Design and Construction Services
DC
SA
No
Permanent
Section 21 of the Arms Export Control Act (AECA) (22 U.S.C. 2761), as amended
Section 29 (AECA) (22 U.S.C.2769) Foreign Military Construction Sales
Section 61 of the AECA, as amended (22 U.S.C. 2796)
10 U.S.C. 2801(a), Department of Defense Military Construction
10 U.S.C. 2802 Military Construction Projects
Countries determined eligible by the President of the United States for Foreign Military Sales
Provides:
- Design and Construction Services for via Foreign Military Sales
DC.1.1. This guidance is for Implementing Agencies (IAs) who provide Foreign Military Sales (FMS) design and construction services to foreign partners on U.S. military installations via Letters of Offer and Acceptance (LOA)
DC.3.1. Department of State (State), Bureau of Political-Military Affairs, Office of Regional Security and Arms Transfers. State Bureau of Political-Military Affairs, Office of Regional Security and Arms Transfers (State (PM/RSAT)) reviews, prioritizes, and provides guidance on funding and Letters of Requests (LORs).
DC.3.2. Office of the Deputy Assistant Secretary of Defense for Plans and Posture. The Deputy Assistant Secretary of Defense (DASD) for Plans and Posture (P&P)reviews and approves Technical Arrangements for Foreign Military Sales (FMS) design and construction
DC.3.3. DoD Office of General Counsel for International Affairs. The International Affairs division of the Office of General Counsel for International Affairs (OGCIA) is responsible for legal advice and services in the broad area of international and national security affairs that include FMS design and construction.
DC.3.4. Defense Security Cooperation Agency. Provides policy guidance to the Security Cooperation Community. DSCA receives requests for FMS design and construction services and coordinates supporting documents (i.e., Technical Arrangements) within the interagency.
DC.3.5. Military Departments. The Military Departments (MILDEPs) identify the need for design and construction Services under FMS. They send Letters of Requests and Technical Arrangements for design and construction services to DSCA and execute the Letter of Offer and Acceptance (LOA).
DC.3.6. Partner Nations. International Countries and Organizations that use the FMS process to acquire goods and services (i.e. Design and Construction).
DC.4.1. Foreign partners may require services to construct dedicated facilities to receive aircraft training under a Letter of Offer and Acceptance (LOA) at a U.S. military installation in the United States. Under 10 U.S.C. 2802 Military Construction Projects, the United States Government may not carry out construction projects on U.S. military installations without specific statutory authority. Therefore, to execute construction projects on U.S. military installations under a foreign military sales (FMS) case, these projects must be outside the scope of activities considered military construction (MILCON) under U.S. law. Authority provided by law to carry out a military construction project includes authority for:
- Surveys and site preparation.
- Acquisition, conversion, rehabilitation, and installation of facilities.
- Acquisition and installation of equipment and appurtenances integral to the project.
- Acquisition and installation of supporting facilities (including utilities) and appurtenances incident to the project; and
- Planning, supervision, administration, and overhead incident to the project.
DC.4.1.1. For design and construction services to be considered for a given LOA, Pre-Letter of Request (LOR) and LOR requirements must be met.
DC.4.2. Pre-LOR Requirements. Implementing Agencies (IAs) must consider design and construction needs as part of a total package approach when conducting pre-LOR engagements with Partner Nations for training that would occur in the continental United States (CONUS). Once the need for facilities, including infrastructure, are identified, the IA should notify the DSCA (Office of International Operations (IOPS)) and the selected DoD Construction Agent as a pre-LOR action. See Table C9.T2a. for Pre-LOR case related activities.
DC.4.3. LOR Requirements. Partner Nations should identify 1) the desired DoD construction agent in its LOR for FMS design and construction services in accordance with DoD Directive (DoDD) 4270.5 “Military Construction”; 2) the proposed method of financing; and 3) whether Price and Availability (P&A) data, a Letter of Offer and Acceptance (LOA), an LOA Amendment, or LOA Modification is desired. See Figure C5.F14., for design and construction services-related requirements.
DC.4.4. Letter of Offer and Acceptance. Section 21 of the Arms Export Control Act (AECA) (22 U.S.C. 2761), as amended, authorizes design and construction services to eligible Partner Nations and international organizations so long as such Partner Nations and organizations pay the full cost for those services to the United States. Design and Construction services are offered under FMS procedures using an LOA. IAs may provide FMS design and construction services on DoD-owned property via a discrete line(s) on an LOA for design and or construction services to construct, renovate, or repair facilities on a U.S. military installation. Any changes to existing case lines to accomplish these activities will require an LOA Amendment.
