The effects of the U.S. Foreign Military Sales (FMS) program in preserving the Defense Industrial Base

Abstract

The objective of this research is to investigate the impact that Foreign Military Sales (FMS) policy can have on the preservation of the Defense Industrial Base. A survey is utilized to gather information from five of the top ten defense contractors. This study concludes that FMS policy will continue to be shaped by U.S. foreign policy. The study identifies how the defense industry has been affected by recent draw downs and it describes arms transfers as an instrument of foreign policy based on United States national security interests. Additionally, offset agreements are analyzed as a contributory factor to the globalization of the arms industry. The study also identifies strategies the Government and the defense industry should use to facilitate the preservation of the Defense Industrial Base. The study recommends the Government review, streamline and liberalize arms transfer procedures. The Government can maintain the Defense Industrial Base by actively and aggressively supporting industry in the arms transfer process.