FOREIGN MILITARY FINANCING

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FOREIGN MILITARY FINANCING BUDGET PROCESS
Security Cooperation Conference 2003 28 October
2003 Presented by Brad Bittinger, DSCA/LPA
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Foreign Military Financing (FMF)

• Authorized under Sec. 503 of the Foreign
  Assistance Act (FAA) to carry out the provisions
  of Sec. 23 of the AECA
• Appropriated under Title III of the annual
  Foreign Operations, Export Financing, and Related
  Programs Appropriations Act
• Finances using grants and/or loans the
  procurement of U.S. defense articles, services
  and training to improve interoperability
  develop self-defense capabilities and modernize
  forces
• Critical foreign policy tool for promoting US
  interests worldwide by ensuring that coalition
  partners and friendly foreign governments are
  equipped and trained to support US goals and
  missions

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FMF Eligibility and Restrictions

• Foreign Governments and International
  Organizations eligible for FMS
• are eligible for FMF
• Many factors influence the decision to provide
  FMF that include
• military and economic conditions of the proposed
  recipient
• U.S. foreign policy interests
• indigenous private financing
• Eligibility can be suspended or terminated for
  legal and/or policy reasons that include
• failure to make payment
• violation of agreements
• terrorism
• human rights violations
• Both legal and policy restrictions exist for
  providing/using FMF that include
• place an extreme economic/resource burden on the
  recipient
• co-production/licensed production
• offshore procurement
• direct commercial contracting

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Major Players Budget Development

• DEPARTMENT OF STATE
• Determines which countries have programs
• Determines Military Assistance funding levels
• DEPARTMENT OF DEFENSE
• Recommends Military Assistance funding levels
• SAOs
• Provides funding requirements for their countries
• Combatant Commands
• Provides a military assessment and prioritization
  of funding requirements for their AORs
• Joint Staff
• Coordinates funding requirements with DoD
  military plans and programs
• DSCA
• Administers the FMF Program and develops budget
  recommendations for the senior DoD civilian
  leadership
• OSD Policy
• Coordinates budget recommendations with Security
  Cooperation and Defense policy

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Budget Development Principles

• Must support elements of
• The National Security Assistance Strategy
• Out-year program requirements
• Objective-oriented
• Fully prioritized and justified with end state
  identified
• Measure effectiveness of funding and achievement
  of objectives
• Department of State Policy
• Submissions must be consistent with the purpose
  of the source of funding being sought
• The Security Cooperation Guidance
• Reflective of goals and priorities outlined
• Combating Terrorism
• Realigning Global Posture
• Moving beyond engagement for engagements sake

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FMF/IMET Budget Influences

• Budget principles
• Budget environment
• Baseline v.s. Supplemental funding requests
• Fiscal constraints
• Policy/political concerns
• Sanctions
• Absorption and Capacity
• Effective and efficient use of previously
  provided funding

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FMF Budget Process - DoD

• Budget targets are determined based on budget
  principles and influences
• SAOs are tasked via DSCA message to submit
  funding requirements to Combatant Commands
  (CoComs)
• CoComs prioritize requirements using budget
  targets/TSCSIPs and submit funding
  recommendation to Joint Staff
• Joint Staff reviews submissions from CoComs for
  consistency with military plans and programs and
  submits funding recommendation to DSCA

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FMF Budget Process - DoD

• DSCA reviews submissions for valid program
  requirements and formulate a preliminary funding
  recommendation based on budgetary and policy
  guidance
• DSCA works with OSD Policy regional offices to
  finalize a budget recommendation
• When a coordinated budget recommendation is
  completed, DSCA updates budget information to
  reflect funded requirements with appropriate
  priorities and ensure the data adheres to the
  budget development principles
• Once the Presidents Budget is released, DSCA
  prepares input for Congressional Budget
  Justification documents

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Budget Cycle - Foreign Operations Appropriations
Sep-Jan SAOs works with Host Countries to assess
the requirements for Security Assistance and
prepare budget submissions Jan-Mar SAOs submit
budgets to Combatant Command which refine and
pass to the Joint Staff for approval Joint Staff
passes to DSCA Apr DSCA formulates, in
conjunction with OSD Policy, DoDs budget
recommendation. DSCA hosts roundtables with
Combatant Commands. DoD submits budget
recommendation to State Apr-May State bureaus
finalize their budget positions May State hosts
roundtables to discuss budget submissions Jun-Sep
State internally staffs and refines budget.
State submits budget and works with OMB to
further refine budget Sep-Feb Administration
finalizes and submits Presidents
Budget Feb-Apr Congressional Budget Justification
documentation prepared Apr-Aug Congress defines
and passes funding legislation Sep State
determines allocations based on
appropriations Oct-Sep DSCA, State, and OMB work
together to apportion funds
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FMF/IMET Budget Web Tool
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Resources

• Security Assistance Management Manual (SAMM)
• Chapter 1, section 3
• Chapter 9, section 7
• Chapter 10, section 6
• Questions, contact
• Brad Bittinger, DSCA/LPA
• COMM 703-604-6620
• DSN 664-6620
• E-MAIL brad.bittinger_at_dsca.mil