Introduction (required)

The data gathered and its interpretation through a summary is discussed in this chapter. It tackles the stated problem and the issues about the need to address the lack of knowledge and resources available for non-Foreign Military Sales employees regarding basic background information of the Foreign Military Sales program and its importance and benefits to the Naval Supply Systems Command Weapon Systems Support as well as the Department of the Navy and the entire Department of Defense.

Demography (required)

Due to the small size and limitations in releasing data regarding the demographics of NAVSUP Weapon Systems Support – Philadelphia employees, the researcher has decided to use a macro-micro approach. The data collected for the macro portion of the research are from organizations outside of NAVSUP WSS – Philadelphia, which are the Departments of the Navy (including the Marine Corps), Army and Air Force, the Department of Defense, the Department of State, and U.S. defense contractors. The micro portion of the research contains information from the Naval Supply Systems Command Weapon Systems Support – Philadelphia. The research focused solely on three of the six Codes of NAVSUP WSS – Philadelphia: Code OF or International Programs (commonly known as Foreign Military Sales), Code 02 or the Contracts Division, and Code 03 or the Integrated Weapon Systems Teams

Objective (required)

The objective of this research is to evaluate an alternative information disbursing method that will complement the existing procedural manuals and process desk guides that were created as a result of various inter-code Green Belt Projects geared toward minimizing or even eliminating sales order processing and contracts initiation delays. The researcher hopes that by having information readily available regarding the background, purpose and benefits of Foreign Military Sales through various forms of delivery formats will encourage and motivate non-FMS employees to work on their FMS workload.

Objective Questions (required)

Pre-existing and relevant historical data were analyzed and delivered in the form a statement in order to answer the research questions covered in this research.

What information should FMS provide Codes 02 and 03 to motivate its employees to properly process his or her FMS workload?
How should FMS deliver the information to the two Codes to see results?
Will the availability of information and its delivery be enough to change the perception of the employees of Codes 02 and 03 about the FMS program?

Analysis of Research Questions(required) but Supporting Project (not required)

There research consists of a two part analysis. The first part is the analysis of macro data which are information extracted from factors outside of the NAVSUP WSS – Philadelphia. The macro data focused on the benefits of the FMS program and contains FMS sales figures, jobs created by the program and the relationship building aspect of arms sales. The second part is the analysis of micro data collected within NAVSUP WSS – Philadelphia. The micro data should mirror some of the types of macro data except at a small scale. Due to the limitations previously stated regarding data collection within NAVSUP WSS – Philadelphia, the pre-existing macro data will fill the missing portions that the micro data cannot provide.

QUESTION 1: “What information should FMS provide Codes 02 and 03 to motivate its employees to properly process his or her FMS workload?” The data gathered focused solely on the benefits of the Foreign Military Sales. The first two of benefits are tangible which are visible through the annual sales figures and jobs created by the program.

Figure 1: Total Foreign Military Sales from all U.S. Government agencies (fiscal year 2000-2012)

FMS Sales Figures: The Foreign Military Sales revenue hovered around $10 to just over 13.5 billion U.S. dollars from fiscal year 2000 to 2005, but jumped to $20 billion then eventually doubled in its 2000-2005 figures when it catapulted to $36.38 billion dollars in fiscal year 2008. From then on it stayed in the 30’s mark and the obsession in maintaining sales in this level was achieved for the next four years from fiscal year 2008 to 2011. The most recent of the four record breaking years where recorded at $34.8 billion dollars included sales from the United States allies such as “the Afghan Security Forces ($5.4 billion); the Taipei Economic and Cultural Representative Office in the United States ($4.9 billion); India ($4.5 billion); Australia ($3.9 billion); Saudi Arabia ($3.5 billion); Iraq ($2.0 billion); the United Arab Emirates ($1.5 billion); Israel ($1.4 billion); Japan ($0.5 billion); and Sweden ($0.5 billion) (Defense Security Cooperation Agency, 2011).

The U.S. Defense Security Cooperation Agency (DSCA) forecasted in the beginning of Fiscal Year 2012 that the $30 billion sales trend was to continue, but by June of 2012 sales figures exploded and surpassed $50 billion dollars. The $20 billion dollar jump is in response to the United States Government’s efforts to increase exports and to boost the local economy. During a special briefing by Andrew Shapiro, Assistant Secretary of the Bureau of Political-Military Affairs (a division of the U.S. Department of State), he stated that combined efforts from the U.S. diplomats and senior officials of the State Department in promoting and advocating for U.S. companies for foreign defense contracts bids and government related business opportunities through meetings, official visits and conferences, is the reason why the FMS program has grown and stayed strong throughout the recent economic downturn (United States Department of State, 2012). The focus on U.S. military allies by the defense industry is also a reaction to scheduled budget cuts of at least $450 billion for the next ten year, which contractors are hoping to at least gain some revenue to replace expected losses to come (Lerman, 2012). This was echoed on June 29, 2012 by U.S. Secretary of Defense Leon E. Panetta when he announced that a threat of sequestration, which is built into the Budget Control Act, will start the said decade long budget cuts if reduction in spending is not immediately identified by Congress (Parrish, 2012).

