TREATIES AND OTHER INTERNATIONAL ACTS SERIES 06-1231 

________________________________________________________________________ 

DEFENSE 

Joint Strike Fighter Program 

 Memorandum of Understanding 

 Between the 

UNITED STATES OF AMERICA 

and OTHER GOVERNMENTS 

Signed at Washington, Oslo, and 

Copenhagen November 14, 2006, December 11, 2006, 

December 12, 2006, January 25, 2007, January 31, 2007, 

February 7, 2007, and February 27, 2007 

with 

Annexes 
 

NOTE BY THE DEPARTMENT OF STATE 

 Pursuant to Public Law 89—497, approved July 8, 1966 

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued 

under the authority of the Secretary of State shall be competent 

 evidence . . . of the treaties, international agreements other than 

treaties, and proclamations by the President of such treaties and 

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime 

jurisdiction, and in all the tribunals and public offices of the 

United States, and of the several States, without any further proof 

or authentication thereof.” 
 

 MULTILATERAL 

 Defense: Joint Strike Fighter Program 

 Memorandum of understanding signed at Washington, Oslo, and Copenhagen 

 November 14, 2006, December 11, 2006, December 12, 2006, 

 January 25, 2007, January 31, 2007, February 7, 2007, and 

 February 27, 2007; 

 Entered into force December 31, 2006. 

 With annexes. 
07 - 118

MEMORANDUM OF UNDERSTANDING

AMONG THE

DEPARTMENT OF DEFENCE OF AUSTRALIA

AND THE

MINISTER OF NATIONAL DEFENCE OF CANADA

AND THE

MINISTRY OF DEFENCE OF DENMARK

AND THE

MINISTRY OF DEFENCE OF THE REPUBLIC OF ITALY

AND THE

STATE SECRETARY OF DEFENCE OF THE KINGDOM OF THE

NETHERLANDS

AND THE

MINISTRY OF DEFENCE OF THE KINGDOM OF NORWAY

AND THE

UNDERSECRETARIAT FOR DEFENSE INDUSTRIES ON BEHALF OF THE

MINISTRY OF NATIONAL DEFENSE OF THE

REPUBLIC OF TURKEY

AND THE

SECRETARY OF STATE FOR DEFENCE OF THE

UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND

AND THE

SECRETARY OF DEFENSE ON BEHALF OF THE DEPARTMENT OF DEFENSE

OF THE UNITED STATES OF AMERICA

CONCERNING THE PRODUCTION,. SUSTAINMENT,

AND FOLLOW-ON DEVELOPMENT OF THE

JOINT STRIKE FIGHTER

THIS DOCUMENT IS CERTIFIED TO BE A TRUE COPY

CERTIFIED BY: FRANK KENLON, DEPUTY DIRECTOR,

INTERNATIONAL NEGOTIATIONS
MEMORANDUM OF UNDERSTANDING

AMONG THE

DEPARTMENT OF DEFENCE OF AUSTRALIA

AND THE

MINISTER OF NATIONAL DEFENCE OF CANADA

AND THE

MINISTRY OF DEFENCE OF DENMARK

AND THE

MINISTRY OF DEFENCE OF THE REPUBLIC OF ITALY

AND THE

STATE SECRETARY OF DEFENCE OF THE KINGDOM OF THE NETHERLANDS

AND THE

MINISTRY OF DEFENCE OF THE KINGDOM OF NORWAY

AND THE

UNDERSECRETARIAT FOR DEFENSE INDUSTRIES ON BEHALF OF THE

MINISTRY OF NATIONAL DEFENSE OF THE

REPUBLIC OF TURKEY

AND THE

SECRETARY OF STATE FOR DEFENCE OF THE

UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND

AND THE

SECRETARY OF DEFENSE ON BEHALF OF THE DEPARTMENT OF DEFENSE

OF THE UNITED STATES OF AMERICA

CONCERNING THE PRODUCTION, SUSTAINMENT,

AND FOLLOW-ON DEVELOPMENT OF THE

JOINT STRIKE FIGHTER

(Short Title - JSF PSFD MOU)
TABLE OF CONTENTS

INTRODUCTION 4

SECTION I

DEFINITIONS 6

SECTION II

OBJECTIVES 14

SECTION III

SCOPE OF WORK 16

SECTION IV

MANAGEMENT (ORGANIZATION AND RESPONSIBILITY) 26

SECTION V

FINANCIAL PROVISIONS 34

SECTION VI

CONTRACTING PROVISIONS 41

SECTION VII

INDUSTRIAL PARTICIPATION 48

SECTION VIII

PROJECT EQUIPMENT AND JOINTLY ACQUIRED EQUIPMENT 50

SECTION IX

DISCLOSURE AND USE OF PROJECT INFORMATION 52

SECTION X

CONTROLLED UNCLASSIFIED INFORMATION 64

SECTION XI

VISITS TO ESTABLISHMENTS 66

SECTION XII

SECURITY 67

SECTION XIII

THIRD PARTY SALES AND TRANSFERS 70

SECTION XIV

LIABILITY AND CLAIMS 76

SECTION XV

PARTICIPATION OF ADDITIONAL NATIONS 78

SECTION XVI

CUSTOMS DUTIES, TAXES, AND SIMILAR CHARGES 79

SECTION XVII

SETTLEMENT OF DISPUTES 80

SECTION XVIII

LANGUAGE 81

SECTION XIX

AMENDMENT, WITHDRAWAL, TERMINATION, ENTRY INTO EFFECT, AND

DURATION 82

ANNEX A

ESTIMATED JSF AIR VEHICLE PROCUREMENT QUANTITIES 88

ANNEX B

MANAGEMENT STRUCTURE 89

2
ANNEX C

COOPERATIVE PROJECT PERSONNEL 94

ANNEX D

SUSTAINMENT 99

ANNEX E

FOLLOW-ON DEVELOPMENT PROCESS 108

ANNEX F

ESTIMATED ALLOCATION OF FINANCIAL COST CEILINGS 111

3
INTRODUCTION

The Department of Defence of Australia, the Minister of National

Defence of Canada, the Ministry of Defence of Denmark, the

Ministry of Defence of the Republic of Italy, the State

Secretary of Defence of the Kingdom of the Netherlands, the

Ministry of Defence of the Kingdom of Norway, the

Undersecretariat for Defense Industries on behalf of the

Ministry of National Defense of the Republic of Turkey, the

Secretary of State for Defence of the United Kingdom of Great

Britain and Northern Ireland, and the Secretary of Defense on

behalf of the Department of Defense of the United States of

America, hereinafter referred to as the "Participants":

Having a common interest in defense;

Recognizing the benefits to be obtained from international

cooperation regarding standardization, rationalization, and

interoperability of military equipments;

Desiring to improve their mutual conventional defense

capabilities through the application of emerging technology;

Recognizing the Participants' cooperation under the Memorandum

of Understanding (MOU) among the Department of Defence of

Australia and the Minister of National Defence of Canada and the

Ministry of Defence of Denmark and the Ministry of Defence of

the Republic of Italy and the State Secretary of Defence of the

Kingdom of the Netherlands and the Ministry of Defence of the

Kingdom of Norway and the Undersecretariat for Defense

Industries on behalf of the Ministry of National Defense of the

Government of the Republic of Turkey and the Secretary of State

for Defence of the United Kingdom of Great Britain and Northern

Ireland and the Secretary of Defense on behalf of the Department

of Defense of the United States of America concerning the

Cooperative Framework for System Development and Demonstration

of the Joint Strike Fighter (JSF SDD Framework MOU) of January

17, 2001, as amended, and the Participant-specific Supplements

thereto;

Desiring to cooperate in the production, sustainment, and

follow-on development of the Joint Strike Fighter (JSF) to

satisfy similar operational requirements;

Recognizing the benefits of continued cooperation in the JSF

Program, and seeking to capitalize on the lessons learned from

4
their previous experience in that program and other

international cooperative programs;

Seeking to establish a model for international cooperative

acquisition programs;

Affirming their intent to use their best efforts to ensure that

international cooperation under this PSFD MOU will maximize

benefits (including financial) that will accrue to each of them;

Seeking to establish a robust vehicle of cooperation that will

span the life cycle of the JSF Air System;

Recognizing the importance of technological and industrial

cooperation to the national security of all Participants, and

seeking to reduce barriers to that cooperation between the

Participants; and

Recognizing that industrial participation will be an important

parameter in the Participants' various national decision-making

processes;

Have reached the following understandings:

5
SECTION I

DEFINITIONS

The Participants have jointly decided upon the following

definitions for terms used in this MOU:

Autonomic Logistics An integrated, knowledge-based system that

(AL) encompasses JSF maintenance planning,

manpower and personnel, supply support,

support equipment, training, technical data,

computer resource support, facilities,

packaging, handling, storage and

transportation, prognostics and health

management, and design interface while

coordinating with mission planning,

engineering, safety, command and control

functions, within a respective logistics

infrastructure to support mission execution.

Autonomic Logistics The worldwide cooperative sustainment system

Global Sustainment for the JSF Air System consisting of a

(ALGS) predominantly shared common logistics

enterprise tailored to the Participants'

needs. It consists of both Government and

industry sustainment efforts, including

interfaces, as determined by the

Participants, between ALGS and Participants'

national support capabilities outside of

ALGS.

Autonomic Logistics An integrated Information system consisting

Information System of hardware and software operating on

(ALIS) networks provided by the Participants or

their Contractors and facilitating

Information exchange with each Participant's

appropriate Information systems. ALIS

supports the operation, including mission

planning, and maintenance of the JSF Air

System.

Best Value Maximizing affordability consistent with

broader Project objectives. .

6
Classified Official Information that requires

Information protection in the interests of national

security and is so designated by the

application of a security classification

marking. This Information may be in oral,

visual, magnetic, or documentary form or in

the form of equipment, material or

technology.

Composite Share

Ratio

A formula used to calculate the

Participants' proportionate share of the

costs under this MOU, based on the

Participants' estimated JSF Air Vehicle

procurement quantities.

Consolidated A document that combines the requested

Procurement Request articles and services contained in more than

one Participant Procurement Request.

Contract

Contracting

Any mutually binding legal relationship

under national laws that obligates a

Contractor to furnish supplies or services,

and obligates one or more of the

Participants to pay for them.

The obtaining of supplies or services by

Contract from sources outside the Government

organizations of the Participants.

Contracting includes description (but not

determination) of supplies and services

required, solicitation and selection of

sources, preparation and award of Contracts,

and all phases of Contract administration.

Contracting Agency The entity within the Government

organization of a Participant that has

authority to enter into, administer, or

terminate Contracts.

Contracting Officer A person representing a Contracting Agency

of a Participant who has the authority to

enter into, administer, or terminate

Contracts.

Contractor Any entity awarded a Contract by a

Participant's Contracting Agency.
Contractor Support Persons specifically identified as providing

Personnel administrative, managerial, scientific, or

technical support services to a Participant

under a support Contract.

Controlled Unclassified Information to which access or

Unclassified distribution limitations have been applied

Information in accordance with applicable national laws

or regulations. It includes Information

that has been declassified but remains

controlled.

Financial Cost The maximum amount of shared Financial Costs

Ceiling that will be dedicated to the Project.

Financial Costs

Host Participant

Information

Intellectual

Property

Project costs met with monetary

contributions.

The Participant to whose facility a JSF CPP

is assigned.

Knowledge that can be communicated by any

means, regardless of form or type,

including, but not limited to, that of a

scientific, technical, business, or

financial nature, and also including

photographs, reports, manuals, threat data,

experimental data, test data, computer

software, designs, specifications,

processes, techniques, inventions, drawings,

technical writings, sound recordings,

pictorial representations, and other

graphical presentations, whether in magnetic

tape, computer memory, or any other form and

whether or not subject to Intellectual

Property rights.

In accordance with the World Trade

Organization Agreement on Trade-related

Aspects of Intellectual Property Rights of

April 15, 1994, all copyright and related

rights, all rights in relation to inventions

(including Patent rights), all rights in

registered and unregistered trademarks

(including service marks), registered and

unregistered designs, undisclosed

Information (including trade secrets and

8
know-how), layout designs of integrated

circuits, and geographical indications, and

any other rights resulting from creative

activity in the industrial, scientific,

literary, and artistic fields.

Jointly Acquired

Equipment

JSF Air System

JSF Air Vehicle

JSF Cooperative

Project Personnel

(JSF CPP)

JSF Data Library

(JDL)

Any material, equipment, end item,

subsystem, component, special tooling or

test equipment that is obtained and jointly

funded by some or all of the Participants

under this MOU.

The JSF Air System consists of two interrelated elements: the JSF Air Vehicle and

Autonomic Logistics that operate within the

context of external interfaces and

environments.

The JSF Air Vehicle includes the three

variants of the JSF aircraft and the

propulsion systems, as well as the on-board

hardware, the ancillary mission equipment

necessary to employ the JSF Air System, and

the software necessary to perform assigned

missions, autonomous operation and

communication with off-board systems.

Military members or civilian employees of a

Parent Participant assigned to the

facilities of another Participant who

perform managerial, engineering, technical,

administrative, Contracting, logistics,

financial, planning or other functions in

furtherance of the Project.

A Contractor provided and operated web-based

tool designed to contain JSF Program

Information including, but not limited to,

prime Contract deliverables and subcontract

management data, and other general Programrelated Information such as policies,

directives, plans and processes.

9
JSF Purposes

The portion of the JSF Program that will

produce, sustain, and provide follow-on

development for the JSF Air System.

Efforts to achieve a three variant family of

the JSF Air System, consisting of JSF

concept demonstration, system development

and demonstration, production, sustainment,

and follow-on development.

Performance of Project activities pursuant

to the JSF PSFD MOU; and any future efforts

by a Participant (collaboratively,

nationally, or under U.S. Department of

Defense (DoD) Foreign Military Sales

arrangements) for the production,

sustainment, and follow-on development of

any of the three variants of the JSF Air

System, including efforts required for

interfaces between the JSF Air System and

other systems operated by the Participants.

JSF Production,

Sustainment, and

Follow-on

Development Phase

(JSF PSFD Phase)

JSF Program

Line Shutdown Efforts associated with the Contractors'

cessation of production of JSF Air Vehicles.

National Audit An audit agency or authority within a

Institution Participant's Government.

National Security The security office approved by national

Authority/ authorities to be responsible for the

Designated Security security aspects of this MOU.

Authority (NSA/DSA)

Non-commercial Used for governmental activities only; not

available.for disclosure to or use by the

public.

Non-financial Costs Project costs met with non-monetary

contributions.

10
Operational The document originally developed during the

Requirements JSF concept demonstration phase and

Document (ORD) subsequently modified during the JSF system

development and demonstration phase that

defines the overall JSF Air System level

operational requirements.

Original Equipment The original manufacturer of a hardware

Manufacturer (OEM) item, component, sub-component, or software.

Parent Participant A Participant that sends its JSF CPP to the

facilities of another Participant.

Partially Common Common to more than one but less than all

Participants.

Participant A signatory to this MOU represented by its

military and civilian personnel.

Contractors and Contractor Support Personnel

will not be representatives of a Participant

under this MOU.

Participant A document prepared and submitted by a

Procurement Request Participant that describes the desired

(PPR) articles and services that the Participant

seeks to acquire through a Contract. The

document, which generally contains a

statement of work and a specification,

constitutes a formal request to a

Contracting Officer to initiate a

solicitation to a Contractor or Contractors

in order to award or modify a Contract.

Patent Grant by any government or a regional office

acting for more than one government of the

right to exclude others from making, using,

importing, selling, or offering to sell an

invention. The term refers to any and all

patents including, but not limited to,

patents of implementation, improvement, or

addition, petty patents, utility models,

appearance design patents, registered

designs, and inventor certificates or like

statutory protection, as well as divisions,

reissues, continuations, renewals, and

extensions of any of these.

11
Privileged Safety

Information

Project

Project Invention

Information regarding safety matters that is

marked and handled as Controlled

Unclassified Information and provided to the

Participants' civilian and military

employees and Contractors who have a need to

know such Information to improve safety as

determined by each Participant's national

safety authorities.

The cooperative JSF PSFD Phase efforts of

the Participants under this MOU to achieve

the objectives in Section II (Objectives)

and accomplish the work in Section III

(Scope of Work).

Information not generated in the performance'

of the Project.

Any material, equipment, end item,

subsystem, component, special tooling, or

test equipment provided by one Participant

to another Participant for use in the .

Project.

Information generated in the performance of

the Project.

Any Information provided to, generated in,

or used in this Project.

Any invention in any field of technology,

provided it is new, involves an inventive

step, is capable of industrial application,

and is formulated or made (conceived or

"first actually reduced to practice") in the

course of work performed under the Project.

The term, "first actually reduced to

practice", means the first demonstration,

suffidient to establish to one skilled in

the art to which the invention pertains, of

the operability of an invention for its

intended purpose and in its intended

environment.

Project Background

Information

Project Equipment

Project Foreground

Information

Project Information

12
Prospective Any entity that seeks to enter into a

Contractor Contract to be awarded by a Participant's

Contracting Agency and that, in the case of

a solicitation involving the release of

export-controlled Information, is eligible

to receive such Information.

Then Year (TY)

U.S. Dollars

Third Party

U.S. Dollars that reflect purchasing power

at the time expenditures are actually made.

Future costs stated in Then Year U.S.

Dollars are projected amounts to be paid.

A government other than the Government of a

Participant and any person or other entity

whose government is not the Government of a

Participant.

13
SECTION II

OBJECTIVES

2.1 The overall objective of the JSF PSFD MOU is the

cooperative production, sustainment, and follow-on development

of the JSF Air System to meet the requirements of the

Participants. This MOU establishes the framework that will

enable the Participants to cooperate effectively to accomplish

this objective and that will detail their responsibilities and

benefits under this MOU.

2.2 The specific objectives to be accomplished are:

2.2.1 To produce and sustain the most advanced,

affordable, JSF Air System for the Participants;

2.2.2 To identify opportunities for the most costeffective common sustainment of the Participants'

JSF Air Systems taking into account the

Participants'. capabilities;

2.2.3 To implement Autonomic Logistics Global Sustainment

(ALGS) through associated sustainment Contracts,

supporting peacetime and increased operational

tempo, and delivering continuous improvements in

both cost of ownership and JSF Air System

performance to all Participants;

2.2.4 To participate in follow-on development, which will

consist of identifying and developing upgrades

(preferably common) that will ensure that the JSF

Air System remains affordable, interoperable,

operationally effective, operationally safe, and

operationally suitable throughout its life;

2.2.5 To foster the exchange of ideas and promote

collaborative initiatives among the Participants'

JSF fleets and supporting industries;

2.2.6 To provide, and permit the Participants to utilize,

all Project Information on the JSF Air System

acquired in the implementation of Section III

(Scope of Work), in accordance with Section IX

(Disclosure and Use of Project Information), to

enable the Participants to make informed and timely

14
national decisions concerning the production,

sustainment, and follow-on development of the JSF

Air System, to enable them to utilize and sustain

the JSF Air System, and to interface the JSF Air

System with their unique national weapons systems,

logistics support systems, equipment, or software

for national and coalition operations of the JSF

Air System;

2.2.7 To maximize JSF Air System commonality to achieve

affordability and coalition interoperability;

2.2.8 To ensure security of supply for the JSF Air System

throughout its life;

2.2.9 To develop and implement cooperative management and

control processes to ensure successful, costeffective execution of the Project; and

2.2.10 To promote new, as well as continued, involvement

of the industries of the nations of the

Participants in the production, sustainment and

follow-on development of the JSF Air System.

