DEFENSE SECURITY COOPERATION AGENCY
201 12th STREET SOUTH, STE 203
ARLINGTON, VA 22202-5408

MEMORANDUM FOR :

DEPUTY UNDER SECRETARY OF THE ARMY
(DEFENSE EXPORTS AND COOPERATION)
(DASA(DE&C)/SAAL-ZN)
DEPARTMENT OF THE ARMY

DEPUTY ASSISTANT SECRETARY OF THE NAVY
(INTERNATIONAL PROGRAMS)
DEPARTMENT OF THE NAVY

DEPUTY UNDER SECRETARY OF THE AIR FORCE
(INTERNATIONAL AFFAIRS)
DEPARTMENT OF THE AIR FORCE

DIRECTOR, DEFENSE LOGISTICS AGENCY

DIRECTOR, DEFENSE FINANCE AND ACCOUNTING SERVICE (DENVER CENTER)

SUBJECT :

Revised Cooperative Logistics Supply Support Arrangement (CLSSA) Policy (DSCA 05-23)

As part of our FMS transformation initiative, DSCA chartered a team to review and make improvements to the CLSSA program. This memorandum and attachments constitute the revised CLSSA policies. Except where noted, these policies are effective immediately. Some exceptions are made to accommodate changes in case management practices. The vast majority of deferrals are in light of ongoing and long-term transformation efforts, such as the Business Management Modernization Program (BMMP). Attached are the following:

• Attachment 1: New DoD Directive 2010.6. Section 4.3 of this Directive provides the departmental authority for the CLSSA program, under the direction of DSCA. (Note: The prior CLSSA Directive 2000.8 was cancelled.) The SAMM and DoD Financial Management Regulation (DoDFMR) will be updated accordingly.

• Attachment 2: New DoD Instruction 2000.ii. This DoD Instruction accompanies Attachment 1. It provides eligibility criteria and contains detailed implementation and execution procedures.

• Attachment 3: CLSSA Business Rules. One of the key outcomes of the CLSSA project team was to standardize as many aspects of the CLSSA program as possible, recognizing the systemic constraints that will exist until other transformation-related objectives are accomplished. This attachment provides the standardized business rules and practices in effect for CLSSA.

• Attachment 4: CLSSA Letter of Offer and Acceptance (LOA) Notes. As part of the standardization effort, this attachment furnishes the revised LOA Notes applicable to CLSSA. These Notes will be incorporated in future LOA documents (basic, amendments and modifications).

• Attachment 5: Future Improvements. This attachment identifies those features of CLSSA where implementation is deferred, pending deployment of future system and/or transformation deliverables.

• Attachment 6: CLSSA Team Members. This comprehensive project was entirely dependent upon the outstanding teamwork and professionalism of the individual team members listed here. I truly appreciate their superior contributions.

In summary, I am confident that these policies represent real change and improvements to our FMS program. Its implementation and widespread practice will further promote business process efficiencies and increase customer satisfaction. This policy will be posted on the DSCA web site (http://www.dsca.mil). Publications Section. Additionally, this policy will be revisited within two years to ensure its continued effectiveness and to gauge the timing of future improvements identified in Attachment 5.

The CLSSA team facilitator is Mr. David Rude, Business Deputy for Administration and Management. Should you have any questions, the process owner for CLSSA financial policies is Ms. Jan Rakickas, Financial Policy & Support Division, (303) 676-6172, Jan.Rakickas@dfas.mil. For CLSSA logistics policies, the process owner is Ms. Kathy Robinson, Policy Division, (703) 601-4368, Kathy.Robinson@dsca.mil.

Jeffrey B. Kohler
Lieutenant General, USAF
Director

ATTACHMENT :
As stated

CC :

Chairman, Foreign Procurement Group
Commandant, DISAM
OUSD (Comptroller)/ODCFO/A&FP&A

Department of Defense DIRECTIVE
Number 2010.6
November 10, 2004

Subject: Materiel Interoperability with Allies and Coalition Partners

References:

1. DoD Directive 2010.6 "Standardization and Interoperability of Weapon Systems and Equipment within the North Atlantic Treaty Organization," March 5.1980 (hereby canceled)

2. Section 2457 of title 10, United States Code

3. DoD Directive 5000.1. ''The Defense Acquisition System," May 12. 2003

4. DoD Instruction 5000.2, "Operation of the Defense Acquisition System," May 12. 2003

5. through (ab). see enclosure 1

1. REISSUANCE AND PURPOSE

This Directive:

1.1. Reissues reference (a) to provide DoD policies for materiel interoperability with allies and coalition partners in implementation of reference (b)

1.2. Along with references (c) and (d), provides DoD policy and responsibilities for materiel interoperability with allies and coalition partners.

