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Navy League Special Topics Breakfast Series

Navy League Special Topics Breakfast Series. VADM William E. Landay III. 21 May 2013. Director, Defense Security Cooperation Agency. UNCLASS – Cleared for Public Release. Why Security Cooperation?. Support U.S. and Partner regional and global security initiatives through transfer of:

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Navy League Special Topics Breakfast Series

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  1. Navy LeagueSpecial Topics Breakfast Series VADM William E. Landay III 21 May 2013 Director, Defense Security Cooperation Agency UNCLASS – Cleared for Public Release

  2. Why Security Cooperation? • Support U.S. and Partner regional and global security initiatives through transfer of: • Defense Equipment • Defense Services • Defense Education and Training • Enhance interoperability • Build military-to-military cooperation • Create lasting relationships UNCLASS – Cleared for Public Release

  3. Global Reach . . Partners participate in at least one Security Cooperation Program UNCLASS – Cleared for Public Release

  4. Global Sales Trends FY12 Total Cases 12,869 Total Value $393.6B 6,289 LOAs, AMDs and MODs 227 Countries and Intl Organizations $137.7B Delivered FY05- FY 12 $32.9 FY13 Core Forecast UNCLASS – Cleared for Public Release

  5. Global Sales Trends Compared toNavy and USMC Procurement Budgets $32.9 FY13 Core Forecast UNCLASS – Cleared for Public Release

  6. The Changing Competitive Environment • Our customers are changing: • In 2004, 36% of US defense business went to Western industrialized countries, Japan, Australia • By 2011, only 16% did • Our competitors are improving • The customer demands more say in decisions • Economic challenges and annual budgets drive decisions • The trend of global competitions is growing • Currently over $25B worth of competitions underway worldwide • U.S. Industry needs international sales to offset DoD reductions • U.S. stakeholders need to grow relationships during the tough budget times Like any market leader, our customers expect more from us and our competitors are focused on taking away our business – Both affect our international relationships UNCLASS – Cleared for Public Release

  7. Improving FMS - What We’ve Done Reduced Cost of Doing Business • Reduced FMS admin surcharge 8%; $40.9M savings as of May 1, 2013 • Recalculated Termination Liability- $1.4B FY12 Worldwide • Waived Non-Recurring Costs - $760M Worldwide in FY12 • Suspended the Small Case Management Line fee Increased Speed and Flexibility • 34% reduction in time to get to LOA • 25% reduction in time from LOA to implementation • Stockpiling equipment via Special Defense Acquisition Fund (SDAF) to reduce delivery time; $42M on contract • Addressing Technology Security by frontloading key steps such as technology release; on-going efforts to reduce 13 technology release security processes to a total of 7 UNCLASS – Cleared for Public Release

  8. Improving FMS - What We’ve Done Improved Partner Visibility and Involvement • 82% of cases meet the Anticipated Offer Date • Contracting “tiger team” with Foreign Procurement Group • Customer involvement in Security Cooperation IT upgrade • Security Cooperation Information Portal features for improved visibility include: • Excess Defense Articles End Use Monitoring In-Transit Visibility Contract Milestones (future) Improving Processes • Export Control Reform • Technology Security & Foreign Disclosure • Acquisition improvements • Congressional Notification (State) UNCLASS – Cleared for Public Release

  9. What We Do is Core to Building Partnerships Our goal is exceptional business performance that must be: • Fast, Flexible, Responsive • Provide Reduced Cost • Offer Customer Visibility • Deliver Great Customer Satisfaction Relationships improve or degrade based on customer satisfaction with how we execute our business UNCLASS – Cleared for Public Release

  10. The Transformation – Supremely Satisfied Customers “Our relationship with this country is built on the basis of a strong Mil – to - Mil partnership. The foundation of that partnership is the superb performance of our FMS programs…” --DoD Leader “The U.S. is our most important partner. Through them we have developed the military capability to meet our most important defense needs. The U.S. FMS process has delivered everything they have promised with a speed and quality no other country can match…” --Partner Minister of Defense “… If I need real capability, I always turn to the U.S. Their FMS program is far superior to any other country in the world. They are fast, fair, provide full support and deliver on their promises.” --Chief of Defense International Partner Nation UNCLASS – Cleared for Public Release

  11. Questions? UNCLASS – Cleared for Public Release

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