In many cases, these types of funding

choices were made by the individual Services

and DoD did not make the extraordinary effort

needed to override them. The result is an attitude within DoD and the Services that is it

acceptable (although not good) to cut/eliminate

funding for cooperative programs. Likewise,

the failure to enforce effectively the policy

requiring serious consideration of international

cooperation at the start of a program has resulted in the policy’s being generally ignored.15

This is especially true because the challenges

in harmonization of military requirements and

program management that must be overcome

to successfully cooperate add significant

complexity for PMs who are taxed enough in

U.S.-only programs. The few collaborative

arrangements that result lead to a thin pool of

U.S. international expertise to draw on when

considering future cooperative opportunities.

This lack of experience combined with little

education in cooperation results in ignorance

in the acquisition work force regarding international cooperative programs.16 Hence, the

U.S. finds itself in a cycle that is hard to break.

Barriers to cooperation within the U.S. government, but outside DoD, reinforce the culture

that ignores international opportunities. PMs

and others in the acquisition workforce receive

little encouragement from the daunting prospect of dealing with the bureaucracies of the

Departments of Commerce and State, not to

mention congressional budget issues. Moreover, cooperation for US personnel is difficult

since they are not normally “internationalists.”

Americans rarely speak other languages, know

other customs, or the history of other nations.
6-10

ENDNOTES

8. Interview with a member of the NATO International

Staff (February 28-29, 2000).

9. Interview with French armaments officials (March

2-3, 2000).

10. Ibid.

11. Linda De France, “Export Process Reform is

Cohen’s Number One Issue, DoD Official Says,”

Aerospace Daily (April 12, 2000).

12. Report of the Defense Science Board Task Force on

International Armaments Cooperation, Summary of

Task Force Recommendations (August, 1996).

13. Interview with U.S. DoD official by the authors.

14. Ibid.

15. International Cooperative Research and Development Program, Audit Report by the Office of the

Inspector General, DoD, Report Number. 98-121

(April 27, 1998), pp. i,ii.

16. Survey of intermediate level acquisition students at

the Defense Systems Management College (DSMC)

conducted in April 2000 by the authors.

1. John Vincour, “France Has a Hard Sell to Rein In

U.S. Power,” International Herald Tribune (February

6, 1999).

2. William Pfaff, “Falling Out Over European Defense,” International Herald Tribune (April 13,

2000).

3. Interview with a European officer with extensive

experience in armaments cooperation with the U.S.

(January, 2000).

4. Gordon Adams, Convergence or Divergence?: The

Future of the Transatlantic Defense Industry,

Research paper, Elliott School of International

Affairs, The George Washington University

(February, 2000).

5. Interviews with German armaments officials (March

7-8, 2000).

6. Interview with a European national armaments

representative at NATO headquarters (February 28-

29, 2000).

7. Interviews with German armaments officials (March

7-8, 2000).
7-1

7

CONCLUSIONS AND

RECOMMENDATIONS

“Even if you are on the right track,

you’ll get run over if you just sit there.”

— Will Rogers

development costs grow out of proportion to

defense budgets, however, the potential for cost

savings that cooperation offers cannot be

ignored.

Important as RSI are, the most important single

reason to engage in transatlantic defense

cooperation is to help ensure the continued

viability of the NATO alliance. Close military

cooperation, to include collaboration in the

development and production of armaments, is

the glue that keeps the alliance intact. This is

all the more true with the collapse of the Soviet

Union. RSI was never achieved, even at the

height of the Cold War, but alliance unity was

served by cooperation. The operational incompatibility of allied forces in Kosovo underscored the importance of interoperability, however, and may help drive future transatlantic

cooperation.

Should cooperation be abandoned or allowed

to die on the vine, NATO allies will become

competitors in a race for arms sales—in many

Transatlantic cooperation is worthwhile and

should continue to be pursued.

Despite all the currents working against international armaments cooperation, the fundamental reasons for engaging in it are sound and

remain intact.

Armaments cooperation constitutes a substantive and symbolic tie between the U.S. and its

allies. A successful collaborative defense effort

builds trust in a meaningful sense and proves

to the world that we share security interests.

The common or compatible systems that flow

from transatlantic cooperation make NATO a

more effective fighting force. MIDS is a good

recent example of a system developed through

collaboration, one that will allow allied pilots

to communicate in future scenarios similar to

Desert Storm or the Balkans. Interoperability

is essential for allies to share the field. Perhaps

the biggest public selling point for the pooling

of effort in armaments development is cost,

though the benefits are elusive in practice. As
7-2

cases to unstable nations that may use their

arms in regrettable ways. Acrimony between

the EU and the U.S. will erupt and contact will

weaken. In some ways this has been foreshadowed by transatlantic trade tensions.

However ...

The objectives of cooperation are only served

by successful undertakings.

A failed program is worse than no program at

all. The resentments that are bred through the

failure of a cooperative project linger at all

levels. Most important, the well for future cooperation is poisoned and the resulting suspicions

may spill over into other areas of policy. The

result will be missed opportunities and isolation

in security matters. The longer the situation persists in which European allies have their negative perception of the U.S. as a partner reinforced,

the more difficult future undertakings become.

Successful programs, however, often yield

additional cooperative opportunities in the form

of follow-on efforts. Several of the programs

reviewed in Chapter 4 demonstrate this. The

over thirty-year history of NATO Seasparrow

has seen successive improvements to the

missile and the project office continues to serve

as an incubator for, and an example of, NATO

cooperation.

In order to replicate this success ...

Cooperative programs must be carefully selected with a view toward long-term success.

If the U.S. undertakes cooperation as a hedge

against the failure of a parallel program, the

chances of that cooperation coming to fruition

are low. The system in consideration must fill

an important need and the date on which the

requirement needs to be filled for all partners

must comport with the program’s projections.

It must be reasonably likely that the expectations of all partners will be met. Technology

transfer and work share issues need to be

surmountable. Preliminary cost estimates must

have solid footing in the U.S. budget and a firm

commitment of support made by the DoD.

Funding for the entire cooperative program

should be planned, programmed, and budgeted

as a prerequisite to signing an MOU.

Despite trends against transatlantic cooperation, there will be opportunities as long as a

technology gap exists.

The large disparity in R&D spending across

the Atlantic (a three or four to one advantage

in favor of the U.S. – see Figure 3-2), creates

an incentive for Europe to seek cooperation

with the U.S. According to Secretary of Defense Cohen, Europe seeks to “free-load” on

U.S. defense spending. This applies to technology investments, and indeed, Europe is not

likely ever to invest enough in R&D to close

the technology gap. The numbers may understate the problem as Europe’s R&D is divided

between several nations which results in

duplication of effort. This is not a question of

capability but one of commitment of resources.

It is one reason why black boxes are so disliked

by European partners. It is also why, when

making equitability decisions, the DoD Comptroller is steadfast to quantify the nonfinancial

contributions (i.e., technical data) that partners

bring into cooperative programs.

On the other hand, cooperative R&D efforts

serve as the foundation for future cooperation.

At a minimum, R&D produces exposure to and

understanding of technologies developed among the transatlantic allies. This is a two-way

street; although the U.S. holds an edge in technology overall, there are areas in which some

European nations hold an advantage. With a

better mutual understanding of technology, the
7-3

prospect of defining interoperable standards

(such as STANAGS) improves, as does the

technical basis for harmonization of military

requirements. The trend of diminishing staffing

for cooperative R&D activities should be

reversed, sending the signal that the U.S. is

serious about the future of transatlantic defense

cooperation.

The U.S. needs to develop an organizational

culture that supports international armaments cooperation.

The pursuit of a cooperative program in the

U.S. DoD and Services is a lonely endeavor.

There are many supportive statements from

senior leaders and even official policies, but

the fact remains that international cooperation

is not a central concern in the realm of acquisition. For many years an organizational culture

that is unfavorable toward cooperation has

existed for the understandable reason that

people within DoD or the Services value only

those things that the leadership emphasizes and

actively expresses interest in. That usually

hasn’t been the case regarding armaments cooperation with U.S. allies. Only with a concerted

effort can this condition be reversed over time

to create a culture that is positively disposed

toward cooperation.

In order to increase the number and quality of

cooperative opportunities and their chances for

success, a series of steps are recommended

below for the U.S. These steps are aimed not

only at addressing European complaints, but

also at better preparing the U.S. acquisition

workforce and encouraging them to follow

commitments through to a successful conclusion. Ultimately, an organizational culture

within DoD must emerge that is more oriented

toward international armaments cooperation.

Recommended Steps

Funding stability similar to that enjoyed by

the European partners must be provided for

U.S. international cooperative programs. DoD,

the Service components, and Congress all play

large roles in this regard. First, DoD should

rigorously adhere to the long-standing requirement of programming for the entire expected

program cost (whether a cooperative program

or not) prior to entering any cooperative program. Temptations to deviate from this procedure in order to accommodate optimal timelines

for initiation of a cooperative effort should be

resisted. Second, DoD and the Services must

instill within their organizational cultures that

it is unacceptable, barring extraordinary circumstances, to cancel or withhold funding once

a cooperative effort has been engaged in good

faith. This cultural change cannot merely be

another DoD policy proclamation; it must be

effected by example every time DoD and the

Services make funding priority decisions on

programs. Third, Congress must view the funds

in cooperative programs differently from those

committed to national programs. DoD and

Service staffs must associate armaments cooperative efforts with our allies as significant political benefits to the U.S. The influence of U.S.

defense companies lobbying for funding of

competing national efforts must be resisted.

Congressional support of cooperative programs

will send a strong signal to U.S. allies. The

above actions will help ensure funding stability

and provide significant incentives for the

pursuit of cooperative programs.