1.3. Replaces 000 Directive 2000.8, DoD Directive 2000.9, DoD Directive 2010.8, DoD Directive 3100.3, DoD Directive 3100.4, DoD Directive 5100.27, and DoD Directive 5100.53 (references (e) through (k).

2. APPLICABILITY

This DoD Directive applies to the Office of the Secretary of Defense, the. Military Departments, the Chairman of the Joint Chiefs of Staff, the Combatant Commands, the Office of the Inspector General of the Department of Defense, the Defense Agencies, the DoD Field Activities, and all organizational entities in the Department of Defense (hereafter collectively termed to as the "DoD Components").

3. POLICY

It is DoD Policy that:

3.1 The Department of Defense may attain material interoperability with allies and coalition partners under reference(c). This means that systems, unites, and forces shall be able to provide and accept data, information, materiel , and services to and from other systems, units and forces and shall effectively interoperate with all U.S. Forces and those of allied and coalition partners.

3.2. Interoperability shall be accomplished by using joint, interagency, and multinational concepts, technologies, integrated architectures, information technology and national security systems. Interoperability shall also be accomplished by compliance with DoD Directive 4630.4 (reference (l)), DoD Directive 8000.1 (reference (m)), DoD Directive 8100.1 (reference (n)), DoD Instruction 8110.1 (reference (o)), DEPSECDEF Memorandum of March 22, 2004 (reference (p)), DEPSECDEF Memorandum f November 10, 2003 (reference (q)), and CJCS Instruction 3170.01D, March 12, 2004 (reference (r)).

3.3 The Department of Defense shall consider future military concepts for multinational operations in the acquisition of all materiel intended for use by U.S. Forces. These concepts may require allied and/or coalition forces to operate seamlessly, as part of a U.S.-led or supported coalition in a net-centric environment. In this environment, operational effectiveness shall depend increasingly on the ability of the United States, the allies and the coalition forces to share information rapidly in response to changing battlefield conditions. Therefore, the Department of Defense shall pursue interoperability and address export considerations with allies and coalition partners throughout the Defense Acquisition Management Framework under reference (d):

3.3.1. During the Concept Refinement and Technology Development phases of pre-systems acquisition, through international forums, personnel exchanges under DoD Directive 5230.20 (reference (s)), information exchanges under DoD Instruction 2015.4 (reference (t)), and studies, including the analysis of alternatives under reference (d).

3.3.2. During the Systems Development and Demonstration phase of systems acquisition, or earlier through:

3.3.2.1. The procurement of modification of commercially available products and technologies from international sources or the additional production or modification of allied military system or equipment under reference (c).

3.3.2.2. Cooperative research, development, and cooperative production under authorities, such as Section 2767 of title 22, U.S.C. (reference (u)), and Sections 2350a and 2358 of title 10, U.S.C. (reference (v)).

3.3.2.3. International cooperative testing, testing of foreign non-developed items, and reciprocal testing under Section 2796d of title 22, U.S.C. (reference (w)), Section 2350a(q) of title 10, U.S.C. (reference (x)) and Section 2350i of title 10, U.S.C. (reference (y)).

3.3.2.4. Programs providing interoperability fur coalition operations, such as Coalition Warfare.

3.3.3. During the Production and Deployment phase of systems acquisition through:

3.3.3.1. Cooperative production conducted with a partner nation under a cooperative international agreements and featuring a division of labor. Each partner produces parts of system and acquires other parts from partners. Final assembly may be conducted by one or more of the partners. Most cooperative production programs naturally evolve from earlier development phase agreements.

3.3.3.2. Foreign Military Sales (FMS) of military systems or equipment and coproduction involving the use of FMS procedures and commercial licenses to transfer to a foreign nation the ability to produce U.S. origin defense article. developed and fielded by the Department of Defense under the DoD 5105.38-M (reference (z)).

3.3.3.3. Direct commercial sale of military systems or equipment and licensed coproduction involving the use of munitions export licenses to enable U.S. companies to transfer to foreign governments or foreign companies the ability to produce U.S. origin defense articles under reference (z).

