The term "Security Assistance Office" (SAO) is a generic term encompassing DoD elements located in a foreign country that are responsible for Foreign Military Sales (FMS) and associated services, including training, sales management, program monitoring, evaluation of the host government's military capabilities and requirements, administrative support, and liaison functions. The SAO also promotes standardization and interoperability of host country and U.S. equipment, and promotes armaments cooperation between the United States and its friends and allies. Many SAOs have independent status within the U.S. embassies and are referred to as Offices of Defense Cooperation (ODC); some have armament cooperation contingents.
Administration policy on the SAO/ODC role in support of defense sales overseas has changed dramatically over the last few years. Starting in 1981, the Reagan Administration progressively replaced the previous restrictive guidelines with a policy that fully supports U.S. defense sales overseas. In August 1988, the DoD issued supplementary guidelines addressing the roles that SAOs and ODCs should play in assisting U.S. defense industry sales. Consequently, part of the SAO and ODC mission is to support the marketing efforts of U.S. companies while maintaining strict neutrality between U.S. competitors.
Providing Country Information
Upon request, and subject to such factors as availability of resources and country sensitivity, the SAOs or ODCs can provide industry representatives with the following kinds of unclassified information:
Data on the defense budget cycle in the host country, including the share of that budget devoted to procurement. Data on the country's current FMS and Military Assistance Program budgets.
Information on the national decision-making process, both formal and informal, and on decision makers in the Ministry of Defense and military services.
Information on the national procurement process, to include bidding procedures, legal or policy impediments to procurement from U.S. sources, and other information necessary for the U.S. commercial competitor to deal effectively with the country.
Estimates as to the kind of equipment the country currently needs to fill defense requirements and that it is likely to need in the future, as well as procurement plans for this equipment as known and appropriate for disclosure.
Information regarding the marketing efforts of foreign competitors.
Information on major in-country defense firms and their products. This can assist U.S. firms in identifying possible subcontract support services or exploring teaming, licensing, or other cooperative arrangements.
The SAOs/ODCs can also facilitate appointments in the host country Ministry of Defense (MoD) and military services. In order to avoid the impression of SAO/ODC endorsement of a given item or service, making calls for appointments with country officials will normally be done by the industry representatives involved in a marketing effort, unless the host country prefers to work directly with SAOs/ODCs.
Thirty days prior to the proposed visit, industry representatives should provide to the SAO/ODC the following information:
- A synopsis of equipment and services proposed for sale.
- Current export license information, including restrictions and provisos.
- Dates of planned in-country travel/country clearance request.
- Non-proprietary information already provided to the host country, or other contacts concerning the equipment in question.
- Specific support (e.g., briefings, appointments) requested.
Unlike most other countries that sell defense equipment, the United States is likely to have more than one producer of a given weapons system. SAOs/ODCs will maintain neutrality between such competitors. When more than one U.S. competitor is involved, the SAO/ODC should still be able to explain to host country personnel why the purchase of a U.S. system would be to the country's advantage. If asked by a representative of one U.S. company, the SAO can acknowledge whether and when other U.S. vendors have come through the country, but he cannot divulge any marketing strategy or other proprietary information of any U.S. competitor.
Commercial Versus FMS Sales
DoD policy generally has no preference whether a foreign country fills its valid defense needs through FMS or commercial channels. DoD tries to accommodate preference for direct sales, if such a preference is indicated by the contractor, unless the host country requests to make the purchase through FMS or the specific item is restricted to FMS. DoD policy also provides that price quotes will not normally be provided for comparison of FMS and direct sales.
U.S. firms should also have a working knowledge of the major differences between FMS and direct commercial sales. A DoD publication entitled A Comparison of Direct Commercial Sales and Foreign Military Sales for the Acquisition of U.S. Articles and Services is available through the following office:
Defense Institute for Security Assistance Management
DISAM/DIR, Bldg. 125, Area B
Wright Patterson Air Force Base, OH 45433-5000
Tel: (513) 255-2994/3669
Prior to departing, visiting U.S. contractors should debrief the SAO/ODC and other relevant members of the country team on their experiences in-country. The SAO/ODC will provide any known reactions from host country officials or subsequent marketing efforts by foreign competitors. Embassy staff will also be alerted about obtaining reactions from host country officials and sharing these with industry representatives.
For detailed information on the role of the SAO in support of U.S. defense sales overseas, refer to DoD 5100.38-M within the Security Assistance Management Manual. This can also be obtained from the Defense Institute for Security Assistance Management.