Export controls have received a great deal of

emphasis within DoD recently. An effort is

under way to reduce significantly the time and

amount of bureaucracy associated with processing export licenses. DoD recently signed a

bilateral agreement with the U.K. to facilitate

defense trade and armament cooperation with
7-4

the U.S. DoD is attempting to reach similar

understandings with other allies. To be fully

effective, DoD’s efforts to reduce bureaucratic

export burdens must be supported by the

Department of State and Congress.

False Impressions regarding technology

transfer must be assiduously avoided by U.S.

officials. Technology is likely to remain a very

emotional and controversial issue on both sides

of the Atlantic because of the importance it

plays in determining military capabilities and

its potential value in industrial applications.

Officials at all levels (including high levels) of

DoD and the Services should be particularly

conscious of the importance of technology and

should not create an expectation that it will be

shared when approval is uncertain.

Education of PMs and other members of the

DoD acquisition workforce on all aspects of

international cooperative programs would help

in ensuring that viable cooperative programs

are selected as well as ensuring the success of

those that are already engaged. Since the U.S.

has only a small percentage of experienced personnel, education is the only effective means

to address the existing general ignorance of

cooperative programs in the acquisition workforce. The DSMC has recently increased the

amount of time (from two to seven hours)

devoted to international acquisition education

in its Advanced Program Manager’s Course

(APMC). This initiative will help and should

continue, but alone it will only provide exposure to and awareness of some fundamental

considerations in international acquisition. It

will not create the expertise that is needed to

initiate or manage them. DSMC also continues

to offer one-week courses on technology/export

controls, international program management,

and MOU negotiations and development. It is

to be hoped that these courses, along with distribution of this book and subsequent initiatives,

will arm PMs and the acquisition workforce

with substantial knowledge of cooperative

programs.

Harmonization efforts should be rigorously

and systematically pursued by the U.S. The

Services should promote additional periodic

mid-level (O-6 or equivalent) discussions with

the allies focused on opportunities for harmonization. These mid-level discussions have been

one of the most productive means of harmonizing requirements in the past and hold the

same promise for the future.

The recent NATO armaments review process

should be fully supported by the U.S. Although

CNAD has been only minimally effective at

promoting cooperative programs in the past,

this new approach may prove more fruitful.

Only time will tell, since the new NATO procedures are focused on a long-term systematic

fix. The ICOG, although relatively new and

lacking any conspicuous success, should continue. The early focus of ICOG discussions will

likely prove productive over the long term.

Europe’s experience with the Western European Union is instructive. Some fora or organizations remain dormant until conditions permit

their flowering—an opportunity for the ICOG

to foster.

Leadership on the U.S. side of any cooperative

program must be selected with special care.

Managers of cooperative programs face a

significantly more complex leadership challenge than their U.S.-only counterparts.

Leaders require the temperament to build consensus, to operate within ill-defined bounds and

ambiguous lines of authority, yet to drive aggressively toward program goals. Sensitive cultural antennae, patience, and strong interpersonal skills need to be combined with the

firmness and consistency that produce success

in any endeavor. Such a person will engender
7-5

trust, an essential ingredient in international

cooperation. The same considerations apply to

the selection of all participants in cooperative

programs.

Incentives for acquisition professionals to

involve themselves in cooperative programs are

lacking. PMs who initiate and administer cooperative programs face many more challenges

than their counterparts who manage national

programs, in spite of which, they receive no

benefit or compensation for the extra headaches. The idea of rewarding international program PMs with increased promotion opportunities, as joint assignments for uniformed

personnel are treated, would be a positive incentive for cooperative programs. However, since

there are so few cooperative programs, it would

be difficult to systematically implement this

within the structured promotion systems of

each of the Services, particularly for military

officers. Additional incentives, such as public

recognition for successful cooperation, would

help to a degree and certainly should be implemented, but these measures hold little promise

to motivate PMs to seek international programs.

Emphasis is a more realistic approach to

ensuring guidelines already in place that

mandate the consideration of cooperation

where feasible are followed. Usually PMs have

so many requirements related to cost, performance, and schedule, that if something is

difficult or perceived to be so, and is not emphasized (as seeking cooperative partners is

not), PMs will follow the path of least resistance. Therefore, if DoD desires to maximize

cooperative programs, the leadership must

underscore the point at program decision

reviews by closely questioning PMs to determine whether they have exercised due diligence

in seeking cooperative partners. International

cooperation must be stressed in the Acquisition

Strategy and Analysis of Alternatives. In Germany and France, two countries with an

abundance of collaborative programs, PMs

universally stated that seeking cooperative

partners is seriously emphasized by their

leadership. In most cases in those countries, it

would be unacceptable to propose only a

national solution when initiating a new program. The opposite is true in the U.S.; rarely

does leadership in the DoD or the Services

emphasize finding cooperative partners. It is a

written policy that is not enforced in practice.

OSD and Service-level support must improve

for cooperative programs. PMs currently involved in these programs often feel that they

are isolated. The organizations in OSD and the

Services that are chartered to advocate international armaments cooperation could be more

consistently effective in their support role. PMs

involved in cooperation need someone in their

corner who has a vital interest in their work,

someone to smooth the path and clear the obstacles inherent in these international endeavors.

DoD and Service leadership must inculcate the

view that support for the PMs working to establish and manage these particularly challenging

programs serves U.S. long-range policy objectives. A degree of flexibility and willingness to

compromise in the short term is also consistent

with those objectives.
7-6
A-1

APPENDIX A

GUIDELINES FOR

THE PREPARATION OF

SUMMARY STATEMENT

OF INTENT (SSOI)
A-2
A-3

APPENDIX A

GUIDELINES FOR THE PREPARATION OF

SUMMARY STATEMENT OF INTENT (SSOI)

Header Information:

• Short Title of Proposed Project

• DoD Proponent

• Country/ies Involved

1. Overview of International Agreement

• Briefly describe the project. Be specific as to what the project will deliver. Is this a new or

existing U.S. project? Is there currently a Memorandum of Understanding or other

international agreement in effect that is applicable to this effort?

• Is this proposed for Nunn funding? If so, what technological development is to be pursued

which is necessary to develop new defense equipment or munitions, or what existing

military equipment would be modified to meet U.S. requirements?

2. Operational Requirement

• What U.S. operational requirement would this project satisfy and/or what critical deficiency

or shortfall would this project address? If known, cite applicable documents.

• Briefly describe the project’s objectives.

• Provide an estimated schedule for the project, and Initial Operational Capability (IOC), if

applicable.

3. Partner Nation(s)

• Which nations are proposed partners? Which nations have agreed to be partners? What is

the assessment (and your basis for it) of foreign interest/commitment?

• Briefly describe the proposed negotiation strategy and negotiation schedule.

• Describe any planned variations from the policy guidance contained in the latest approved

version of the International Agreements Generator (“IA Generator”) and any resulting

variations to the required International Agreement text that are known.

4. Legal Authority

• State the statutory legal authority for the proposed agreement. If section 27 of the AECA

is not being used, explain why not.
A-4

5. Project Management

• Briefly describe how the project will be structured and managed.

6. Benefits/Risks to the United States

• List the advantages and disadvantages of this cooperative project. Address project timing,

developmental and life cycle costs, technology to be shared and obtained, impact on U.S.

and foreign military capability, and rationalization, standardization and interoperability

(RSI) considerations. Indicate whether there are any risks associated with conducting this

project as an international cooperative program, and briefly describe how these risks are

to be managed. Is a similar project currently in development or production in the U.S. or

an allied nation? If so, could that project satisfy or be modified in scope to satisfy the U.S.

requirement?

7. Potential Industrial Base Impact

• Briefly describe the potential industrial base impact. Do you anticipate workshare

arrangements, requests for offsets, or offshore production of items restricted to procurement

in the United States? Are you aware of any key parts or components with single source of

production? What U.S. Government facilities and/or contractors would be likely to

participate in this cooperative effort? Will there be any significant effects (pro or con) on

any U.S. companies or U.S. industrial sector(s)?

8. Funding Availability and Requirements

• List the total estimated cost (in U.S. dollars) of the International Agreement. The total cost

should include all U.S. and foreign government financial and non-financial costs.

• List the cost shares (in U.S. dollars) of each participant. Also list any non-financial

contributions, their value (in U.S. dollars), and describe how the value was determined.

• If not equitable financially, justify on a program basis (show the relative benefit to the

DoD). An equitable agreement is defined as one which a participant’s share is commensurate

with that participant’s share of the anticipated benefits from the agreement.

• List the Department’s estimated costs (in U.S. dollars) by fiscal year, appropriation, and

program element. Indicate if the funds required to pay these costs have been, or will be,

approved in the budget and are available for use.

• List other participant’s estimated costs (in U.S. dollars) by fiscal year. If applicable, outline

the likelihood of follow-on research or acquisition and the proponent’s commitment to

fund such follow-on action.
A-5

9. Procurement

• Will the Department of Defense participation in the project involve contracting? If so,

what agency will perform the contracting, and for what part of the project work?

• Will a participant other than DoD perform contracting? If so, which participants and for

what part of the work?

• Will contracting be done on a competitive basis? If not, what justification will be used?

10. Information Security and Technology Transfer Issues

• Briefly identify the products and/or technologies involved in the program and their NDPC

category and classification. The Militarily Critical Technologies List (MCTL) may be

used as a guide.

• Is an exception required to the National Disclosure Policy? If so, provide date of approval

or date that a request will be submitted to the National Disclosure Policy Committee

(NDPC).

• If known, describe the foreign availability of comparable systems and technologies and

whether the U.S. technology has been shared through other programs, e.g., FMS, DEA,

etc.

• Briefly describe the risk of compromise of classified and export controlled technology

and/or products and the technology advantages in the event of such compromise (e.g.,

negating primary U.S. technological advantage(s), revealing U.S. system weaknesses,

development of countermeasures, susceptibility to reverse engineering).

