28 January 2003

By Douglas Harpel, DSD's Washington Correspondent

DSD's Washington Correspondent recently sat down with US Air Force Colonel Linda Palmer, Director of the Foreign Comparative Test Programme to discuss the programme and the opportunity it presents for allied industry to penetrate the US defence market.

Since its inception in 1980, the Office of the Secretary of Defense (OSD) Foreign Comparative Testing (FCT) Programme has provided a means for promising foreign defence items from 23 countries to be evaluated for potential acquisition by the US Department of Defense (DoD).

OSD's objective in funding the FCT programme - to the tune of $30-$35 million annually - is to leverage promising non-developmental items (NDI) to accelerate the acquisition process and to avoid duplicative development costs. "Our foremost objective," according to Colonel Palmer, "is transitioning tested systems to the warfighter."

According to the FCT Programme Office, by promoting competition and leveraging previous development and testing, many FCT projects have reduced the total ownership cost of military systems, cutting overall acquisition and support expenditures while enhancing standardisation and interoperability, improving cross-Service support, and promoting international co-operation.

System & Technology Focus

While the primary focus of the FCT programme is on the evaluation for US procurement of foreign-fielded non-developmental items (NDI) such as the German FOX NBC Reconnaissance System, the FCT programme also provides an important channel to US sponsors for the assessment of systems "in the last stages of development" as well as for the evaluation of technologies that improve the capability of current mission critical US systems.

During Operation Desert Storm, US forces found that the engine blades of MH-53 Sea Stallion helicopters were badly corroded and damaged by sand, resulting in significantly degraded performance. The successful FY1997 FCT of a Russian (PRAD) titanium nitride engine blades coating technique has since led to the provision of the MH-53 fleet with improved performance and increased lifespan.

A follow-on FCT project, again involving promising Russian and Canadian technology to provide a high-temperature protective coating for gas turbine engines, was approved for funding in FY2003.

Authority & Approach

The FCT programme is administered by the Deputy Undersecretary of Defence for Advanced Systems & Concepts (DUSD(AS&C)) and is funded outside of the Military Service budgets. As such, the FCT budget represents a separate "pot of money" for the competitive access of the Services and SOCOM.

Each year the Military Services and US Special Operations Command (SOCOM) nominate projects via formal proposal to the FCT Programme Office for funding consideration. The OSD Staff screens the proposals to ensure:

• The proposed NDI addresses valid requirements;
• A thorough marketing survey was conducted to identify all potential contenders; and
• The sponsoring organisation has developed a viable acquisition strategy.

To the first point, FCT projects must address an existing operational requirement of the sponsor.

On the second, where a thorough market survey, advertised through the Federal Business Opportunities process, reveals a viable domestic alternative, the sponsoring Service must provide funds to test the alternatives, while FCT can fund the evaluation of the foreign candidates.

Lastly, and this is perhaps the key to the abiding success of the program, the FCT sponsoring organisation must have developed a plan and committed the Service/SOCOM outyear resources to actually fund the procurement of items that test successfully.

FCT project proposals that meet these three criteria are then evaluated and prioritised by an OSD-level Review Committee of civilian and military experts.The following timeline reflects the normal FCT submittal, review, and approval cycle.

SUMMARY PROPOSALS TO OSD	DRAFT PROPOSALS TO OSD	FINAL PROPOSALS TO OSD	OSD REVIEW COMMITTEE	PROJECTS APPROVED & FUNDED
DEC	MAR	1 MAY	JUN-JUL	OCT-NOV

The FCT Programme Office then aligns these priorities against available funding and notifies Congress of the intent to fund new and continuing projects.Approved projects are normally funded for one or two years.The sponsoring organisation obtains, tests, and evaluates the items selected with the explicit goal of procuring the items "if they meet the requirements of and provide best value to the sponsor."

Current programmes - new and ongoing for FY03 - are at www.acq.osd.mil/fct/News_03.pdf.

Project funding depends on available resources and competition.Rejection of a proposal is not necessarily permanent, and proposals are sometimes refined and submitted more than once. One "persistence pays" example can be found in the current (FY03) FCT evaluation of a Deployable Instrumentation for Marine Air Ground Task Force Training (MAGTF) system provided by RUAG of Switzerland and Saab Training Systems of Sweden. According to the FCT programme office, this proposal was approved for funding upon its third submittal.

The Track Record

According to Colonel Palmer and other advocates, the FCT programme is inaccurately maligned as simply a means for the US Government to evaluate allied technologies and systems.The proof that FCT does exactly what it purports is found in its results.

Specifically, since 1980s, OSD funded 473 projects and has completed 407 to date. Of the 407 evaluations, 214 (52%) were found to meet the sponsor's requirement. Of these 214 qualified systems, 140 (65%) have thus far led to procurements worth approximately $5.9 billion in FY03 dollars.

"And the more recent story is even better than that," insists Colonel Palmer.She notes that in more recent years a more refined and detailed proposal vetting process has resulted in better success. "We are being more selective, and the trends are going in the right direction. Since 1995, the procurement rate of those tested systems meeting the Services' need is nearly four out of five."

