The Army expects to perform roughly $5 billion less than the previous year in Foreign Military Sales (FMS) in 2016, which the service’s acquisition executive attributes to budget instability among international partner nations.
Assistant Secretary of the Army for Acquisition, Technology and Logistics (AT&L) Heidi Shyu said Oct. 13 the land service achieved $20 billion in FMS in 2015. Army Materiel Command (AMC) commander Gen. Dennis Via said Oct. 13 the Army performed about $15 billion in FMS sales in 2014. FMS is the federal government’s program for transferring defense articles, services and training to its international partners and international organizations. FMS is run by the Defense Security Cooperation Agency (DSCA).
“Believe it or not, a lot of our partner nations…their budgets are also coming down,” Shyu said during a briefing at the Association of the United States Army (AUSA) convention in Washington, adding that the Army exceeded FMS expectations the last two years. “Sometimes their priorities also change.”
Via attributed the forecast decrease in FMS sales to a decline in the price of oil. Many of the United States’ biggest FMS partners are Middle East nations like Saudi Arabia and the United Arab Emirates, nations whose budgets largely depend on oil sales. Though FMS deals to Middle East partners may slump, Via said FMS deals with eastern European and Pacific partner nations have increased.
Via and Shyu said the U.S.’ most popular FMS platforms are helicopters, Patriot air defense systems and associated missiles. The United States reached a pair of big-ticket agreements with Saudi Arabia earlier this year, offering to provide it with MH-60R multi-mission helicopters for roughly $1.9 billion. The United States also agreed in July to provide Saudi Arabia with Patriot Advanced Capability-3 (PAC-3) missiles for roughly $5.4 billion. Congress must sign off on FMS deals.
Domestic budget uncertainty also has Shyu’s attention. She said her biggest fear was that the Army would buy “a lot less quantity” in critical programs if a long term continuing resolution was passed instead of traditional appropriations. She said the Army would acquire half of its planned AH-64 Apache helicopter buy. Shyu also said the Army would buy about seven fewer CH-47 Chinook helicopters.
Shyu said over 400 programs would be impacted by a long-term CR, a cloud hanging over the Defense Department as lawmakers squabble over whether overseas continuing operations (OCO), or wartime funds should be used to evade sequestration budget caps. DoD has been calling a long term CR damaging as it funds the next fiscal year at the level of the previous fiscal year.