• Identify any measures proposed to minimize the potential risks and/or minimize any damage

that might occur due to loss, diversions, or compromise of sensitive classified or unclassified

controlled data or hardware. Specify NDPC categories involved, where applicable. Include

any phased release of information designed to ensure that information is disseminated

only when and to the extent required to conduct the program; restrictions on release of

specific information (including classification, description, and disclosure methods); release

of components, software or information in modified form (e.g., export versions, exclusion

of design rationale and deletion of data on weapons not sold to the participant); and special

security procedures (both government and industrial) to control access to restricted material

and information.

11. Proponent’s Points of Contact

• Include organization, name, telephone, fax, and Internet address. Assure that this POC or

an alternate is available to answer any questions from reviewing offices during the RAD

review period.

Source: Appendix A, Volume 12, Chapter 9 of the DoD Financial Management Regulation
A-6
B-1

APPENDIX B

SUMMARY OF

SECURITY PROCEDURES

FOR NATO PROGRAMS
B-2
B-3

APPENDIX B

SUMMARY OF SECURITY PROCEDURES

FOR NATO PROGRAMS

A. NATO has four levels of security classification:

1. COSMIC TOP SECRET (CTS)

2. NATO SECRET (TS)

3. NATO CONFIDENTIAL (NC)

4. NATO RESTRICTED (NR)

The marking “ATOMAL” is used to identify U.S. Restricted Data and Formerly Restricted

Data (RD/FRD) and UK ATOMIC information shared with NATO. Each NATO member

nation must establish a central registry to manage the receipt, dissemination, and control of

NATO classified information. These central registries may establish sub-registries and control

points. The Central U.S. Registry (CUSR) is located in the Pentagon.

B. Access. U.S. personnel with a U.S. security clearance may have access to NATO information

at the level of their clearance when there is a need-to-know in the performance of their duties

and responsibilities and they have been briefed on NATO security procedures. Access to

NATO Restricted information does not require a clearance, but recipients must be informed

of NATO procedures for its protection. Contractors may have access to NATO classified

information only to bid on or perform on a NATO contract or on a U.S. Government Agency

or NATO member nation non-NATO contract that requires access to NATO information.

C. Facility Clearance. A NATO Facility Clearance Certificate is required for any contractor to

negotiate or perform on a NATO classified contract. A U.S. facility clearance qualifies if

cleared personnel requiring access have been briefed on NATO procedures.

D. Marking and Downgrading/Declassification. Normally, NATO documents are not portion

marked and do not contain downgrading and declassification instructions. However, U.S.

documents prepared for NATO are to be so marked. NATO classified documents cannot be

declassified or downgraded without prior consent of the originating or otherwise responsible

NATO nation or civil or military body. U.S. documents must be marked to identify any NATO

information contained in them.

E. Storage. NATO classified documents are stored in the same manner as U.S. documents of an

equivalent classification level, but they must be segregated from other non-NATO documents.

Material containing NATO RESTRICTED information may be stored in locked filing cabinets,

desks, bookcases, or other similar locked containers to preclude unauthorized access, or in

locked rooms to which access is controlled.
B-4

F. Hand Carry. The hand carrying of NATO SECRET, NATO CONFIDENTIAL, and NATO

RESTRICTED documents across international borders may be authorized, following basically

the same procedures used for U.S. material. However, NATO courier certificates and briefings

are used. COSMIC TOP SECRET information cannot be hand-carried.

G. Extracts. NATO classified information may be extracted from a NATO document and used

in a U.S. document; the U.S. document must be marked to identify the NATO information.

H. Transmission. Transmission of COSMIC TOP SECRET and NATO SECRET and all

ATOMAL material must be through the Registry System. NATO CONFIDENTIAL and

RESTRICTED material will be routed through the U.S. Postal Service and U.S. military

postal channels (Certified mail within the United States and Registered mail for international

transmission) to the U. S. organization effecting the transfer to the NATO recipient. The

material may also be sent by courier or encrypted and sent electronically.

I. Destruction. NATO SECRET information and below is destroyed in the same manner as

equivalent U. S. material, but the destruction of NATO SECRET material must be witnessed

and recorded; witnesses and destruction records are not required for NATO CONFIDENTIAL

and RESTRICTED material. COSMIC TOP SECRET is destroyed in the Registry System

and destruction must be witnessed and recorded.

J. Receipts. A continuous chain of receipts is required for COSMIC TOP SECRET documents.

Receipts are required for the receipt, disposition, and dispatch of NATO SECRET documents.

Receipts are not required for NATO CONFIDENTIAL documents unless required by the

originator, although receipts are required for packages containing NATO CONFIDENTIAL

documents when transmitted outside an organization or facility and internationally. Receipts

are not required for NATO RESTRICTED documents or packages unless required by the

originator. Receipts must be retained for ten years for NATO TOP SECRET and three years

for NATO SECRET.

K. Release to Non-NATO Entities. Release of NATO classified information to non-NATO entities

must be approved by the originating nation or the responsible NATO civil or military body

that generated the document, as applicable.

L. U.S. Information Released to NATO. U.S. information to be released to NATO will be

marked with the U.S. classification level and the notation that it is releasable to NATO. NATO

is responsible for applying the NATO markings. Some U.S. activities, if they are the last U.S.

holder, prefer to apply the NATO markings themselves before providing the material to the

NATO recipient.

Source: ODUSD(PS) International Programs Security Requirements Course
C-1

APPENDIX C

NATIONAL DISCLOSURE POLICY

COMMITTEE MEMBERSHIP
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APPENDIX C

NATIONAL DISCLOSURE

POLICY COMMITTEE MEMBERSHIP

The General Members of the National Disclosure Policy Committee are representatives of:

• The Secretary of State

• The Secretary of Defense (designates Chairman)

• The Secretary of the Army

• The Secretary of the Navy

• The Secretary of the Air Force

• The Chairman, Joint Chiefs of Staff

The Special Members are representatives of:

• The Secretary of Energy

• The Director of Central Intelligence

• The Under Secretary of Defense for Policy

• The Under Secretary of Defense for Acquisition, Technology and Logistics

• The Assistant Secretary of Defense for Command, Control, Communications

and Intelligence

• The Assistant to the Secretary of Defense (Nuclear, Chemical

and Biological Defense Programs)

• The Director, Defense Intelligence Agency

• The Director, Ballistic Missile Defense Organization

Source: ODUSD(PS) International Programs Security Requirements Course
C-4
D-1

APPENDIX D

SAMPLE OF

NDP-1 COUNTRY CHARTS
D-2
D-3

APPENDIX D

DELEGATIONS OF

DISCLOSURE AUTHORITY

Sample of

NDP-1 Country Charts

Country A Country B Country C

Organization, Training and Employment 1 S C

of Military Forces

Military Materiel and Munitions 2 S C

Applied Research and Development 3 C

Information and Materiel

Production Information 4

Combined Military Operations, Planning, 5

and Readiness

U.S. Order of Battle 6

North American Defense 7

Military Intelligence 8 TS S X

Source: Department of Defense, International Programs Security
D-4
E-1

APPENDIX E

DOD PRINCIPAL

DISCLOSURE AUTHORITIES
E-2
E-3

APPENDIX E

DOD PRINCIPAL

DISCLOSURE AUTHORITIES

These officials have the authority to authorize the disclosure of classified information over which

their agencies have original classification authority, provided the classification level of the

information falls within the levels delegated in the NDP-1 charts, all of the disclosure criteria can

be satisfied, and disclosure is not limited by a NDP-1 policy statement. DoD officials who are not

listed must seek delegated disclosure authority from the Office of the Deputy Under Secretary of

Defense (Policy Support).

OFFICE OF THE SECRETARY OF DEFENSE

• Under Secretary of Defense for Policy (USD(P))

• Under Secretary of Defense for Acquisition, Technology and Logistics (USD(AT&L))

• Assistant Secretary of Defense for Command, Control, Communications

and Intelligence (ASD(C3I))

• Chief of Staff, Defense Intelligence Agency

• Chairman of the Joint Chiefs of Staff

• Director, Ballistic Missile Defense Organization

MILITARY SERVICES

• Department of the Army: Deputy Chief of Staff for Intelligence

• Department of the Navy: Assistant Secretary of the Navy

(Research, Development and Acquisition)

• Department of the Air Force: Deputy Under Secretary of the Air Force

(International Affairs)

Source: ODUSD(PS) International Programs Security Requirements Course
E-4
F-1

APPENDIX F

SUMMARY OF

THE MULTINATIONAL INDUSTRIAL

SECURITY WORKING GROUP (MISWG)

DOCUMENTS
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F-3

APPENDIX F

SUMMARY OF

THE MULTINATIONAL INDUSTRIAL

SECURITY WORKING GROUP (MISWG)

DOCUMENTS

A. MISWG Document Number 1, “Arrangements For The International Hand Carriage of

Classified documents, Equipment, and/or Components.” The Defense Security Service (DSS)

normally authorizes its use for individual efforts. SUMMARY: This document addresses the

issue of cross-border hand carriage of classified material; must be an urgent need, material

not present, and no other way to get it there; cannot turn material over to customs or security;

must stay in personal possession.

B. MISWG Document Number 3, “Use of Cryptographic Systems” (Document #2 was merged

with Document #7.) SUMMARY: Document #3 pertains to the use of cryptographic systems;

requires use of NATO standards and consent of national communications authority for use.

C. MISWG Document Number 4, “Security Clauses.” SUMMARY: Pertains to agreed security

clauses to be used in cooperative program agreements.

D. MISWG Documents Number 5, “Programme/Project Security Instruction.” SUMMARY:

Provides a single document with sample format that includes all security procedures for a

cooperative program; to comprise other MISWG procedures that are applicable to a particular

program; content requires agreement of all participants.

E. MISWG Document Number 6, “Procedures For the Protection of Restricted Information.”

SUMMARY: The document contains procedures that were agreed to by the countries that

have a Restricted classification.