3.3.3.4. Purchases of foreign military systems or equipment.

3.3.4. During the Operations and Support phase of sustainment through cooperative logistics, including Cooperative Logistics Supply Support Arrangements (CLSSAs) and logistics support acquired or transferred under DoD Directive 2010.9 (reference (aa)).

3.4. North Atlantic Treaty Organization (NATO) commitments are imperative. The need for U.S. Forces to meet worldwide commitments does not diminish the importance of maximizing interoperability and standardization of systems within NATO by entering into cooperative projects under reference (v). The "NATO Alliance's Strategic Concept (reference (ab)), makes Alliance interoperability and standardization essential. NATO members and Partnership for Peace countries are likely to be future coalition partners

3.5. Reciprocal procurement Memorandum of Understanding (MOUs) with NATO member nations and other key allies and friends are international agreements intended to promote interoperability and standardization of military equipment, the exchange of defense technology consistent with respective national policies, and the most cost-effective and rational use of funds allocated to defense. Towards those ends, reciprocal procurement MOUs help procurement by each country from the other, emphasizing competition and access to each other's markets. Discriminatory barriers to purchase of supplies and services shall be removed to the extent mutually beneficial and consistent with laws, regulations, and international obligations.

4. RESPONSIBILITIES

4.1. The Under Secretary of Defense for Acquisition Technology and Logistics shall:

4.1.1. Advise the Secretary and the Deputy Secretary of Defense on U.S. materiel interoperability with allies and coalition partners.

4.1.2. Devise DoD research, development, and acquisition (RD&A), and program policies for interoperability and standardization, and provide guidance for implementation of these policies.

4.1.3. Coordinate U.S. positions on harmonization of NATO weapons needs and complementary schedules for new weapons development and production.

4.1.4. Coordinate with allies and coalition partners on their RD&A efforts to ensure standardization and interoperability of materiel.

4.1.5. Represent the United States as the National Armaments Director at the NATO Conference of National Armaments Directors (CNAD) and other appropriate international forums.

4.1.6. Ensure and monitor DoD representation in appropriate groups and subgroups of the CNAD. Representation shall be coordinated with the Department of State, through the Assistant Secretary of Defense (International Security Policy), on behalf of the Chairman of the Joint Chiefs of Staff, the Military Departments, the Assistant Secretary of Defense (Networks & Information Integration), and the other DoD Components, as appropriate.

4.1.7. Ensure that the Military Departments consider interoperability and standardization throughout the Defense Acquisition Management Framework under reference (d).

4.1.8. Assist the Military Departments and the other DoD Components in obtaining information on allied and coalition systems and subsystems.

4.1.9. Provide, in conjunction with the Military Departments, technical positions regarding the exchange of technology with allies and coalition partners, and oversight for ongoing programs involving the transfer of technology.

4.1.10. Consult with the Chairman of the Joint Chiefs of Staff on the interaction of interoperability and standardization, strategy, force objectives, and joint war fighting capabilities.

4.1.11. Review DoD acquisition policies and regulations and incorporate revisions to maximize, within the constraints imposed by law, the opportunity for sources in countries with which the United States has signed a reciprocal procurement MOU to compete with U.S. sources for DoD business.

4.1.12. Ensure that the Department of Defense administers the policies for all acquisition programs and activities outlined in this Directive.

4.1.13. Develop DoD logistic policies and guidelines that support and facilitate programs for materiel interoperability and standardization with allies and coalition partners.

4.1.14. Ensure appropriate representation of the United States at NATO and other international acquisition, technology, and logistics activities.

4.2. The Assistant Secretary of Defense (International Secretary Policy), under the Under Secretary of Defense (Policy), shall:

4.2.1. Coordinate overall DoD policy on multinational interoperability and standardization.

4.2.2. On matters concerning interoperability and standardization, act as the principal contact within the Department of Defense for the Department of State and other U.S. Government Agencies and appropriate allied and coalition partner countries and agencies and coordinate with those organizations.

4.2.3. Initiate action to change DoD policies, procedures, and regulations or laws that block or impede the achievement of multinational interoperability and standardization within NATO.

4.2.4. Monitor the political and economic factors that affect interoperability and standardization.

4.3. The Director, Defense Security Cooperation Agency (DSCA), under the authority, direction, and control of the Under Secretary of Defense For Policy, shall serve as the focal point for all requests for, and as the approval authority for FMS involving establishment of CLSSAs. The Director shall establish procedures for the implementation and administration of CLSSAs.

4.4. The Assistant Secretary of Defense (Networks and Information Integration) shall lead DoD efforts to achieve interoperable communications, command, and control with allies and coalition partners under references (I), (m), (n), (o), (p), and (q).