15
SECTION III

SCOPE OF WORK

3.1 The overall Project work to be performed under this MOU is

the production, sustainment, and follow-on development of

an affordable, three-variant family of the JSF Air System,

which consists of the following: Conventional Take-Off and

Landing (CTOL) variant; catapult-launched, arrestedlanding Carrier Variant (CV); and shipboard capable Short

Take-Off and Vertical Landing (STOVL) variant. The

Project efforts will reflect the JSF Air System

requirements contained in joint capabilities documentation

developed and approved in accordance with the processes

described in Annex E (Follow-on Development Process).

3..2 Production

3.2.1 The production work will include, but will not be

limited to, the following:

3.2.1.1 Production of the JSF Air Vehicle, including

propulsion systems (both F135 and F136).

3.2.1.1.1 The Participants' estimated

procurement quantities in Annex A

(Estimated JSF Air Vehicle Procurement

Quantities) will be used in production

planning. Actual procurement of JSF

Air Vehicles by the Participants will

be subject to the Participants'

national laws and regulations and the

outcome of the Participants' national

procurement decision-Making processes.

Each Participant's actual procurement

quantities of JSF Air Vehicles and

propulsion systems will be established

in Participant Procurement Requests

(PPRs), which will be submitted by

that Participant through the

procedures described in Section VI

(Contracting Provisions).

3.2.1.1.2 The U.S. DoD will grant and maintain

JSF Air System certifications pursuant

to criteria developed under the JSF

16
SDD Framework MOU and this MOU. U.S.

DoD will provide necessary insight and

participation in the JSF Air System

certification process to the other

Participants to enable the recognition

of the U.S. DoD-granted certifications

by those Participants' cognizant

authorities.

3.2.1.1.3 Configuration changes resulting from

follow-on development efforts under

this MOU will be incorporated during

production runs of the affected

article or will be implemented through

production and installation of

retrofit kits.

3.2.1.2 Procurement, repair, and maintenance of test

and tooling equipment to support production.

3.2.1.3 Shutting down production lines and

disposition of Jointly Acquired Equipment.

3.2.2 The U.S. DOD will use its best efforts to provide

the other Participants with the opportunity to

obtain equipment and systems produced under U.S.

DoD programs, other than the JSF Program, to the

extent that such equipment and systems are needed

to meet the JSF Air System requirements contained

in the joint capabilities documentation referenced

in paragraph 3.1 of this Section.

3.3 Sustainment

3.3.1 Sustainment efforts, including but not limited to

manufacture of sustainment articles and provision

of sustainment services, will be performed

consistent with Section II (Objectives) to meet the

Participants' operational readiness requirements by

achieving the most cost-effective common

sustainment of the JSF Air System. The general

principles for the sustainment efforts are as

follows:

3.3.1.1 Sustainment will be provided under ALGS,

which will meet the Participants'

requirements through a predominantly common

17
solution and will enable Participanttailored solutions (Partially Common or

unique), making appropriate use of existing

infrastructure, to the extent practicable

and cost-effective.

3.3.1.2 Responsibility for Contracting for

sustainment efforts under ALGS will be in

accordance with paragraph 6,1 of Section VI

(Contracting Provisions).

3.3.1.3 The JSF Program Executive Officer (JSF PEO)

will be responsible, as part of his

responsibility to manage the Project in

accordance with Section IV (Management

(Organization and Responsibility)), for the

management of ALGS (including delivery of

ALGS articles and services under Contract),

as well as coordination among production,

sustainment and follow-on development

activities conducted under Section III

(Scope of Work). JSF Cooperative Project

Personnel (JSF CPP) will be assigned to

participate in ALGS planning and

implementation efforts in accordance with

Annex B (Management Structure).

3.3.1.4 ALGS will be achieved through an effective,

affordable, and acceptable performance-based

business model, which will use a continuous

improvement approach.

3.3.1.5 The ALGS will employ a performance-based

logistics (PBL) business approach, which

will focus on buying and delivering

outcomes, rather than specific products.

The required outcomes will be established in

individual performance-based arrangements

(PBAs) for each Participant. Such PBAs will

include performance metrics, support

relationships (i.e., roles and

responsibilities of the JSF Program Office

and Participants) and the conditions for

delivering sustainment articles and

services.

18
3.3.1.6 ALGS will be implemented using a phased

approach. The details regarding ALGS and

its phases, as well as the PBA process, are

included in Annex D (Sustainment).

3.3.2 Sustainment will include the following efforts:

3.3.2.1 Provision of individual Participants'

sustainment requirements for articles and

services, by either Contracting or from the

Participants' respective existing ALGS

resources, related to the Autonomic

Logistics (AL) domains identified at

paragraphs 3.3.3.1 through 3.3.3.10 of this

Section.

3.3.2.2 Performance of the following activities for

the Participants' joint benefit, which will

be funded by all Participants:

3.3.2.2.1 Common sustaining engineering services

related to the AL domain in paragraph

3.3.3.9 of this Section.

3.3.2.2.2 Common efforts for the expansion of

Original Equipment Manufacturer (OEM)

and other required repair capacity as

determined through the industrial

services management activities

described in paragraph 3.3.3.10 of

this Section.

3.3.3 ALGS efforts will encompass, but will not be

limited to, efforts regarding the following

logistic domains:

3.3.3.1 Joint fleet management, which will provide

coordination and facilitation for JSF Air

System maintenance, JSF Air System

configurations, planning of maintenance and

configuration modifications, and making JSF

Air Vehicle structural life and disposal

recommendations. This activity will be done

in conjunction with each Participant's

management of its fleet.

19
3.3.3.2 Supply chain management, which will provide

delivery and problem resolution for supply,

inventory and warehousing, transportation,

and distribution and related performance

tracking.

3.3.3.3 Support equipment management, which will

provide for the management of support

equipment, optimize support equipment by

location, maintain support equipment,

provide configuration management, assist

service personnel in support equipment

maintenance, provide problem resolution, and

aid in technology updating for support

equipment.

3.3.3.4 Training system operations, which will

provide for the delivery and management of

training services and the delivery,

maintenance, and management of associated

articles.

3.3.3.5 Autonomic Logistics Information System

(ALIS) support, which will provide the AL

system Information infrastructure and

decision support while maintaining the

approved configuration data for the JSF Air

System.

3.3.3.6 AL field operations, which will provide

effective support to the Participants'

warfighters in the operational environment,

when and where it is needed, including

technical support and all interfaces between

the warfighters and the network of services.

Under this domain, Participant priorities

will be identified, Information flow will be

monitored, and issues will be tracked and

resolved.

3.3.3.7 AL business operations, which will implement

the business aspects of AL and monitor

support performance, including that

performance under Contracts issued in

accordance with paragraph 6.1 of Section VI

(Contracting Provisions). It also includes

support to government budget cycles, program

20
schedules, future strategic program

planning, prioritization of Participants'

needs, and program reviews.

3.3.3.8 ALGS operations development, which will

ensure that the development of the ALGS

operations through the life of the JSF Air

System remains flexible to the evolving

needs and requirements of the Participants.

3.3.3.9 Sustaining engineering, which will provide

product support and field service

engineering support. This includes

engineering, problem/issue resolution,

engineering investigations, mishap

assistance, maintenance, modifications and

technology upgrades of software and

hardware, software maintenance, technical

data, airworthiness, configuration

management, definition of facility

requirements, and low observable

restoration.

3.3.3.10 Industrial services, which will provide the

management activities required to coordinate

fleet-wide JSF Air System depot level

maintenance, modification and repair, and

will include utilization of OEMs, regional

support capabilities, and Participant-unique

and Partially Common support facilities.

3.3.4 The JSF Program Office will establish and maintain

a business continuity plan for sustainment support.

3.3.5 The sustainment activities under this MOU will be

pursued primarily as efforts common to all

Participants. However, some activities may be

pursued as Partially Common efforts, or an effort

unique to one Participant, in those cases in which

a Participant's or Participants' requirements

cannot be met through common sustainment

activities. This will generally be determined by

the business case analysis (BCA) process developed

under the JSF SDD Framework MOU. However,

Participants will have the option to make their own

decisions. Under this process, BCAs will be

conducted by a BCA team, consisting of the JSF

21
Program Office, Participants' representatives and

industry. BCAs will be conducted following a

spiral approach, with each spiral corresponding to

milestone or policy decisions. Each BCA will

utilize a repeatable process to describe specific

task steps required for each spiral.

3.3.6 Planning efforts for an alternative sustainment

approach will commence; under the direction of the

JSF Executive Steering Board (JESB) as described in

paragraph 4.4 of Section IV (Management

(Organization and Responsibility)), if there are

indications that the ALGS will not meet the

Participants' requirements for satisfactory and

affordable support of their JSF Air Systems. If

required, implementation of an alternative

sustainment approach will be described in a

revision to Annex D (Sustainment), and an amendment

to this MOU will be made in accordance with Section

XIX (Amendment, Withdrawal, Termination, Entry into

Effect, and Duration) as necessary.

3.4 Follow-on Development

3.4.1 The follow-on development work will be performed to

keep the JSF Air System affordable, interoperable,

operationally effective, operationally safe, and

operationally suitable throughout its service life

by adding upgrades (preferably common) in

continuous increments, approximately every two

years. These upgrades will address, but will not

be limited to:

3.4.1.1 Common requirements, as mutually determined

by the Participants, and requirements

specific to a Participant (or one of its

military services), or to a variant of the

JSF Air System.

3.4.1.2 Corrections to operational deficiencies

documented from in-service use and

development test (DT) or operational test

(OT) events.

3.4.1.3 Capabilities, listed in the Operational

Requirements Document (ORD), subsequent

22
documents, or JESB decisions that have not

yet been implemented.

3.4.2 Other JSF Air System capability upgrades may occur

that may not be specifically part of an increment

of capability upgrade described in paragraph 3.4.1

of this Section. Examples of such other upgrades

include electronic warfare or mission planning

reprogramming, cryptographic material updates,

quick reaction changes, or urgent operational

requirements that may arise in a time period

between major increment upgrades.

3.4.3 The activities in paragraphs 3.4.1 and 3.4.2 of

this Section will be conducted primarily as efforts

common to all Participants; however, some of those

activities may be conducted as Partially Common

efforts or as an effort unique to one Participant.

The designation of efforts as common, Partially

Common, or unique will be in accordance with the

processes described in Annex E (Follow-on

Development Process).

3.4.4 Urgent safety changes will be managed as part of

the JSF sustaining engineering efforts as provided

in Annex D (Sustainment).

3.5 Follow-on DT and Follow-on Operational Test and Evaluation

(FOT&E)

3.5.1 Follow-on DT will be conducted in areas common to

all Participants. Follow-on DT of Partially Common

or Participant-unique requirements may be performed

under this MOU, contingent upon availability of

personnel, aircraft, test equipment, and scheduling

of facility or range time.

3.5.2 FOT&E will be conducted in areas common to all

Participants to refine the estimates made during

initial operational test and evaluation (IOT&E); to

complete any remaining IOT&E activity; to verify

correction of IOT&E deficiencies; to evaluate

significant follow-on development changes to design

or employment; and to evaluate the JSF Air System

as it evolves through follow-on development efforts

to ensure it continues to meet operational needs

and retains effectiveness in a substantially new

23
environment or against a new threat. FOT&E of .

Partially Common or Participant-unique requirements

may be performed in any Participant's country under

this MOU, contingent upon availability of

personnel, aircraft, test equipment, and scheduling

of facility or range time.

3.5.3 Personnel of the Participants will normally

participate in the activities in paragraph 3.5.1

and 3.5.2 of this Section, subject to national

disclosure policies.

3.6 Science and Technology (S&T) Development

3.6.1 S&T efforts will include, but will not be limited

to, the following:

3.6.1.1 Identification of S&T efforts from the

Participants' national programs that may be

applicable and of benefit to the JSF Air

System.

3.6.1.2 Submission of identified S&T efforts to the

Requirements Working Group (RWG), referenced

in Annex B (Management Structure), for

consideration.

3.6.2 Any cooperation on S&T development efforts will be

the subject of separate written arrangements by the

Participants.

3.7 The cooperative efforts under this MOU will also include

the exchange of notifications of safety-related events,

including, but not limited to exchange of Privileged Safety

Information in accordance with the procedures contained in the

project security instruction (PSI), among the Participants in

those cases in which an event related to the JSF Air System has,

resulted in or may result in an unsafe condition. Such

notifications may be by Government message, electronic mail, or

other written means as soon as possible.

3.8 • Each Participant will demilitarize and dispose of its JSF

Air Systems in accordance with mutually determined JSF

demilitarization guidelines.

24
3.9 The Participants will use their best efforts to review

expeditiously applications for export licenses related to the

scope of work for this Project.

25
SECTION IV

MANAGEMENT (ORGANIZATION AND RESPONSIBILITY)

4.1 A JESB will be established and will exercise executivelevel guidance and oversight for the Project. The JESB will

provide a forum for discussions, consultations, and decisions on

Project matters. Decisions of the JESB will be made by

consensus, and those decisions affecting the execution of this

MOU will be documented in serially numbered and dated decision

memoranda or major decision memoranda, depending on the

importance of the decision. Decisions on Partially Common and

unique matters will be made by consensus of the JESB

representatives for the U.S. DoD and the directly affected

Participants.

4.2 The Service Acquisition Executives of the United States

Department of the Air Force and the United States Department of

the Navy will chair the JESB on an alternating basis, with an

official of a non-U.S. DoD Participant serving as a co-chair.

The JESB will also include one duly authorized representative

appointed by each of the Participants. The JESB representatives

(or their successors in the event of reorganization) will be as

follows: Australia, Director General New Air Combat Capability;

Canada, Assistant Chief of the Air Staff (ACAS); Denmark,

Director Air Force Projects; Italy, Chief Programs Department of

the National Armaments Directorate; the Netherlands, Director of

Projects and Procurement; Norway, National Armaments Director;

Turkey, Deputy Undersecretary for Defense Industries or Turkish

Air Force Chief Plans and Principles; the United Kingdom,

Capability Manager (Precision Attack); and the United States,

the Service Acquisition Executives of the United States

Department of the Air Force and the United States Department of

the Navy on an alternating basis. Other personnel of the

Participants, as appropriate, may attend JESB meetings. The JSF

PEO will serve as the JESB's Executive Secretary. The U.S. SAEs

and the JESB representatives of the Participants may delegate

their respective authority regarding the functions in paragraph

4.4 of this Section. The JESB may establish subordinate working

bodies as appropriate.

4.3 The JESB will normally meet semi-annually. Additional

meetings may be held as mutually determined by the JESB. The

JESB may also decide to conduct business in a virtual forum via

e-mail, teleconference, or videoconference.

26
4.4 In exercising its executive-level guidance and oversight

of the Project, the JESB will perform functions including, but

not limited to:

4.4.1 Reviewing progress towards accomplishing Section II

(Objectives) and Section III (Scope of Work).

4.4.2 Approving JSF PEO-recommended annual or multiyear

Consolidated Procurement Requests (CPRs) for JSF

Air System articles and services.

4.4.3 Approving JSF PEO-recommended ALGS configuration

changes and providing strategic guidance to the

ALGS process.

4.4.4 Approving JSF PEO-recommended JSF Air System

configuration changes and providing strategic

guidance to the follow-on development process.

4.4.5 Resolving issues brought forth by the JSF PEO, in

accordance with paragraph 4.5.4 of this Section,

concerning the solutions for impacts of production

delays upon the deliveries of JSF Air Vehicles.

4.4.6 Conducting financial oversight of Project efforts

to ensure compliance with the provisions of Section

V (Financial Provisions).

4.4.7 Approving the JSF PEO-recommended Project Financial

Management Procedures Document (FMPD), with the

exception of bilateral annexes, and any changes

thereto, in accordance with Section V (Financial

Provisions).

4.4.8 Monitoring proposed Partially Common or unique

efforts to be conducted by Participants through the

JSF Program Office.

4.4.9 Addressing governmental oversight responsibilities

concerning Project-related industrial matters

raised by JESB representatives in accordance with

Section VII (Industrial Participation).

4.4.10 Employing its best efforts to resolve, in

consultation with the export control authorities of

the Participants concerned, any export control

issues raised by the JSF PEO in accordance with

27
paragraph 4.5.12 of this Section or raised by a

Participant's JESB representative in accordance

with paragraph 9.1.2.2 of Section IX (Disclosure

and Use of Project Information).

4.4.11 Consulting on proposed Third Party sales and

transfers in accordance with Section XIII (Third

Party Sales and Transfers).

4.4.12 Providing oversight of Project efforts to ensure

compliance with the provisions of Section XII

(Security) and reviewing the PSI and the

Classification Guide (CG) for the Project prior to

the JSF PEO's forwarding them to the National

Security Authorities/Designated Security

Authorities (NSAs/DSAs) for approval.

4.4.13 Approving JSF PEO-recommended plans to manage and

control the transfer of Project Equipment provided

by any Participant to support the execution of the

Project in accordance with Section VIII (Project

Equipment and Jointly Acquired Equipment).

4.4.14 Approving JSF PEO-recommended plans for the

disposal of Jointly Acquired Equipment under this

MOU in accordance with Section VIII (Project

Equipment and Jointly Acquired Equipment).

4.4.15 Consulting on any matters that affect the Project

and resolve any issues brought forth by JESB

representatives.

4.4.16 Reviewing and forwarding to the Participants for

approval JESB representative-recommended amendments

to this MOU in accordance with Section XIX

(Amendment, Withdrawal, Termination, Entry Into

Effect, and Duration).

4.4.17 Approving JSF PEO-recommended adjustments, as

necessary, to reflect the changed requirements of

the Participants, to the procurement quantities

established in Annex A (Estimated JSF Air Vehicle

Procurement Quantities), recognizing that each

Participant retains the right to adjust its

estimated procurement quantities on a yearly basis.

28
4.4.18 Approving JSF PEO-recommended amendments to Annex A

(Estimated JSF Air Vehicle Procurement Quantities),

consistent with paragraph 4.4.17 of this Section,

Annex B (Management Structure), Annex D

(Sustainment), Annex E (Follow-on Development

Process), and Annex F (Estimated Allocation of

Financial Cost Ceilings) of this MOU consistent

with Section XIX (Amendment, Withdrawal,

Termination, Entry Into Effect, and Duration) of

this MOU.