F. MISWG Document Number 7, “International Visit Procedures.” SUMMARY: The policies

and procedures in this document are compatible with DoD Directive 5230.20, “Visits and

Assignments for Foreign Representatives.”

G. MISWG Document Number 8, “Controlled Unclassified Information Clauses.” SUMMARY:

Describes additional clauses to be inserted into program agreements addressing the protection

of CUI.

H. MISWG Document Number 9, “Security Education and Awareness.” SUMMARY: Provides

a topical outline of a security briefing for contractor employees; each participant is responsible

for briefing its personnel and investigating breaches on its territory.
F-4

I. MISWG Document Number 10, “Transportation Plan For The Transmission of Classified

Material As Freight.” SUMMARY: Describes the content and use of a transportation plan for

the movement of classified material as freight; provides a sample format; can be modified to

meet circumstances; Annex contains provisions for recurring shipments.

J. MISWG Document Number 11, “Control of Security Cleared Facilities.” SUMMARY: Annex

to Document #5, PSI, to list all participating facilities and points of contact involved in a

program.

K. MISWG Document Number 12, “Facility Security Clearance Information Sheet.”

SUMMARY: Document 12 is to be used in requesting and verifying facility security clearance

information.

L. MISWG Document Number 13, “Automated Data Processing (ADP) Security Plan.”

SUMMARY: Provides a suggested format for preparing standard operating procedures when

automated information systems are to be used within a program.

M. MISWG Document Number 14, “Contract Security Clauses.” SUMMARY: These clauses

are very similar to the contract clauses contained in the NISPOM.

N. MISWG Document Number 15, “International Transportation by Commercial Carriers of

Classified Documents and Equipment or Components as Freight.” SUMMARY: Describes

the procedures for the transfer of classified material as freight; to be used with document

Number 10 (Transportation Plan).

O. MISWG Document Number 16, “Guidelines for Assessing Protection and Control of Classified

Information in a Multinational Non-NATO Cooperative Defense Program.” SUMMARY:

These guidelines are intended to assist government industrial security specialists in assessing

security measures at contractor facilities involved in a cooperative program.

P. MISWG Document Number 17, “International Hand Carriage of Classified Documents,

Equipment, and/or Components by Visitors.” SUMMARY: This document expands the scope

of MISWG Document Number 1 to permit visitors from a participating country who are

dispatched for other purposes (e.g., on a visit outside of the international program, on loan, or

to a conference) to hand carry classified material for the international program under specified

procedures.

Q. MISWG Document Number 18, “International Industrial Security Requirements Guidance

Index.” SUMMARY: This document contains guidance for governments to use in providing

participating contractors with the security requirements and classification guidance required

for the performance of classified contracts. This document serves the same purpose as the

DD Form 254, “Contract Security Classification Specification,” which the U.S. will use instead.
F-5

R. MISWG Document Number 19, “Personal (sic) Security Clearance Information Sheet.”

SUMMARY: This document contains a standard format for requesting and verifying personnel

security clearances.

S. MISWG Document Number 20, “International Transfer of Material Classified RESTRICTED

by Express Commercial Couriers.” SUMMARY: This document describes eligibility and

security requirements for the urgent international transfer by express commercial carriers of

material classified Restricted. It is a test document only which is being validated by several

MISWG countries that have a Restricted classification.

NOTE: In addition to the above documents, a number of MISWG countries have approved a

format and procedures for the use of secure voice, fax, and digital communications in international

programs. The DSS approves the use of these procedures when they involve contractors. Guidance

should be sought from the DSS Headquarters, International Branch at (703)325-6050.

Source: ODUSD(PS) International Programs Security Requirements Course
F-6
G-1

APPENDIX G

TECHNOLOGY CONTROL

PLAN (TCP)
G-2
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APPENDIX G

TECHNOLOGY CONTROL PLAN (TCP)

The TCP should cover, at a minimum, the points described below. It is not necessary to prepare a

TCP for each foreign national located at a cleared facility. A generic TCP can be prepared with

annexes to cover specific access authorizations and restrictions and the identification of oversight

officials for individual foreign national visitors or employees.

1. Responsible company officials, e.g., the facility security officer (FSO) and technology control

coordinator or officer, and the responsible company officer or director who provide oversight

of security and technology control measures.

2. Specific measures (i.e., unique badges, escorts, segregated work area, etc.) to control access

within the facility and limit access to the specific information for which a government disclosure

or export authorization has been obtained.

3. A description of the elements of export controlled information to which the foreign national

may have access, and disclosure guidelines for that access.

4. Indoctrination of the foreign national and company personnel who will be in contact with the

foreign national on government security and technology transfer policies, disclosure guidance,

and the provisions of the TCP. The disclosure guidance shall be emphasized to those other

employees who will have frequent contact with the foreign national.

5. Procedures for controlling access to reproduction equipment, automated information, and

telefax equipment.

6. A requirement that the foreign national sign a certificate, witnessed by the FSO or designee,

certifying that he or she acknowledges, understands, and shall comply with U.S. Government

requirements regarding access to, use, and retransfer of technical data, and shall comply with

applicable provisions of the TCP.

7. The designation of a company employee who shall be responsible for overseeing the activities

of each foreign national assigned to or employed at the facility.

Source: ODUSD(PS) International Programs Security Requirements Course
G-4
H-1

APPENDIX H

CHRONOLOGY OF

EUROPEAN DEFENSE INITIATIVES
H-2
H-3

APPENDIX H

CHRONOLOGY OF

EUROPEAN DEFENSE INITIATIVES

Date Event

May 1955 Western European Union (WEU) was established as a result of

the agreements signed in Paris in October 1954 modifying the

1948 Brussels Treaty.

March 25, 1957 Treaty of Rome was signed creating the European community.

February 2, 1976 The Independent European Programme Group was established

to promote European cooperation in research, development, and

production of defense equipment; improve transatlantic

armament cooperation; and maintain a healthy European

defense industrial base.

December 9-10, 1991 The Treaty on European Union was signed in Maastricht but was

subject to ratification. The WEU member states also met in

Maastricht and invited members of the European Union to

accede to WEU or become observers, and other European

members of the North Atlantic Treaty Organization (NATO) to

become associate members of WEU.

May 21, 1992 The Council of the WEU held its first formal meeting with NATO.

December 1992 The European Defense Ministers decided to transfer the

Independent European Programme Group’s functions to WEU.

November 1, 1993 The Maastricht Treaty was ratified and the European Community

became the European Union.

December 1993 French and German Ministers of Defense decided to simplify the

management for joint armament research and development

programs. The proposal for a Franco-German procurement

agency emerged.

January 10-11, 1994 A NATO summit was held, which supported developing of a

European Security and Defense Identity and strengthening the

European pillar of the Alliance.
H-4

November 14, 1994 WEU Ministers issued the Noordwijk Declaration, endorsing a

policy document containing preliminary conclusions of the

formation of the Common European Defense policy.

March 1996 The European Union Intergovernmental Conference, or

constitutional convention, convened.

November 12, 1996 The Defense Ministers of France, Germany, Italy, and the United

Kingdom signed the political foundation document for the joint

armaments agency Organisme Conjoint de Coopération en

Matière d’Armament (OCCAR).

November 19, 1996 The Western European Armaments Organization was

established, creating a subsidiary body within WEU to administer

research and development contracts.

February 4, 1997 The four National Armaments Directors of France, Germany,

Italy, and the United Kingdom met during the first meeting of the

Board of Supervisors of OCCAR. The board reached decisions

about OCCAR’s organizational structure and programs to

manage.

June 19, 1997 The European Union Intergovernmental Conference concluded.

A new treaty was drafted, but little advancement was made to

developing a common foreign and security policy. The treaty

called for the European Union to cooperate more closely with

WEU, which might be integrated into the European Union if all

member nations agree.

July 3, 1997 The Board of Supervisiors of OCCAR held a second meeting.

GAO/NSIAD 98-6

Oct 97 Defense Trade

“European Initiatives to Integrate the Defense Market”
I-1

APPENDIX I

STANDING UP OR JOINING

AN INTERNATIONAL

PROGRAM OFFICE
I-2
I-3

APPENDIX I

INTERNATIONAL COOPERATIVE PROGRAMS

STANDING UP OR JOINING

AN INTERNATIONAL

PROGRAM OFFICE?

Some Nitty Gritty Details

You Might Need to Know

Col. Alan E. Haberbusch, U.S. Air Force, Ret.

In this article, I describe some of these details

I had to manage from my perspective as program director. As you read through the article,

you will find, as did I, that no “one size fits

all”; nor are there any magic “cookbook” solutions for international cooperative programs.

What I hope you glean from this article is an

appreciation of some of the things you may

encounter and how we handled them in the

MSOW IPO.

Getting Started

First, some background. The MSOW was originally a seven-nation (later five-nation)

collaborative effort under a General MOU

signed in July 1987.1

 This MOU had the basic

“rules of the road” but did not commit anyone

to spend any money. Each phase was to be

further defined by a supplementary MOU that

would contain a financial annex and, when

approved through the national approval process

and signed by the appropriate officials, would

commit that nation to that phase of the program.

Haberbusch spent 27 years in the research,

development, acquisition, and test field (1964–

91), including assignments in the space, aircraft, and munitions systems areas. He is currently working as a contractor under the Technical and Acquisition Management Support

contract at Air Armament Center, Eglin AFB,

Fla. He is a graduate of PMC 76-1, DSMC.

So you’re going to lead or be part of an

international program office (IPO). Let me take

you back to 1987 and tell you about my experience when I worked on an international cooperative program—the Modular Stand-Off Weapon (MSOW). As program director, I found a

reasonable amount of assistance and information on developing a Memorandum of Agreement (MOU) and “big picture” management

of such programs, much of which is covered in

the Defense Systems Management College

(DSMC) International Program Management

courses. What is not readily available, I discovered, is greatly needed but hard-to-find insight

into the detailed aspects of such an effort.
I-4

When I came to the program in September

1987, the Project Definition (PD) Phase MOU

was being negotiated.2 The text was agreed upon by November 1988, and the program office

used it as a directive. Eventually, the Management Group approved the financial annex, but

the MOU was never signed.