4.5. The Secretaries of the Military Departments shall:

4.5.1. Ensure that interoperability is considered in the basic conceptual approach in the development, production, and product improvement of all systems with a potential to be used in coalition operations.

4.5.2. Establish close and parallel relationships with NATO organizations and NATO allies for the developing of compatible doctrine and operational concepts. This include defining capability needs and materiel requirements and involves close collaborating in the acquiring of interoperable or standardized systems, subsystems, and follow-on logistic support.

4.5.3. Provide representation at appropriate groups under the NATO CNAD, the NATO Standardization Agency, the NATO Consultation Command, and Control Board, and other groups, as required, and provide Military Department coordination on interoperability and standardization matters developed within NATO. Proposed U.S. positions shall be coordinated with the appropriate DoD Components.

4.5.4. Provide representation, as required, under other international forums affecting interoperability and standardization and provide the Military Department coordination on matters developed within these groups. Proposed U.S. positions shall be coordinated with the appropriate DoD Components.

4.6. The Chairman of the Joint Chiefs of Staff shall:

4.6.1. Identify opportunities for and impediments to improved interoperability of U.S. Forces with allies and coalition partners.

4.6.2. Coordinate doctrine and operational concepts with those of our allies and coalition partners.

4.6.3. Ensure there is appropriate U.S. representation at NATO and other international military logistic meetings.

4.6.4. Ensure that the Combatant Commands throughout the world actively support the pursuit of interoperability and standardization with allies and coalition partners throughout the Defense Acquisition Management Framework under reference (d).

4.6.5. Validate those capabilities specifically designated to be interoperable with allies and coalition partners. Ensure that all Special Operations Forces (SOF) weapons systems capability needs are reviewed by U.S. Special Operations Command to ensure that SOF techniques, tactics or capabilities are not transmitted to governments or enemies sympathetic to the overthrow of the United States.

5. EFFECTIVE DATE

This Directive is effective immediately.

Paul Wolfowitz
Deputy Secretary of Defense

E1. ENCLOSURE 1
REFERENCES, continued

5. DoD Directive 2000.8, "Cooperative Logistics Supply Support Arrangements," February 12, 1981 (hereby canceled)
6. DoD Directive 2000.9, "International Co-Production Projects and Agreements between the United States and Other Countries or International Organizations," January 23, 1974 (hereby canceled)
7. DoD Directive 2010.8, "Department of Defense Policy for NATO Logistics," November 12, 1986 (hereby canceled)
8. DoD Directive 3100.3, "Cooperation with Allies in Research and Development of Defense Equipment," September 27, 1963 (canceled)
9. DoD Directive 3100.4, "Harmonization of Qualitative Requirements for Defense Equipment of the United States and Its Allies," September 27, 1963 (canceled)
10. DoD Directive 5100.27, "Delineation of International Logistics Responsibilities," December 29, 1964 (canceled)
11. DoD Directive, 5100.53, "U.S. Participation in Certain NATO Groups Relating to the Research, Development, Production, and Logistics Support of Military Equipment," July 29, 1967 (canceled)
12. DoD Directive 4630.5, "Interoperability and Supportability of Information Technology (IT) and National Security Systems (NSS)," January 11, 2002
13. DoD Directive 8000.1, "Management of DoD Information Resources and Information Technology," February 27, 2002
14. DoD Directive 8100.1, "Global Information Grid (GIG) Overarching Policy," September 19, 2002
15. DoD Instruction 8100.1, "Multinational information Sharing Networks Implementation," February 6, 2004
16. Memorandum, DEPSECDEF, "Information Technology Portfolio," March 22, 2004
17. Memorandum, DEPSECDEF, "Global Information Grid Enterprise Services (GIG ES) Core Enterprise Services (CBS) Implementation," November 10, 2003
18. CJCS Instruction 3170.0ID, "Joint Capabilities Integration and Development System," March 12, 2004
19. DoD Directive 5230.20, "Visits, Assessments, and Exchanges of Foreign Nationals," August 12, 1998
20. DoD Instruction 2015.4, "Defense Research, Development, Test and Evaluation (RDT&E) Information Exchange Program (IEP)," February 7, 2002
21. Section 27 and Section 2767 of title 22, United States Code
22. Sections 2350a and 2358 of title 10, United States Code
23. Section 65 and Section 2796d of title 22, United State. Code
24. Section 2350a(g) of title to, United States Code
25. Section 2350i of title to, United States Code
26. DoD 5105.38-M, "Security Assistance Management Manual," October 3, 2003
27. DoD Directive 2010.9, "Acquisition and Cross-Servicing Agreements," April 28, 2003
28. NATO "The Alliance's Strategic Concept" - Approved in the Meeting of the North Atlantic Council in Washington, DC, on 23 and 24 April 1999

