On June 13, 2023, the Department of Defense announced that the Secretary of Defense approved recommendations for strengthening the Foreign Military Sales program and instructed FMS-implementing agencies to move forward with these recommendations.  It remains to be seen how the DoD agencies will implement the recommendations, and there is a possibility that legislative action will impact FMS reform and supplement or supersede these recommendations.

Last year, the Pentagon formed a Tiger Team to evaluate the FMS program and consider potential improvements.  As part of that process, the Tiger Team solicited industry input in the form of a November 2022 report compiled by the Aerospace Industries Association, the Professional Services Council, and NDIA, and a follow-on set of seven industry recommendations released in February of this year.  Last month, the Tiger Team released (and the DoD adopted) its own set of six recommendations which largely mirror the broad goals – if not the specific action items – set forth in the industry recommendations. 

The second Tiger Team recommendation is to enable efficient reviews and reduce barriers to export control approvals for key technologies.  The Tiger Team did not identify any specific actions here, but the industry report flagged the need for a more centralized approach to export management, including considering aligning the end use monitoring programs across various departments. 

Fourth, the Tiger Team called for accelerating acquisition and contracting support by establishing contract award standards/metrics and developing process maps to monitor FMS cases.  Industry flagged the same underlying issue in its report, noting that “Time has the most impact on U.S. competitiveness, sales, production schedules, and defense partnership objectives.”

The most in-depth Tiger Team recommendation is to expand Defense Industrial Base capacity.  To achieve this, the DoD will undertake a comprehensive study on how to incentivize investment in production capability, including surge capacity for high-demand articles and services.  Other action items include use of multi-year contracts (rather than standard one-year base contracts with additional one-year option periods) and enhanced use of the Special Defense Acquisition Fund. 

In summary, the Tiger Team’s recommendations largely track the industry recommendations, although industry made more explicit recommendations on topics such as creative contracting processes and export financing arrangements.  For example, industry made specific recommendations around strategic alignment, including establishing an interagency working group to track major arms transfers to the National Security Strategy and National Defense Strategy.  Industry also recommended changes to expedite the contracting process, such as allowing contractors to be directly involved in the Letter of Offer and Acceptance process for sole source requests from foreign partners. 

It is possible that the Tiger Team adopted some of the specific action items suggested by industry, but the Pentagon chose not publish a full copy of the Tiger Team’s recommendations, electing only to summarize them in a press release.  For the moment, industry remains in the dark regarding the precise actions recommended by the Tiger Team and what actions the DoD may focus on moving forward. 

Despite some overly enthusiastic media reporting to the contrary, the Pentagon’s adoption of the Tiger Team findings does not guarantee that any of these recommendations will become reality.  The Secretary of Defense instructed the DoD components to move forward with implementation, but the implementing agencies will retain discretion on how to best move forward, and certain aspects of the Tiger Team recommendations may be restructured or deferred.  As mentioned the outset, the Tiger Team recommendations and DoD’s move towards implementation may be impacted or even superseded by legislative action.  There are several legislative proposals for FMS reforms circulating around Capitol Hill, and the next National Defense Authorization Act appears primed to provide additional direction to the Pentagon on the future of the FMS program.

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Photo of Nooree Lee Nooree Lee

Nooree Lee represents government contractors in all aspects of the procurement process and focuses his practice on the regulatory aspects of M&A activity, procurements involving emerging technologies, and international contracting matters.

Nooree advises government contractors and financial investors regarding the regulatory aspects of…

Nooree Lee represents government contractors in all aspects of the procurement process and focuses his practice on the regulatory aspects of M&A activity, procurements involving emerging technologies, and international contracting matters.

Nooree advises government contractors and financial investors regarding the regulatory aspects of corporate transactions and restructurings and – more recently – on equity investments by the U.S. government. His experience includes preparing businesses for sale, negotiating deal documents, coordinating large-scale diligence processes, and navigating pre- and post-closing regulatory approvals and integration. He has advised on 50+ M&A deals involving government contractors totaling over $40 billion in combined value. This includes Advent International’s sale of Ultra Maritime to Lockheed Martin for $3.45 billion; Bridgepoint Group’s sale of Evac Group to Altor Equity Partners; the acquisition of Perspecta Inc. by Veritas Capital portfolio company Peraton for $7.1 billion; and Cameco Corporation’s strategic partnership with Brookfield Renewable Partners to acquire Westinghouse Electric Company for $7.8+ billion. Nooree also advised the financial advisor and lead left arranger of MP Materials’ $1 billion in committed financing for its partnership with the Pentagon to build out the U.S. rare earth materials supply chain.

Nooree also counsels clients focused on delivering emerging technologies to public sector customers. Over the past several years, his practice has expanded to include advising on the intersection of government procurement and artificial intelligence. Nooree counsels clients on the negotiation of AI-focused agreements with the U.S. government and the rollout of federal and state-level regulations impacting the procurement and deployment of AI solutions on behalf of government agencies.

Nooree also counsels clients navigating the Foreign Military Sales (FMS) program and Foreign Military Financing (FMF) arrangements. Nooree has advised both U.S. and ex-U.S. companies in connection with defense sales to numerous foreign defense ministries, including those of Australia, Israel, Singapore, South Korea, and Taiwan.

In addition to his government contracts advising, Nooree assists clients with navigating federal Freedom of Information Act and state public records requirements, including objecting to a government agency’s proposed release of a company’s proprietary information.

In addition to his work within the firm, Nooree is the Secretary for the American Bar Association’s Section of Public Contract Law. He also previously served as the firm’s Fellow for the Leadership Council on Legal Diversity program.