4.4.19 Approving the JSF PEO-recommended JSF Program

Office Integrated Project Teams Cooperative Project

Personnel Personnel Description Document (IPT CPP

PDD) referenced in paragraph 4.7 of this Section.

4.5 The JSF Program is directed by the U.S. DoD JSF PEO (or

successor in the event of reorganization), who heads the JSF

Program Office and who is responsible for managing the cost,

schedule, performance requirements, and technical aspects of the

JSF Program. The JSF PEO will manage the Project on behalf of

the Participants in accordance with this MOU, and will promote

international cooperation in the JSF Program Office in order to

meet the requirements of this MOU. The JSF PEO will perform

functions including, but not limited to:

4.5.1 Monitoring progress towards accomplishing Section

II (Objectives) and Section III (Scope of Work),

regularly advising the JESB on this progress, and

apprising the JESB of significant issues and

problems as they arise.

4.5.2 Recommending for JESB approval annual or multiyear

CPRs for JSF Air System articles and services

consistent with the Participants' requirements.

4.5.3 Monitoring affordability and Contractor performance

and advising the JESB if any issues arise.

4.5.4 Addressing the impact of any production delays upon

the deliveries of JSF Air Vehicles that have been

placed under Contract for the Participants, and

referring to the JESB any unresolved issues

regarding the solutions for such impacts;

4.5.5 Recommending for JESB approval ALGS configuration

changes.

29
4.5.6 Recommending for JESB approval JSF Air System

configuration changes.

4.5.7 Managing certifications and airworthiness for the

JSF Air System for production, sustainment, and

follow-on development.

4.5.8 Managing the financial aspects of Project efforts

to ensure compliance with the provisions of Section

V (Financial Provisions).

4.5.9 Recommending for JESB approval the FMPD, with the

- exception of bilateral annexes, and any changes

thereto in accordance with Section V (Financial

Provisions), and implementing the JESB-approved

FMPD.

4.5.10 Recommending, for approval of the JESB

representatives of the U.S. DoD and the applicable

non-U.S. DoD Participant, a bilateral FMPD annex

for each of the non-U.S. DoD Participants, and any

changes thereto, in accordance with Section V

(Financial Provisions).

4.5.11 Advising the JESB of proposed Partially Common or

unique efforts to be conducted by Participants

through the JSF Program Office.

4.5.12 Monitoring export control arrangements required to

implement this MOU and, if applicable, referring

immediately to the JESB any export control issues

that could adversely affect the implementation of

this MOU.

4.5.13 Advising the JESB of any proposed U.S. DoD Third

Party sales and transfers and monitoring all

authorized sales and transfers, in accordance with

Section XIII (Third Party Sales and Transfers).

4.5.14 Managing the security aspects of the Project,

including forwarding the PSI and the CG to the JESB

for review and then to the NSAs/DSAs for approval

in accordance with Section XII (Security).

4.5.15 Recommending for JESB approval plans for managing

and controlling the transfer of Project Equipment

30
provided by any Participant to support the

execution of the Project in accordance with Section

VIII (Project Equipment and Jointly Acquired

Equipment).

4.5.16 Recommending for JESB approval plans for the

disposal of Jointly Acquired Equipment under this

MOU in accordance with Section VIII (Project

Equipment and Jointly Acquired Equipment).

4.5.17 Resolving issues brought forth by the U.S. DoD

Director, JSF International Directorate (JSF/ID)

and referring to the JESB those issues that the JSF

PEO cannot resolve.

4.5.18 Recommending to the JESB amendments to this MOU in

accordance with Section XIX (Amendment, Withdrawal,

Termination, Entry Into Effect, and Duration).

4.5.19 Reviewing annually and recommending to the JESB

adjustments, if necessary, to the procurement

quantities established in Annex A (Estimated JSF

Air Vehicle Procurement Quantities).

4.5.20 Recommending to the JESB amendments to Annex A

(Estimated JSF Air Vehicle Procurement

Quantities), consistent with paragraph 4.5.19 of

this Section, Annex B (Management Structure),

Annex D (Sustainment), Annex E (Follow-on

Development Process), and Annex F (Estimated

Allocation of Financial Cost Ceilings) of this MOU

consistent with Section XIX (Amendment,

Withdrawal, Termination, Entry Into Effect, and

Duration).

4.5.21 Recommending for JESB approval the JSF Program

Office IPT CPP PDD described in paragraph 4.7 of

this Section and maintaining oversight of the IPT

CPP PDD.

4.5.22 Approving changes to the JSF ALGS Strategic Plan

referenced in Annex D(Sustainment).

4.6 The Director, JSF/ID, assisted by National Deputies of the

other Participants referenced in paragraph 4.7 of this Section,

will be responsible for:

31
4.6.1 Managing the day-to-day administration of this MOU.

4.6.2 Preparing and submitting to the JSF PEO the Project

FMPD, with the exception of bilateral annexes, and

any changes thereto for JESB approval.

4.6.3 Preparing and submitting to the JSF PEO, for the

approval of the JESB representatives of the U.S.

DoD and the applicable non-U.S. DoD Participant, a

bilateral FMPD annex for each of the non-U.S. DoD

Participants, and any changes thereto, in

accordance with Section V (Financial Provisions).

4.6.4 Coordinating the financial aspects of the Project

in accordance with Section V (Financial Provisions)

and the FMPD.

4.6.5 Preparing and submitting to the JSF PEO the JSF

Program Office IPT CPP PDD for the JESB's approval.

4.6.6 Developing and submitting to the JSF PEO amendments

to this MOU and its Annexes for recommendation to

the JESB.

4.6.7 Developing plans to manage and control the transfer

of Project Equipment provided by a Participant in

accordance with Section VIII (Project Equipment and

Jointly Acquired Equipment), submitting them to the

JSF PEO for recommendation to the JESB, and

implementing the JESB-approved plans.

4.6.6 Developing plans for the disposal of Jointly

Acquired Equipment under this MOU in accordance

with Section VIII (Project Equipment and Jointly

Acquired Equipment), submitting them to the JSF PEO

for recommendation to the JESB, and implementing

the JESB-approved plans.

4.6.9 Developing and forwarding to the JSF PEO a PSI and

a CG for the Project within three months after MOU

signature, and implementing them upon final

approval.

4.6.10 Providing reports to the JSF PEO as required.

4.6.11 Referring issues to the JSF PEO that cannot be

resolved by the Director, JSF/ID.

32
4.7 Each non-U.S. DoD Participant will provide a National

Deputy and JSF CPP, in accordance with Annex B (Management

Structure), who will be assigned to the JSF Program Office or

Project field activities. Each National Deputy's primary

responsibility will be to serve as the national representative

for the National Deputy's Participant. Specific National Deputy

responsibilities are identified in paragraph 4.8 of this

Section. Specific IPT responsibilities for non-U.S. DoD

personnel will be identified in the JSF Program Office IPT CPP

PDD.

4.8 Each National Deputy will be responsible for:

4.8.1 Supporting the Director, JSF/ID in the day-to-day

administrative management of this MOU, to include

oversight of the JSF PSFD MOU CPP of the cognizant

Participant.

4.8.2 Providing day-to-day representation of the

cognizant Participant within the JSF Program Office

on all matters related to the Project.

4.8.3 Assisting the Director, JSF/ID in developing the

FMPD, PSI, and CG, and IPT.CPP PDD.

4.8.4 Performing other tasks, as may be assigned by the

Director, JSF/ID or the National Deputy's

respective JESB representative.

4.9 U.S. DoD personnel may serve as JSF CPP in activities of

the non-U.S. DoD Participants; assignments of such personnel

will be reflected in an amendment to Annex B (Management

Structure) as the need for such assignments arises. Annex C

(Cooperative Project Personnel) establishes provisions for the

general conduct of all personnel of the Participants who will

serve as JSF CPP.

4.10 The Participants will have representation in JSF

management groups, both external and internal to the JSF Program

Office, as depicted in Annex B (Management Structure).

33
SECTION V

FINANCIAL PROVISIONS

5.1 The estimate for the total shared costs for the

Participants' cooperative efforts under this MOU is 21.876

billion Then Year (TY) U.S. Dollars. Each Participant's maximum

contribution to the total shared costs of this MOU is reflected

in Table 5-1. In no event will any of these maximum

contribution amounts be increased without an amendment to this

MOU. However, if a Participant's expenditures reach its maximum

contribution amount, the provisions of paragraph 19.5 of Section

XIX (Amendment, Withdrawal, Termination, Entry into Effect, and

Duration) will apply.

Table 5-1 (In TY U.S. Dollars)

Participant Maximum

Contribution

Australia $0.690B

Canada $0.551B

Denmark $0.33B

Italy $0.904B

The Netherlands $0.586B

Norway $0.33B

Turkey $0.690B

United Kingdom $0.952B

United States $16.843B

5.2 The costs of the cooperative efforts under this MOU will

not exceed the following Financial Cost Ceilings:

5.2.1 A Financial Cost Ceiling of 7.303 billion TY U.S.

Dollars for shared production non-recurring costs

(including, but not limited to, production test and

tooling equipment, and production Line Shutdown)

and the shared costs of Project overhead and

administration. The estimated allocation of the

costs for this Financial Cost Ceiling among the

Participants is depicted in Annex F (Estimated

Allocation of Financial Cost Ceilings).

5.2.2 A Financial Cost Ceiling of 1.323 billion TY U.S.

Dollars for the shared non-recurring costs of

sustainment. The estimated allocation of the costs

for this Financial Cost Ceiling among the

34
Participants is depicted in Annex F (Estimated

Allocation of Financial Cost Ceilings).

5.2.3 A Financial Cost Ceiling of 13.250 billion TY U.S.

Dollars for shared follow-on development nonrecurring costs. The estimated allocation of the

costs for this Financial Cost Ceiling among the

Participants is depicted in Annex F (Estimated

Allocation of Financial Cost Ceilings).

5.2.3.1 Each Participant will contribute to the

shared non-recurring costs of follow-on

development incurred from the beginning of

the follow-on development efforts to the end

of that Participant's production run.

5.2.3.2 Each Participant will also contribute to the

shared non-recurring costs of follow-on

development efforts incurred after its

production run, if it wishes to receive

Information generated in the performance of

such follow-on development efforts or to

purchase a retrofit kit or equipment that

results from those efforts.

5.3 The Financial Cost Ceilings in paragraph 5.2 of this

Section may be changed only by amendment to this MOU.

5.4 The U.S. dollar will be the reference currency for the

Project, and the Project fiscal year will be the U.S. fiscal

year (1 October - 30 September).

5.5 Each Participant will contribute its equitable share of

the full Financial Costs and Non-financial Costs of the Project,

including overhead costs, administrative costs, and, in

accordance with Section XIV (Liability and Claims), costs of

claims, and will receive an equitable share of the results of

the Project, as specified in this MOU.

5.6 The Financial Costs for common production, sustainment,

and follow-on development efforts will be shared among the

Participants in accordance with the proportion of their

individual JSF Air Vehicles to the total JSF Air Vehicles of all

Participants participating in those efforts. This requirement

is reflected in the Composite Share Ratio (CSR) formula,

S=(A/B)C, where:

35
5.6.1 "S" represents the financial contribution by an

individual Participant to the cooperative effort;

5.6.2 "A" represents the individual Participant's

estimated JSF Air Vehicle procurement quantities.

The values for "A" are identified in Annex A

(Estimated JSF Air Vehicle Procurement Quantities),

and will be adjusted by the JESB annually, if .

necessary, to reflect changes in the Participants'

estimated JSF Air Vehicle procurement quantities,

in accordance with paragraph 4.4.17 of Section IV

(Management (Organization and Responsibility)).

The impact of any such adjustments to the JSF Air

Vehicle procurement quantities upon the financial

contributions determined by this formula will be

prospective only;

5.6.3 "B" represents the sum of'the individual "A" values

of the Participants participating in the

cooperative effort; and

5.6.4 "Cu represents the total Financial Costs of the

cooperative effort.

5.7 The CSR formula will also be used to calculate nonrecurring cost shares for Participants participating in

Partially Common production, sustainment, and follow-on

development efforts that are within the scope of this MOU. In

such cases, the values for "B" in paragraph 5.6.3 of this

Section will represent the sum of the individual "A" values of

the Participants participating in a Partially Common effort.

Except as provided in paragraph 9.1.5 of Section IX (Disclosure

and Use of Project Information), if a Participant who does not

join in a Partially Common effort but who subsequently decides

that it wishes to receive Information generated in the

performance of that effort or to acquire any item that results

from that effort, that Participant will be treated as a

Participant participating in that effort, for the purposes of

cost sharing. Accordingly, such Participant will contribute its

share of the costs of that effort in accordance with the formula

set forth in this paragraph.

5.8 The non-recurring costs for production, sustainment, and

follow-on development efforts that are incurred to satisfy the

unique requirements of a Participant will be paid by that

Participant. Except as provided in paragraph 9.1.5 of Section

IX (Disclosure and Use of Project Information) and paragraph

36
2.1.3 of Annex D (Sustainment), if another Participant

subsequently wishes to receive Information generated in the

performance of such an effort, or to acquire any item that

results from that effort, that Participant will be treated as a

Participant participating in those efforts for the purposes of

cost sharing. Accordingly, that Participant will contribute its

share of the costs of those efforts in accordance with the

formula in paragraph 5.7 of this Section.

5.9 Those recurring costs associated with the provision of JSF

Air Systems and related articles and services intended solely

and exclusively for use by a Participant will be paid by that

Participant.

5.10 Participation in the Project will also include, but not be

limited to, a Non-financial Cost contribution of personnel

assigned to the JSF Program Office, U.S. DoD field activities,

and facilities of non-U.S. DoD Participants. The Non-financial

Cost contribution of the U.S. DoD Participant will include the

JSF PEO, the Director, JSF/ID, and any JSF CPP of the U.S. DoD

assigned to the facilities of non-U.S. DoD Participants. The

Non-financial Cost contributions of the other Participants will

include their National Deputies and JSF CPPs.

5.11 in addition to the shared costs of Project administration

referenced in paragraph 5.2.1 of this Section, the Participants

will bear the cost of personnel who are provided as nonfinancial contributions in accordance with paragraph 5.10 of

this Section, as follows:

5.11.1 The U.S. DoD will bear the costs of all pay and.

allowances of the JSF PEO and the Director, JSF/ID.

5.11.2 Each Parent Participant will bear the following JSF

CPP-related costs:

5.11.2.1 All pay and allowances Of its JSF CPP

assigned to the facilities of another

Participant.

5.11.2.2 Transportation of its JSF CPP, JSF CPP

dependents, and their personal property to

the location of the facilities of another

Participant prior to commencement of the JSF

CPP assignment, and return transportation of

the foregoing from this location upon

37
completion or termination of the JSF CPP

assignment.

5.11.2.3 Compensation for loss of, or damage to, the

personal property of its JSF CPP or JSF CPP

dependents, subject to the laws and

regulations of the Parent Participant's

Government.

5.12 The following costs will be borne entirely by the

Participant incurring the costs or on whose behalf the costs are

incurred:

5.12.1 Costs associated with national representation at

meetings by personnel not assigned, as part of this

Project, to the JSF Program Office, U.S. DoD field

activities, or facilities of non-U.S. DoD

Participants.

5.12.2 Costs associated with any unique national

requirements identified by a Participant not

included under paragraphs 5.8 and 5.9 of this

Section.

5.12.3 Any costs that are outside the scope of this MOU.

5.13 The JSF PEO will be responsible for establishing the

detailed financial management procedures under which the Project

will operate. These procedures will include cost and

performance tracking provisions and any measures designed to

minimize the currency exchange rate risk upon the costs of the

Participants. These procedures, which must accord with the

national accounting and audit requirements of the Participants,

will be detailed in a FMPD prepared by the Director, JSF/ID and

subject to the approval of the JESB. Each Participant will fund

the Project in accordance with the estimated financial schedule

of financial contributions and processes contained in the FMPD,

which will be consistent with the funding requirements of

paragraph 5.16 of this Section. The FMPD will reflect that each

Participant will pay its CSR share of production Line Shutdown

costs at the time required to make contractual payment of the

Line Shutdown, except that if a Participant withdraws from the

MOU prior to Line Shutdown, such payment will be made upon

withdrawal. However, if a Participant withdraws prior to any of

its Air Vehicle requirements being placed on Contract, that

Participant will not be responsible for paying any Line Shutdown

costs.

38
5.14 The Director, JSF/ID will prepare a bilateral annex to the

FMPD for each of the non-U.S. DoD Participants, which will be

submitted, via the JSF PEO, for approval by the JESB

representatives of the U.S. DoD and the applicable non-U.S. DoD

Participant. Each annex will include an estimated financial

schedule for the payment of the costs of the applicable non-U.S.

Participant described in paragraphs 5.7, 5.8, 5.9, and 5.12.2 of

this Section; this schedule will be consistent with the funding

requirements of paragraph 5.16 of this Section. Each annex will

also include those provisions necessary to satisfy the unique

financial management procedures requirements of the applicable

non-U.S. Participant.

5.15 A Participant may provide Non-financial Cost contributions

to the Project, such as in-kind articles and services, instead

of Financial Cost contributions not to exceed a cumulative

amount of 50 million TY U.S. dollars, as mutually determined by

the JESB. Any such Non-financial Cost contributions by a

Participant will be reflected in an approved change to the FMPD.

The FMPD change will also reflect that the Participant's

Financial Cost contributions will be decreased by an amount that

the JESB mutually determines to be the value of the Nonfinancial Cost contribution.

5.16 The Participants recognize that in fulfilling their

Contracting responsibilities under Section VI (Contracting

Provisions), it may become necessary for a• Contracting

Participant to incur contractual or other obligations for the

benefit of the Participants prior to the receipt of the other

Participants' funds. In the event that a Contracting

Participant incurs such obligations, the other Participants so

benefited will make such funds available in such amounts and at

such times as may be

obligations and will

from the performance

other obligations in

or costs are due.

required by the Contracts or other

pay any damages and costs that may accrue

of or cancellation of the Contracts or

advance of the time such payments, damages,

5.17 A Participant will promptly notify the other Participants

if available funds are not adequate to fulfill its

responsibilities under this MOU. If a Participant notifies the

other Participants that it is terminating or reducing its

funding for this Project, the JESB will immediately consult to

decide upon the appropriate course of action with a view toward

continuation on a modified basis.

39
5.1$ The Participants acknowledge the importance of sound

financial management practices and the need to comply with the

audit requirements of their respective Governments.

Accordingly, each Participant will, to the maximum extent

permitted within its national laws, regulations, and disclosure

policies, provide to the other Participants or the National

Audit Institutions of the Participants (as applicable) the

Information and assistance described in paragraphs 5.19 through

5.21 of this Section.

5.19 Each Contracting Participant will be responsible for the

audit of the procurement activities for which it is responsible

under the Project in accordance with its national practices.

