Success Does Not Come Overnight

Written by Marty Kauchak

One industry insider, Bob Clydesdale, business development manager, Saab Training USA, pointed out that “foreign companies can compete in the U.S. defense market, but success does not come overnight. It requires years of assimilation and the development of creditable past performance on contracts with local commands in the U.S.”

CHALLENGES AND SOLUTIONS

Saab, CAE, Thales, Indra and 3-D Perception are a short list of companies with headquarters outside the United States and namesake entities in the United States. The companies’ U.S. teams deliver training products and services for the Marine Corps’ AV-8 Harrier, Navy’s next generation P-8A Poseidon and other future and current weapons platforms. These and other foreign-owned companies must first comply with laws, regulations and policies to enter the domestic defense market.

Security regulations are one particular hurdle on the path to market participation that continues to bedevil many businesses. “U.S. companies owned or controlled by foreign owners must take steps to mitigate the control to allow them to fully participate in classified programs,” Clydesdale explained. For its part, Saab entered into a special security agreement with DoD in 2007 to oversee the U.S. company’s compliance with U.S. Industrial Security and Export regulations. “The U.S. engineering and production staff in the U.S. facility under this agreement can modify existing Saab commercial training products in wide use around the world to exacting DoD information assurance and other performance requirements,” Clydesdale said.

As the companies conform to security and other policies, they may take a path to market access, which depends on the overseas company gaining support from its parent government to enter into agreements with the U.S. government. This strategy helps overcome the challenge to overseas companies presented in Buy American Act (BAA)-language found in numerous DoD contracts. The act identifies certain products and services that can only be acquired from a U.S. source. Exceptions in the form of treaties, procurement memoranda of understanding and other legal tools exempt foreign countries’ products from the restrictions of the BAA. “The Federal Acquisition Regulation Defense Department Supplement currently lists 19 countries, which includes Sweden, whose products are exempt because of national treaties,” Clydesdale noted.

To obtain innovative and effective ideas from non-U.S. sources, the departments’ training acquisition community also uses the Foreign Comparative Testing (FCT) program. The FCT initiative is under the oversight of the Comparative Testing Office (http://www.acq.osd.mil/ cto/) within the Office of the Secretary of Defense (acquisition, technology and logistics).

Each fiscal year the Office of the Secretary of Defense funds side-by-side testing of foreign non-developmental, or COTS, weapons and training and other support systems to evaluate whether they meet U.S. war fighting needs. In fiscal year 2009, only one training program, the Carl Gustaf 20 mm training system (Sweden), is being examined through the FCT program.

For its part, the Marine Corps’ PM TRASYS has had several successful examples of acquiring and fielding training products from foreign vendors, selected through use of the FCT program, open competitive solicitations and General Service Administration pricing to include:

• Theissen and SAAB Portable Infantry Targets (PITs)
• SAAB Deployable Instrumented Training System (DITS)
• Swiss Moving Infantry Targets and Location of Miss and Hit (LOMAH) Targets
• Bohemia Interactive Virtual Battle Space (VBS)
• General Dynamics/SNC Simunitions Special Effects Small Arms Marking System (SESAMS)

Saab’s Clydesdale recalled that his company’s efforts with FCT program evaluation of its DITS product started in 2003 and continued into 2007 with new urban warfare improvements. “The Urban DITS program was selected out of 37 new start programs as the 2007 FCT program of the year by greatly exceeding the performance factors while finishing the test more than a year ahead of the schedule.” The Marine Corps has now begun fielding Saab Training’s instrumentation systems to its divisions and schools.

In addition to the formal FCT process, the DoD acquisition community uses other formal and informal strategies to interact with prospective overseas industry teammates.

“PM TRASYS maintains an open door for industry partners to provide capabilities briefings and also alerts industry of our needs through advanced planning briefings to industry,” Brian Kummer, PM TRASYS business and operations manager, said. The command, and its team Orlando counterparts annually interface with industry through I/ITSEC, which includes a significant number of foreign vendor participants. “PM TRASYS also participates in Europe’s sister venue ITEC. The primary purpose of participation in the ITEC is to educate the European vendors on the FCT program and how they can do business with the Marine Corps,” Kummer added.

A LEVEL PLAYING FIELD

Asked whether training companies beyond the U.S. borders have a level playing field on which to market and field their products, Kummer responded, “Yes,” and pointed out the European vendors that have successfully been awarded competitive contracts for the Marine Corps.

“Additionally, PM TRASYS views this as a global marketplace and all vendors are encouraged to bid on Marine Corps solicitations. We are looking for the best value to provide training solutions to the Marine Corps. The only exception to this would be if there were security and/or regulatory restrictions,” he concluded.

Another indication that non-U.S. companies can establish a beachhead in the United States and become competitive is their ability to win an award of a PEO STRI STOC II multiyear requirementstype contract. One 2009 award designated Saab as one of a limited number of U.S. companies that can compete for $17.5 billion of tasks over a 10-year period.

“Saab has confirmed its position as a leader in the U.S. simulation training industry with this multiyear award,” Lars Borgwing, president of Saab Training USA, said. “We are proud to be part of this broad-based group of highly qualified contractors capable of rapidly and effectively providing task-specific solutions to warfighter training and testing requirements, using streamlined contracting procedures.” ♦

For more information, contact MT2 Editor Marty Kauchak or search our online archives for related stories.

Back to Top