The program was set to enter the PD Phase

[NATO terminology], which would be equivalent to the current Program Definition and Risk

Reduction Phase (Demonstration/Validation

Phase in the MSOW time frame). Program management was a three-tier international structure

with a Steering Committee at the top (a twostar/civilian equivalent membership), a Management Group (colonel/civilian equivalent

membership), and an IPO at the bottom. For

the top two groups, this structure put all the

participants in an equal position.

MSOW was unique in that it began the collaboration on a major system much earlier in

the development process than did the more

familiar F-16 and Airborne Warning and

Control System (AWACS) programs. MSOW

had to build its day-to-day management

structure (the IPO) from scratch. This was

necessary because MSOW had no infrastructure already in place, such as the F-16

System Program Office (SPO) or the AWACS

SPO, to aid in its collaborative efforts.

A Home for the IPO

The PD Supplement MOU identified the United

States as the host nation and Eglin AFB as the

location of the IPO. The IPO was therefore an

international tenant on Eglin AFB. This particular agreement was different than the usual

agreement the base had developed for other

tenants because of the non-U.S. Government

nature of the IPO. Therefore, it took considerable time and several iterations to get all the

items included that were needed. The final iteration was not completed before the United

States withdrew, the program ended, and the

IPO disbanded.3

 The IPO operated on Eglin

without a formal agreement for over three

years.

The construction of a building for the MSOW

was another aspect of defining a home. The

initial direction to the host base through a

Program Management Directive was to construct a modular relocatable building whose

“funded cost” was not to exceed $200K. It took

me some time to get someone in the civil engineering community to define funded cost, but

it meant that this was the cost ceiling for all

the site preparation work. After that, as much

could be spent on the structure itself as was

desired by the funding agency. As it turned out,

a later ruling stipulated that the structure cost

was not an appropriate expenditure for U.S.

MSOW program funding. This delayed the

construction process until funding was sorted

out. Because funding was delayed about five

months—a potentially embarrassing situation

for the United States—it took action by the

Commander, [then] Air Force Systems Command with the Secretary of the Air Force to

obtain release of emergency funding.

The building was eventually finished, taking

about twice as long (eight months) as originally

envisioned. By that time, the U.S. withdrawal

had terminated the program. While the IPO was

in existence, it temporarily occupied existing

buildings at Eglin AFB.

Organization, Staffing, and

Other Personnel-Related Items

The IPO would be staffed by the participating

nations in consonance with their financial

contribution. So if a nation contributed 20

percent of the financing, it would provide 20
I-5

percent of the approved staffing for the IPO.

First, opinions differed on how many people it

would take to properly staff the IPO. Depending

on the nation, the numbers varied from six to

40. The compromise was 28 from the nations,

with direct support staff (U.S. personnel funded

by the participants) providing specialist

expertise (e.g., contracting) or administrative

support (e.g., secretarial).

The second task was to determine how the 28-

member IPO would be organized and who

would provide personnel to fill what positions.

Two personnel selections were decided up

front: the program director (United States) and

the deputy director (United Kingdom). As the

program director, I worked with my deputy to

define the organization structure. For the

remaining 26 members of the IPO, it was fairly

easy to come to agreement on the functions and

distribution of personnel.4

Third, we had to answer two questions: What

countries would provide the chiefs of the various functions; and what countries would

provide the working level in each function? The

former question turned out to be politically

“sticky” because we had more countries than

chief positions (not counting the director and

his deputy). This had to be resolved by the

Steering Committee and was only resolved

when one participant agreed not to seek a chief

position but instead was granted preference for

certain other positions.

As for the working level, we came up with a

process where each participant offered to fill

certain positions. In almost every case, we had

more offers than positions.5,6 At this stage,

particular individuals and their qualifications

were not put forward. This never came to final

resolution because the program did not go forward. In hindsight, we most certainly would

have considered each offer based on individuals

and their qualifications, while keeping in mind

that each nation had to provide a certain number

of people to meet their commitment. Again, this

would have been a politically sticky job at best.

PM : JANUARY–FEBRUARY 2000 34

An additional factor was that some nations were

not prepared to assign their personnel to the

IPO permanently until their respective countries approved the PD Supplement MOU. Notwithstanding, there were exceptions—the British deputy and the total German contingent

became permanent members of the IPO as soon

as we defined and obtained approval on the IPO

structure. However, all nations fully supported

the source selection process with temporary

duty personnel, as required.

The direct support positions presented another

interesting challenge. The direct support concept was to hire U.S. employees on term positions. (We could establish a term position based

on the fact that we had known funding available

over a specific period to do jobs only a U.S.

employee could do [contracting] or where it

made more sense that a U.S. employee perform

the task [secretarial/administrative].) The participating nations would share the costs of these

positions in the same way that they shared other

program costs. While the IPO encountered no

problem when these positions required someone full time, part time was a problem. For part

time, the only way to get needed support was

to have an existing, authorized, and filled U.S.

position and reimburse for the actual use. This

created a problem in two ways.

• First, when the particular specialty already

had its currently authorized people fully

engaged in other work, no way existed to

establish a “partial term position” to cover

MSOW needs.
I-6

• Second, even if the U.S. employees in the

particular specialty were available to support

the IPO, the United States was unwilling to

accept “pay as you go” and wanted a minimum use guarantee. No good solution emerged for either of these problems, and again

the overall approach was never tested due

to program termination.

The last portion of the personnel area was

performance reporting. Quoting the General

MOU, “The Terms of Reference for the IPO

will make clear that staff members are dedicated to the Programme only and that Participants will not place other national tasks on

their respective IPO members.” This, in essence, said everyone in the IPO is, as we say in

the United States, “purple”; that is, representing

everyone involved. To me, this clearly meant

we needed a system of performance evaluation

inside the IPO for our members. Since IPO

members were administered by their respective

home nations, we were mindful that this performance reporting must also “feed” the national personnel system of each of the five participating nations. Toward that end, I developed,

presented, and gained approval of the Management Group for a system that had the following

parameters:

• Immediate supervisor must be an integral

part of the process.

• Process must lead to an accurate and fair

reporting into the national systems.

• System must be based on task definitions.

For those IPO personnel below the division

chief level, the Senior National Representative

or SNR (the most senior person from a given

country in the IPO) would brief supervisors on

key aspects of the national system. SNRs would

stay knowledgeable on the performance of their

particular nation’s IPO members. To develop a

task definition, reach agreement with the ratee

on the task definition (IPO director and deputy

review), observe and record performance, and

provide feedback to the ratee, the supervisor

would use the Terms of Reference for the

position.

Next, SNRs would receive the supervisor’s

performance evaluation of their respective

nation’s IPO members and transpose the

evaluations onto national forms peculiar to each

country. Each form would then be reviewed

with the ratee’s supervisor, the IPO director,

and deputy. Finally, the supervisor would feed

each evaluation into the national system of the

ratee.

For those personnel at the division chief level,

the system works the same, with the IPO

director or deputy as the supervisor. Similarly,

the IPO director is the supervisor for the IPO

deputy director. For the IPO director, the Management Group would provide an input to the

officer evaluation reporting official who

prepares the national form.7

National Approval Processes

During the life of the program, the five participating nations had their own approval

processes for the MOU supplements. What

drove these processes were the text and the Notto-Exceed Cost Annex of the supplement. In

most cases, the parliament stayed involved in

the approval process. To assure a timely

contract award, I needed to be confident that

the approval processes could be successfully

completed somewhere close to the end of the

source selection process. As the program

moved through the source selection process, I

began to ask about the time lines of these

processes.
I-7

During the source selection process, I looked

into this situation and discovered that the topic

of the national approval processes had been

discussed at the Management Group before I

came to the program; but somehow the discussion never reached a clear definition of each

country’s process. These processes were on the

critical path to a contract award, so I was finally

able to convince the two-star Chairman of the

Source Selection Advisory Committee and the

four-star Chairman of the Source Selection

Authority Committee to use their influence and

force this topic onto the table.

The prior reluctance to get this in the open, in

my view, was that no one wanted their nation’s

process to be the “long pole in the tent.” All

these approvals were in two stages: first, the

signatures of the MOU supplement, and second

the process to make the money available to the

IPO. Once all the information became available, it showed that the key element was a fourmonth gap between the two parts for one of

the countries, and that gap began just about

when the source selection decision was due.

What this told me was that we needed to get an

agreement among all the other participants to

front-load their funding and allow this trailing

country to back-load its funding; otherwise, we

would have a four-month delay in the contract

award. We did, in fact, get this agreement.

A Word From the Author

I provided all the documents listed as references

to the DSMC International Department. In

addition to these documents, three others (also

supplied DSMC) contain additional information that may be helpful to U.S. personnel

involved in international collaborative efforts:

• Munitions Systems Division History Office

Interview of Air Force Col. Alan E.

Haberbusch, Program Director, MSOW

IPO, Eglin AFB, Fla. 32542, Dec. 15, 1989.

• “Modular Standoff Weapon Management,

the Programme Manager’s Perspective,” an

article that appeared in the magazine

NATO’s Sixteen Nations, April/May 1988.

• “The Modular Stand-Off Weapon, Federal

Acquisition Regulation Waivers and

Deviations in an International Acquisition,”

published in Proceedings, 1991 Acquisition

Research Symposium, Volume II.

Editor’s Note: The author welcomes questions

or comments concerning this article. Contact

him via E-mail at haberbus@eglin.af.mil.
I-8

REFERENCES

1. General Memorandum of Understanding Concerning General Arrangements for the Collaborative

Development and Production of a Modular StandOff Weapon, July 1987.