The Contracting Participant will use its best efforts to perform

any audits requested by another Participant. In the event that

an audit of procurement activities requested by another

Participant cannot be performed by the Contracting Participant,

then the requesting Participant may request to perform an audit

itself. Each Participant's reports of audits will be promptly

made available to the other Participants.

5.20 The U.S. DoD will be responsible for the internal audit

regarding administration of the other Participants' Project.

funds in accordance with U.S. national practices. The U.S. DoD

will promptly make audit reports of such funds available to the

other Participants. Upon the mutual consent of the U.S. DoD and

another Participant, that Participant or its National Audit

Institution auditors will be permitted to assist the U.S. DoD on

any audit elements required to satisfactorily perform the audit.

In addition, if the Participant or its National Audit

Institution auditors need to obtain or to inspect specific

Project data in order to fulfill their national obligations, the

U.S. DoD will arrange for access to such specific data at

mutually determined times and locations.

5:21 In the event external audits concerning the Project are

conducted by the National Audit Institutions of the

Participants' nations, such reports will be provided by the

applicable Participant to the JESB representative of the other

Participants. The Director, JSF/ID, and the National Deputies

will apprise each other as soon as possible of external audits

concerning the Project by the National Audit Institutions of the

Participants' nations.

40
SECTION VI

CONTRACTING PROVISIONS

6,1 The U.S. DoD will be primarily responsible for Contracting

for this Project in accordance with U.S. Contracting laws,

regulations and procedures. However, the JSF PEO may request

that a Participant other than the U.S. DoD issue Contracts for

the Project in accordance with that Participant's national

Contracting laws, regulations, and procedures. The JSF PEO will

ensure that Contracts issued on behalf of the Participants are

in accordance with this MOU. The Contracting Officer for each

Contract is the exclusive source for providing contractual

direction and instructions to Contractors, and is responsible

for ensuring that such directions and instructions are in

accordance with the terms and conditions of the Contract. The

Contracting Officer will, when it facilitates satisfying the

objectives of this MOU, seek waivers of national procurement

regulations, procedures, and practices.

6.2 Contracting for the Project will include Contracting for

the common, Partially Common, and unique requirements of the

Participants for their JSF Air Systems. Each Participant will

delineate its national requirements for production, sustainment,

and follow-on development of its JSF Air Systems in individual

PPRs. To initiate the procurement of JSF Air System articles

and services, the Participants will submit PPRs to the JSF

Program Office in accordance with procedures proposed by the PEO

and approved by the JESB, which will include the timing, format,

and acceptance procedures for such requests. PPRs for

propulsion systems will be submitted separately from PPRs for

other JSF Air System articles and services. The following

principles will apply to PPRs:

6.2.1 PPRs may contain technical requirements, statements

of work, and Contract terms and conditions that are

unique to a Participant. Unique terms and

conditions will be consistent with the Contracting

Agency's national laws and (unless a waiver is

obtained) regulations. Unique terms and condition

requests may include designation of Contractors or

subcontractors in order to satisfy the requirements

of the Participant submitting the PPR. The costs

of a Participant's unique technical requirements

and statements of work (to include associated

proposal preparation costs) or a Participant's

41
unique Contract terms and conditions will be funded

by that Participant.

6.2.2 The Participants may designate the F135, the F136,

or both in their PPRs in such quantities and in

accordance with such delivery schedules as they

require.

6.2.2.1 If a Participant makes such a designation in

its PPR, that Participant's personnel may

not thereafter participate in the

procurement activities described in

paragraphs 6.3, 6.6, and 6.7 of this Section

as to a Contract competition between the

Contractors of the F135 and the F136

pertinent to that PPR. However, the

Participant's personnel may review the model

Contract included in the Request for

Proposals (RFP) released to the Contractors

for that competition in order to verify that

the Contract will reflect the Participant's

requirements as specified in its applicable

PPR.

6.2.2.2 If a Participant does not designate the F135

or the F136 for Contracts that will be

competed, or if Contracts containing the

F135 or the F136 requirements of a

Participant are not competitively awarded,

that Participant's personnel may participate

in post-PPR submission procurement

activities for such Contracts in accordance

with paragraphs 6.3, 6.6, and 6.7 of this

Section.

6.2.3 A Participant's PBA will document JSF Air System

performance . besed metrics, support relationships

(i.e., roles and responsibilities of the JSF

Program Office and Participants), and conditions

for delivering sustainment articles and services

applicable to unique, common, and Partially Common

requirements. A Participant's PPR for sustainment

articles and services will be consistent with the

requirements of that Participant's PBA. Additional

Participant sustainment requirements, such as

spares contingency support packages and the

42
establishment of training centers, will be

delineated as separate requirements within the PPR.

6.2.4 In order to achieve economy of scale efficiencies

and to ensure that capacity and capability exists

to meet the Participants' joint requirements, the

JSF Program Office will combine all the

requirements reflected in the PPRs into CPRs to the

extent feasible.

6.2.5 If, at the time of PPR consolidation, the JSF

Program Office determines that all of the PPR

requirements of the Participants cannot be met,

then priority among the Participants for JSF Air

System procurement requirements will be determined

by their contribution shares to the JSF SDD

Framework MOU, unless otherwise decided by the

JESB. In all cases the Participants' JSF Air

System procurement requirements will have priority

over procurement requirements of Third Parties.

6.2.6 The requirements and terms and conditions contained

in the JESB-approved CPRs (or, in the event a CPR

is not generated, the PPRs mutually determined by

the Contracting Agency and the applicable

Participant to be acceptable) will be the subject

of the solicitation package issued to Contractors

in an RFP.

6.3 The personnel of the Participants on whose behalf a

Contract will be awarded or modified may participate in the

procurement planning process leading to the RFP. This process

may include planning procurement actions involving requirement

definitions (including development of statements of work and

specifications), acceptance procedures, tentative schedule,

establishment of milestones, procurement strategies, and

Contract development (including terms and conditions).

6.4 The Contracting Officer will endeavor to establish

Contract sustainment terms and conditions that provide

incentives for the Contractor to meet the threshold sustainment

requirements of all Participants rather than the threshold

sustainment requirements of an individual Participant.

6.5 The Contracting Officer will use best efforts to negotiate

for the procurement of requirements contained in the RFP. A

Participant will be consulted in the event that the Contracting

43
Officer is unable to. obtain that Participant's requirements as

delineated in the RFP. In such event, a Participant may have

its requirements deleted from the proposed RFP or may request

modification of its requirements as stated in the RFP. The

modified or deleted requirements will be documented in a

revision to the Participant's PPR, and the Contracting Officer

will use best efforts to negotiate the inclusion of the modified

requirements.

6.6 The personnel of the Participants on whose behalf a

Contract will be awarded or modified will be permitted to

participate in proposal evaluations. They also will be

permitted to participate in Contract negotiations at the

discretion of the Contracting Officer or Contracting Agency,

depending upon the national laws and regulations governing the

Contracting Agency. To facilitate review of a proposal for a

requirement of a Participant, the Participant on whose behalf a

Contract will be awarded or modified will be permitted to

request cost and pricing data. The Participant will receive

such cost and pricing data, unless it is proprietary to a

Contractor or subcontractor. If requested, the Contracting

Officer will use best efforts to obtain the written consent of

that Contractor or subcontractor to provide such proprietary

data to the Participant.

6.7 Prior to Contract award, the personnel of the Participants

on whose behalf a Contract will be awarded will be permitted to

review the proposed Contract. Such personnel will be permitted

to also review proposed modifications to the Contract. The

Contracting Participant will not award such a Contract or award

such a modification without the prior approval of the benefiting

Participant to the amount that may become payable by that

Participant under the Contract or modified Contract. The

benefiting Participant will have ten of the benefiting

Participant's working days after that Participant's receipt of

the proposed Contract or proposed modification to give its

approval, and if such approval has not been received within the

designated period, the benefiting Participant may, at the

discretion of the Contracting Participant, be considered to have

withdrawn its requirements from the Contract or modification.

6.8 Contracting Officers will insert into prospective

Contracts (and require its Contractors to insert in

subcontracts) provisions to satisfy the requirements of this

MOU, including Section VII (Industrial Participation), Section

IX (Disclosure and Use of Project Information), Section X

(Controlled Unclassified Information), Section XII (Security),

44
Section XIII (Third Party Sales and Transfers), and Section XIX

(Amendment, Withdrawal, Termination, Entry into Effect, and

Duration), including the export control provisions in accordance

with this MOU, in particular paragraphs 6.10 and 6.11 of this

Section. During the Contracting process, Contracting Officers

will advise Prospective Contractors of their responsibility to

immediately notify the Contracting Agency, before Contract

award, if they are subject to any license or agreement that will

restrict their freedom to disclose Information or permit its

use. Contracting Officers will also advise Prospective

Contractors to employ their best efforts not to enter into any

new agreement or arrangement that will result in restrictions.

6.9 Contracting Officers will negotiate to obtain the rights

to use and disclose Project Information required by Section IX

(Disclosure and Use of Project Information). In the event the

Contracting Officer is unable to secure adequate rights to use

and disclose Project Information as required by Section IX

(Disclosure and Use of Project Information), or is notified by

Contractors or Prospective Contractors of any restrictions on

the disclosure and use of Information, the matter will be

referred to the JESB for resolution.

6.10 Each Participant will legally bind its Contractors to a

requirement that the Contractor will not retransfer or otherwise

use export-controlled Information furnished by another

Participant for any purpose other than the purposes authorized

under this MOU. The Contractor will also be legally bound not

to retransfer the export-controlled Information to another •

Contractor or subcontractor unless that Contractor or

subcontractor has been legally bound to limit use of the

Information to the purposes authorized under this MOU. Exportcontrolled Information furnished by one Participant under this

MOU may only be retransferred by another Participant to its

Contractors if the legal arrangements required by this paragraph

have been established.

6.11 Each Participant will legally bind its Prospective

Contractors to a requirement that the Prospective Contractor

will not retransfer or otherwise use export-controlled

Information furnished by another Participant for any purpose

other than responding to a solicitation issued in furtherance of

the purposes authorized under this MOU. Prospective Contractors

will not be authorized use for any other purpose if they are not

awarded .a Contract. The Prospective Contractors will also be

legally bound not to retransfer the export-controlled

Information to a prospective subcontractor unless that

45
prospective subcontractor has been legally bound to limit use of

the export-controlled Information for the purpose of responding

to the solicitation. Export-controlled Information furnished by

one Participant under this MOU may only be retransferred by

another Participant to its Prospective Contractors if the legal

arrangements required by this paragraph have been established.

Upon request by the furnishing Participant, the receiving

Participant will identify its Prospective Contractors and

prospective subcontractors receiving such export-controlled

Information.

6.12 The Contracting Agency will, upon request from a

Participant on whose behalf a Contract has been awarded,

terminate the portion of the Contract relating to the

requirements of . that Participant. The Participant requesting

such termination will be responsible for all Contract costs for

such termination that would not have been incurred but for its

request to terminate.

6.13 The personnel of the Participants on whose behalf a

Contract has been awarded may participate in Contract

administration as . determined in writing by the Contracting

Officer. In addition, such personnel may participate in

acceptance procedures for major articles acquired on their

behalf, subject to national disclosure policies. Designation of

major articles will be made during the procurement planning

process in accordance with paragraph 6.3.

6.14 During Contract administration, the JSF PEO will ensure

that he is immediately advised of any cost growth, schedule

change, or performance problems (including problems identified

by a Participant) of any Contractor, as well as the intended

measures for managing and resolving such issues, including any

contemplated Contract terminations, in the best interest of all

affected Participants. The JSF PEO will keep the National

Deputies advised of the foregoing Information and will advise

the JESS of all major issues (including proposed Contract

terminations). The Contracting Officer will act in the best

interests of all affected Participants in Contract

administration decisions.

6.15 Participants on whose behalf a Contract has been awarded

may provide written award or incentive fee recommendations to

the award fee board, in accordance with the applicable

Contracting Agency's award or incentive fee process and

procedures, regarding the level of Contractor achievement

related to their articles and services that have been placed on

46
Contract on an incentive or award fee basis. Representatives of

the Participants may be members of an award fee board when the

award fee under discussion only addresses the unique

requirements of the applicable Participants. Participants may

observe award or incentive fee deliberations for Contracts that

relate to their common or Partially Common requirements.

6.16 When contracting on behalf of the other Participants, a

Contracting Participant will protect the interests of the other

Participants. The Contracting Participant will investigate, in

a timely manner, concerns that a Contractor is not meeting

contractual requirements, and, upon verification of the validity

of such concerns, will pursue contractual remedies and utilize

Contract disputes processes to the same extent as that

Contracting Participant would in protecting its own interests.

The Contracting Participant will keep the affected Participants

informed during this process and will take their views into full

consideration.

47
SECTION VII

INDUSTRIAL PARTICIPATION

7.1 The Participants, through their Contracting Agencies, will

require their Contractors to select subcontractors (which term

includes subcontractors from all of the Participants' nations)

on a competitive, Best Value basis to the maximum practical •

extent consistent with the objectives and requirements of the

Contracts and this MOU.

7.2 Contracts for the Project will require, subject to the

principles in paragraph 7.1 of this Section, that Contractors

and subcontractors will actively pursue Best Value solutions

with the Participants' industries for the production,

sustainment, and follow-on development requirements.

7.3 The Participants acknowledge that, subject to the

submission of Best Value offers, industries that are in the

nations of Participants procuring JSF Air Systems under this MOU

and that were awarded SDD subcontracts will normally also be

awarded subcontracts for low rate initial production and full

rate production work, as well as for related sustainment and

follow-on development work.

7.4 The Participants will require their Contractors to make

good faith efforts, when conducting subcontracting competitions,

to furnish timely notification of such competitions to qualified

sources in each of the Participant's nations that are known to

the Contractors. The Participants will also require their

Contractors to implement a transparent industrial participation

process as well as visibility into the results of subcontracting

competitions upon request.

7.5 In order to ensure that industrial opportunities are open

to industry in all of the Participants' nations, the

Participants will use their best efforts and encourage their

Contractors to use their best efforts, to address export control

issues in a timely manner that promotes the maximum degree of

industrial cooperation among the Participants' nations,

consistent with their national laws and regulations.

7.6 No requirement will be imposed by any Participant for work

sharing or other industrial or commercial compensation in

connection with this MOU that is not in accordance with this

48
MOU. However, this will not prevent the Participants'

industries from establishing arrangements with JSF Contractors

regarding work outside the scope of work of this MOU.

49
SECTION VIII

PROJECT EQUIPMENT AND JOINTLY ACQUIRED EQUIPMENT

8.1 Each Participant may provide Project Equipment identified

as being necessary for executing this MOU to another

Participant. Project Equipment will remain the property of the

providing Participant. A list of all Project Equipment provided

by one Participant to another Participant will be developed and

maintained by the JSF Program Office.

8.2 The receiving Participant will maintain any such Project

Equipment in good order, repair, and operable condition. Unless

the providing Participant has authorized the Project Equipment

•to be expended or otherwise consumed without reimbursement to

the providing Participant, the receiving Participant will return

the Project Equipment to the providing Participant in as good

condition as received, normal wear and tear excepted, or return

the Project Equipment and pay the cost to restore it. If the

Project Equipment is damaged beyond economical repair, the

receiving Participant will return the Project Equipment to the

providing Participant (unless otherwise specified in writing by

the providing Participant) and pay the replacement value, which

will be computed pursuant to the providing Participant's

national laws and regulations. If the Project Equipment is lost

while in the custody of the receiving Participant, the receiving

Participant will issue a certificate of loss to the providing

Participant and pay the replacement value.

8.3 . The providing Participant will deliver Project Equipment

to the receiving Participant at a mutually determined location.

Possession of the Project Equipment will pass from the providing

Participant to the receiving Participant at the time of receipt

of the Project Equipment. Any further transportation is the

responsibility of the receiving Participant.

8.4 All Project Equipment that is transferred will be used by

the receiving Participant only for the purposes of carrying out

this MOU, unless otherwise consented to in writing by the

providing Participant. In addition, in accordance with Section

XIII (Third Party Sales and Transfers) Project Equipment will

not be re-transferred to a Third Party without the prior written

consent of the providing Participant.

50
8.5 Project Equipment transferred to one Participant under

this MOU will be returned to the providing Participant prior to

the termination or expiration of this MOU.

8.6 Any Jointly Acquired Equipment will be disposed of during

this Project or when the Project ceases, as mutually determined

by the JESB representatives of the directly affected

Participants.

8.7 Subject to the mutual determination of the U.S. DoD and a

non-U.S. DoD Participant, legal title and possession of tooling

that is funded solely by one non-U.S. DoD Participant for its

unique requirements will be transferred to that Participant.

51
SECTION IX

DISCLOSURE AND USE OF PROJECT INFORMATION

9.1 General

9.1.1 The Participants recognize that successful

collaboration depends on exchange of Information

necessary for carrying out this Project. The

Participants intend to acquire and exchange

sufficient Project Information and rights to use

such Information to enable the production,

sustainment, and follow-on development of the

three-variant family of the JSF Air System. The

nature and amount of Project Information to be

acquired will be consistent with the objectives

stated in Section II (Objectives) and Section III

(Scope of Work).

9.1.2 The following export control provisions will apply

to the transfer of Project Information:

9.1.2.1 Transfer of Project Information will be

consistent with the furnishing Participant's

applicable export control laws and

regulations. Unless otherwise restricted by

duly authorized officials of the furnishing

Participant at the time of transfer to

another Participant, all export-controlled

Information furnished by that Participant to

another Participant may be retransferred to

the other Participant's Contractors,

subcontractors, Prospective Contractors, and

prospective subcontractors, subject to the

requirements of paragraphs 6.10 and 6.11 of

Section VI (Contracting Provisions).

Export-controlled Information may be

furnished by Contractors, subcontractors,

Prospective Contractors, and prospective

subcontractors of one Participant's nation

to the Contractors, subcontractors,

Prospective Contractors, and prospective

subcontractors of another Participant's

nation pursuant to this MOU subject to the

conditions established in licenses or other

approvals issued by the Government of the

52
former Participant in accordance with its

applicable export control laws and

regulations.

9.1.2.2 If a Participant finds it necessary to

exercise a restriction on the retransfer of

export-controlled Information as set out in

paragraph 9.1.2.1 of Section IX (Disclosure

and Use of Project Information), it will

promptly inform the other Participants. If

a restriction is then exercised and an

affected Participant objects, that

Participant's JESB representative will

promptly notify the other Participants' JESB

representatives and they will immediately

consult in order to discuss ways to resolve

such issues or mitigate any adverse effects.

9.1.2.3 Notwithstanding the provisions of this MOU

that relate to the protection of

Information, particularly Section IX

(Disclosure and Use of Project Information),

Section X (Controlled Unclassified

Information), Section XII (Security), and

Section XIII (Third Party Sales and

Transfers), the specific export control

provisions set out in Section VI

(Contracting Provisions) and this Section

will not apply to transfers of Information

amongst non-U.S. DoD Participants where such

exchanges do not include U.S. exportcontrolled Information.