DC.4.5. Exceptions to Policy. Exceptions related to FMS design and construction services will be considered on a case-by-case basis in accordance with Section C6.7.5.
DC.4.6. Letter of Offer and Acceptance Notes. LOA notes must include FMS design and construction services being provided on the LOA. The note must also include the name or organization acting as the construction agent and convey the associated line note for Design and Construction activity is contingent upon conclusion of a Lease, Contribution agreement, or a Technical Arrangement that conveys primary operational use and access of DoD-owned U.S. military installation facilities pursuant to 10 U.S.C. 2802 Military Construction Projects, for construction of required facilities by the Implementing Agency. See Appendix 6 for LOA note language. Only Partner Nation funds may be used for FMS design and construction services on DoD U.S. military installations. See Table C9.T2a. for allowable LOA case funded activities for design and construction.
DC.4.7. DoD Construction Agent Case Execution, Reporting and Closure. DoD Construction Agents are responsible for reporting status of case execution and closure in alignment with existing processes and procedures for traditional FMS programs. Design and Construction case closure is performed in accordance with normal case closure procedures in Appendix 7.
DC.4.8. Design Services and Construction Mechanisms. There are three legal mechanisms by which DoD may provide FMS design and construction services on U.S. military installations pursuant to Section 61 of the AECA (22 U.S.C. 2796), as amended, 10 U.S.C. 2608 Acceptance of Contributions for defense programs, projects, and activities; Defense Cooperation Account, and DoDD 4270.5, respectively:
- A lease agreement
- A technical arrangement or
- A contribution (gift)
DC.4.8.1. Obligational Authority under an LOA will not pass to the IA without a signed arrangement with the Partner Nation documenting the use of one of these legal mechanisms, the required initial deposit, and a signed and implemented LOA with the Partner Nation.
DC.4.9. Agreements.
DC.4.9.1. Lease Agreements. The IA may carry out FMS design and construction services on U.S. military installations by leasing DoD-owned property to the foreign partner under Section 61 of the AECA, as amended (22 U.S.C. 2796). Lease agreements for DoD-owned property shall be for a specified period which may not exceed five years, and a specified period required to complete major refurbishment work. Such a lease shall provide the Partner Nation with sufficient access to, and use of the leased DoD-owned property that effectively removes any subsequent design or construction services from the purview of the Military Construction authorities. Under the lease, no U.S. entity may occupy or take title of the leased DoD-owned property unless the lease has expired or been terminated. The IAs are responsible for preparing leases using the Defense Security Assistance Management System (DSAMS). For lease format guidance, see Appendix 8, Leases of Defense Articles. Any defense articles or services that are necessary to support the lease will require a separate FMS case.
DC.4.9.2. Technical Arrangements. In cases where a lease is not executable or desirable, the IA may enter into a non-legally binding Technical Arrangement (TA) to grant the foreign partner primary operational access and use of specific areas and/or facilities on a U.S. military installation, pursuant to 10 U.S.C. 9013 Secretary of the Air Force. The TA clarifies the procedures the United States and Partner Nation must follow to fulfill responsibilities under the FMS-design and construction services case. The TA must:
- Be consistent with the terms and conditions of any other applicable agreements or arrangements between the U, S. military installation and the Partner Nation that address provisional services and/or access and use, as well as the applicable LOA.
- Delineate the authorization duration of the Partner Nation’s presence on the DoD U.S. military installation.
- Identify the specific facilities and locations to which the provision of primary operation access and use apply.
- Describe permissible activities at those facilities and locations after construction including improvements and maintenance, as well as the necessary degree of primary access and use of the facilities; and
- Set forth the Partner Nation’s fiscal and other responsibilities in accordance with the applicable LOA.
DC.4.9.3. Technical Arrangements Termination. If the TA is terminated prior to the completion of the specified facilities listed in the TA, the DoD reserves the right to either (1) assume ownership of any improvements or any new facilities or 2) request removal of any improvements, demolition of any new facilities and reconstitution of the area at a cost to the IA prior to program closure. No residual value will be paid to the Partner Nation for any facilities fully or partially constructed pursuant to the TA or the LOA. If the U.S. elects, all improvements, and any new facilities shall revert or transfer to the U.S. automatically and the IA will execute any documentation reasonably requested by the U.S. to confirm transfer or reversion and be free and clear of liability. Upon TA termination, the corresponding LOA must be amended to remove the provision of any future design and construction services to the Partner Nation.
