Streamlining and expediting foreign military sales process

(a)

Security cooperation workforce and defense acquisition workforce

(1)

Responsibilities of Secretary of Defense

(A)

In general

The Secretary of Defense shall—(i)expand, carry out activities to professionalize, and increase the resources available to the security cooperation workforce so as to enable the full implementation of this section and the amendments made by this section;(ii)ensure that members of the defense acquisition workforce involved in the foreign military sales process are aware of evolving United States regional and country-level defense capability-building priorities; and(iii)ensure that members of the defense acquisition workforce are professionally evaluated using metrics to measure—(I)responsiveness to foreign partner requests;(II)ability to meet foreign partner capability and delivery schedule requirements; and(III)advancement of foreign capability-building priorities described in the semiannual guidance issued under paragraph (2). (B)

Report

Not later than 90 days after the date of the enactment of this Act, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the resources necessary to implement subparagraph (A), including—(i)the anticipated costs of new personnel and training to carry out such subparagraph; and (ii)the estimated increase in foreign military sales administrative user fees necessary to offset such costs. (2)

Guidance

(A)

In general

Not less frequently than semiannually, the Secretary of Defense, in coordination with the commander of each relevant combatant command, shall develop and publish guidance—(i)based on the National Security Strategy and the National Defense Strategy for dissemination to the security cooperation workforce and the defense acquisition workforce; and(ii)informed by the theater campaign plans and theater security cooperation strategies of such combatant commands.(B)

Elements

The guidance required by subparagraph (A) shall—(i)identify—(I)regional and country-level foreign defense capability-building priorities; and(II)levels of urgency and desired timelines for achieving foreign capability-building objectives; and(ii)provide guidance to the defense acquisition workforce regarding levels of resourcing, innovation, and risk tolerance that should be considered in meeting urgent needs.(3)

Commission

(A)

Establishment

The Secretary of Defense shall establish a commission (in this section referred to as the Commission), independent of the Department of Defense, which shall, subject to applicable law, provide independent advice on matters studied under subparagraph (B) directly to the Secretary of Defense and the Deputy Secretary of Defense without obtaining the approval or concurrence of any other official within the Department of Defense.(B)

Study

The Commission shall conduct a study of—(i)the requirements for establishing a contracting capacity that is—(I)led by the Defense Security Cooperation Agency; and (II)specific to the foreign military sales process; and(ii)the feasibility and advisability of—(I)establishing, at the Department of Defense level or the military department level, a contracting capacity that—(aa)is specific to the execution of contracts for foreign military sales;(bb)is fully funded by the Defense Security Cooperation Agency using foreign military sales administrative funds so as to ensure that such capacity is dedicated solely to foreign military sales contracting;(cc)is monitored by the Defense Security Cooperation Agency Chief Performance Office to ensure effectiveness in meeting foreign military sales contracting requirements; and(dd)empowers the Director of the Defense Security Cooperation Agency, in coordination with the Under Secretary of Defense for Policy and the Under Secretary of Defense for Acquisition and Sustainment, to increase or decrease foreign military sales contracting capacity through the semiannual guidance under paragraph (2); and(II)with respect to technology release deliberations of the Defense Technology Security Administration, incorporating greater global and regional strategic considerations, including by— (aa)transferring the organization, manpower, and functions of the Defense Technology Security Administration to the Defense Security Cooperation Agency so as to enable the Director of the Defense Security Cooperation Agency, as the head of the security cooperation enterprise of the Department of Defense—(AA)to readily balance potential risks to technologies with an existing understanding of foreign partner capability needs and levels of urgency; and(BB)to provide release recommendations to the Office of the Secretary of Defense at the Under Secretary level or the Assistant Secretary level, as appropriate; and (bb)converting the Defense Technology Security Administration into an organization that reports to the Under Secretary of Defense for Research and Engineering to ensure a greater understanding of the state of play with regard to cutting-edge technologies. (C)

Membership

(i)

In general

The Commission shall be composed of not fewer than seven members, each of whom shall have expertise in the foreign military sales process.(ii)

Restriction

The Commission may not have as a member—(I)an officer or employee of the Department of Defense; or(II)a member of the United States Armed Forces.(D)

Report

Not later than 1 year after the date of the enactment of this Act, the Commission shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the results of the study required by subparagraph (B).(b)

Modification of foreign military sales processing

(1)

Deadlines

(A)

Responses

(i)