9.1.3 Notwithstanding any other provision in this

section, disclosure of Project Information will

only be in accordance with the Participants'

respective national disclosure policies. The

Participants will use their best efforts to

maximize disclosure of Project Information under

this MOU within national disclosure policies.

9.1.4 The Participants will use their best efforts to

ensure that, within the constraints of national

disclosure policies, each Participant will be able

to access and use (or have used on its behalf),

without charge, for JSF Purposes the common

sustainment Information in ALIS that is needed by

53
that Participant's operators and training and

maintenance personnel for the support of that

Participant's JSF Air Systems. Accordingly, the

Participants will use their best efforts to avoid

including in ALIS any such Information that is

subject to Intellectual Property use rights

restrictions, when those restrictions would limit

the ALIS access and use rights otherwise intended

to be provided to the Participants pursuant to this

paragraph, to the extent that such efforts do not

adversely affect the functionality of ALIS.

9.1.5 Notwithstanding paragraphs 9.2, 9.4, and 9.5 of

this Section, and except as provided in paragraph

2.1.3 of Annex D (Sustainment), if an effort under

this MOU is for the unique requirements of a

Participant, or for Partially Common requirements,

the following will apply:

9.1.5.1 Subject to paragraph 9.1.5.3 of this

Section, only the Participant or

Participants funding that effort will

receive the Project Foreground Information

generated in that effort. Such a

Participant or Participants may use or have

used such Project Foreground Information for

JSF Purposes, subject to any greater rights

that a Participant or Participants may have

as a result of that Participant's or

Participants' generation of that

Information, or as a result of that

Participant's or Participants' placing

Contracts for that Information that provide

the Contracting Participant with greater

rights.

9.1.5.2 Subject to paragraph 9.1.5.3 of this

Section, only the Participant or

Participants funding that effort will

receive the Contractor Project Background

Information delivered under Contracts

awarded for that effort. Such a Participant

or Participants may use or have used such

Information for JSF Purposes, subject to any

restrictions by holders of Intellectual

Property rights.

54
9.1.5.3 In order to carry out the Project

effectively (to include maintaining

configuration control and interoperability),

the U.S. DoD will receive, and may use or

have used, for Project purposes, all Project

Foreground Information generated under this

MOU for the unique or Partially Common

requirements of any other Participant or

Participants. It will also receive all

Contractor Project Background Information

delivered under Contracts awarded for the

unique or Partially Common requirements of

any other Participant or Participants, and

may use or have used that Information for

Project purposes, subject to any

restrictions by holders of Intellectual

Property rights. Participants other than

the U.S. DoD and the Participants for whom

the Information described in this paragraph

was generated or delivered may, upon

request, receive and use such Information

for the purposes of interoperability,

Project management, and configuration

control, subject to the prior written

consent of the U.S. DoD and the Participants

for whom the Information was generated or

delivered.

9.1.6 The Participants recognize that the majority of the

Project Foreground Information will be provided

electronically. The Participants will have timely

access to such electronic data to the extent

consistent with paragraph 9.1.3 of this Section.

9.1.7 A Participant may use the following Information

provided to it under the JSF SDD Framework MOU for

the following purposes under this JSF PSFD MOU:

Government Project Foreground Information and

Contractor Project Foreground Information, for

Project purposes; and Contractor Project Background

Information delivered under Contracts awarded under

the JSF SDD Framework MOU, for Project purposes,

subject to any restrictions by holders of

Intellectual Property rights. However, if a

Participant has greater rights of use to such

Information under the JSF SDD Framework MOU or its

55
Supplement to that MOU, that Participant will

retain its greater rights of use.

9.2 Government Project Foreground Information

9.2.1 Disclosure: All Project Foreground Information

generated by a Participant's military or civilian

employees (hereinafter referred to as "Government

Project.Foreground Information") will be disclosed

promptly and without charge to the Participants.

9.2.2 Use: The Participants may use or have used all

Government Project Foreground Information without

charge for JSF Purposes. The Participant

generating Government Project Foreground

Information will also retain all its rights of use

thereto. Any sale or other transfer to a Third

Party will ( be subject to the provisions of Section

XIII (Third Party Sales and Transfers) of this MOU.

9.3 Government Project Background Information

9.3.1 Disclosure: Each Participant, upon request, will

disclose promptly and without charge to the

requesting Participant any relevant Government

Project Background Information generated by its

military or civilian employees, provided that:

9.3.1.1 Such Government Project Background

Information is necessary to or useful in the

Project, with the Participant in possession

of the Information determining, after

consultation with the requesting

Participant, whether it is "necessary to" or

"useful in" the Project;

9.3.1.2 Such Government Project Background

Information may be made available only if

the rights of holders of Intellectual •

Property rights are not infringed;

9:3.1.3 Disclosure is consistent with national

disclosure policies and regulations of the

furnishing Participant; and

9.3.1.4 Any disclosure or transfer of such

Government Project Background Information to

56
Contractors is consistent with the

furnishing Participant's export control laws

and regulations.

9.3.2 Use: Government Project Background Information

furnished by one Participant to the requesting

Participant may be used without charge by or for

the requesting Participant for Project purposes.

However, subject to Intellectual Property rights

held by entities other than the Participants, such

Government Project Background Information may be

used for JSF Purposes by the requesting

Participant, without charge, when such Information

is necessary for the use of Project Foreground

Information. The furnishing Participant, in

consultation with the other Participant, will

determine whether the Government Project Background

Information is necessary for the use of Project

Foreground Information. The furnishing Participant

will retain all its rights with respect to such

Government Project Background Information.

9.4 Contractor Project Foreground Information

9.4.1 Disclosure: Project Foreground Information

generated and delivered by Contractors (hereinafter

referred to as "Contractor Project Foreground

Information"), will be disclosed promptly and

without charge to the Participants. Project

Foreground Information generated by a Contractor,

but not delivered, will be made available upon the

request of the Participants at the cost of the

Information's conversion into the prescribed form

and the cost of reproduction and delivery in

accordance with the terms of the applicable

Contract.

9.4.2 Use: The Participants may use or have used without

charge for JSF Purposes all Contractor Project

Foreground Information generated and delivered by

Contractors of the Participants. The Participant

whose Contractors generate and deliver Contractor

Project Foreground Information will also retain all

its rights of use thereto in accordance with the

applicable Contract(s). Any sale or other transfer

to a Third Party of Contractor Project Foreground

Information will be subject to the provisions of

57
Section XIII (Third Party Sales and Transfers) of

this MOU.

9.5. Contractor Project Background Information

9.5.1 Disclosure: A Contracting Participant will make

available to the other Participants promptly and

without charge all Project Background Information

generated by Contractors which is delivered under

Contracts awarded in accordance with this MOU. Any

other Project Background Information which is

generated by Contractors and which is in the

possession of one Participant will be made

available promptly and without charge to another

Participant, upon its request, provided the

following conditions are met:

9.5.1.1

9.5.1.2

9.5.1.3

9.5.1.4

Such Contractor Project Background

Information is necessary to or useful in the

Project, with the Participant in possession

of the Information determining, after

consultation with the requesting

Participant, whether it is "necessary to" or

"useful in" the Project;

Such Contractor Project Background

Information may be made available only if

the rights of holders of Intellectual

Property rights are not infringed;

Disclosure is consistent with national

disclosure policies and regulations of the

furnishing Participant; and

Any disclosure or transfer of such

Contractor Project Background Information to

Contractors is consistent with the

furnishing Participant's export control laws

and regulations.

9 5.2 Use: All Project Background Information delivered

by Contractors under Contracts awarded in

accordance with this MOU may be used by or for the

receiving Participants, without charge, for JSF

Purposes, subject to any restrictions by holders of

Intellectual Property rights other than the

Participants. Any other Project Background

58
Information furnished by one Participant's

Contractors and disclosed to a requesting

Participant may be used without charge by the

requesting Participant for Project purposes,

subject to any restrictions by holders of

Intellectual Property rights other than the

Participants; also, when necessary for the use of

Project Foreground Information, such other

Contractor Project Background Information may be

used by the requesting Participant for JSF

Purposes, subject to such fair and reasonable terms

as may be necessary to be arranged with the

Contractor. The furnishing Participant, in

consultation with the requesting Participant, will

determine whether such other Contractor Project

Background Information is necessary for the use of

Project Foreground Information. The furnishing

Participant will retain all its rights with respect

to Contractor Project Background Information.

9.6 Alternative Uses of Project Information

9.6.1 The prior written consent of the U.S. Government

will be required for the use of Project Foreground

Information by the other Participants for purposes

other than those provided for in paragraphs

9.1.5.1, 9.2.2 and 9.4.2 of this Section. Prior to

the issuance of any such consent in the case of

Project Foreground Information generated for the

common or Partially Common requirements of the

Participants, the JSF/ID Director will consult with

the National Deputies of the Participants that

funded the generation of that Information.

9.6.2 Any Project Background Information provided by one

Participant will te used by the other Participants

only for the purposes set forth in this MOU, unless

otherwise consented to in writing by the providing

Participant.

9.7 Proprietary Project Information

9.7.1 All Project Information that is subject to

disclosure and'use restrictions with respect to

Intellectual Property rights will be identified and

marked, and it will be handled as Controlled

Unclassified Information or as Classified

59
Information, depending on its security

classification.

9.7.2 For NATO member Participants, the provisions of the

NATO Agreement on the Communication of Technical

Information for Defense Purposes, done at Brussels

on 19 October 1970, and the Implementing Procedures

for the NATO Agreement on the Communication of

Technical Information for Defense Purposes,

approved by the North Atlantic Council on 1 January

1971 (or any successor agreement and procedures)

will apply to Project Information that is subject

to Intellectual Property ri ghts. The Australian

DoD consents to the insertion of provisions in the

PSI that are no less stringent than the NATO

Agreement on the Communication of Technical

Information for Defense Purposes, done at Brussels

on 19 October 1970, and the Implementing Procedures

for the NATO Agreement on the Communication of

Technical Information for Defense Purposes,

approved by the North Atlantic Council on 1 January

1971. As to the Australian DoD, in the event of an

inconsistency between the PSI and the NATO

agreement, the PSI will prevail.

9.8 Patents

9.8.1 Each Participant will include in all its Contracts

for the Project a provision governing the

disposition of rights in regard to Project

Inventions and Patent rights relating thereto,

which either:

9.8.1.1 Provides that the Participant will hold

title to all such Project Inventions

together with the right to make Patent

applications for the same, free of

encumbrance from the Contractor concerned;

or

9.8.1.2 Provides that the Contractor will hold title

(or may elect to retain title) for such

Project Inventions together with the right

to make Patent applications for the same,

while securing for the Participants a

license for the Project Inventions, and any

60
Patents thereto, on terms in compliance with

the provisions of paragraph 9.8.2 below.

9.8.2 In the event that a Contractor owns title (or

elects to retain title) to any Project Invention,

the Contracting Participant will secure for the

other Participants non-exclusive, irrevocable,

royalty-free licenses under all Patents secured for

that invention, to practice or have practiced the

patented Project Invention throughout the world for

JSF Purposes.

9.8.3 The provisions of subparagraphs 9.8.4 through 9.8.7

below will apply in regard to Patent rights for all

Project Inventions made by the Participants'

military or civilian employees, including those

within Government-owned facilities, and for all

Project Inventions made by Contractors for which

the Contracting Participant holds title or is

entitled to acquire title.

9.8..4 Where a Participant has or can secure the right to

file a Patent application with regard to a Project

Invention, that Participant will consult with the

other Participants regarding the filing of such

Patent application. The Participant that has or

receives title to such Project Invention will, in

other countries, file, cause to be filed, or

provide the other Participants with the opportunity

to file on behalf of the Participant holding title,

Patent applications covering that Project

Invention. A Participant will immediately notify

other Participants that a Patent application has

been filed. If a Participant, having filed or

caused to be filed a Patent application, abandons

prosecution of the application or ceases

maintaining the Patent granted or issued on the

application, that Participant will notify the other

Participants of that decision and permit the other

Participants to continue the prosecution or

maintain the Patent as the case may be.

9.8.5 Each Participant will be furnished with copies of

Patent applications filed and Patents granted with

regard to Project Inventions.

61
9.8.6 Each Participant will grant to the other

Participants a non-exclusive, irrevocable, royaltyfree license under its Patents for Project

Inventions, to practice or have practiced the

Project Invention throughout the world for JSF

Purposes.

9.8.7 For NATO member Participants, Patent applications

to be filed, or assertions of other Intellectual

Property rights, under this MOU that contain

Classified Information will be protected and

safeguarded in a manner no less stringent than the

requirements contained in the NATO Agreement for

the Mutual Safeguarding of Secrecy of Inventions

Relating to Defence and for Which Applications for

Patents Have Been Made, done in Paris on 21

September 1960, and its Implementing Procedures

(or any successor agreement and procedures). The

Australian DoD consents to the insertion of

provisions in the PSI that are no less stringent

than the NATO Agreement for the Mutual Safeguarding

of Secrecy of Inventions Relating to Defence and

for Which Applications for Patents Have Been Made,

done in Paris on 21 September 1960, and its

Implementing Procedures. As to the Australian DoD,

in the event of, an inconsistency between the PSI

and the NATO agreement, the PSI will prevail.

9.9 Intellectual Property Infringement Claims

9.9.1 Each Participant will notify the other Participants

of any Intellectual Property infringement claims

brought against that Participant arising in the

course of work performed under the Project on

behalf of one or more of the other Participants.

Insofar as possible, the other applicable

Participants will provide Information available to

them that may assist in defending such claims.

Each Participant will be responsible for handling

such Intellectual Property infringement claims

brought against it, and will consult with the other

Participants during the handling, and prior to any

settlement, of such claims. The Participants will

share the costs of resolving such Intellectual

Property infringement claims in proportion to their

financial contributions for that work specified in

Section V (Financial Provisions). The Participants

62
will, as permitted by their national laws,

regulations, and practices, give their

authorization and consent for all use and

manufacture in the course of work performed under

the Project of any invention covered by Patent, or

as determined to be necessary for work under the

Project, authorization and consent for Noncommercial copyright, granted or otherwise provided

by their respective countries.
SECTION X

CONTROLLED UNCLASSIFIED INFORMATION

10.1 Except as otherwise provided in this MOU or as authorized

in writing by the originating Participant, Controlled

Unclassified Information provided or generated pursuant to this

MOU will be controlled as follows:

10.1.1 Such Information will be used only for the purposes

authorized for use of Project Information as

specified in Section IX (Disclosure and Use of

Project Information).

10.1.2 Access to such Information will be limited to

personnel whose access is necessary for the

permitted use under subparagraph 10.1.1 of this

Section, and will be subject to the provisions of

Section XIII (Third Party Sales and Transfers).

10.1.3 Each Participant will take all appropriate lawful

steps, which may include national classification,

available to it to keep such Information free from

further disclosure (including requests under any

legislative provisions), except as provided in

subparagraph 10.1.2 of this Section, unless the

originating Participant consents to such

disclosure. In the event of unauthorized

disclosure, or if it becomes probable that the

Information may have to be further disclosed under

any legislative provision, immediate notification

will be given to the originating Participant.

10.2 To assist in providing the appropriate controls, the

originating Participant will ensure that Controlled Unclassified

Information is appropriately marked to ensure its "in

confidence" nature. The Participants' export-controlled

Information will be marked in accordance with the applicable

Participant's export control markings as documented in the

Project Security Instruction (PSI). The Participants will also

decide, in advance and in writing, on the markings to be placed

on any other types of Controlled Unclassified Information and

describe such markings in the PSI.

64
10.3 Controlled Unclassified Information provided or generated

pursuant to this MOU will be handled in a manner that ensures

control as provided for in paragraph 10.1 of this Section.

10.4 Prior to authorizing the release of Controlled

Unclassified Information to Contractors, the Participants will

ensure the Contractors are legally bound to control such

Information in accordance with the provisions of this Section.

65
SECTION XI

VISITS TO ESTABLISHMENTS

11.1 Each Participant will permit visits to its Government

establishments, agencies and laboratories, and Contractor

industrial facilities by employees of another Participant or by

employees of another Participant's Contractor(s), provided that

the visit is authorized by the Participants involved in the

visit and the employees have any necessary and appropriate

security clearances and a need-to-know.

11.2 All visiting personnel will be required to comply with

security regulations of the hosting Participant. Any

Information disclosed or made available to visitors will be

treated as if supplied to the Participant sponsoring the

visiting personnel, and will be subject to the provisions of

this MOU.

11.3 Requests for visits by personnel of one Participant to a

facility of another Participant will be coordinated through

official channels, and will conform with the established visit

procedures of the host country. Requests for visits will bear

the name of the Project.

11.4 Lists of personnel of each Participant required to visit,

on a continuing basis, facilities of another Participant will be

submitted through official channels in accordance with recurring

international visit procedures.

66
SECTION XII

SECURITY

12.1 All Classified Information provided or generated pursuant

to this MOU will be used, stored, handled, transmitted, and

safeguarded in accordance with bilateral or multilateral

security agreements between the Participants.

12.2 Classified Information will be transferred only through

official Government-to-Government channels or through channels

approved by the NSAs/DSAs of the Participants. Such Classified

Information will bear the level of classification, denote the

country of origin, the provisions of release, and the fact that

the Information relates to this MOU. Each Participant will take

steps to facilitate the transfer of such Classified Information

in a timely manner.

12.3 Each Participant will take all appropriate lawful steps

available to it to ensure that Classified Information provided

or generated pursuant to this MOU is protected from further

disclostire, except as permitted by paragraph 12.8 of this

Section, unless the other Participants consent to such

disclosure. Accordingly, each Participant will ensure that:

12.3.1 The recipient will not release the Classified

Information to any Government, national,

organization, or other entity of a Third Party

except as permitted under the procedures detailed

in Section XIII (Third Party Sales and Transfers).

12.3.2 The recipient will not use the Classified

Information for other than the purposes provided

for in this MOU.

12.3.3 The recipient will comply with any distribution and

access restrictions on Classified Information that

is provided under this MOU.

12.4 The Participants will investigate all cases in which it is

known or where there are grounds for. suspecting that Classified

Information provided or generated pursuant to this MOU has been

lost or disclosed to unauthorized persons. Each Participant

also will promptly and fully inform the other Participants of

the details of any such occurrences, and of the final results of

67
the investigation and of the corrective action taken to preclude

recurrences.