2. Supplement No. 1 to the Memorandum of Understanding Concerning the Collaborative Project

Definition Phase of the Modular Stand-Off Weapon

System, Draft, Nov. 10, 1988.

3. MSOW IPO/CC Letter, Jan. 24, 1990, Lessons

Learned, Appendix 1, “Some Special Topics,” Attachments 6-7, MSD/MSOW IPO Program Office

Support Agreement.

4. MSOW IPO/CC Letter, Jan. 24, 1990, Lessons

Learned, Appendix 1, “Some Special Topics,” Attachment 3, MSOW IPO Organization.

5. MSOW IPO/CC Letter, Jan. 24, 1990, Lessons

Learned, Appendix 1, “Some Special Topics,” Attachment 2, MSOW IPO Organization in the PD

Phase.

6. Addendum to Lessons Learned on Modular StandOff Weapon (MSOW).

7. Ibid.
J-1

APPENDIX J

EXAMPLES OF

EUROPEAN DEFENSE COMPANY

TRANSNATIONAL COOPERATIVE

ACTIVITIES
J-2
J-3

APPENDIX J

EXAMPLES OF EUROPEAN DEFENSE COMPANY

TRANSNATIONAL COOPERATIVE ACTIVITIES

Company participants and Countries

Joint company percentage shareholdinga involved Product

Airbus Military Aerospatiale (37.9%), Daimler-Benz France, Germany, Future Large

Company Aerospace (37.9%), British Italy, Spain, and Aircraft (planned)

Aerospace (20%), CASA (4.2%), the United Kingdom

Alenia (Associate Member)

Eurocopter Aerospatiale (60%), Daimler-Benz France and Germany Tiger helicopter

Holding Aerospace (40%) and various

military and civilian

helicopters

Eurodrone Matra Hachette (50%), STN Altas France and Germany Brevel surveillance

Elektronik (50%) and reconnaissance drone

Eurofighter Daimler-Benz Aerospace (30%), Germany, Italy, Spain, Eurofighter 2000

Jagdflugzeug Alenia (19.5%), British Aerospace and the United

(37.5%), CASA (13%) Kingdom

Eurojet Turbo MTU (33%), Fiat Avio (21%), Germany, Italy, Spain, Turbo jet engines

Industria de Turbo Propulsores and the United for the Eurofighter

(13%), Rolls Royce (33%) Kingdom 2000

Euromissile Aerospatiale (50%), Daimler-Benz France and Germany Milan and Hot

Aerospace (50%) antitank missiles

and Roland air

defense missile

European Agusta (50%), GKN Westland Italy and the United EH-101 helicopter

Helicopter Helicopters (50%) Kingdom

Industries

Eurosam Thomson-CSF (33.3%), France and Italy Future surface-toAerospatiale (33.3%), Alenia air family of

(33.3%) missiles

GTK/MRAV/VBCI Two competing consortium:b France, Germany, and Family of wheeled

(1) GKN Defense, Krauss-Maffei the United Kingdom armored vehicles

Wehrtechnik, Giat Industries,

Wegmann & Co., MaK System

(2) Henschel Wehrtechnik, Alvis,

Vickers Defense Systems, Panhard

& Lavassar, KUKA Wehrtechnik
J-4

Horizon Direction des Constructions France, Italy, and Horizon frigate

International Navales (33.3%), Fincantieri (33.3%) the United Kingdom

Joint Venture GEC-Marconi Naval Systems

(33.3%)

NH Industries Eurocopter (66.4%), Fokker France, Germany, NH-90 helicopter

Aerostructures (6.7%), Agusta Italy, and the

(26.9%) Netherlands

Panavia Aircraft Daimler-Benz Aerospece (42.5%), Germany, Italy, and Tornado combat

British Aerospace (42.5%), the United Kingdom aircraft

Alenia (15%)

aCompany participants and shareholdings obtained from Forecast International.

bData on shareholdings are not available.

GAO/NSIAD 98-6

Oct 97 Defense Trade

“European Initiatives to Integrate the Defense Market”
K-1

APPENDIX K

GLOSSARY
K-2
K-3

APPENDIX K

GLOSSARY

ACAT Acquisition Category

AECA Arms Export Control Act (1976)

AFB Air Force Base

ANG Air National Guard

AoA Analysis of Alternatives

APMC Advanced Program Manager’s Course

ARC Air Reserve Component

ASD(C3I) Assistant Secretary of Defense (Command, Control, Communications

and Intelligence)

ASF Systems Architect

ASTOVL Advanced Short Take-Off Vertical Landing

AWACS Airborne Warning and Control System

BENELUX Belgium, The Netherlands, and Luxembourg (Customs Union)

BoD Board of Directors

BUR Bottom Up Review

BWB Federal Office of Military Technology and Procurement

BXA Bureau of Export Administration (Department of Commerce)

C&F Contractual & Financial Subcommittee

CAIV Cost-As-an-Independent-Variable

CCL Commerce Control List

CEO Chief Executive Officer

CFIUS Committee on Foreign Investment in the U.S. (CFIUS)

CJCS Chairman, Joint Chiefs of Staff

CMI Classified Military Information

CNAD Conference of National Armaments Directors

CPA Cooperative Production Agreement

CRD Capstone Requirements Document

CUI Controlled Unclassified Information

DAB Defense Acquisition Board

DASA DaimlerChrysler Aerospace
K-4

DCI Defense Capabilities Initiative

DCMA Defense Contract Management Agency

DCS Direct Commercial Sale

DDL Delegation of Disclosure Authority Letter

DDR&E Director, Defense Research & Engineering

DGA Délégation Générale pour l’Armement

DLA Defense Logistics Agency

DOC Department of Commerce

DoD Department of Defense

DOS Department of State

DPA Defence Procurement Agency

DSB Defense Science Board

DSMC Defense Systems Management College

DSS Defense Security Service

DTRA Defense Threat Reduction Agency

DUSD Deputy Under Secretary of Defense

EAA Export Administration Act

EADS European Aeronautic Defense Space Company

EDC European Defense Community

EEC European Economic Community

EMC Executive Management Committee

EMD Engineering and Manufacturing Development

EO Executive Order

EPG European Production Group, European Participating Governments

ESSM Evolved Seasparrow Missile

EU European Union

FAR Federal Acquisition Regulation

FGI Foreign Government Information

FMS Foreign Military Sale

FOCI Foreign Ownership, Control, or Influence

FOIA Freedom of Information Act

FORDTIS Foreign Disclosure and Technical Information System

FOUO For Official Use Only

FPIF/AF Fixed Price Incentive Contract with an Award Fee
K-5

FRG Federal Republic of Germany

FSD Full Scale Development

FTMA Future Tank Main Armament

G.I. Government Issue

GAO General Accounting Office

GDP Gross Domestic Product

GMLRS Guided Multiple Launch Rocket System

GPS Global Positioning System

GSA General Security Agreement

IA International Agreement

IAP International Acquisition Program

IAW In Accordance With

ICOG International Cooperative Opportunities Group

IEPG Independent European Program Group

IPO International Programs Office

IPT Integrated Product Team, Integrated Process Team

ITAR International Traffic in Arms Regulation

IWSM Integrated Weapon System Management

JAST Joint Advanced Strike Technology

JIRD Joint Interim Requirements Document

JORD Joint Operational Requirements Document

JSC Joint Steering Committee

JSF Joint Strike Fighter

JTIDS Joint Tactical Information Distribution System

JV Joint Venture

KPP Key Performance Parameter

LCC Life Cycle Cost

LMAC Lockheed Martin Aeronautical Company

LMVS Lockheed Martin Vought Systems

LOA Letter of Acceptance

LTF Lead the Fleet

M&S Modeling and Simulation

MDA Milestone Decision Authority

MIC MLRS International Corporation
K-6

MIDS Multifunctional Information Distribution System

MIDS-LVT Multifunctional Information Distribution System-Low Volume Terminal

MILDEP Military Department

MIMIC Microwave Millimeter Wave Monolithic Integrated Circuit

MISWG Multinational Industrial Security Working Group

MLRS Multiple Launch Rocket System

MLU Mid-Life Update

MNFP F-16 Multi-national Fighter Program

MNS Mission Need Statement

MOA Memorandum of Agreement

MoD Ministry of Defence

MOU Memorandum of Understanding

NAAWS NATO Anti-Air Warfare System

NAD National Armaments Director

NADGE NATO Air Defense Ground Environment

NADREP National Armaments Director Representative

NAG Naval Armaments Group

NATO North Atlantic Treaty Organization

NAVSEA Naval Sea Systems Command

NBMR NATO Basic Military Requirement

NDP National Disclosure Policy

NDPC National Disclosure Policy Committee

NIAG NATO Industrial Advisory Group

NISPOM National Industrial Security Operating Manual

NNAG NATO Naval Armaments Group

NSDM National Security Decision Memorandum

NSPO NATO Seasparrow Project Office

NSPSC NATO Seasparrow Project Steering Committee

NSSMS NATO Seasparrow Surface Missile System

OCCAR Organisme Conjoint de Cooperation en Matiere d’Armement

OCEM Corresponding Coherence Services Officer

OCO Operational Coherence Officer

ODTC Office of Defense Trade Controls

ODUSD(PS) Office of the Secretary of Defense (Policy Support)
K-7

OEEC Organization for European Economic Cooperation

ORD Operational Requirements Document

OSC/LSC Operational & Logistics Subcommittee

OSD Office of the Secretary of Defense

P3I Preplanned Product Improvement

PDDP Product Definition Data Package

PDRR Program Definition and Risk Reduction

PEO Program Executive Officer

PG2 Project Group 2

PM Program Manager

PPP Program Protection Plan

PSI Program Security Instruction

R&D Research and Development

RAD Request for Authority to Develop

RAM Rolling Airframe Missile

RAMPO Rolling Airframe Missile Program Office

RFA Request for Final Authority

RFP Request for Proposal

RSI Rationalization, Standardization and Interoperability

SABCA Société Anonyme Belge de Constructions Aéronautiques

SACEUR Supreme Allied Commander Europe

SAE Service Acquisition Executive

SAG Stork Aerospace Group

SCA Steering Committee Arrangement

SCG Security Classification Guide

SCIM Subcommittee on Industrial Matters

SNR Senior National Representative

SNR(A) Senior National Representative, Army

SOI Statement of Intent

SOW Statement of Work

SPAWAR Space and Naval Warfare Systems Command

SPD System Program Director

SPO System Program Office

SSOI Summary Statement of Intent
K-8

STANAG Standardization Agreement

STOVL Short Take-off Vertical Landing

TA/CP Technology Assessment/Control Plan

TAA Technical Assistance Agreement

TACAN Tactical Air Navigation

TCP Technology Control Plan

TDP Technical Data Package

TGW Terminally Guided Warhead

TVI Trial Verification Installation

U.K. United Kingdom

USAF United States Air Force

USD(AT&L) Under Secretary of Defense (Acquisition, Technology and Logistics)

