So last month I gave you all an overview of the FMS world that provides opportunities for contractors. I wanted to follow up this month with more information on some of the problems and issues that will come up in dealing with FMS.
One of the biggest problems is money. Some countries have very solid budget processes and once committed to a FMS case, funding flows easy and there are minimum issues in the country paying its bills. However, there are some countries that spend like drunken sailors on leave and have gotten into trouble paying their bills. Since some of the funds actually come from the US, these countries spend in anticipation of getting money from the US. So, if the budget process results in the country not getting what it anticipated in foreign aid, it can mess with contracts. A few years ago, my self and other contracting officers had contracts for all sorts of equipment for country where the country was so over committed on contracts they could not order new equipment. It impacted the existing contracts as options for work could not be exercised and in one case for repairs had to be stopped on aircraft.
The situation with the aircraft repair led to another issue, the repairs were being done in country, so what do you do with the contractor personnel who were working in the country? Since there was no funding the people had to be sent home with work incomplete. Now that caused a real political problem cause the country was unhappy with the idea that aircraft were sitting in hangers disassembled to some degree. The company wanted to stay and continue working but the CO had to say no, as there was direction to stop work till the financial situation was resolved. As you can see this turned into a real headache for the CO and the contractor.
Another issue is the safety and security of personnel in some countries. Protecting our troops and contractors from civil law is something the government has to be concerned with. When the USA had a large presence in Iraq, it became necessary to establish a Status of Forces Agreement (SOFA) It is the policy of the United States that U.S. Defense personnel should not be sent to foreign countries unless sufficient status safeguards are assured. They define the legal status of U.S. Department of Defense (DoD) personnel, activities, and property in the territory of another nation and set forth rights and responsibilities between the United States and the host government. The Department of State has overall responsibility for leading the U.S. government’s negotiation. The US has SOFAs with over 100 nations according to the State Department. So, when sending personnel always be aware of and familiar with the SOFA for that country.
Security in general is a big issue for contractors overseas. I have seen instances where the threat level was raised to the point that the State Department ordered US nationals to leave or stay at their own risk. In my own experience I had a contract where the issue of allowing contractor personnel in country to perform became a major disagreement between the government and contractor. The contractor did not want to go in country without certain protections but neither state or the country could provide those. When the FMS country could provide the protections, the contractor said he was unable to perform but still wanted compensation for the employees, claiming they were unable to be reassigned while they were waiting to be allowed back in country. It took almost a year to untangle that mess, and the negotiations were difficult.
The FMS world can be really easy when dealing with the more stable countries and regions of the world. If you find yourself contemplating bidding work for the USG that is for a FMS country it’s good to be aware of the potential issues that may arise. If you win a contract, it is important to keep your CO in the loop. He is your best protection from country personnel trying to get work done that is out of scope and helping with issues concerning money or safety.