12.5 The Director, JSF/ID will prepare a PSI and a CG for the

Project. The PSI and the CG will describe the methods by which

Project Information will be classified, marked, used,

transmitted, and safeguarded (including, but not limited to, the

JSF Program Office request for Information process), and will

require that the markings for all export-controlled Classified

and Controlled Unclassified Information will include the

applicable export control markings identified in the PSI in

accordance with paragraph 10.2 of Section X (Controlled

Unclassified Information). The PSI and CG will be developed by

the Director, JSF/ID within three months after this MOU enters

into effect. They will be reviewed and forwarded to the

Participants' NSAs/DSAs for approval and will be applicable to

all Government and Contractor personnel participating in the

Project. The CG will be subject to regular review and revision

with the aim of downgrading the classification whenever this is

appropriate. The PSI and the CG will be approved by the

appropriate NSAs/DSAs prior to the transfer of any Classified

Information or Controlled Unclassified Information.

12.6 The NSAs/DSAs of the Participant in which a classified

Contract is awarded will assume responsibility for administering

within its territory security measures for the protection of the

Classified Information, in accordance with its laws and

regulations. Prior to the release to a Contractor, Prospective

Contractor, or subcontractor of any Classified Information

received under this MOU, the NSAs/DSAs will:

12.6.1 Ensure that such Contractor, Prospective Contractor

or subcontractor and their facility(ies) have the

capability to protect the Classified Information

adequately.

12.6.2 Grant a security clearance to the facility(ies), if

appropriate.

12.6.3 Grant a security clearance for all personnel whose

duties require access to Classified Information, if

appropriate.

12.6.4 Ensure that all persons having access to the

Classified Information are informed of their

responsibilities to protect the Classified

68
Information in accordance with national security

laws and regulations, and provisions of this MOU.

12.6.5 Carry out periodic security inspections of cleared

facilities to ensure that the Classified

Information is properly protected.

12.6.6 Ensure that access to the Classified Information,is

limited to those persons who have a need-to-know

for purposes of the MOU.

12.7 Contractors, Prospective Contractors, or subcontractors

which are determined by NSAs/DSAs to be under financial,

administrative, policy or management control of nationals or

entities of a Third Party, may participate in a Contract or

subcontract requiring access to Classified Information provided

or generated pursuant to this MOU only when enforceable measures

are in effect to ensure that nationals or other entities of a

Third Party will not have access to Classified Information. If

enforceable measures are not in effect to preclude access by

nationals or other entities of a Third Party, the other

Participants will be consulted for approval prior to permitting

such access.

12.8 For any facility wherein Classified Information is to be

used, the responsible Participant or Contractor will approve the

appointment of a person or persons to exercise effectively the

responsibilities for safeguarding at such facility the

Information pertaining to this MOU. These officials will be

responsible for limiting access to Classified Information

involved in this MOU to those persons who have been properly

approved for access and have a need-to-know.

12.9 Each Participant will ensure that access to the Classified

Information is limited to those persons who possess requisite

security clearances and have a specific need for access to the

Classified Information in order to participate in the Project.

12.10 Information provided or generated pursuant to this MOU may

be classified as high as TOP SECRET. The U.S. DoD may enter

into bilateral classified MOU Supplements with the other

Participants, as necessary, in order to address necessary

security measures and other bilateral issues. The existence of

this MOU is UNCLASSIFIED and the contents are UNCLASSIFIED.

69
SECTION XIII

THIRD PARTY SALES AND TRANSFERS

13.1 Subject to paragraph 13.3 of this Section, the U.S.

Government will not sell, transfer title to, disclose, or

transfer possession of Project Foreground Information, Jointly

Acquired Equipment, or any item produced either wholly or in

part from Project Foreground Information to any Third Party

without prior consultation with the Governments of the other

Participants. Furthermore, the U.S. Government will not permit

any such sale, disclosure, or transfer, including by the owner

of the item, without prior consultation with the Governments of

the other Participants. The U.S. Government recognizes that it

is important to the other Participants that U.S. Government

decisions on such potential sales, disclosures, and transfers

take into account the views on security matters held by the

other Participants. The U.S. Government also recognizes that

sales, disclosures, or other transfers described in this

paragraph will be made only if the Government of the intended

recipient consents in writing that it will:

13.1.1 Not retransfer, or permit the further retransfer

of, any equipment or Information provided; and

13.1.2 Use, or permit the use of, the equipment or

Information provided only for the purposes for

which such equipment or Information is furnished.

13.2 Subject to paragraph 13.3 of this Section, the other

Participants, individually and collectively, will not sell,

transfer title to, disclose, or transfer possession of Project

Foreground Information, Jointly Acquired Equipment, or any item

produced wholly or in part from Project Foreground Information

to any Third Party without the prior written consent of the U.S.

Government. Furthermore, the other Participants will not permit

any such sales, disclosure, or transfer by others, including the

owner of the item, without the prior written consent of the U.S.

Government. The other Participants recognize that sales,

disclosures, or other transfers described in this paragraph will

be authorized only if the Government of the intended recipient

consents in writing that it will:

13.2.1 Not retransfer or permit the further retransfer of

any equipment or Information provided; and

70
13.2.2 Use, or permit the use of, the equipment or

Information provided only for the purposes for

which such equipment or Information is furnished.

13.3 In the case of Project Foreground Information that is

wholly funded by a Participant other than the U.S. DoD ("funding

Participant") for its unique requirements or any item that is

produced from such Project Foreground Information, the

Participants (including the U.S. DoD) will not sell, transfer

title to, disclose, or transfer possession of such Project

Foreground Information or any item produced from such Project

Foreground Information to any Third Party without the prior

written consent of the U.S. Government and the Government of the

funding Participant. Furthermore, the Participants (including

the U.S. DoD) will not permit any such sale, disclosure, or

transfer, including by the owner of the item, without the prior

consent of the U.S. Government and the Government of the funding

Participant. The Participants (including the U.S. DoD)

recognize that sales, disclosures, or other transfers described

in this paragraph will be made only if the Government of the

intended recipient consents in writing that it will:

13.3.1 Not retransfer or permit the further retransfer of

any equipment or Information provided; and

13.3.2 Use, or permit the use of, the equipment or

Information provided only for the purposes for

which such equipment or Information is furnished.

13.4 Each Participant will retain its right to sell, transfer

title to, disclose, or transfer possession of its Project

Background Information, provided it does not include any Project

Foreground Information or Project Background Information of the

other Participants.

13.5 A Participant will not sell, transfer title to, disclose,

or transfer possession of Project Background Information or

Project Equipment provided by another Participant to any Third

Party without the prior written consent of the Government of the

Participant that provided such, equipment or Information. The

providing Participant's Government will be solely responsible

for authorizing such transfers and, as applicable, specifying

the method and conditions for implementing such transfers.

13.6 A Participant's consent to Third Party sales and transfers

of Project Foreground Information, Jointly Acquired Equipment,

or any item produced either wholly or in part from Project

71
Foreground Information will be subject to its foreign policy,

national security considerations, and national laws,

regulations, and policies.

13.7 The Participants anticipate that other governments may

wish to buy JSF Air Systems. Consistent with Section VII

(Industrial Participation), the Participants recognize the

advantages of their respective nations' industries working

together to provide such JSF Air Systems for sale to other

governments.

13.8 Sales and other transfers by a Participant or a Contractor

to Third Parties of equipment cooperatively developed as a

common or Partially Common effort under the JSF Program may

attract a levy to be shared among the Participants who

contributed to those efforts ("contributing Participants") in

accordance with the following provisions and the procedures

contained in the FMPD:

13.8.1 Prior to any such sale or other transfer, the

amount of any levy and the procedures for assessing

and distributing such levy will be mutually

determined by the contributing Participants and the

Participant who will make (or whose Contractors

will make) the sale or transfer, consistent with

the laws and regulations of each applicable

Participant, using a pro rata recovery method

described in paragraph 13.8.2 of this Section, or

in accordance with paragraph 13.8.3 of this

Section, as applicable.

13.8.2 The JSF Program Office, in consultation with U.S.

DoD authorities, will determine the total

qualifying non-recurring costs for research and

development (including JSF research and development

in the Concept Demonstration phase, System

Development and Demonstration phase, and follow-on

development efforts), and production of the

equipment proposed for sale or transfer. The

research, development, and production nonrecurring costs of such equipment must exceed 50

million U.S. dollars to qualify for levy collection

by one Participant or its Contractors for the other

Participants. Qualifying non-recurring costs for

levy collection will be determined in accordance

with U.S. laws and U.S. DoD regulations concerning

recoupment of non-recurring costs. Once qualifying

72
non-recurring costs have been determined for the

equipment proposed for sale or transfer, the JSF

Program Office will divide those total costs by the

total projected production of that equipment, based

on the projected procurement quantities of the

contributing Participants and Third Parties. Upon

JESB approval, the resulting figure will constitute

the levy that may be assessed for the equipment

proposed for sale or transfer. Each contributing

Participant's share of that levy will be calculated

by multiplying the levy by the ratio of the

contributing Participant's total qualifying nonrecurring costs for research and development, and

production of the equipment to all of the

contributing Participants' total qualifying nonrecurring costs for research and development, and

production of the equipment.

13.8.3 The provisions of paragraph 13.8.2 of this Section

will not apply in those cases in which a non-U.S.

DoD Participant or its Contractors collect, on

behalf of other non-U.S. DoD Participants, a levy

on equipment developed as a Partially Common effort

by non-U.S. DoD Participants. In such cases, the

non-U.S. DoD Participant or its Contractors

collecting the levy and the non-U.S. DoD

Participants that funded the development of the

equipment will determine the appropriate recovery

method and other applicable levy determination

processes.

13.9 Sales and other transfers by a Participant or a Contractor

to Third Parties of equipment for which the development was

wholly funded under the JSF Program by a Participant for its

unique requirements may attract a levy for that Participant, in

accordance with the following provisions and the procedures

contained in the FMPD:

13.9.1 Prior to any such sale or other transfer, the

amount of any levy and the procedures for assessing

and distributing such levy will be mutually

determined by that Participant and the Participant

who will make (or whose Contractors will make) the

sale or transfer, consistent with the laws and

regulations of both Participants, using a pro rata

recovery method described in paragraph 13.9.2 of

73
this Section or in accordance with paragraph 13.9.3

of this Section.

13.9.2 For those levy collections made by the U.S DoD or

its Contractors on behalf of another Participant,

the JSF Program Office, in consultation with U.S.

DoD authorities, will determine the total

qualifying non-recurring costs for research and

development, and production of the equipment

proposed for sale or transfer. The research,

development, and production non- recurring costs of

such equipment must exceed 50 million U.S. dollars

to qualify for such levy collections. Qualifying

non-recurring costs for levy collection will be

determined in accordance with U.S. laws and U.S.

DoD regulations concerning recoupment of nonrecurring costs. Once qualifying non-recurring

costs have been determined for the equipment

proposed for sale or transfer, the JSF Program

Office will divide those total costs by the total

projected production of that equipment, based on

the projected procurement quantities of the

Participant and Third Parties. Upon approval by

the JESB representative of the Participant that

funded the equipment's development, the resulting

figure will constitute the levy that may be

assessed for the equipment proposed for sale or

transfer.

13.9.3 The provisions of paragraph 13.9.2. of this Section

will not apply to those levy collec t ions made by a

non-U.S. DoD Participant or its Contractors on

behalf of another non-U.S. DoD Participant. In

such cases, the non-U.S. DoD Participant or its

Contractors collecting the levy and the non-U.S.

DoD Participant that funded the development of the

equipment will determine the appropriate recovery

method and other applicable levy determination

processes.

13.10 Levies for the equipment addressed in paragraphs 13.8 and

13.9 of this Section will be collected for each applicable

Participant in accordance with this Section, but in no event

will levies continue to be collected for a Participant after

that Participant's total qualifying non-recurring costs for that

equipment have been recouped. Each Participant making a Third

Party sale or other transfer of such equipment will be

74
responsible for collecting levies on behalf of the applicable

Participants and will reimburse the applicable Participants

based on the levies calculated in accordance with this Section.

Each Participant will bear that responsibility even if that

Participant decides to reduce or waive its share of the levies

in accordance with paragraph 13.11. Each Participant will

require its Contractors (through such appropriate Contracts for

the Project as may be available) to collect levies on behalf of

the applicable Participants (excluding the U.S. DoD) when those

Contractors make a direct sale or other transfer of equipment

addressed in paragraph 13.8 or paragraph 13.9 to a Third Party,

and to reimburse the applicable Participants based on the levies

calculated in accordance with this Section.

13.11 A Participant may reduce or waive the assessment of its

share of a levy on any Third Party sale or transfer.

13.12 The Participants acknowledge that U.S. Government Foreign

Military Financing funds may not be used to pay levies on any

Third Party sales or transfers of equipment developed under the

JSF Program, and that the Third Party will pay any such levies

with other funds.

75
SECTION XIV

LIABILITY AND CLAIMS

14.1 Subject to multilateral and bilateral treaties and

agreements of the Participants concerning liability for claims,

when applicable, the following provisions will apply regarding

liability arising out of, or in connection with, activities

carried out in the performance of official duty in the execution

of this MOU:

14.1.1 With the exception of claims for loss of or damage

to Project Equipment, which are addressed in

Section VIII (Project Equipment and Jointly

Acquired Equipment), each Participant waives all

claims against the other Participants for injury to

or death of its military or civilian personnel

(which do not include Project Contractors) and for

damage to or loss of its property (including its

interest in Jointly Acquired Equipment) caused by

such personnel of another Participant. If,

however, such injury, death, damage, or loss

results from reckless acts or reckless omissions,

willful misconduct or gross negligence of a

Participant's personnel, the costs of any liability

will be borne by that Participant alone.

14.1.2 Claims from any other persons (either individuals

or entities) for injury, death, damage or loss of

any kind caused by one of the Participants'

personnel will be processed by the most appropriate

Participant, as determined by the Participants.

Any costs determined to be owed the claimant will

be borne by the Participants in proportion to their

financial contributions, as specified in Section V

(Financial Provisions), for the work out of which

the claim arose. If, however, such liability

results from the reckless acts or reckless

omissions, willful misconduct or gross negligence

of a Participant's personnel, the costs of any

liability will be borne by that Participant alone.

14.2 If a person or entity, other than the Participants

(including their personnel), damages Jointly Acquired Equipment,

and the cost of making good such damage is not recoverable from

such person or entity, such cost will be borne by the

76
Participants in proportion to their financial contributions, as

specified in Section V (Financial Provisions), for the work for

which the Jointly Acquired Equipment was obtained.

14.3 Claims arising under any Contract awarded under this MOU

will be resolved in accordance with the provisions of that

Contract.

77
SECTION XV

PARTICIPATION OF ADDITIONAL NATIONS

15.1 The Participants in the JSF PSFD MOU will be limited to

the signatories of the JSF SDD Framework MOU. The JSF PSFD MOU

will not confer any benefits or impose any requirements upon a

JSF SDD Framework MOU signatory until such signatory becomes a

Participant under the JSF PSFD MOU.

15.2 If a signatory of the JSF SDD Framework MOU wishes to

accede to the JSF PSFD MOU twelve months after the latter has

entered into effect in accordance with paragraph 19.9 of Section

XIX (Amendment, Withdrawal, Termination, Entry Into Effect, and

Duration), the accession of that signatory will require an

amendment to this MOU. Upon its accession, the new Participant

to the JSF PSFD MOU will pay its share of the Project costs

incurred prior to its accession, calculated in accordance with

the cost sharing arrangements in Section V (Financial

Provisions), and the future contributions of the other

Participants will be adjusted accordingly.

78
SECTION XVI

CUSTOMS DUTIES, TAXES, AND SIMILAR CHARGES

16.1 Customs duties, import and export taxes, and similar

charges will be administered in accordance with each

Participant's respective laws and regulations. Insofar as

existing national laws and regulations permit, the Participants

will endeavor to ensure that such readily identifiable duties,

taxes and similar charges, as well as quantitative or other

restrictions on imports and exports, are not imposed in

connection with work carried out under this Project.

16.2 Each Participant will use its best efforts to ensure that

customs duties, import and export taxes, and similar charges are

administered in a manner favorable to the efficient and

economical conduct of the work. If any such duties, taxes, or

similar charges are levied, the Participant in whose country

they are levied will bear such costs over and above that

Participant's shared costs of the Project.

16.3 If, in order to apply European Union (EU) regulations, it

is necessary to levy duties, then these will be met by the EU

member end recipient. To this end, parts of the components of

the equipment coming from outside the EU will proceed to their

final destination accompanied by the relevant customs document

enabling settlement of duties to take place. The duties will be

levied as a cost over and above that Participant's shared costs

of the Project.

79
SECTION XVII

SETTLEMENT OF DISPUTES

17.1 Disputes among the Participants arising under or relating

to this MOU will be resolved only by consultation among the

Participants and will not be referred to an individual, to a

national court, to an international tribunal, or to any other

person or entity for settlement.

80
SECTION XVIII

LANGUAGE

18.1 The working language for the Project will be the English

language.

18.2 All Project Information generated under this MOU and its

implementing Contracts and provided by one Participant to the

other Participants will be furnished in the English language.

81
SECTION XIX

AMENDMENT, WITHDRAWAL, TERMINATION, ENTRY INTO EFFECT, AND

DURATION

19.1 All activities of the Participants under this MOU will be

carried out in accordance with their national laws and

regulations, including their export control laws and

regulations. The responsibilities of the Participants will be

subject to the availability of funds for such purposes. If

available funds are not adequate to fulfill a Participant's

responsibilities, paragraph 5.17 of Section V (Financial

Provisions) will apply.

19.2 Except as otherwise provided herein, this MOU may be

amended by the mutual written consent of the Participants.

Annex A (Estimated JSF Air Vehicle Procurement Quantities),

Annex B (Management Structure), Annex D (Sustainment), Annex E

(Follow-on Development Process), and Annex F (Estimated

Allocation of Financial Cost Ceilings) of this MOU may be

amended by the written approval of the JESB, provided that any

such amendment is consistent with the Sections of this MOU.

19.3 This MOU may be terminated at any time upon the written

consent of the Participants. In the event the Participants

consent to terminate this MOU, the Participants will consult

prior to the date of termination to ensure termination on the

most economical and equitable terms.

19.4 Any Participant may withdraw from this MOU upon 90 days

written notification of its intent to withdraw to the other

Participants. Such notice will be the subject of immediate

consultation by the JESB to decide upon the appropriate course

of action. In the event of such withdrawal, the following rules

apply:

19.4.1 The withdrawing Participant will continue

participation, financial or otherwise, up to the

effective date of withdrawal.

19.4.2 In accordance with paragraph 5.13 of Section V

(Financial Provisions), if a Participant's

withdrawal occurs prior to production Line

Shutdown, the withdrawing Participant will pay its

share of the Line Shutdown costs upon its

withdrawal. However, if a Participant withdraws

82
prior to any of its Air Vehicle requirements being

placed on Contract, that Participant will not be

responsible for paying any Line Shutdown costs.