Letters of request for pricing and availability

The Secretary of Defense shall ensure that an eligible foreign purchaser that has submitted a letter of request for pricing and availability data receives a response to the letter not later than 45 days after the date on which the letter is received by a United States security cooperation organization, the Defense Security Cooperation Agency, or other implementing agency. (ii)

Letters of request for letters of offer and acceptance

(I)

In general

Subject to subclause (II), the Secretary of Defense and the Secretary of State shall ensure that an eligible foreign purchaser that has submitted a letter of request for a letter of offer and acceptance receives a response—(aa)in the case of a letter of request for a blanket-order letter of offer and acceptance, cooperative logistics supply support arrangements, or associated amendments and modifications, not later than 45 days after the date on which the letter of request is received by a United States security cooperation organization, the Defense Security Cooperation Agency, or other implementing agency;(bb)in the case of a letter of request for a defined-order letter of offer and acceptance or associated amendments and modifications, not later than 100 days after such date; and(cc)in the case of a letter of request for a defined-order letter of offer and acceptance or associated amendments that involve extenuating factors, as approved by the Director of the Defense Security Cooperation Agency, not later than 150 days after such date. (II)

Eligible foreign purchasers with special designations

The Secretary of Defense shall ensure that an eligible foreign purchaser with a special designation that has submitted a letter of request for a letter of offer and acceptance receives a response—(aa)in the case of an eligible foreign purchaser that is a member of the national technology and industrial base— (AA)in the case of a letter of request for a defined-order letter of offer and acceptance, not later than 65 days after the date on which the letter of request is received by a United States security cooperation organization, the Defense Security Cooperation Agency, or other implementing agency; and (BB)in the case of a letter of request for a defined-order letter of offer and acceptance involving extenuating factors, as approved by the Director of the Defense Security Cooperation Agency, not later than 90 days after such date;(bb)in the case of Israel, Japan, the Republic of Korea, New Zealand, or an eligible foreign purchaser that is a member of the North Atlantic Treaty Organization or a major non-NATO ally—(AA)in the case of a letter of request for a defined-order letter of offer and acceptance, not later than 75 days after such date; and(BB)in the case of a letter of request for a defined-order letter of offer and acceptance involving extenuating factors, as approved by the Director of the Defense Security Cooperation Agency, not later than 100 days after such date; and(cc)in the case of an eligible foreign purchaser that is a major defense partner or a major security partner—(AA)in the case of a letter of request for a defined-order letter of offer and acceptance, not later than 85 days after such date; and (BB)in the case of a letter of request for a defined-order letter of offer and acceptance involving extenuating factors, as approved by the Director of the Defense Security Cooperation Agency, not later than 125 days.(iii)

Rule of construction

Nothing in this subparagraph may be construed to include, within a deadline set forth in this subparagraph—(I)any period for the issuance of a decision under subparagraph (B);(II)any period of consultation described in subparagraph (C); or(III)a notification period under section 36(c)(2) of the Arms Export Control Act (22 U.S.C. 2776(c)(2)). (B)

Licenses for release of sensitive technology

(i)

Deadline for decision

With respect to an application of a defense industry provider for a license for the release of sensitive technology as part of foreign military sales negotiations, not later than 120 days after the date on which such an application containing all relevant information in the form required is received by the Department of State Directorate of Defense Trade Controls, the Secretary of State shall issue a decision on the application.(ii)

Approval

In the case of a decision under clause (i) to approve such an application, the defense industry provider concerned may commence negotiations with the eligible foreign purchaser on the earliest date practicable following the issuance of such decision.(iii)

Denial

Concurrently with the issuance of a decision under clause (i) denying such an application, the Secretary of State shall provide to the Committee on Armed Services and the Committee on Foreign Relations of the Senate and the Committee on Armed Services and the Committee on Foreign Affairs of the House of Representatives written notice of the decision, including the basis for the denial.(iv)

Rule of construction

Nothing in this subparagraph may be construed to include, within the deadline set forth in clause (i)—(I)any response period under subparagraph (A);(II)any period of consultation described in subparagraph (C); or (III)a notification period under section 36(c)(2) of the Arms Export Control Act (22 U.S.C. 2776(c)(2)).(C)

Department of State consultation

Any period of consultation between the Secretary of State and Congress with respect to a proposed foreign military sale may not—(i)be longer than 20 days; or (ii)be construed to include a notification period under section 36(c)(2) of the Arms Export Control Act (22 U.S.C. 2776(c)(2)).(2)

Expansion of country prioritization

(A)

