DOD  administers the FMS program and manages the procurements executed  within the military departments on behalf of foreign governments. The FMS process generally begins when a foreign government submits a  letter of request to the Department of State or DOD to purchase defense  articles or services. Requests for price and availability data represent an optional step in the  process. DOD Received about 3,000 Requests for Price and Availability Data over the Past 5 Years

From fiscal years 2014 through 2018, DOD reported receiving 3,038  requests for price and availability data from foreign customers from 93  countries and the North Atlantic Treaty Organization. Foreign customer  requests included services and items such as training and support  services for weapon systems, missiles and ammunition, aircraft, and  communication equipment. The guidance also  instructs officials to assess whether a foreign customer’s request  contains the necessary information to develop price and availability  data, such as the major item or service, quantity, anticipated delivery  schedule, and other specifications;  suggests that price and availability data also provide customers with  information about costs for not only buying equipment but also the  related operation and sustainment costs; assumes responses will include standard items—nonstandard items  identifies relevant data sources that the military departments can  consult to develop price and availability data, such as last contract  award, stock price, or information from defense contractors;  states that military departments and DSCA should use the Defense  Security Assistance Management System to prepare responses to  price and availability requests;  suggests that data should be itemized by separating main equipment  from training, technical publication, transportation costs, and other  elements, as applicable; and  states that responses should be developed and communicated to  customers within 45 days from when DOD receives the request. Specifically, in the five examples we reviewed, we found that DOD  officials generally used a total package approach when developing price  and availability data. For example, military department officials developed  price and availability data that not only included the items and services  requested by the customer, but also included rough order of magnitude  estimates for additional costs to reflect the expected ownership costs. Among the five examples we reviewed, responses took from  45 to 320 days, as shown in table 1. Complexity of the request. For example, in response to a request for a  complex weapon system to be integrated into a foreign customer’s  ship, Navy program officials said that they needed several months to  develop price and availability data due to the complexity of this  request, which required program officials to work with multiple  contractors and DOD entities to develop price and availability data. DOD’s response letter is reproduced in appendix II. Appendix I: Objectives, Scope, and Methodology

In this report, we (1) described foreign military sales (FMS) price and  availability requests Department of Defense (DOD) received from fiscal  years 2014 through 2018, (2) assessed DOD’s guidance on developing  price and availability data, (3) described how DOD develops price and  availability data for the requested capability, and (4) identified factors that  can influence the timeliness for DOD to provide price and availability data  to the customer. We reviewed data for fiscal years 2014  through 2018, the most recent 5-year period available. To describe factors that DOD considers when developing price and  availability data and illustrate how these factors influence the process, we  selected a non-generalizable sample of five responses from fiscal year  2017 data provided by the military departments. To identify the factors that can influence the timeliness of responses, we  interviewed officials from DSCA and the Army, Navy, and Air Force. The  information we obtained from these foreign customers and defense  contractors is not generalizable to all foreign customers and defense  contractors.
Why GAO Did This Study

DOD manages the procurement of billions of dollars in defense items and services on behalf of foreign customers through the FMS program. These sales help support the defense industrial base and are vital to U.S. foreign policy and national security interests.
The FMS process generally begins with a request by a foreign government for information about a U.S. defense item or service. Requests for price and availability data are an optional step in the process. DOD guidance is to generally respond to such requests within 45 days.
The fiscal year 2018 National Defense Authorization Act included a provision for GAO to review DOD's process for developing price and availability data for foreign customers. This report addresses, among other objectives, (1) price and availability requests DOD received from fiscal years 2014 through 2018, (2) how DOD develops price and availability data, and (3) the factors that can influence the timeliness of DOD's responses to foreign customers with price and availability data.
GAO analyzed DOD price and availability data for fiscal years 2014 through 2018, the latest data available; and reviewed documents for a non-generalizable sample of five price and availability responses—varying by estimate value—provided to foreign customers by the Army, Navy, and Air Force. GAO also interviewed defense contractors and DOD officials.
GAO is not making any recommendations at this time.

What GAO Found

The Department of Defense (DOD) reported receiving 3,038 requests for Foreign Military Sales (FMS) price and availability data in fiscal years 2014 through 2018 from 93 countries across six geographic regions, as shown in the figure. Foreign customer requests included services and items such as training and support services for weapon systems, missiles, aircraft, and communication equipment.
Not all countries in each region submitted a price and availability request.
DOD officials indicated they generally strove to offer price and availability data that reflected rough order of magnitude estimates of total anticipated costs for a complete and sustainable capability. Contractors often provide input to DOD for these cost and schedule estimates. In the five examples GAO reviewed, DOD officials considered factors such as possible production delays and included anticipated costs for support services, operations, and sustainment, when needed. DOD officials also included FMS administrative charges and, as applicable, nonrecurring and transportation costs. GAO found that when DOD considered these factors in developing the response to the customer, at times, they made adjustments to the estimates provided by contractors to more fully reflect expected costs if the items are purchased.
Among the five examples, GAO found that response times ranged from 45 to 320 days and that a number of factors can affect timeliness. For example, the complexity of the system or capability the customer is interested in acquiring may require involvement from multiple program offices and defense contractors, requiring more time than the 45 days suggested by DOD's guidance.