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  3. International Cooperative Program (ICP) Equitability – Foundational Knowledge

International Cooperative Program (ICP) Equitability – Foundational Knowledge

International Cooperative Program (ICP) Equitability – Foundational Knowledge

Frank Kenlon (Prof of Int'l Acq, DAU/DSMC-Int'l)

We recently conducted an ICP International Agreement (IA) Familiarization Workshop with a Department of Defense (DoD) organization where the participants brought up a topic that we are often asked to address in our DAU courses and mission assistance activities …

How does DoD assess equitability in the identification, formulation, negotiation, approval, and implementation of ICP IAs?

This may seem like a simple question to answer but, like a lot of things in DoD, it isn’t. As H.L. Mencken aptly pointed out several years ago, "For every complex problem, there's a solution that is simple, neat, and wrong."

I will do my best to try to explain what is an often considered a complex area by describing the overall U.S. Government and DoD framework and decision process that’s used by DoD to assess ICP equitability for each proposed program, project, or activity.

Legal Aspects

There are four U.S. statutes that are typically used by DoD as a legal basis for entering into ICP IAs:

The first two U.S. statutes in this list are most often used; the third and fourth are occasionally used. Two of these statutes specifically address equitability; Title 10 USC 2350a and Title 22 USC 2767.

Title 10 USC 2350a Excerpt

(c) Cost Sharing.-

(1) Except as provided in paragraph (2), each cooperative research and development project entered into under this section shall require sharing of the costs of the project (including the costs of claims) between the participants on an equitable basis.

(2) A cooperative research and development project may be entered into under this section under which costs are shared between the participants on an unequal basis if the Secretary of Defense, or an official specified in subsection (b)(2) [of this statute] to whom the Secretary delegates authority under this paragraph, makes a written determination that unequal cost sharing provides strategic value to the United States or another participant in the project.

(3) For purposes of this subsection, the term "cost" means the total value of cash and non-cash contributions.

Title 22 USC 2767 Excerpt

(c) Agreements for equitable share of costs; limiting nature of agreements

Each agreement for a cooperative project shall provide that the United States and each of the other participants will contribute to the cooperative project its equitable share of the full cost of such cooperative project and will receive an equitable share of the results of such cooperative project. The full costs of such cooperative project shall include overhead costs, administrative costs, and costs of claims. The United States and the other participants may contribute their equitable shares of the full cost of such cooperative project in funds or in defense articles or defense services needed for such cooperative project. 

Of note, while the other two U.S. statutes listed above that are used as a legal basis for ICP IAs do not specifically address equitability, DoD OGC and OUSD(AT&L) (now A&S) decided back in the 1990s to establish a single ICP IA policy and process to assess equitability regardless of the ICP IA’s legal basis.

DoD International Agreement Policy & Process “Basics”

DoD policy for International Agreements is contained in DoDI 5530.03 issued in December 2019. Reading DoD directives and instructions to comprehend their actual meaning (especially the nuances) is like reading runestones. To be successful, you must first understand how and why DoDD/Is are constructed the way they are, then interpret each DoDD/I’s specific meaning based on a detailed understanding of the policy domain(s) being addresses.

DoDI 5530.03, authored by DoD Office of General Counsel, addresses the international agreement domain across the entire Department by:

  • ‘Carving up the turf’ by assigning responsibility for overseeing and managing the international agreement process in each ‘piece of turf’ among the Office of Secretary of Defense (OSD) senior officials that are direct reports to the SecDef and DepSecDef (SD and DSD).
  • Delegating limited responsibility for oversight and management of selected international agreement actions to the DoD Components (e.g., Army, Navy, Air Force, Combatant Commanders, Defense Agencies, etc.).
  • Establishing fundamental business process standards and process requirements that apply to “Initiating, negotiating, concluding, and reporting” all DoD international agreement actions regardless of the DoD originator or type of agreement.

When we zoom into the area of acquisition international agreements, USD (Acquisition & Sustainment) is delegated authority in DoDI 5530.03 paragraph 2.2 to “authorize the negotiation and conclusion of all international agreements relating to the responsibilities and functions of the USD(A&S) established in DoDD 5134.01” and DSD guidance. This category of international agreements is typically referred to as International Cooperative Program (ICP) International Agreements (IAs) in various DoD 5000 series directives and instructions.

In exercising this responsibility, DoDI 5530.03 requires USD(A&S) to consult and coordinate with the following OSD senior officials and (for some agreements) the State and Commerce Departments:

  • DoD OGC - to ensure legal sufficiency
  • USD(R&E) - if 10 USC 2350a is used as legal basis
  • USD(Comptroller) – to ensure financial sufficiency
  • USD(P) - to ensure foreign policy and Technology Security & Foreign Disclosure (TSFD) compliance
  • Affected DoD Components – to ensure their organizational equities are considered & addressed
  • State and Commerce – to ensure their organizational responsibilities/equities are considered & addressed

The involvement of these organizations often includes sharing their perspectives on the equitability of proposed ICP IAs and providing their inputs into the DoD decision-making process that governs DoD ICP IA efforts.

ICP Policy & Process “Basics”

USD(A&S) has established the process it uses to oversee and manage the ICP IA process in the DoD International Acquisition & Exportability (IA&E) Practices Guidebook. DAU has developed and published an ICP Job Support Tool (JST) to assist DoD acquisition workforce members in this area.

The overall ICP Process described in the IA&E Guidebook and ICP JST contains three steps:

  1. Cooperative Opportunity Identification and Assessment
  2. ICP IA Process
  3. ICP Implementation


The ICP IA Process in Step 2 consists of four phases:

  • Request for Authority to Develop (RAD) (internal to USG/DoD)
  • International Agreement Negotiation (with other nation(s))
  • Request for Final Approval (RFA) (internal to USG/DoD)
  • International Agreement Signature (with other nation(s))

Equitability – The Big Picture

During Step 1, the DoD Component organization that has decided to establish a new ICP – commonly referred to as the ICP Proponent – should formulate an ICP that will be considered equitable from both a DoD and prospective partner nation(s)’ perspective(s) during higher level review.

During Step 2, the OSD senior officials’ staffs – and their counterpart in the prospective partner nation(s) -- evaluate the ICP Proponent’s equitability approach to confirm that the ICP IA is equitable. DoD evaluates an ICP IA’s equitability during RAD and RFA phase from a DoD legal and policy point of view. The other nation(s)’ perspective(s) on equitability are provided during the negotiation and signature phases of the ICP IA process.

During Step 3, the ICP Proponent and their partner nation counterpart(s) are mutually responsible for implementing the ICP described in the IA in an equitable manner until the IA either expires or is terminated. Failure to do so could be a violation of U.S. law (depending on the ICP IA’s legal basis) and would be a violation of DoD policy which could result in adverse actions for DoD personnel that are deemed responsible.

Summary

In many instances, the equitability of a proposed ICP IA is clear to both DoD and partner nation higher level evaluators … or as our UK colleagues would call them “scrutineers.” However, reasonable people in various DoD organizations sometimes have divergent views on an ICP IA’s equitability which must be assessed and reconciled. My next blog on this topic will explore the process DoD uses to evaluate ICP IA equitability and decide on what is (and isn’t) equitable from a DoD perspective.

Until next time,
Prof K