DX ratings

With respect to foreign military sales to member countries of the North Atlantic Treaty Organization, major non-NATO allies, major defense partners, and major security partners, the Secretary of Defense may assign a Defense Priorities and Allocations System order rating of DX (within the meaning of section 700.11 of title 15, Code of Federal Regulations (as in effect on the date of the enactment of this section)).(B)

Rapid technology release review and rapid acquisition

The Secretary of Defense shall establish a path within the foreign military sales process that prioritizes Israel, Japan, the Republic of Korea, New Zealand, member countries of the North Atlantic Treaty Organization, major non-NATO allies, major defense partners, major security partners, and eligible purchasers that are members of the national technology and industrial base for rapid technology release review and rapid acquisition of United States defense articles and defense services.(3)

Limitations on price modifications

(A)

In general

With respect to the dollar amount of an offer to sell or the sale of United States defense articles or services developed by a military department and the Defense Security Cooperation Agency for purposes of the foreign military sales process documented in a letter of offer to an eligible foreign purchaser and submitted to the Secretary of State for review, the Secretary of Defense may subsequently direct an increase of—(i)not more than 20 percent of such dollar amount to account for supply chain disruptions, including the unavailability of materials and inflation; and(ii)not less than 20 percent of such dollar amount, subject to review by the Foreign Military Sales Cost Review Board.(B)

Foreign Military Sales Cost Review Board

(i)

Establishment

The Secretary of Defense shall establish within the Department of Defense a board, to be known as the Foreign Military Sales Cost Review Board (in this subparagraph referred to as the Board)—(I)to review requests by the Director of the Defense Security Cooperation Agency for an increase in the dollar amount described in subparagraph (A) that is more than 20 percent of the dollar amount documented in a letter of offer and acceptance to an eligible foreign purchaser and submitted to the Secretary of State for review; and(II)to make recommendations to the Secretary of Defense as to whether such an increase in such dollar amount should be directed, and if so, the recommended amount of such increase to be implemented.(ii)

Consultation

The Board shall conduct reviews under clause (i)(I) in consultation with the eligible foreign purchaser concerned.(C)

Justification for price increase

In the case of an increase in the dollar amount described in subparagraph (A), the Secretary of Defense shall provide to the eligible foreign purchaser and the primary defense industry provider concerned documentation justifying such increase.(D)

Report

Beginning on December 15, 2025, and annually thereafter, the Under Secretary of Defense for Acquisition and Sustainment and the Under Secretary of Defense for Policy shall submit a report, and provide a briefing, to the Committees on Armed Services of the Senate and the House of Representatives on each request for a dollar amount increase reviewed by the Board during the fiscal year ending on September 30 of the applicable year. (4)

Definitions

In this subsection:(A)

Blanket-order letter of offer and acceptance

The term blanket-order letter of offer and acceptance means an agreement between an eligible foreign purchaser and the United States Government for a specific category of items or services (including training) that—(i)does not include a definitive listing of items or quantities; and (ii)specifies a maximum dollar amount against which orders for defense articles and services may be placed. (B)

Cooperative logistics supply support arrangement

The term cooperative logistics supply support arrangement means a military logistics support arrangement designed to provide responsive and continuous supply support at the depot level for United States-made military materiel possessed by foreign countries or international organizations. (C)

Defined-order letter of offer and acceptance

The term defined-order letter of offer and acceptance means a foreign military sales case characterized by an order for a specific defense article or service that is separately identified as a line item on a letter of offer and acceptance.(D)

Implementing agency

The term implementing agency means the military department or defense agency assigned, by the Director of the Defense Security Cooperation Agency, the responsibilities of—(i)preparing a letter of offer and acceptance; (ii)implementing a foreign military sales case; and (iii)carrying out the overall management of the activities that—(I)will result in the delivery of the defense articles or services set forth in the letter of offer and acceptance; and (II)was accepted by an eligible foreign purchaser. (E)

Letter of request

The term letter of request—(i)means a written document—(I)submitted to a United States security cooperation organization, the Defense Security Cooperation Agency, or an implementing agency by an eligible foreign purchaser for the purpose of requesting to purchase or otherwise obtain a United States defense article or defense service through the foreign military sales process; and(II)that contains all relevant information in such form as may be required by the Secretary of Defense; and(ii)includes—(I)a formal letter;(II)an email;(III)signed meeting minutes from a recognized official of the government of an eligible foreign purchaser; and (IV)any other form of written document, as determined by the Secretary of Defense or the Director of the Defense Security Cooperation Agency.(F)

Major defense partner

The term major defense partner means—(i)India; and(ii)any other country, as designated by the Secretary of Defense. (G)