USML U.S. Munitions List

WEAG Western European Armaments Group

WEAO Western European Armaments Organization

WEU Western European Union
L-1

APPENDIX L

INTERVIEWS AND

PERSONAL CONTACTS
L-2
L-3

APPENDIX L

INTERVIEWS AND

PERSONAL CONTACTS

OFFICE OF

THE SECRETARY OF DEFENSE

Steven Austin

Director, Planning & Analysis,

International Cooperation

OUSD (Acquisition, Technology &

Logistics/IC)

Washington, DC

December 2, 1999

Dr. Spiros G. Pallas

Principal Deputy Director Strategic &

Tactical Systems

OUSD (Acquisition, Technology &

Logistics)

Washington, DC

December 14, 1999

Lisa Bronson

Deputy Assistant Secretary

(European/NATO)

OUSD (Policy)

Washington, DC

December 14, 1999

Frank Kenlon

International Programs

OUSD (Acquisition, Technology &

Logistics/IC)

Washington, DC

February-May 2000

Dr. Vitalij Garber

Director, Interoperability

OUSD (Acquisition, Technology &

Logistics)

Washington, DC

January 5, 2000

Alfred G. Volkman

Director, International Cooperation

OUSD (Acquisition, Technology &

Logistics)

Washington, DC

August 1999

Robert Bruce

Director, Atlantic Armaments Cooperation

OUSD (Acquisition, Technology &

Logistics/IC)

Washington, DC

January 4, 2000

Jeffrey Bialos

Deputy Under Secretary of Defense

(Industrial Affairs)

OUSD (Acquisition, Technology &

Logistics)

Washington, DC

December 14, 1999

Victor Ciardello

Director, Financial & Economic Analysis

ODUSD (Industrial Affairs)

OUSD (Acquisition, Technology &

Logistics)

Washington, DC

December 14, 1999

Jeffrey Roncka

ODUSD (Industrial Affairs)

OUSD (Acquisition, Technology &

Logistics/IA/FEA)

Washington, DC

December 7, 1999
L-4

Susan Ludlow McMurray

Director International Security Programs

DUSD Policy (Policy Support)

Washington, DC

February 15, 2000

Gary Blasser

Defense Procurement, Foreign Contracting

OUSD (Acquisition, Technology &

Logistics)

Washington, DC

Telephone Interview, April 2000

Col J. C. Dodson, USAF

Project Manager for Low Observables

OUSD (Acquisition, Technology &

Logistics)

Washington, DC

April 14, 2000

Seth Wilson

International Programs

OUSD (Acquisition, Technology &

Logistics/IC/ACA)

Washington, DC

Telephone Interview, May 2, 2000

NATO

COL Don Baker, USA

National Armaments Director Representative

(NADREP)

U.S. Delegation to NATO

Brussels, Belgium

February 28, 2000

Winfried Ventker

National Armaments Director Representative

(NADREP)

German Delegation to NATO

Brussels, Belgium

February 28, 2000

Francoise Peret

National Armaments Director Representative

(NADREP)

French Delegation to NATO

Brussels, Belgium

February 29, 2000

John Mattiussi

National Armaments Director Representative

(NADREP)

UK Delegation to NATO

Brussels, Belgium

February 29, 2000

Diego A. Ruiz Palmer

Head, Planning and Policy Section

Defense Support Division

NATO International Staff

Brussels, Belgium

February 29, 2000

Richard Froh

Head, Land Armaments Section

Defense Support Division

NATO International Staff

Brussels, Belgium

February 29, 2000
L-5

FRANCE

Dr. Gertrude Humily

Executive Director, International Education

DGA

Paris, France

March 2, 2000

IGA Jacques Pechamat

DGA

Paris, France

March 3, 2000

CDR Patrick Regis, USN

U.S. Navy Representative

Office of Defense Cooperation

U.S. Embassy France

Paris, France

March 1, 2000

LTC Jacques A. Azemar, USA

Director, Army Affairs

Office of Defense Cooperation

U.S. Embassy France

Paris, France

March 1, 2000

LTC Gregory Ulsh, USA

U.S. Army Research, Development

and Standardization Group (FR)

U.S. Army Materiel Command

Paris, France

March 1, 2000

ICA Daniel Pezet

MLRS Program Manager

DGA

Paris, France

March 3, 2000

ICA Francois Cote

Director of Maritime Operations

(NH-90 Helicopter)

DGA

Paris, France

March 2, 2000

ICA Christophe Tailleur

Program Director

LaFayette Frigates (Horizon Frigate)

DGA

Paris, France

March 3, 2000

ICA Benoit Laurensou

MIDS Program

DGA

Paris, France

March 3, 2000

Robert Kaneda

First Secretary

Political Affairs

U.S. Embassy France

Paris, France

March 1, 2000

Robert Gianfranceschi

Economic Officer

U.S. Embassy France

Paris, France

March 1, 2000
L-6

GERMANY

BDir Gerhard Coors

Chief, Missiles, Ship-Air, Ship-Ship,

Air-Ship Programs

BWB

Koblenz, Germany

March 7, 2000

BOR Dirk Herborg

Deputy Program Manager RAM

BWB

Koblenz, Germany

March 7, 2000

BDir Herwarth Weis

Head of Department Heavy and

Weapons Systems (MEADS)

BWB

Koblenz, Germany

March 7, 2000

LBDir G. Hebel

EuroFighter Program

BWB

Koblenz, Germany

March 7, 2000

BDir Wassenberg

MLRS Program

BWB

Koblenz, Germany

March 7, 2000

BDir Weis

FTMA Program

BWB

Koblenz, Germany

March 7, 2000

CDR Brian J. Gerling, USN

Chief, Navy Affairs

Office of Defense Cooperation

U.S. Embassy Germany

Bonn, Germany

March 6, 2000

LTC Gary Allen, USA

U.S. Army Research, Development

and Standardization Group (GE)

U.S. Army Materiel Command

Bonn, Germany

March 6, 2000

Richard A. Hayes

U.S. Army Materiel Command

Liaison Officer

Bonn, Germany

March 7, 2000

LTC Michael L. Dunkley, USA

Chief, Army Affairs

Office of Defense Cooperation

U.S. Embassy Germany

Bonn, Germany

March 6, 2000

Ulrich Sticker

Ministerialrat

Branch Chief, Armaments Cooperation

with USA, Canada, Portugal,

Denmark, Norway, and Israel

Federal Ministry of Defense

Bonn, Germany

March 8, 2000
L-7

Bernd-U. von Wegerer

Baudirektor

Assistant Branch Chief, Armaments

Cooperation with USA, Canada,

Portugal, Denmark, Norway, and Israel

Federal Ministry of Defense

Bonn, Germany

March 8, 2000

Werner Frank

Defense Official

Federal Ministry of Defense

Bonn, Germany

March 8, 2000

UK

Col Douglas Knutsen, USAF

Chief, Office of Defense Cooperation

U.S. Embassy

London, UK

March 8, 2000

CDR Richard D. Suttie, USN

Navy Programs Manager

Office of Defense Cooperation

U.S. Embassy

London, UK

March 8, 2000

LTC Thomas A. McWhorter, USA

U.S. Army Research, Development

and Standardization Group (UK)

U.S. Army Materiel Command

London, UK

March 9, 2000

Lt Col Micheal Krimmer, USAF

USAF R&D Liaison Office – London

London, UK

March 9, 2000

CAPT Dennis L. Ryan, III, USN

Commanding Officer

Office of Naval Research

International Field Office

London, UK

March 9, 2000

Graham C. Williams

Director, UK

Lockheed Martin International S.A.