The continued success of fiscal year 2012 as it approaches its end is due to sales efforts that have been in continuous negotiation for over a decade which included previous sales and deliveries of military equipment and materiel. In 2008 the United States signed a $29.6 billion arms transfer agreement as reported by the Congressional Research Service (CRS), which is the same agency that reported the United State’s delivery of 184 combat helicopters from 2000 to 2004 and an additional 160 from 2005 to 2008 to its foreign allies (Chavanne, 2010). But the sales transaction most responsible to the staggering increase in fiscal year 2012’s figures is the agreement with Saudi Arabia. The Saudi’s signed an agreement worth $29.4 billion in December 2011 that included the purchase of 84 F-15SA fighter jets and its future parts and supply support, training, logistics and maintenance, plus upgrades to its current fleet of 70 F-15 jets (Shapiro, 2012). Japan’s $10 billion purchase of the Joint Strike Fighter has also contributed to this number. These two sales contracts were significantly higher than the previous fiscal year’s much anticipated sales agreement with the Commonwealth of Australia when it announced on June 15, 2011 the purchase of 24 MH-60R helicopters via an FMS agreement with the United States Navy worth approximately $3 to 3.5 billion. (www.defence.gov.au/dmo/hsd/air9000/phase8.cfm).

Moving forward fiscal year 2012, the FMS pipeline (see Table 1) looks strong and promising with various announcements and public notices posted on DSCA’s Security Cooperation News website www.dsca.mil/sc_news/. The following are just some of the possible foreign military sales which are still under negotiation:

Table 1
Sample of most recent public announcement of possible FMS by DSCA as of 7/1/12
Complete list is available in Appendix A

Country Approx Value in USD Quantity Description Announcement Date
United Kingdom $300 million 20 F-117-PW-100 engines, logistics support, maintenance 3/7/2012
Poland $447 million n/a F-16 munitions, parts, training and logistics and supply support 2/2/2012
Saudi Arabia $120 million n/a Continuation of services for the PATRIOT
Systems Engineering Services Program (ESP). 12/23/2011
Australia $950 million 10 C-27J aircraft and associated equipment,
parts, training and logistical support 12/19/2011
Iraq $18 billion 18 F-16IQ aircraft and associated equipment,
parts, weapons, training and logistical support 12/12/2011
Source: http://www.dsca.mil/sc_news/

FMS and Job Creation: A study conducted at the George Mason University and published in 2011 proposed that a decade long defense budget cuts will significantly affect American jobs. The initial set of military spending cuts valued at $45.01 billion ($25.686 have already been approved and the remainder expected in fiscal year 2013) will result in the loss of 1,006,315 full time jobs: 352,745 is expected come directly or indirectly from major U.S. defense contractors; 124,428 from prime contractors and suppliers; 228,318 from other businesses that support the defense industry; 65% of the loss or 653,570 jobs will be the result of personal spending cuts due to the decrease in take home pay; adding another .6 percentage points to the unemployment rate (Fuller, 2011).

This is enough reason why many U.S. contractors have refocused their targets overseas in which the Foreign Military Sales program with the Department of Defense would be an excellent vehicle to save some of the expected job losses. The Department of State stated that the FMS agreement with Saudi Arabia is forecasted to produce 50,000 U.S. jobs from 600 contractors based in 44 states, and add $3.5 billion to the U.S. economy per annum which will also positively affect other sectors that directly and indirectly support the defense industry (Shapiro, 2012). FMS also support employment of specific sociological demographics. One example was the U.S. Army’s selection of CABVI through the AbilityOne program – geared to create a source of employment for the blind and people with other disabilities (Mohawk Valley Chamber of Commerce, 2012). The $6.5 million contract in which CABVI will manufacture military equipment and clothing for FMS customers has an indefinite delivery and quantity in its contract clause, which promotes long term relationship and future contract extensions (Kozak, 2012). In addition, defense programs where a type of equipment or weapon systems have seen a significant decrease in sales orders from the U.S. military are given a second chance. Two prime examples the production activities for the F-15 and F-16 fighter jets. The F-15 production line was almost closed by Boeing until FMS orders came from Japan and South Korea and resulted to its life extension until Saudi Arabia caught its attention and kept the program going, while FMS program serves as a lifeline extension or a bridge program to employees working at the F-16 facility in Forth Worth, TX while waiting the full production of the F-35 aircraft (Wall, 2009).

The Defense Institute of Security Assistance Management (DISAM) the formula used to determine out how many jobs are generated by the FMS program is: $1 Billion = 35,000 man-years of direct employment = 26,250 man-years of indirect employment or 1 man-years of direct employment = .75 man-years of indirect employment (Bajuzs & Louscher, 1988). Using the formula with the recent Saudi Arabia FMS at $29.4 billion, the agreement should produce 1,029,000 man-years of direct employment and an additional 771,750 of indirect employment from surrounding industries and support activities. To put in perspective, Table 2 shows the man-years directly generated by the Foreign Military Sales from fiscal year 2000 to portions of 2012.