Department of Defense INSTRUCTION
Number 2000.ii
29 AUG 2005
ASD(ISA)

Subject: Cooperative Logistics Supply Support Arrangements

References:

1. DoD Directive 2010.6, "Materiel Interoperability with Allies and Coalition Partners," November 10, 2004

2. DoD 7000.14-R, ''Financial Management Regulation," Volumes 11B and 15, current edition

3. DoD 4000.25-1-M, "Military Standard Requisitioning and Issue Procedures (MILSTRIP)," November 8, 2000

4. DoD 4500.9-R, "Defense Transportation Regulation," Part II, Cargo Movement, May 2003

5. DoD Directive 5530.3, "International Agreements," reissued February 18,1991

6. Sections 2752-2797 of title 22, United States Code

1. ISSUANCE AND PURPOSE

This Instruction provides procedures to implement reference (a) for Cooperative Logistics Supply Support Arrangements (CLSSAs) between the Department of Defense and the defense establishments of foreign Governments or international organizations, including, but not limited to members of the North Atlantic Treaty Organization.

2. APPLICABILITY AND SCOPE

The provisions of this Instruction:

2.1. Apply to the Office of the Secretary of Defense, the Military Departments, the Chairman of the Joint Chiefs of Staff, the Combatant Commands, the Office of the Inspector General of the Department of Defense, the Defense Agencies, the DoD Field Activities, and all other organizational entities in the Department of Defense (hereafter referred to as "the DoD Components").

2.2. Govern arrangements, agreements, guidance, and supplemental documents that support, define, or implement a cooperative logistics understanding between the Department of Defense and defense establishments of a foreign Government or international organization (included hereafter in the term "Purchaser").

3. DEFINITIONS

Terms used in this Instruction are defined in enclosure 1.

4. POLICY

It is DoD policy pursuant to DoD Directive 2010.6 (reference (a» that procedures shall be promulgated by the Director, Defense Security Cooperation Agency for use by the Heads of the DoD Components for the implementation and administration of CLSSAs.

5. RESPONSIBILITIES

5.1. The Director, Defense Security Cooperation Agency under the authority, direction, and control of the Secretary of Defense through the Under Secretary of Defense for Policy shall oversee the implementation and administration of CLSSAs in coordination with the Heads of the DoD Components.

5.2. The Heads of DoD Components shall adhere to the procedures for implementation and administration of CLSSAs established herein when negotiating, processing, or implementing CLSSAs.

6. PROCEDURES

6.1. The CLSSA program supports Purchaser orders for centrally stocked or centrally managed spare and repair parts of the defense systems common to the forces of a Purchaser and U.S. forces. Safes of equipment being phased out of the active inventory normally shall be conditional upon explicit understanding with the Purchaser that such support shall be limited and may be terminated. Purchasers shall not be authorized to order defense articles under the CLSSA program that the Department of Defense does not centrally stock or centrally manage. The CLSSA program provides deeper access into DLA stock.

6.2. Budget authority for CLSSAs shall be executed in accordance with DoD Financial Management Regulation, Volume 15 (reference (b)) Chapter 2. Records for reimbursement shall be maintained in accordance with the guidance in Volume 11B, Annex 1, reference (b). Charges associated with CLSSAs shall be assessed in accordance with instructions contained in Volume 15 and Volume 11B of reference (b). Financial records shall be maintained to determine the financial status for supplies under the CLSSAs. Status shall be recorded with the Defense Finance and Accounting Service-Denver.

6.3. The quality of support provided under CLSSAs to Purchasers shall be the same as that provided to U.S. forces within assigned Force Activity Designators (FADs). The goal of the Department of Defense is to provide uniform support for all military forces participating in the DoD Supply System. To prevent any detrimental effect on support of U.S. forces for authorized CLSSA items, Purchaser's orders received prior to the end of the augmentation period for each item shall not be satisfied from U.S. serviceable on-hand stocks that are below the reorder point. Instead, such orders shall be processed as a non-programmed order against the CLSSA case.