Major non-NATO ally

The term major non-NATO ally—(i)has the meaning given the term in section 644 of the Foreign Assistance Act of 1961 (22 U.S.C. 2403)); and (ii)includes Taiwan, as required by section 1206 of the Security Assistance Act of 2002 (Public Law 107–228; 22 U.S.C. 2321k note).(H)

Major security partner

The term major security partner means—(i)the United Arab Emirates;(ii)Bahrain; (iii)Saudi Arabia; and(iv)any other country, as designated by the Secretary of Defense, in consultation with the Secretary of State and the Director of National Intelligence.(I)

National technology and industrial base

The term national technology and industrial base has the meaning given the term in section 4801 of title 10, United States Code. (c)

Modification of reporting requirements

Section 36 of the Arms Export Control Act (22 U.S.C. 2776) is amended—(1)in subsection (b)—(A)in paragraph (1)—(i)in the matter preceding subparagraph (A), by striking any letter of offer and all that follows through $14,000,000 or more and inserting any letter of offer to sell any defense articles or services under this Act for $170,000,000 or more, any design and construction services for $681,000,000 or more, or any major defense equipment for $47,000,000 or more; and(ii)in the undesignated matter at the end, in the second sentence, by striking or New Zealand and inserting New Zealand, any major non-NATO ally (as defined in section 644 of the Foreign Assistance Act of 1961 (22 U.S.C. 2403)), or any major defense partner, or major security partner;(B)in paragraph (2), by striking or New Zealand and inserting New Zealand, any major non-NATO ally, or any major defense partner or major security partner; and(C)in paragraph (6), in the matter preceding subparagraph (A)—(i)by striking or New Zealand and inserting New Zealand, a major non-NATO ally, or a major defense partner or major security partner; (ii)in subparagraph (A), by striking $25,000,000 and inserting $85,000,000;(iii)in subparagraph (B), by striking $100,000,000 and inserting $340,000,000; and (iv)in subparagraph (C), by striking $300,000,000 and inserting $1,000,000,000;(2)in subsection (c)—(A)in paragraph (2)(A), by striking or New Zealand and inserting New Zealand, any major non-NATO ally, or any major defense partner or major security partner; (B)in paragraph (5), by striking or New Zealand and inserting New Zealand, a major non-NATO ally, or a major defense partner or major security partner; and(C)by adding at the end the following new paragraph:

(7)A sale of major defense equipment, defense articles, or defense services that is the subject of an application for which notification has been provided under this subsection, including such a sale for which the number of such equipment, articles, or services is increased, shall not require subsequent notification under this subsection unless the dollar amount of the offer to sell or the sale exceeds 150 percent of the dollar amount of the offer to sell or the sale set forth in the notification provided.

;

(3)in subsection (d)(2)(A), by striking or New Zealand and inserting New Zealand, a major non-NATO ally, or a major defense partner or major security partner; and (4)by adding at the end the following new subsection:

(j)

Definitions

In this section:(1)

Major defense partner

The term major defense partner means—(A)India; and(B)any other country, as designated by the Secretary of Defense. (2)

Major non-NATO ally

The term major non-NATO ally—(A)has the meaning given the term in section 644 of the Foreign Assistance Act of 1961 (22 U.S.C. 2403)); and (B)includes Taiwan, as required by section 1206 of the Security Assistance Act of 2002 (Public Law 107–228; 22U.S.C. 2321k note).(3)

Major security partner

The term major security partner means—(A)the United Arab Emirates;(B)Bahrain; (C)Saudi Arabia; and(D)any other country, as designated by the Secretary of Defense, in consultation with the Secretary of State and the Director of National Intelligence.

(d)

Assistant Secretary of Defense for technology cooperation and security review

(1)

In general

Section 138 of title 10, United States Code, is amended—(A)in subsection (a)(1), by striking 19 and inserting 20; and(B)in subsection (b), by adding at the end the following new paragraph:

(9)One of the Assistant Secretaries is the Assistance Secretary of Defense for Technology Cooperation and Security Review. The Assistant Secretary shall serve under the authority, direction, and control of the Under Secretary of Defense for Acquisition and Sustainment. The principal duty of the Assistant Secretary shall be the overall supervision of policy and processes of the Department of Defense for technology cooperation and security review in the context of foreign military sales and direct commercial sales.