DC.4.9.4. Contributions. Acceptance of contributions (gifts) under 10 U.S.C. 2608 “Acceptance of Contributions for defense programs, projects, and activities; Defense Cooperation Account” requires the Partner Nation and the IA to sign a Memorandum of Understanding (MOU) to document their intent to contribute and accept DoD-owned property pursuant to 10 U.S.C. 2608 after agreeing to provide FMS design and construction services per Section 21 of the Arms Export Control Act (AECA) (22 U.S.C. 2761), as amended, via an LOA. Facility ownership transfers to the U.S. after services completion.
DC.4.9.4.1. Regarding the MOU it must:
- Be legally non-binding and non-obligating for both parties,
- Describe the intentions, roles, and responsibilities of both parties,
- Delineate the effective date, authorized duration, governance, funding, and reporting and,
- Be signed by both parties.
DC.4.9.4.2. Any contribution of DoD-owned property received under 10 U.S.C. 2608 may be:
- Retained and used by the Department of Defense in the form in which it was donated,
- Sold or otherwise disposed of upon such terms and conditions and in accordance with such procedures as the Secretary of Defense determines appropriate; or
- Converted into a form usable by the Department of Defense.
DC.5.1. The IA should follow established thresholds for 36(b) Congressional Notification for Construction and Design Services in Table C5.T13.
DC.7.1. Contribution (gift) Reporting Requirement. Contributions accepted by the Secretary of Defense (SECDEF) must be reported to Congress during the preceding two fiscal quarters for DoD-owned property valued at more than $1M per 10 U.S.C. 2608(e).
DC.7.2. Oversight. FMS construction, repair, or renovation of facilities on U.S. military installations is subject to oversight of the Office of the Secretary of Defense (OSD). The Office of the Deputy Assistant Secretary of Defense (DASD) for Plans and Posture (P&P) and DoD Office of General Counsel (OGC) for International Affairs (IA) will review and coordinate on proposed TAs that contemplate construction based upon grant of primary access and use of areas and facilities to a foreign nation on U.S. military installations in the United States. The IAs should coordinate proposed TAs with DSCA as the initial reviewer. DSCA OGC will coordinate with DASD (P&P) before negotiations with the partner and after completion of negotiations. Any changes to the intent of the TA after the initial approval, will need DASD (P&P) approval.
DC. Design and Construction Services Authority/Appropriation List
Section 21 of the Arms Export Control Act (AECA) (22 U.S.C. 2761), as amended | The basic U.S. law providing the authority and general rules for the conduct of Foreign Military Sales and commercial sales of defense articles, defense services, and training. |
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Section 29 (AECA) (22 U.S.C.2769) Foreign Military Construction Sales | 22 U.S.C.2769 is a section of the Arms Export Control Act that authorizes the president of the United States to sell design and construction services to any eligible foreign country or international organization. The country or organization must agree to pay in United States dollars not less than the full cost to the United States Government of furnishing such services. |
Section 61 of the AECA, as amended (22 U.S.C. 2796) | The President may lease defense articles in the stocks of the Department of Defense to an eligible foreign country or international organization if he determines that there are compelling foreign policy and national security reasons for providing such articles on a lease basis rather than on a sales bases under this chapter. Each lease agreement under this section shall be for a fixed duration of not to exceed five years and shall provide that, at any time during the duration of the lease, the President may terminate the lease and require the immediate return of the leased articles. |
10 U.S.C. 2801(a) Department of Defense Military Construction | The term "military construction" as used in this chapter or any other provision of law includes any construction, development, conversion, or extension of any kind carried out with respect to a military installation, whether to satisfy temporary or permanent requirements, or any acquisition of land or construction of a defense access road (as described in section 210 of title 23). b. A military construction project includes all military construction work, or any contribution authorized by this chapter, necessary to produce a complete and usable facility or a complete and usable improvement of an existing facility (or to produce such portion of a complete and usable facility or improvement as is specifically authorized by law. |
10 U.S.C. 2802 Military Construction Projects | 10 U.S.C. 2802 is a section of Title 10 of the United States Code that authorizes the Secretary of Defense and Secretaries of the Military Departments to carry out military construction projects, land acquisitions, and defense access road projects. In determining the scope of a proposed military construction project, the Secretary concerned shall submit to the President such recommendations as the Secretary considers to be appropriate regarding the incorporation and inclusion of life-cycle cost-effective practices as an element in the project documents submitted to Congress. |
DC.9.1. N/A