19.4.3 Except as to Contracts awarded on behalf of the

Participants, each Participant will be responsible

for its own Project-related costs associated with

withdrawing from the Project. For Contracts

awarded on behalf of the Participants, the

withdrawing Participant will pay all Contract

modification or termination costs that would not ,

otherwise have been incurred but for the decision

to withdraw; in no event, however, will a

withdrawing Participant's total financial

contribution, including Contract termination costs,

exceed that Participant's total share of the

Financial Cost Ceilings for financial contributions

as established in Section V (Financial Provisions).

19.4.4 All Project Information and rights therein received

under the provisions of this MOU prior to the

withdrawal will be retained by the Participants,

subject to the provisions of this MOU.

19.5 If a Participant's expenditures reach its maximum

contribution amount in paragraph 5.1 of Section V (Financial

Provisions), that Participant's performance of the work

described in Section III (Scope of Work) under this MOU will be

suspended based on conditions determined by the JESB until the

Participants have entered into an amendment to the MOU. If the

Participants do not enter into an amendment within twelve months

of a Participant's suspension, such circumstance will constitute

the automatic withdrawal of that Participant. All Project

Information and rights therein received under the provisions of

this MOU prior to the withdrawal will be retained by the

Participants subject to the provisions of this MOU.

19.6 In the event a Participant withdraws from the JSF SDD

Framework MOU, such action will constitute that Participant's

automatic withdrawal from the JSF PSFD MOU, effective 90 days

after the Participant's written notification to withdraw from

the JSF SDD Framework MOU. The terms applicable to voluntary

withdrawal, detailed in paragraph 19.4 of this Section, will

apply to an automatic withdrawal.

19.7 If the U.S. DoD withdraws from the JSF PSFD MOU, the U.S.

DoD will use its best efforts to provide, under separate

83
arrangements, support for the production, sustainment, and

follow-on development of the JSF Air System to the remaining

Participants as long as those Participants require such support.

19.8 The respective benefits and responsibilities of the

Participants regarding Section VIII (Project Equipment and

Jointly Acquired Equipment), Section IX (Disclosure and Use of

Project Information), Section X (Controlled Unclassified

Information), Section XII (Security), Section XIII (Third Party

Sales and Transfers), Section XIV (Liability and Claims),

Section XVII (Settlement of Disputes), and this Section XIX

(Amendment, Withdrawal, Termination, Entry into Effect, and

Duration) will continue to apply notwithstanding termination of,

withdrawal from, or expiration of this MOU.

19.9 This MOU, which consists of nineteen (19) Sections and six

(6) Annexes, will enter into effect on December 31, 2006,

provided that the U.S DoD and at least one other Participant

have signed the MOU (and in the event that the Undersecretariat

for Defense Industries on Behalf of the Ministry of National

Defense of the Republic of Turkey is the other Participant,

Parliamentary approval has been issued). As to any Participant

that signs the MOU ("subsequent Participant") after it enters

into effect, the Participants who have previously signed the MOU

will have no responsibilities with regard to that subsequent

Participant, and that subsequent Participant will have no

responsibilities or benefits under this MOU, until such time as

the subsequent Participant has signed the MOU, and, in the case

of the Undersecretariat for Defense Industries on Behalf of the

Ministry of National Defense of the Republic of Turkey,

Parliamentary approval has been issued. If within twelve months

after the MOU has entered into effect, all nine Participants

have not signed the MOU, or Republic of Turkey Parliamentary

approval has not been issued, the Participants who have joined

the MOU will immediately consult in order to negotiate an

amendment to make those changes necessitated by the reduction in

Participants.

19.10 This MOU will remain in effect for forty-five (45) years,

and may be extended by the written concurrence of the

Participants.

84
r. Brendan Nelson, MP Mr. W.P.D. Elcock

nature Signature

ame Name

The foregoing represents the understandings reached among the

Department of Defence of Australia, the Minister of National

Defence of Canada, the Ministry of Defence of Denmark, the

Ministry of Defence of the Republic of Italy, the State

Secretary of Defence of the Kingdom of the Netherlands, the

Ministry of Defence of the Kingdom of Norway, the

Undersecretariat for Defense Industries on behalf of the

Ministry of National Defense of the Republic of Turkey, the

Secretary of State for Defence of the United Kingdom of Great

Britain and Northern Ireland, and the Secretary of Defense on

behalf of the Department of Defense of the United States of

America.

Signed, in nine (9) copies, by authorized representatives of the

Participants.

FOR THE DEPARTMENT OF DEFENCE FOR THE MINISTER OF NATIONAL

OF AUK RALIA DEFENCE OF CANADA

Minister for Defence

Title

December 12, 2006

Date

Deputy Minister

of National Defence

Title

December 11, 2006

Date

Washington, DC

Location

Washington, DC

Location

85
Signature

Mr ees van der Knaap

me

THE STA

DEFEN

NETHE

E SECRETARY OF

OF THE KINGDOM OF THE

S

FOR THE MINISTRY OF DEFENCE FOR THE MINISTRY OF DEFENCE

OF DENMARK OF THE REPUBLIC OF ITALY

Signature

Mr. Soren Gade Sen. Giovanni Lorenzo FORCIERI

Name Name

Minister of Defence I1 Sottosegretario Di Stato

Title Title

February 27, 2007 February 7, 2007

Date

Copenhagen, Denmark

Location

Date

Washington, DC

Location

State Secretary of Defence

Title

November 14, 2006

Date

Washington, DC

Location

FOR THE MINISTRY OF DEFENCE

OF THE KINGDOM OF NORWAY

Mrs. Anne-Grete Strom-Erichsen

Name

Minister of Defence

Title

3f, 2oc 

Hate

abiO, 

Location

86
FOR THE SECRETARY OF DEFENSE

ON BEHALF OF THE DEPARTMENT

OF DE ENSE OF THE UNITED

STA OF AM CA

FOR THE UNDERSECRETARIAT FOR FOR THE SECRETARY OF STATE

DEFENSE INDUSTRIES ON BEHALF FOR DEFENCE OF THE UNITED

OF THE MINISTRY OF NATIONAL KINGDOM OF GREAT BRITAIN AND

DEFENSE OF THE REPUBLIC OF NORTHERN IRELAND

Mr. M. Vecdi Lord Drayson

Name

Minister of National Defense

Title

January 25, 2007

Date

Washington, DC

LocatiOn

Mr. Gordon England

Name

Deputy Secretary of Defense .

Title

November 14, 2006

Date

Washington, DC

Location

Name

Minister Defence Procurement

Title

December 12, 2006

Date

Washington, DC

Location

87
ANNEX A

ESTIMATED JSF AIR VEHICLE PROCUREMENT QUANTITIES

The estimated JSF Air Vehicle procurement quantities of the

Participants are identified in Table A-1.

Table A-1

Participants' Estimated JSF Air Vehicle Procurement Quantities

(Projected FY of Production Contract Definitization (approximately

two years prior to delivery))

Participant FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Austialia 0 0 0 2 6 14 15 15 15 15 15 3

Canada 0 0 0 0 0 0 0 10 10 10 10 10

Denmark 0 0 0 0 0 0 0 8 8 8 8 8

Italy 0 0 0 0 0 6 6 14 14 14 14 14

Netherlands 0 0 1 2 0 6 10 12 12 12 12 18

Norway 0 0 0 0 0 0 0 8 12 12 12 4

Turkey 0 0 0 0 0 10 10 ' 10 12 12 10 10

United

Kingdom 0 0 2 3 8 3 2 9 9 12 12 12

United

States 5 16 47 56 64 103 135 157 160 160 160 160

Total 5 16 50 63 78 142 178 243 252 255 253 239

Table A-1 -

Participants' Estimated JSF Air Vehicle Procurement Quantities

(Continued)

Participant FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 Total % of

Total

Australia 0 0 0 0 0 0 0 0 0 100 3.2%

Canada 10 10 10 0 0 0 0 0 0 80 2.5%

Denmark 8 0 0 0 0 0 0 0 0 48 1.5%

Italy 12 12 12 12 1 0 0 0 0 131 4.1%

Netherlands 0 0 0 0 0 0 0 0 0 85 2.7%

Norway 0 0 0 0 0 0 0 0 0 48 1.5%

Turkey 10 10 6 0 0 0 0 0 0 100 3.2%

United

Kingdom 12 12 12 12 12 6 0 0 0 138 4.3%

United

States 160 160 160 153 148 118 110 110 101 2443 77.0%

Total 212 204 200 177 161 124 110 110 101 3173 100.0%

88
Senior War Fighters

Group

Operational Advisory

Group

Interoperabliity .

Advisory Council

Autonomic Logistics

Advisory Council

Legend

I

Executive Body

Advisory Body

ANNEX B

MANAGEMENT STRUCTURE

JSF

Executive Steering

Board

JSF Program

Executive

Officer

JSF PSFD.Functional Areas •

•Requirements

Working Group Follow-On

Production T

iff Sustalnment Development

I •

Figure 1. JSF Management Structure

Note: The detailed JSF PO organizational structure is shown in

Figure 2.

1.0 The JSF Management Structure as depicted in Figure 1 will

encompass external and internal JSF management groups as

described below.

2.0 External JSF Management Groups

2.1 The functions of the JSF Executive Steering Board

(JESB) are provided in Section IV (Management

(Organization and Responsibility)).

2.1.1 The Senior Warfighters Group (SWG) will

provide senior-level guidance to the JESB

regarding the JSF Program from the

warfighters' and sustainment communities'

89
perspective, and will review and discuss the

operational significance and sustainment

impact of proposed JSF Program and

configuration baseline changes. The SWG

will consist of Flag and General officers

representing the Participants' warfighting

and sustainment communities.

2.2 The functions of the JSF Program Executive Officer

(JSF PEO) are provided in Section IV (Management

(Organization and Responsibility)).

2.2.1 The Operational Advisory Group (OAG) will

provide a conduit for liaison between the

JSF Program Office and the Participants'

requireMents and operational communities.

. It will participate in and review relevant

trade studies, and will provide operational

and sustainment advice on requirements

issues. The OAG will consist of

representatives from all Participants.

2.2.2 The Autonomic Logistics Advisory Council

(ALAC) will provide a multi-service,

international forum of senior executives to

advise the JSF Program Office of the design

and delivery of JSF Air System support

capabilities from the perspective of the

operational and logistics support user . communities. The ALAC will consist of Flag

and General officers or equivalent-level

civilian officials representing the

Participants' logistics communities.

2.2.3 The Interoperability Advisory Council (IAC)

will address JSF interoperability issues

that are beyond the cognizance of the JSF

Program Office and will provide advice to

the JSF PEO. The IAC will consist of Flag

and General officers or equivalent-level

civilian officials representing the

Participants' interoperability communities.

3.0 Internal JSF Management Groups

3.1 The JSF Program Office will employ multidisciplined and product-focused Integrated Product

90
Teams (IPTs) to efficiently manage and execute

Project requirements. The IPTs will consist of

representatives of the Participants from a variety

of subject matter areas (i.e., program management,

engineering, environmental, manufacturing,

Contracting, financial management, quality

assurance, safety, supportability, and training).

3.2 The Requirements Working Group (RWG) will function

as the Follow-on Development process manager. The

RWG will coordinate the JSF Air System Product

Roadmap efforts referenced in Annex E (Follow-on

Development Process), provide a forum for new

requirements and science and technology inputs, and

make requirements disposition recommendations to

the JSF PEO. The RWG will consist of

representatives from the JSF Program Office IPTs

and each of the Participants.

4.0 JSF CPP

4.1 General Principles

4.1.1 National Deputies and CPP of non-U.S. DoD

Participants serving under the JSF SDD

Framework MOU may be assigned to perform

Project production, sustainment, and followon development duties under the JSF PSFD

MOU, and the CPP PDD for the JSF SDD

Framework MOU will be changed to reflect

their additional responsibilities under the

JSF PSFD MOU.

4.1.2 The JSF PSFD MOU Organization Chart (Figure

2) depicts projected non-U.S. DoD

Participant CPP assignments in the JSF

Program Office. Additional CPP assignments

in the JSF Program Office may be authorized

based on the recommendation of the JSF PEO

and approval of a change to Figure 2 of this

Annex by the JESB. In general, the number

of CPP for a non-U.S. Participant in the JSF

Program Office will be commensurate to that

Participant's share of Financial Costs

calculated in accordance with the Composite

Share Ratio.

91
Chief of Staff Deputy Program Director

.1 1 • ■./;11:1•• • LI •

I " I CI

Technical Director

Program Director

Executive Assistant

Executive Secretary

INTEROFERAINUTY

AFFORDABILITY

Product Teams

SUPPORT SYSTEMS lef

MO

J0E-1I78 POPE

E

NING SYSTEMR

2009

pplumN

ACQUISITION TEAM

SUSINESS STRATEGY 111CAVPSA PLANNFR

I ID COMENCRE=

ALsmomwmoN2

.6,

VEHIC

,orM8

LE SYSTEMS

NIS INTER

Initially

VIA RWG

MIN

IMO

IMO

OPERATION2

CONTRACTS

11:1 BENI

SIE 2009

SECURITY

PUBLIC AFFAIRS

LEGAL

SITE DIRECTORS

AUTOLOG PROPULSION

Figure 2. JSF PSFD MOU Organization Chart with CPP

Manning

4.1.3 CPP assignments to U.S. DoD field activities

outside the JSF Program Office, including

but not limited to CPP assignments in ALGS

operations facilities in the United States,

may be authorized based on the

recommendation of the JSF PEO and approval

of a change to this Annex by the JESB, which

reflects the addition of those assignments.

In general, the number of CPP for a non-U.S.

DoD Participant in U.S. DoD field activities

outside the JSF Program Office will be

commensurate to that Participant's share of

Financial Costs calculated in accordance

with the Composite Share Ratio.

4.1.4 The Participants recognize that CPP

requirements that are undefined or

unforeseen at the time of entry into effect

of this MOU may arise during the course of

this MOU. Accordingly, notwithstanding

paragraphs 4.1.2, 4.1.3, and 4.2.3 of this

92
Annex, in order to meet such undefined or

unforeseen requirements, Participants may

propose CPP assignments to the JSF Program

Office, U.S. DoD field activities outside

the JSF Program Office, or activities of

non-U.S. DoD Participants, even if those

assignments are not commensurate with a

Participant's share of Financial Costs

calculated in accordance with the Composite

Share Ratio. Such CPP assignments may be

authorized based on the recommendation of

the JSF PEO and approval of a change to this

Annex by the JESB, except that assignment of

U.S. DoD CPPs to the activities of non-U.S.

DoD Participants will be authorized based on

the recommendation of the JSF PEO and the

approval of the JESB representatives of the

U.S. DoD and the applicable Host

Participant.

4.2 Time Phasing of PSFD MOU CPP Assignments

4.2.1 Each non-U.S. DoD Participant may assign

three CPPs to the JSF Program Office two

years before the projected first Contract

for that Participant's JSF Air Vehicles.

These CPPs will be assigned to participate

in production planning, airworthiness and

certification, and PBA coordination.

4.2.2 Each non-U.S. DoD Participant may assign one

CPP to the ALGS operations facilities in the

United States two years before the projected

first delivery of that Participant's JSF Air

Vehicles. These CPP will be assigned to

participate in ALGS planning and

implementation efforts.

4.2.3 By 2013, when the JSF PSFD Phase is

anticipated to reach full maturity, the JSF

PEO and the JESB will review PSFD MOU CPP

assignments and employ their best efforts to

achieve and maintain overall CPP assignments

in accordance with the Composite Share Ratio

principles outlined in paragraph 4.1.2 of

this Annex.

93
ANNEX C

COOPERATIVE PROJECT PERSONNEL

1.0 Purpose and Scope

1 .1 This Annex establishes the provisions that will

govern the activities of JSF CPP. Each Parent

Participant will assign military members or

civilian employees to the JSF Program Office, U.S.

DoD Field activities, and facilities of non-U.S.

DoD Participants in accordance with Section IV

(Management (Organization and Responsibility)),

Annex B (Management Structure) and this Annex. JSF

CPP must be able to perform all the

responsibilities for the positions assigned to them

under this MOU. Commencement of assignments will

be subject to any requirements that may be imposed

by the Host Participant or its Government regarding

acceptance of JSF CPP, such as, but not limited to,

visas and visit request documentation. The JESB

will determine the length of tour fOr the positions

at the time of initial assignment.

1.2 JSF CPP will be assigned to the JSF Program Office,

U.S. DoD field activities, or facilities of nonU.S. DoD Participants for Project work and will

report to their designated supervisor within those

organizations regarding that work. JSF CPP will

not act as liaison officers on behalf of a Parent

Participant. However, JSF CPP may act from time to

time on behalf of their respective JESB member if

the latter so authorizes in writing or as described

in the IPT CPP PDD.

1.3 JSF CPP will not be assigned to command or other

positions that would require them to exercise

responsibilities that are reserved by law or

regulation to an officer or employee of the Host

Participant's Government.

2.0 Security

2.1 The JESB will establish the maximum level of

security clearance required to permit JSF CPP to

have access to. Classified Information and

94
facilities in which Classified Information are used

in accordance with the Project Security Instruction

(PSI) and Classification Guide (CG). Access to

Classified Information and facilities in which

Classified Information are used will be consistent

with, and limited by, Section II (Objectives) and

Section III (Scope of Work) of this MOU and will be

kept to the minimum required to accomplish the work

assignments.

2.2 Each Parent Participant will cause security

assurances to be filed, through its embassy,

specifying the security clearances for the JSF CPP

being assigned. The security assurances will be

prepared and forwarded through prescribed channels

in compliance with established Host Participant

procedures.

2.3 The Host Participant and Parent Participants will

use their best efforts to ensure that JSF CPP

assigned to the JSF Program Office, U.S. DoD field

activities, or facilities of non-U.S. DoD

Participants are aware of, and comply with,

applicable laws and regulations pertaining to

Controlled Unclassified Information and Classified

Information as well as the requirements of Section

X (Controlled Unclassified Information), Section XI

(Visits to Establishments), Section XII (Security),

and paragraph 19.8 of Section XIX (Amendment,

Withdrawal, Termination, Entry into Effect, and

Duration) of this MOU and the provisions of the PSI

and CG. Prior to commencing assigned duties, JSF

CPP will, if required by the'Host Participant's

Government laws, regulations, policies, or

procedures, sign a certification concerning the

conditions and responsibilities of JSF CPP.

2.4 JSF CPP will at all times be required to comply

with the security and export control laws,

regulations, and procedures of the Host

Participant's Government. Any violation of

security procedures by JSF CPP during their

assignment will be reported to the Parent

Participant for appropriate action. JSF CPP

committing willful violations of security and

export control laws, regulations, or procedures

during their assignments will be withdrawn from the

95
Project with a view toward appropriate

administrative or disciplinary action by their

Parent Participant.

2.5 All Classified Information made available to JSF

CPP will be considered as Classified Information

furnished to the Parent Participant, and will be

subject to all provisions and safeguards provided

for in Section XII (Security), the PSI, and the CG.