(2)

Conforming amendment

Section 5315 of title 5, United States Code, is amended by striking Assistant Secretaries of Defense (19) and inserting Assistant Secretaries of Defense (20).(e)

Special Defense Acquisition Fund

Section 51 of the Arms Export Control Act (22 U.S.C. 2795) is amended by adding at the end the following new subsection:

(d)Decisions with respect to the use of a portion of the Fund for the acquisition of defense articles and defense services in anticipation of their transfer pursuant to this Act, the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.), or as otherwise authorized by law, to eligible foreign countries and international organizations shall be made independently of acquisition decisions relating to the requirements of the United States Armed Forces.

(f)

Expedited deliveries to priority foreign purchasers

(1)

Acquisition strategies

(A)

In general

With respect to a foreign country or capability identified in guidance issued under subsection (a)(2) as a regional or country-level foreign defense capability-building priority, the Secretary of Defense shall establish a requirement that, in developing letters of offer and acceptance, the acquisition program office of each military department shall develop, at program inception—(i)an acquisition strategy that documents the standard acquisition path; and(ii)an acquisition strategy that documents the fastest acquisition path. (B)

Associated risk

In developing each acquisition strategy required by clauses (i) and (ii) of subparagraph (A), the acquisition program office of the military department concerned shall—(i)measure, and justify with respect to the urgency of delivering a capability in full or in phases, the associated risk, risk mitigation, and risk cost; and (ii)provide, in coordination with the appropriate regional directorate of the Office of the Under Secretary of Defense for Policy and the Director of the Defense Security Cooperation Agency, to the acquisition leadership of such military department a briefing on the results of the measurements under clause (i).(C)

Decision

Not later than 30 days after the date of a briefing under subparagraph (B)(ii), the acquisition leadership of the military department concerned shall issue a decision with respect to the acquisition strategy selected.(2)

Input from eligible foreign purchaser

(A)

In general

The Secretary of Defense shall ensure that, in the development of acquisition strategies for priority countries and capabilities under paragraph (1), the foreign purchaser is provided an opportunity to provide input with respect to risk tolerance. (B)

Information sharing

In carrying out subparagraph (A), the Secretary of Defense shall ensure that a foreign purchaser is briefed on risks identified, alternate approaches that may be taken, and the schedule, cost, and capability tradeoffs associated with such alternate approaches. (C)

Inclusion in briefing

Foreign purchaser input gathered under this paragraph shall be included in the briefing required by paragraph (1)(B)(ii) and appropriately weighted in making final a decision with respect to the appropriate acquisition approach.(3)

Agreements with manufacturers

(A)

In general

The Secretary of Defense shall allow United States companies to enter into agreements with manufacturers to begin the process of acquiring long-lead Government-furnished equipment on forecast.(B)

High-demand systems

United States companies that produce high-demand systems shall purchase certain sensitive and closely controlled items, such as communications security devices, military grade GPS, and anti-spoofing devices, as Government-furnished equipment.(C)

Department of Defense policy

(i)

In general

The Secretary of Defense shall implement policies, and ensure that the head of each military department implements policies, that allow United States companies to enter into agreements with manufacturers of Government-furnished equipment so that production on long-lead Government-furnished equipment may begin before the execution of a signed commercial contract or the issuance of a letter of offer and acceptance.(ii)

Elements

The policies required by clause (i) shall require that—(I)United States companies shall—(aa)before entering into an agreement under this paragraph, obtain the concurrence or approval of the head of the military department concerned to do so; and(bb)be responsible for—(AA)negotiating directly with the manufacturer of Government-furnished equipment; and(BB)providing any payment to such manufacturer; and(II)transfer of Government-furnished equipment from such manufacturer to the purchasing company shall not occur until the date on which a letter of offer and acceptance or commercial contract is produced.(D)

Recovery of costs for certain sales

In the case of defense sales, purchasing companies may recoup costs associated with ordering the Government-furnished equipment described in the applicable letter of offer and acceptance. (g)

Modification of authority for sales to United States companies for incorporation into end items

Section 30(a)(2) of the Arms Export Control Act (22 U.S.C. 2770(a)(2)) is amended by inserting or for the purpose of providing defense capabilities through provision of a service after to be sold by such a company.(h)

Treatment of national technology and industrial base as domestic source under Defense Production Act of 1950

Section 702(7)(A) of the Defense Production Act of 1950 (50 U.S.C. 4552(7)(A)) is amended by striking the United States or Canada and inserting the United States, any other country, the persons or organizations within the national technology and industrial base, or Japan.(i)

Definitions

In this section:(1)

Defense acquisition workforce

The term defense acquisition workforce means the Department of Defense acquisition workforce described in chapter 87 of title 10, United States Code.(2)

Security cooperation workforce

The term security cooperation workforce has the meaning given the term in section 384 of title 10, United States Code.