Aside from the obvious RSI (Rationalisation, Standardisation, and Interoperability) advantages inherent in the US adoption of NATO-manufactured systems, the FCT Programme most certainly pays its way from the perspective of cost-effectiveness. According to the most recent numbers, with a cumulative OSD investment of about $849 million, the FCT Programme has realised an estimated RDT&E cost avoidance of $4.2 billion.

Getting Started

Foreign industry clearly plays a key "push" role in bringing their products to the attention of US military users and the FCT Programme Office. Likewise, US users "pull" systems and technologies from abroad when there are available and known. Colonel Palmer notes that more than one FCT has been the end result of a US serviceman involved in coalition operations seeing an allied system in operation and saying "I need one of those."

Yet another source of candidate programmes comes from the FCT office itself. According to Colonel Palmer, FCT representatives attend defence trade shows and visit industry in allied and friendly nations looking for promising products that meet unaddressed needs.

The outreach efforts of the FCT Program Office notwithstanding, it comes as no surprise that the burden of "salesmanship" is on industry itself to market its products to potential users. In most cases, business development officials and their U.S. advisors are keenly aware of where their U.S. military customers/users are and the best means to access them.

What does come as a surprise to many allied country marketers is that some U.S. military customers/users are unaware of, or do not fully appreciate the potential contribution that the FCT program can make towards a system evaluation. It is not uncommon, as a result, for foreign industry and/or their U.S. Embassy officials to assist their would-be sponsors in accessing the FCT program office and even in "teeing up" FCT proposals for submittal. In fact, the FCT proposal application can be readily downloaded from the FCT Program Office website at www.acq.osd.mil/fct/forms.htm.

Secrets to Success

With in excess of 100 competing FCT concepts in December reduced by half to roughly 50 final proposals in May and halved again (at least) in the review and award process, increased competition for FCT funding dictates that industry and their US Government-sponsoring organisations keenly focus their proposals to ensure success.

According to Colonel Palmer: "The secret to success, if there is one, is convincing OSD and the warfighting community of the benefit of the system to the warfighter on a schedule and at a cost that we can afford. Success will depend on having a very well-planned project that is both achievable and affordable."

Securing the solid support of the Service sponsor is clearly critical to success. In addition to evidencing "POM'ed" procurement dollars if the system meets established requirements, successful sponsors often bring their own resources to the project. Sometimes this contribution is in cash, but more often is the provision of testing assets, personnel, travel allowances, etc. Such in-kind contributions not only make the proposed projects more affordable for OSD, but, Colonel Palmer notes, "they also imply the type of strong user support and involvement that make for successful tests and that are more likely to lead to eventual system acquisition."

Along these lines, having multiple Service sponsors for an FCT project also increases the attractiveness of the project to OSD.According to Palmer, all else being equal, "having more than one sponsor is attractive to us, as it shows that the system is truly needed and therefore more likely to be procured."

An example of the benefit of having more than potential end-user for an FCT candidate can be found in the 40mm practice grenade. Beginning in 1998 the Army tested a training grenade. Based on the successful FCT evaluation, the Marine Corps is now procuring the system that it regards as more reliable, more effective, and more environmentally friendly than the systems it replaced. According to Colonel Palmer: "We spent $1.08 million on the test and the Marine Corps has saved a total of $60 million. That's a good return on investment."

Foreign industry and Governments can also help their chances in the FCT proposal vetting process.

Foreign contractors can contribute or provide low-cost leases on test articles to OSD. For their part, foreign governments, under government-to-government agreements, can make available validated testing results. According to Colonel Palmer, one critical FCT evaluation question that sponsors must answer is whether they have requested all available test data for a system. "We save money by doing this. As long as we understand the procedures, we don't insist on testing everything all over again."

Although there is generally a fairly even distribution of FCT programme funds between the Military Services and SOCOM, Colonel Palmer notes that this is not necessarily by design. "We don't strive to balance the selections on a year-to-year basis. We fund those projects that we believe will give us the most successes."

Colonel Palmer cites roughly the same philosophy with respect to the national dispersion of FCT awards, noting that the programme does not seek to select a certain number or value of projects from any given nation. "Here again, we look at the projects on a case-by-case basis, assessing the quality of the proposal, its costs, and its likelihood for success."

While the FCT does not "consciously seek" any particular geographic breakout, Palmer notes "the people from the international co-operation arena [within OSD] tend to keep a close eye on these things."

So what is the secret to successful entry into the FCT program? In addition to a great product that meets a pressing need in a timely and affordable fashion, discriminators in the FCT proposal vetting include: strong (and if possible redundant) US sponsor support, meaningful industry and Government in-kind contributions, and active Embassy interest.

REF XQQFS

editor@defence-data.com

Copyright(c) 1996 - 2003 Defence Data Ltd. All rights reserved. Reproduction in whole or in part in any form or medium is prohibited except as provided in the Conditions of Use.The Defence Data logo is the trademark of Defence Data Ltd. Defence Systems Daily, and DSD, are the trademarks of Defence Data Ltd. By using this Web Site, you agree to all of the Conditions of Use.