London, UK

March 9, 2000

Ian R. Stopps

Chief Executive

Lockheed Martin UK Limited

London, UK

March 9, 2000

Alan G. Sharman

Director General

Defence Manufacturers’ Association (DMA)

London, UK

March 9, 2000

Keith Hayward

Head of Research

Society of British Aerospace Companies

(SBAC)

London, UK

March 9, 2000

Peter McLoughlin

Managing Director

UK Customer & Government Relations

BAE Systems

London, UK

March 9, 2000
L-8

Captain Mike Nixon

Deputy Director Equipment Capability

(Deep Strike) 2 (JSF)

Ministry of Defence

London, UK

March 10, 2000

Commander M. T. Boast

Deep Strike FCBA 1

Ministry of Defence

London, UK

March 10, 2000

Colonel Nigel Beer

Deputy Director Equipment

Direct Battlefield Engagement

(TRACER/FTMA)

Ministry of Defence

London, UK

March 10, 2000

Commodore Guy Challands

Director Equipment Capability

Underwater Warfare

Ministry of Defence

London, UK

March 10, 2000

Charles Coltman

Director – Corporate Development

Rolls Royce plc

London, UK

March 10, 2000

Group Captain Bruce Wynn

Defence Central Customer Change Team

Ministry of Defence

London, UK

March 10, 2000

MLRS PROGRAM

John Beale

Chief, International Branch

MLRS Project Management Office

Telephone interviews, December 1999-

March 2000

Dennis Vaughn

Former Deputy Program Manager

MLRS Project Management Office

Telephone interview, December 1999

Lawrence Seggel

Former Deputy Program Manager

MLRS Project Management Office

Telephone interviews, February-March 2000

Charles Fitts

Former Chief, Program Cost/FMS Branch

MLRS Project Management Office

Telephone interview, February-March 2000

Robert Neighbors

Former TGW Official

MLRS Project Management Office

Telephone interview, February 2000

Bobby Richardson

Former Chief,

Technical Management Branch

MLRS Project Management Office

Telephone interviews, February 2000

Dave Schumacher

Prime Contractor Representative

Lockheed Martin Vought Systems

Telephone interviews, March-April 2000
L-9

MIDS-LVT

Lt Col George Cho, USAF

Former MIDS Program Manager

SAF/AQXR

Rosslyn, VA

Telephone interviews, May 2000

F-16 MLU

Col (sel) Steven A. MacLaird, USAF

(Former MLU Development

Procuring Contracting Officer)

SAF/AQQX

Rosslyn, VA

Telephone interviews, April 2000

Colonel Robert Montens

Belgian Air Force Ir

Secretary General

F-16 Multinational Program Office

Brussels, Belgium

February 2000

Lt Col Steve E. Misra, USAF

MLU Program Manager

ASC/YPXA

Wright-Patterson AFB, OH

Telephone interviews, April 2000

Major Joep Koenen

Royal Netherlands Air Force

Permanent Secretariat

F-16 Multinational Program Office

Brussels, Belgium

February 2000

Marc Humblet

Marketing and Sales Director

Société Anonyme Belge de Constructions

Aéronautiques (SABCA)

Brussels, Belgium

February 2000

Jerry Zimmerman

Former MLU Program Configuration

Manager

ASC/YPVE

Wright-Patterson, AFB, OH

MLU Section Draft Review

April 2000
L-10

FTMA

Richard McCarthy

Tank Main Armament Systems

Program Office

Telephone interviews, January-February

2000

David Bartle

General Dynamics

Telephone interviews, January-February

2000

Fred Steinburg

Tank Main Armament Systems Program

Office

Telephone interview, January 2000

JSF

Col Douglas W. Anderson, USAF

Deputy Director, International Directorate

Joint Strike Fighter Program Office

Arlington, VA

Telephone interviews, April–May 2000

Lt Col Paul Waugh, USAF

Deputy Propulsion Program Manager

Joint Strike Fighter Program Office

Arlington, VA

Telephone interviews, April–May 2000

NATO SEA SPARROW MISSILE SYSTEM (NSSM)

Raymond Blackburn III

Special Assistant for International Affairs

NATO Sea Sparrow Project Office

January–February 2000

Captain Kees R DeVries

Royal Netherlands Navy

Deputy Project Manager

NATO Sea Sparrow Project Office

February 2000

Robert T. Williams

Technology Services Corporation

Bird Associates Operations

February 2000
L-11

ROLLING AIRFRAME MISSILE (RAM)

Charles Stein

Technical Director, International Programs

Antion Corporation

January 2000

Lieutenant Commander Harald Wehr

German Navy

German Military Representative

Rolling Airframe Missile

January 2000

Joyce Woodward

Systems Integration Engineer

Rolling Airframe Missile

January 2000

OTHER

Francis M. Cevasco

Vice President

Hicks & Associates, Inc.

McLean, VA

September 1999-June 2000

John A. Richards

Corporate Director

International Affairs

General Dynamics

Falls Church, VA

February 8, 2000

Sam Campagna

Director

National Defense Industrial Association

Arlington, VA

February 8, 2000

Vern Luke

Executive Director

Association of Old Crows

Alexandria, VA

January 24, 2000

Charles C. Wilson

Consultant

Security for International Programs

Washington, DC

March-June 2000

Samuel J. Rob

Office of the General Counsel

Department of the Army

Washington, DC

April 6, 2000

COL Michael Cuff, USA

U.S. Army TRADOC System Manager

for Cannon Systems

Fort Sill, OK

January 26, 2000

Hank Themak

Office of the Deputy Under Secretary

of the Army (International Affairs)

Washington, DC

Telephone interviews, December 1999-

January 2000
L-12

LTC Ray Nulk, USA

Office of the Deputy Under Secretary

of the Army (International Affairs)

Washington, DC

February–March 2000

LTC Nate Eberle, USA

Office of the Deputy Under Secretary

of the Army (International Affairs)

Washington, DC

Telephone interviews, January-March 2000

William Denk

Director, Defense Programs

Bureau of Export Administration

Department of Commerce

Telephone interview, February 10, 2000

Aaron Mahr

Deputy Director

International Cooperative Programs Activity

U.S. Army Materiel Command

Alexandria, VA

February 17, 2000

Dr. Rodney Smith

Associate Director

International Cooperative Programs Activity

U.S. Army Materiel Command

Alexandria, VA

February 17, 2000

Lieutenant Colonel Michael Healey

British Army

UK Liaison Officer

U. S. Army Field Artillery Center

Fort Sill, OK

January 25, 2000

Lieutenant Colonel Francois Rouselle

French Army

French Liaison Officer

U. S. Army Field Artillery Center

Fort Sill, OK

January 25, 2000

Lieutenant Colonel Peter H. Piwonski

German Army

German Liaison Officer

U. S. Army Field Artillery Center

Fort Sill, OK

January 25, 2000

Gerald Abbott

Industrial College of the Armed Forces

National Defense University

Washington, D.C.

January 2000

Professor Louis T. Wells

Harvard Business School

Boston, MA

November 9, 1999

Professor Michael Yoshino

Harvard Business School

Boston, MA

November 8, 1999

Don Hood

Professor Systems Acquisition Management,

SPMD-EID

DAU-Fort Belvoir Campus

Fort Belvoir, VA

August 1999–June 2000
L-13

Richard Kwatnoski

Professor Systems Acquisition Management,

SPMD-EID

DAU-Fort Belvoir Campus

Fort Belvoir, VA

August 1999–June 2000

Tony Kausal

Air Force Chair, Executive Institute

DAU-Fort Belvoir Campus

Fort Belvoir, VA

August 1999–June 2000

Tom Dolan

Visiting Professor, Executive Institute

DAU-Fort Belvoir Campus

Fort Belvoir, VA

December 10, 2000

LTC Lise Gagne, USA

Professor Systems Acquisition Management,

FD-PML

DAU-Fort Belvoir Campus

Fort Belvoir, VA

December 1999-March 2000
L-14
M-1

APPENDIX M

SELECTED BIBLIOGRAPHY
M-2
M-3

APPENDIX M

SELECTED BIBLIOGRAPHY

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Cevasco, Francis M. & Marini, John J., Navy

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Barrie, Douglas, and David Mulholland. “JSF

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M-4

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APPENDIX N

ABOUT THE

AUTHORS
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APPENDIX N

ABOUT THE AUTHORS

LtCol Richard “Rich” C. Catington, USAF, has served in a variety of acquisition related jobs

during his 19 years of service in the United States Air Force. His most recent assignment was as

Chief of the Fighter Branch at SAF/AQPB in the Pentagon, Washington, DC. Prior assignments

included the F-15 Program Element Monitor; F-16 Program Element Monitor; Japan FS-X (F-16

Derivative) Program Team Leader, Program Manager F-16 Norway/Deputy Program Manager F16 Mid-Life Update; NAVSTAR GPS User Equipment Procuring Contracting Officer; CBU-87/

B Combined Effects Munition (CEM) Business Manager, later served as both the Assistant Program

Manager and Program Manager; and Antiarmor Weapons Plans Staff Officer. LtCol Catington

holds a Masters Degree in Management from Troy State University and a Bachelors of Science

Degree in Business Administration from The Citadel. In addition, LtCol Catington was Level III

certified in Acquisition Management upon completion of the Defense Systems Management

College Program Management Course in December 1993.

LTC Ole A. Knudson, USA, has served in a variety of acquisition and field artillery related jobs

during his 18 years of service in the Unites States Army. His most recent assignment was as the

Department of the Army System Coordinator for the Multiple Launch Rocket System (MLRS) in

Washington, DC. Prior assignments included the Assistant Product Manager for the Army’s Paladin

Howitzer program and several positions in operational field artillery units. LTC Knudson holds a

Masters Degree in Mechanical Engineering from the Naval Postgraduate School and a Bachelors

of Science Degree from the United States Military Academy. LTC Knudson has completed the

Defense Systems Management College Advanced Program Managers Course and is Level III

certified in Acquisition Program Management.

CDR Joseph “Joe” B. Yodzis, USN, has served in a variety of positions during his 18 years of

service in the United States Navy. His most recent assignment was as the Country Program Director

for Thailand, the Philippines, Indonesia, India and several East Asian countries in the Navy

International Programs Office in Arlington, VA. Prior assignments included Executive Officer of

USS ELROD (FFG 55); Associate Chairman of the Seamanship and Navigation Department at

the U.S. Naval Academy; Exchange Officer at the French Naval Academy; Operations Officer on

the staff of Commander, Destroyer Squadron TWO FOUR; and Operations Officer, USS ESTOCIN

(FFG 15); Division Officer USS BRISCOE (DD 977) and USS IOWA (BB 61). CDR Yodzis

holds a Masters Degree in International Management from the University of Maryland, University

College and a Bachelors of Arts Degree in Modern Language/History from the Virginia Military

Institute where he graduated with honors and distinction.
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