6.4. Item eligibility: CLSSA item eligibility is based on the Acquisition Advice Codes (MCs), which identify an item as centrally managed or centrally stocked. A listing of eligible AACs is provided at enclosure 2. Those categories of items not eligible under CLSSA must be processed by means other than on a FMSO II.

6.5. Noncompliance with CLSSA policies by a Purchaser shall result in the suspension of support under a CLSSA, until the noncompliance issue is resolved. Accordingly, Purchasers shall be encouraged to establish the necessary resources and infrastructure to support their CLSSA program.

6.6. Under normal circumstances, either party may terminate a CLSSA by giving a minimum of six months written notice. Additional information on terminating CLSSA programs is provided in paragraph 6.15., below.

6.7. Negotiations involving the sale of U.S. defense articles shall include full consideration of the Purchaser's operational use of such defense articles and include provisions for effective concurrent and follow-on logistics support. Effectiveness of follow-on spare and repair parts support can be increased through the use of CLSSA for many weapon system programs.

6.8. DoD business practices including those issued by DSCA, shall be used unless modifying these practices will significantly increase logistical readiness. Modifications must be approved by DSCA, in advance. Modifications may not be made if increased operating costs or adverse impact on support of U.S. forces will result. To be consistent with procedures by U.S. forces, Purchasers shall submit orders based on negotiated parameters.

6.9. DoD 4000.25-I-M and Part II of DoD 4500.9-R (references (c) and (d» shall be used to prioritize and systemize the issue and movement of CLSSA materiel.

6.10. Item records of supply transactions shall be maintained by Inventory Control Points, or other Military Department activities to allow the current status of the transactions to be available for determining equity negotiation and termination requirements. Records shall also be able to enable the determination of the share of excess items applicable to weapons systems being supported for which the Purchaser shall be held responsible. Demand records shall be reviewed before excess materiel is transferred to Property Disposal Activities, or sold at reduced prices. If stockage of excess items results from CLSSA demands, the Purchaser shall be notified in accordance with paragraph 6.16., below.

6.11. Forecasts of requirements and stock control of Working Capital Fund (WCF) centrally stocked, or centrally managed items, shall be based upon the following planning considerations:

6.11.1. Programmed CLSSA demands for centrally stocked, or centrally managed items, whose requirements are computed by demand-related methods shall be included in the demand database of the computational system in forecasting CLSSA requirements. For centrally stocked or centrally managed items whose requirements computation relates failures, repairs, and condemnations to past and future activity programs, CLSSA requirements shall be computed with the Purchaser's program information included in the computational system's database or other appropriate data sources. Initially, new CLSSA programs shall be based on Military Department and Purchaser estimates and adjusted according to meet actual demand trends.

6.11.2. All CLSSAs shall involve the Purchaser's investment into the U.S. inventory. The initial investment is based on a defined list of items (also known as the equity list or initial support list) for system(s) identified by the Purchaser. Items that are not included on this list are not part of the CLSSA program and should not be ordered on the CLSSA case, unless the list is modified to include those items, or the Military Department provides prior approval for the item to be purchased in the CLSSA program.

6.11.3. The Secretaries of the Military Departments shall fill FMSO II and U.S. forces' orders to ensure that no party is unfairly supported at the expense of other claimants of the materiel.

6.11.4. FMSO I cases provide for an investment composed of a fixed percentage of the total estimated programmed requirement applicable for all Purchasers, as determined by DSCA in coordination with the Secretaries of the Military Departments. Increases to the FMSO I and FMSO II case values are necessary when the Purchasers requires a higher level of supply effectiveness, or have longer procurement lead-times, or represent a significant increase in complexity for the Purchasers. In these instances, the FMSO I investment shall be synchronized with the FMSO II projected materiel requirements of the item(s) or system(s) being supported.

6.11.5. All non-programmed CLSSA orders shall be excluded from the demand base of the respective computational systems. If the issue of an item to meet these FMS demands results in the inventory being at or below the reorder point, the requisition shall be placed on backorder. The requisition shall be filled when on-hand serviceable stocks are above the reorder point, or filled through procurement.

6.11.6. If the Purchaser's actual orders are below the estimated programmed demand, excess stock may result. This excess stock is the responsibility of and chargeable to the Purchaser. CLSSA drawdown of excess stocks shall be reviewed annually, or when any established funding thresholds are met. Purchaser liability exists to the extent that stock levels exceed demand levels. The Secretaries of the Military Departments shall exercise either a cash or materiel settlement upon executing a CLSSA drawdown.