2.6 JSF CPP will not have personal custody of

Classified Information or Controlled Unclassified

Information unless approved by the Host Participant

and as authorized by the Parent Participant. They

will be granted access to such Information and

material in accordance with Section X (Controlled

Unclassified Information), Section XII (Security),

and the PSI during normal duty hours and when

access is necessary to perform Project work.

2.7 JSF CPP assigned to the JSF Program Office will not

serve as a conduit between the Host Participant and

Parent Participant for requests and/or transmission

of Classified Information or Controlled

Unclassified Information unless specifically

authorized by the PSI.

3.0 Technical and Administrative Matters

3.1 Consistent with the laws and regulations of the

Host Participant's Government, JSF CPP will be

subject to the same restrictions, conditions, and

privileges as Host Participant personnel of

comparable rank and in comparable assignments.

Further, to the extent authorized by the laws and

regulations of the Host Participant's Government,

JSF CPP and their authorized dependents will be

accorded:

3.1.1 Exemption from any Host Participant's

Government tax upon income received from the

Parent Participant.

3.1.2 Exemption from any Host Participant's

Government customs and import duties or .

similar charges levied on items entering the

country for their official or personal use,

96
including their baggage, household effects,

and private motor vehicles.

3.2 Upon or shortly after arrival, JSF CPP will be

informed by the Host Participant about applicable

laws, orders, regulations, and customs and the need

to comply with them. JSF CPP will also be provided

briefings arranged by the Host Participant

regarding applicable entitlements, privileges, and

obligations such as:

3.2.1 Any medical and dental care that may be

provided to JSF CPP and their dependents at

Host Participant medical facilities, subject

to applicable laws and regulations,

including reimbursement requirements.

3.2.2 Purchasing and patronage privileges at

military commissaries, exchanges, theaters,

and clubs for JSF CPP and their dependents,

subject to applicable laws and regulations.

3.2.3 Responsibility of JSF CPP and their

accompanying dependents to obtain motor

vehicle liability insurance coverage in

accordance with the laws and regulations

applicable in the area where they are

residing. In case of claims involving the '

use of private motor vehicles by JSF CPP and

their dependents, the recourse will be

against such insurance.

3.3 The Host Participant will establish standard

operating procedures for JSF CPP in the following

areas:

3.3.1 Working hours, including holiday schedules.

3.3.2 Leave authorization, consistent to the

extent possible with the military and

civilian personnel regulations and practices

of the Host Participant and Parent

Participant. '

3.3.3 Dress regulations, consistent to the extent

possible with the military and civilian

97
personnel regulations'and practices of the

Host Participant and Parent Participant.

3.3.4 Performance evaluations, recognizing that

such evaluations will be rendered in

accordance with the Parent Participant's

military or civilian personnel regulations

and practices.

3.4 JSF CPP committing an offense under the laws of the

Government of the Host Participant or Parent

Participant may be withdrawn from this Project with

a view toward further administrative or

disciplinary action by the Parent Participant.

Disciplinary action, however, will not be taken by

the Host Participant against JSF CPP, nor will the

JSF CPP exercise disciplinary powers over the Host

Participant's personnel. In accordance with the

laws and regulations of the Host Participant's

Government, the Host Participant will assist the

Parent Participant in carrying out investigations

of offenses involving JSF CPP.

3.5 The Participants whose countries are NATO member

countries recognize the following: the military and

civilian employees of a Participant whose country

is a NATO member country, assigned to duty with its

Defense Department or Ministry for the purpose of

working under this MOU, while present in the

territory of another Participant whose country is a

NATO member country, will, to the extent that they

are so qualified, be members of a "Force" and

"civilian component" respectively within the

meaning of Article I of the NATO Status of Forces

Agreement (NATO SOFA), signed on 19 June 1951.

Employees and agents of Contractors do not

constitute a civilian component, and NATO SOFA will

not apply to them.

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ANNEX D

SUSTAINMENT

1.0 Purpose

1.1 This Annex describes the ALGS implementation phases

and other ALGS details, as well as the provisions

that will govern the conduct of the PBA process in

support of JSF sustainment.

2.0 ALGS Implementation Phases

2.1 The ALGS process, developed under the JSF SDD

Framework MOU and addressed at paragraph 3.3.1.4 of

Section III (Scope of Work), will involve the

implementation of a repeatable business process

that will generate qualitative and quantitative

analyses to define ALGS. The Participants intend

that this process be utilized through phases as

generally described below, and specified in more

detail in the JSF ALGS Strategic Plan developed

under the JSF SDD Framework MOU.

2.1.1 The initial sustainment phases will involve

initial deployment of the JSF Air System, to

include fielding and evaluation of the

sustainment solution, and will occur during

the various low rate initial production

(LRIP) periods. A JSF Program Office

sustainment readiness review will be

conducted prior to the first Air Vehicle

delivery of each LRIP to assess readiness of

sustainment services for Participants and

validate that the capabilities and

configuration of the sustainment hardware

and software are consistent with

capabilities and configuration description

documents. The initial sustainment phases

will be used to validate metrics, expose

risk, and gain the confidence necessary to

support transition to full PBL support.

Participants will take part in each LRIP

sustainment readiness review and participate

in forums that will discuss and evaluate

performance against PBA requirements for the

initial sustainment phases.

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2.1.2 Recognizing that the ALGS will gradually

mature during initial sustainment phases,

and that one or more Participants may wish

to implement ALGS risk mitigation measures

to meet their needs, such Participants may:

2.1.2.1 Submit PPRs for a study of the scope

and the cost of the efforts that would

be necessary to make sustainmentrelated Information acquired under the

JSF SDD Framework MOU and contained in

JSF Information systems, including but

not limited to, the JSF Data Library

(JDL), more readily accessible and

usable by the Participant(s) (within

the constraints of national disclosure

policies) for ALGS activities, or PPRs

for a study of the scope and the cost

of the acquisition of other

sustainment-related Information and

associated rights of use, or for

acquisition of greater rights of use in

Information already in the possession

of the Participant(s), to facilitate

ALGS activities.

2.1.2.2 Submit follow-on PPRs for the efforts

necessary to make the sustainmentrelated Information acquired under the

JSF SDD Framework MOU and contained in

JSF Information systems, including but

not limited to, the JDL, more readily

accessible and usable by the

Participant(s) (within the constraints

of national disclosure policies) for

ALGS activities, or PPRs for the

acquisition of other sustainmentrelated Information and associated

rights of use or the acquisition of

greater rights of use in Information

already in the possession of the

Participant(s), to facilitate ALGS

activities.

2.1.2.3 Propose to the JESB commonly funded

efforts to make the sustainment-related

1 00
Information acquired under the JSF SDD

Framework MOU and contained in JSF

Information systems, including but not

limited to, the JDL, more readily

accessible and usable by the JSF

Program Office and the Participants

(within the constraints of national

disclosure policies) for ALGS

activities, or to acquire other

sustainment-related Information and

associated rights of use or to acquire

greater rights of use in Information

already in the possession of the

Participants, to facilitate ALGS

activities that would be beneficial to

all Participants.

2.1.3 The Participants acknowledge that the U.S.

DoD intends to acquire capability for its

organic depot support, and that other

Participants might implement similar unique

efforts. The U.S. DoD and such other

Participants may provide to the Project,

subject to the determination of the

providing Participant, the Information

obtained as a result of acquiring this

capability to support the Participants'

common depot support requirements. Any such

Information provided will be considered, in

the case of the receiving Participant, to be

Project BackgroundoInformation in accordance

with paragraphs 9.3 and 9.5 of Section IX

(Disclosure and Use of Project Information).

2.1.4 The mature sustainment phases will commence

upon the issuance of long term Contracts

wherein deliverables are delineated as PBL

outcomes. The Participants envision that

these Contracts will be issued during full

rate production, after which sustainment

will enter into a steady state phase.

3.0 ALGS

3.1 Principles for ALGS are identified in Section III

(Scope of Work) of this MOU. The Participants

intend that ALGS will feature the following:

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3.1.1 System support from all JSF Air System

Contractors, as integrated by a product

support integrator, to meet the requirements

of each Participant, as identified in each

Participant's PBA. The JSF Program Office

plans to use a product support integrator

that will be responsible for integrating

ALGS sustainment support, both Government

and Contractor, defined within the scope of

the PBL approach.

3.1.2 Support-services and articles (excluding

consumables such as fuels and oils) and the

use of facilities that are obtained by a

Participant for its unique requirements,

provided that such services, articles, and

facilities are recognized as being part of

ALGS in that Participant's PBA. Such

services, articles, and facilities may be

made available for use by other Participants

with the consent of the offering

Participant, subject to inclusion of such

services, articles, and facilities in the

relevant PBAs.

3.1.3 ALGS operations that support the

Participants' fleets in the logistics

domains listed in paragraph 3.3.3 of Section

III (Scope of Work) and provide insight into

and oversight of delivery of sustainment

performance outcomes. The JSF Program

Office, including JSF CPPs provided in

accordance with Annex B (Management

Structure), will participate in ALGS

operations. JSF CPPs will participate by

providing the following:

3.1.3.1 Monitoring of the ALGS and the JSF Air

System to ascertain effectiveness for

all Participants.

3.1.3.2 Assessment of ALGS performance to

determine whether it is meeting the

Participants' requirements.

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3.1.3.3 Coordination among fleets including

configuration management and spares and

resource management.

3.1.3.4 Development, implementation, and

continuous support of ALGS

capabilities.

3.1.3.5 Insight into their Participant's

Government-furnished support services

and articles and Government facilities.

3.1.4 Adequate capacity to:

3.1.4.1 Optimize support during peacetime

operations but enable increased

sustainment levels to meet simultaneous

operational tempo increases of all

Participants, as defined by

Participants within their individual

PBAs. In addition to this capacity,

required levels of sustainment during

follow-on development activities will

be provided.

3.1.4.2 Support unique or Partially Common

sustainment capacity and sparing.

3.1.4.2.1 Participants may require

additional sustainment

capacity within the ALGS that

is unique to one Participant

or Partially Common. A

Participant's requirements

for additional sustainment

capacity will be defined

within PPRs. Support

relationships (i.e., roles

and responsibilities of the

JSF Program Office and the

Participant) and performance

metrics required to support

this additional capacity will

be captured in that

Participant's PBA.

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3.1.4.2.2 ALGS will manage common,

Partially Common, and unique

JSF Air Systems spares that

have been procured for a

Participant's spares

requirements. Participants

may specify spares

contingency support packages,

which will also be managed

through ALGS, to meet their

specified levels of

sustainment performance.

Maximization of economies of

scale and pooling of spares

will be implemented. A

Participant acquiring

Partially Common or unique

spares will be responsible

for the additional costs to

manage such spares within the

ALGS.

3.1.5 Ensuring that sustainment-related Project

Information acquired in the implementation

of Section III (Scope of Work), in

accordance with Section IX (Disclosure and

Use of Project Information), and delivered

under Contracts for the Project through

Information systems (including, but not

limited to, the JDL) is readily accessible

and usable for ALGS activities, within the

constraints of national disclosure policies.

3.1.6 Acquiring and exchanging sustainment

Information, and providing articles

(including equipment, consumables and

spares) as provided in paragraph 3.3.2.1 of

Section III (Scope of Work), as required to

deliver sustainment outcomes and maximize

affordability, within the constraints of

national disclosure policies.

3.1.7 The JSF configuration modification and

control process, under which Participants

are made aware in advance of all changes to

their JSF Air System configurations.

Participants retain final responsibility for

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the continued airworthiness and the `asmaintained' configuration of their fleets.

The Participants will be provided adequate

information and support, to comply with

Participants' national aviation regulations

and requirements.

3.1.8 A prioritization process for sustainment

support, the foundation of which is based on

each Participant's contracted performance

metric levels and operational status of the

Air Vehicle.

4.0 The Performance-Based Arrangement (PBA)

4.1 A PBA will identify support relationships (i.e.,

roles and responsibilities of the JSF Program

Office and the Participant.) A PBA will also

define the sustainment performance outcomes

required by each Participant. These requirements

will be placed on Contract, on behalf of the

Participants, in accordance with paragraph 6.1 of

Section VI (Contracting Provisions).

4.2 The Participants will maintain commonality in the

format of PBAs, to the maximum extent possible.

Each PBA will include, as a minimum:

4.2.1 A set of commonly defined metrics at the JSF

Air System level (e.g., mission capable rate

and degree of logistic footprint changes),

under which each Participant can define its

required level of sustainment performance

for each metric.

4.2.2 The support relationships (i.e., roles and

responsibilities of the JSF Program Office

and the Participant), in the provision of

sustainment outcomes to that Participant.

This will include the responsibility of the

Participant to provide articles and services

for its sustainment requirements, including

but not limited to, Government-furnished

equipment and Information, service manpower

and returning spares and repairables.

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4.2.3 Other provisions applicable to the

Participant's PBA, such as:

4.2.3.1 Participant constraints or conditions

(e.g., detailing point of delivery of

the sustainment outcomes or use of

Participant unique repair facilities).

4.2.3.2 Unique maintenance Information

requirements (for example, technical

publications written in a non-English

language).

4.2.3.3 Requirements for increased operational

tempo (as applicable).

4.2.3.4 Training requirements.

4.3 The JSF Program Office will cooperate with duly

authorized representatives of each Participant to

establish each Participant's initial PBA or update

an existing PBA. The final PBA between the JSF

Program Office and the Participant, will be signed

by the JSF PEO, or designee and applicable

Participant in sufficient time to support a Request

for Proposal (RFP) release for the sustainment

requirements specified in the PBA. Periodic

reviews between the JSF Program Office and duly

authorized representatives of the Participants may

result in revised PBA requirements that reflect

improvements and developments in the ALGS.

4.4 If a change to a PBA necessitates a modification of

a Contract, the Contracting Officer will negotiate

the modification with the Contractor, in a timely

manner, for incorporation into the Contract, in

accordance with Section VI (Contracting

Provisions).

5.0 Sustainment Performance Review

5.1 An annual review of overall JSF Air System

sustainment performance will be conducted by the

JSF Program Office with each Participant and

relevant Contractors with a summary provided to the

JESB. The summary may include recommendations as

to improvements.

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5.2 Each Participant will have continual visibility of

its fleet's ongoing performance through a

sustainment performance management system developed

during the JSF SDD phase.

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ANNEX E

FOLLOW-ON DEVELOPMENT PROCESS

1.0 This Annex establishes the provisions that will govern the

conduct of JSF Follow-on Development. JSF Follow-on development

will use an evolutionary acquisition approach that will deliver

capabilities in approximately two-year increments. The

principles of cost-as-an-independent-variable and cost-andoperational-performance-trades will be applied to the

prioritization and selection of new increments of capability.

2.0 JSF Air System candidate capabilities will be documented

in the JSF Air System Product Roadmap (hereinafter "Roadmap"),

by the Requirements Working Group (RWG). The Roadmap will be

the overarching document used to guide the time-phased

implementation of follow-on development capabilities. As new

capabilities are proposed by the Participants, they will be

cataloged in the Roadmap for consideration into future

increments.

2.1 Proposed follow-on development capabilities will be

derived from a variety of sources including, but

not limited to those listed at paragraph 3.4.1 and

3.4.2 of Section III (Scope of Work).

2.2 Common development will be encouraged to maintain a

common configuration for maximum affordability and

interoperability. In addition, Partially Common or

unique requirements and capabilities (to include

quick reaction or urgent operational requirements)

will be considered.

2.3 The RWG will function as the Follow-on development

process manager and requirements integrator.

2.4 The following process will be used to identify and

• prioritize possible increments of capability:

2.4.1 After identification of program constraints,

including but not limited to available

funding, contractor work load, testing

capacity, operational urgency, unique

requirement desires, and the technical

maturity of proposed capabilities, the RWG

will refer to the Roadmap to identify

potential new increments of capabilities and

• 108
will present these capabilities to the JSF

Operational Advisory Group (OAG).

2.4.2 The OAG will conduct three rounds of voting

over an 18-month cycle culminating in the

ranking of potential increments of

capability and the recommendation of a new

capability increment. These meetings will

be as follows:

2.4.2.1 Meeting #1, the OAG will vote to select

candidate capabilities from the

Roadmap. Each OAG participant will

assess a level of interest to each

candidate capability (for example, High

9 points, Medium 6 points, etc.). The

output of meeting #1 will be a

recommended common, Partially Common,

and unique requirements list, and

identification of capability specific

trade studies to be executed. This

list will represent approximately 125%

of estimated constraints.

2.4.2.2 Meeting #2, the OAG will vote to

prioritize capabilities and develop two

to four possible increment options for

further detailed operational analysis.

These possible increments, which will

be a composite of common, Partially

Common, and unique requirements, will

represent approximately 110% of

estimated constraints. Each

Participant's share of votes will be

based on the Composite Share Ratio.

2.4.2.3 Meeting #3, the OAG will vote to rank

the possible increment options and

recommend one of the possible increment

options for acquisition decision and

execution. This increment will

represent 100% of estimated

constraints. Each Participant's share

of votes will be based on the Composite

Share Ratio.

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2.4.3 The OAG recommendation will be provided to

the Senior Warfighters Group (SWG) for

coordination and concurrence. The SWG will

either unanimously concur with the OAG's

recommendation or lacking consensus, will

vote to re-prioritize the increment options

using voting shares based on the Composite

Share Ratio. Their concurrence or alternate

recommendation will be provided to the JESB.

2.4.4 The JESB will approve the configuration for

execution.

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ANNEX F

ESTIMATED ALLOCATION OF FINANCIAL COST CEILINGS

1.1 The estimated allocation of the shared production nonrecurring costs in TY U.S. dollars of the Financial Cost Ceiling

in paragraph 5.2.1 of Section V (Financial Provisions) is as

follows:

Participant Estimated Cost

Allocation

Australia $0.230B

Canada $0.184B

Denmark $0.110B

Italy $0.302B

The Netherlands $0.196B

Norway $0.110B

Turkey $0.230B

United Kingdom $0.318B

United States $5.623B

1.2 The estimated allocation of the shared sustainment nonrecurring costs in TY U.S. dollars of the Financial Cost Ceiling

in paragraph 5.2.2 of Section V (Financial Provisions) is as

follows:

Participant Estimated Cost

Allocation

Australia $0.042B

Canada $0.033B

Denmark $0.020B

Italy $0.055B

The Netherlands $0.035B

Norway $0.020B

Turkey $0.042B

United Kingdom $0.058B

United States - $1.018B

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1.3 The estimated allocation of the shared follow-on

development non-recurring costs in TY U.S. dollars of the

Financial Cost Ceiling in paragraph 5.2.3 of Section V

(Financial Provisions) is as follows:

Participant Estimated Cost

Allocation

Australia $0.418B

Canada $0.334B

Denmark $0.200B

Italy $0.547B

The Netherlands 60.3e5B

N o $0.200B

TUrkey $0.418B

United Kingdom $0.576B

United States $10.202B

112