6.12. CLSSAs are negotiated and implemented by the U.S. Implementing Agencies using FMS Letters of Offer and Acceptance (LOAs). CLSSA terms, conditions and procedures applicable to each FMSO I or FMSO II case will be attached to the LOA document, or incorporated by reference. CLSSAs are not international agreements within the scope of DoD Directive 5530.3 (reference (e)).

6.13. When a FMSO I case is accepted and implemented, the Secretary of the Military Department concerned establishes a financial equity for the country in the Military Department's WCF for centrally stocked or centrally managed items in the U.S. logistics system. The Secretary of the Military Department shall use this equity investment for procurement to provide appropriate augmentation of DoD stocks of centrally stocked or centrally managed items, in preparation for Purchaser orders. These items are used to sustain Purchaser stocks supporting the defense systems identified in the FMSO 1. CLSSAs are system-specific; items for those systems are typically ordered from the appropriate Military Department. In those rare instances where a small number of items are managed by a different Military Department, and the preparing Military Department does not have an inventory interest, those items may be processed as non-programmed CLSSA orders. The financial equity required for DLA stocks shall be collected, maintained, and managed by the respective Military Departments.

6.14. A procurement lead-time period shall elapse between the time the FMSO I is implemented and DoD stock augmentation is completed. A FMSO II case is usually established concurrently with the .FMSO 1. FMSO II orders from the Purchaser shall not be processed as a programmed CLSSA order until DoD stock augmentation for that item is complete.

6.15. CLSSA cases provide support from the U.S. logistics system. Under unusual and compelling circumstances when the national interest of the United States so requires, the Department of Defense reserves the right to cancel or suspend all or pan of any CLSSA-related LOA at any time prior to the delivery of the defense articles or performance of service connected with such arrangement. In such cases, paragraph 1.4 of the LOA Standard Terms and Conditions applies. Pursuant to Section 42 of the Arms Export Control Act (AECA) (reference (f)), each contract for sales entered into under sections 21 and 22 of the AECA in support of a CLSSA shall provide that such contract may be canceled in whole or in part, or its execution suspended, by the Department of Defense at any time under unusual or compelling circumstances if the national interest so requires. The Purchaser may cancel a CLSSA-related LOA with respect to any or all of the items provided there under at any time prior to the delivery of defense articles or performance of services provided in connection with such arrangement. As appropriate, the Department of Defense or the Purchaser shall be responsible for termination costs or other costs related to cancellation or suspension in accordance with paragraph 1.4 or 2.1 of the Standard Terms and Conditions of the LOA. Unless a party invokes paragraph 1.4 or 2.1 of the LOA, either party to a CLSSA may terminate by giving the other party a minimum of six months written notice.

6.16. Upon issuing or receiving notice of a request to terminate CLSSA support, the FMSO I case shall be renegotiated to adjust the dollar level of investment to the most recent dollar level of demand. After all termination issues are resolved, the Secretary of the Military Department involved shall prepare and forward a termination register to the Purchaser. The register shall list by line item the Purchaser's pro rata share of all quantities above the level of the Military Department requirements that are applicable to the weapons system being supported. The Purchaser shall be given the opportunity to purchase these stocks during the period between notification of termination and the termination date by submitting an order coded to show non-recurring demand. On the termination date, the Purchaser shall be held liable for all remaining materiel that may not be absorbed by the Military Departments. The Purchaser shall be charged for any remaining quantities and shall have the option of liquidating by withdrawing the items or by requesting the Secretaries of the Military Departments to dispose of them on the Purchaser's behalf. For materiel that maybe absorbed, the Secretaries of the Military Departments shall refund the materiel value. The Purchaser shall be provided with the proceeds of any disposal action less the administrative cost of the disposal. No refund shall be made on the administrative charge.

7. EFFECTIVE DATE

This Instruction is effective immediately.

Peter W. Rodman
Assistant Secretary of Defense for
International Security Affairs

E1. Definitions

E.1.1. Augmentation Period: The period of time required to establish or re-establish the prerequisite inventories within the U.S. DoD supply system. This period is tied to the procurement lead time for each individual item.

E.1.2. Centrally Stocked Or Centrally Managed: An item of materiel subject to DoD inventory control point (wholesale level) management.

E.1.3. Cooperative Logistics Supply Support Arrangement (CLSSA): An agreement between a DoD Component and a Purchaser setting the terms and conditions under which the Department of Defense shall provide supply support of common weapons systems on an equal basis with U.S. forces in accordance with a country's Force Activity Designator (FAD), assigned pursuant to DoD 4140.1-R and the Uniform Materiel Movement and Issue Priority System (UMMIPS).Such agreements are established through Foreign Military Sales (FMS) Letters of Offer and Acceptance (LOAs), consisting of two Foreign Military Sales Orders (FMSOs), FMSO I and FMSO II.

E.1.4. FMSO I: An FMS case that provides an equity investment for defense articles to support a Purchaser's anticipated requirement in the DoD inventory. The Military Department uses this equity investment to procure additional levels of centrally stocked or centrally managed items, in preparation for Purchaser orders.

E.1.5. FMSO II: An FMS case that provides for a Purchaser's orders procured under the CLSSA program.

E.1.6. Cooperative Logistics Supply Support Arrangement Programmed: Programmed requirements are forecasted on a FMSO I case initially or after the augmentation period elapsed, and ordered on a FMSO IT case at a quantity below the forecasted level.

E.1.7. Cooperative Logistics Supply Support Arrangement Non-Programmed: Quantities beyond the programmed quantity are non-programmed. Requirements not forecasted or ordered erratically by the Purchaser that are issued up to or below the Inventory Control Point (ICP) reorder point if U.S. forces are not impacted. It may also be supported through contract or procurement action, Direct-Vendor-Delivery, or backordered and supplied through a future contract delivery. If none of these options are available, the requirement may be passed to a commercial buying service. Also includes items not centrally stocked or centrally managed.

E2. List of CLSSA-Eligible AACs

A - Service/Agency regulated
B - ICP regulated
C - Service/Agency managed
D - DoD integrated/managed
E - Other service managed
G - GSN Civil agencies
H - Direct vendor delivery (DVD)
M - Restricted requisitions/major overhaul w/depot capability
Q - Bulk petroleum products
V - Terminal Item (stocked)
Z - Insurance Item

CLSSA PROGRAM: BUSINESS RULES

A main outcome of the CLSSA project team was to standardize as many aspects of the CLSSA program as possible. This provides the standardized business rules and practices in effect for CLSSA. Unless otherwise noted, these business rules are in force immediately.

Section 1: FMSO I Process

Section 2: FMSO II Process

Section 3: Other Program Features

Section 4: CLSSA Item Eligibility

MANDATORY CLSSA-UNIQUE LOA NOTES

Note: MILDEPs are responsible for adding these notes into DSAMS.

SECTION 1: FMSO I LOA NOTES

Points of Contact

Administrative Charge

CLSSA FMSO I Purpose

Stock Augmentation

Financial Summary

Associated FMSO II LOA

SECTION 2: FMSO II LOA NOTES

Points of Contact

CLSSA Requisitioning

Force Activity Designator (FAD)

Supply Exclusions

Support Availability

Associated FMSO I LOA

Replacement FMSO II LOA

CLSSA PROGRAM: FUTURE IMPROVEMENTS

The CLSSA policies announced in this package implement a series of critical improvements to the CLSSA program's management and operations. However, some of the improved efficiencies are dependent on future system changes and transformation-related efforts. The following table identifies those placeholders. DSCA will advise as individual elements listed below are implemented.

CLSSA PROJECT TEAM MEMBERS

DSCA

• Berg, Pamela (DBO/CFM)
• Clelan, John (DISAM)
• Freedenthal, Chester (CIO/IT)
• Hawkins, Joanne (DISAM)
• Robinson, Kathy (STR/POL)
• Rude, David (DBO/ADM)
• Todd, Ronald, LtCol, USAF (OGC

DFAS

• Weaver, Dixon (ADYK/DE)

DLA

• Kimberlin, Linda (J-4) OUSD(COMPT)/ODCFO
• Allen, Becky (A&FP&A)

ARMY

• Barr, William (HQDA/DASA(DE&C)
• Cox, Marty (USASAC)
• Wehde, Eric (AMSAA)

NAVY

• Molyneaux, David (NAVICP-OF)
• Spolowich, Stan (NAVICP-OF)

MARINE CORPS

• Baggett, Ron

AIR FORCE

• Chico, Rita (SAF-FMBIS)
• Crist, Connie (AFMC)
• Law, Jeffrey (AFMC)
• Snyder, Cathy (ASC)
• Spires, Beverly (AFSAC)

BRITISH EMBASSY

• Abbott, Joe (Defence Staff)

GOVERNMENT OF CANADA

• Nelson, Bud (NDHQ)