Table 2
Man-Years as a Direct Result of FMS per FY
Fiscal Year Total Sales in Billions (USD) Man Years
2000 12.14 424900
2001 13.26 464100
2002 12.51 437850
2003 13 455000
2004 13.53 473550
2005 10.58 370300
2006 20.98 734300
2007 23.29 815150
2008 36.38 1273300
2009 38.09 1333150
2010 31.6 1106000
2011 34.8 1218000
2012 50 1750000
FY 2012 figure not finalized and official as of June 2012

FMS and Relationship Building: The main intangible benefit of Foreign Military Sales is the relationship building forged between the United States and the foreign ally. Through FMS, the United States Government solidifies existing diplomatic ties and creates new ones through open inter-government dialogue. Through these relationships, the United States can communicate its interests and deliver it in a particular region of the world where the foreign ally is located. The exchange of information is vital to the growth of both the U.S. military and the foreign country. Each foreign country that participates in FMS has an opportunity to send foreign military representatives and liaisons to the United States and vice-versa. Since the sale of equipment, hardware and materiel require training; foreign military personnel and foreign civilian workers get a chance to visit the United States to train as well. For example, the continued agreement with Saudi Arabia has benefited both countries relationship by having over 1,000 Royal Saudi Air Force students train in the United States since 2007 (Gordon, 2012) This might be alarming to others that are not familiar with international relationship building and security cooperation, but it is a good assumption that a government that is interested in forging military and defense ties with the United States is most likely to share the country’s security interests (Shapiro, 2012). “The United States strengthens its military-to-military ties with the new owner through training opportunities and increased equipment interoperability (Lopez, 2012). This relationship building aspect of FMS also opens up doors to possible business opportunities in emerging markets such as India, Brazil, and many Southeast Asian countries where growth margins are higher. FMS is another window that America can use to position its influence while keeping its military’s strategic dominance in these growing regions.

FMS and its Benefits to NAVSUP WSS: The Naval Supply Systems Command Weapon Systems Support- Philadelphia has been a dedicated contributor to the Department of the Navy’s Foreign Military Sales program efforts since the Navy International Logistics Control Office (NAVILCO) was absorbed by the Command in 1996. Since then it has created FMS specific jobs for almost two decades. FMS or Code-OF currently has three logistics divisions, a policy department, several country program management teams, a transportation department, its own technology support department and a contractor division. Each FMS division has a workforce of about 8 to 15 individuals, while the contractor division has over 20 to 25 employees. FMS as a division of NAVSUP is located in two buildings and is currently growing. In 2010 Code-OF hired 15 college graduate trainees through the Federal Government’s 7-9-11 career ladder program as a direct result of sales agreements signed by the United States Navy and other military services.

The FMS division is also the main driver in forging relationships with foreign countries within NAVSUP. There are a number of foreign liaison offices staffed by both foreign military Security Assistance Foreign Representatives (SAFRs) and civilians. The presence of these foreign offices and foreign military personnel within the two FMS occupied buildings allow very close interactions between FMS and non-FMS U.S. Government military, civilian employees and contractors and the foreign liaisons. These interactions do not only happen in formal settings but also in informal gatherings such as picnics, athletic events or just through casual conversation. This mini United Nations environment allows both sides a chance to open cross cultural dialogue where everyone gets to learn a foreign liaison’s traditions, customs, business etiquette and beliefs.

Figure 2: NAVSUP FMS Contribution to the overall Department of the Navy/US Coast Guard FMS Program

Figure 2 shows that NAVSUP has contributed about a quarter to three quarters of a billion dollar revenue as a Systems Command (SYSCOM) to the combined U.S. Navy/Coast Guard FMS efforts, which had a mean of 5.013 from fiscal year 2004 to 2011 (Holub, 2012). The Command’s FMS program is expected to grow as new programs like Australia and India began with their procurement of NAVSUP specific items. Every year since 2004 (with exception to fiscal year 2010) its steady growth has made FMS an exciting place to work. NAVSUP’s importance to the entire Navy FMS efforts has increased as the Command’s input on FMS subject matters have been more and more consulted by bigger SYCOMS such as the Naval Air Systems Command (NAVAIR) and Naval Sea Systems Command (NAVEA) during FMS conference calls, meetings and conferences as it continuously expands. The expected increase in sales plus the rising importance of NAVSUP to the Department of the Navy’s FMS efforts makes it more imperative that the issues of delayed response from the Integrated Weapon Systems Team (Code 03) and Contracts (Code 02) are answered now as volumes are also expected to rise.

QUESTION 2: “How should FMS deliver the information to the two Codes to see results?” Having an understanding of the age demographics of an organization’s population allows a more tailored approach to training corporate personnel. It is safe to assume that the majority of organizations today include a mixture of four worker generations which are the Traditionalists, Baby Boomers, Generation X and Generation Y. These four groups are found at NAVSUP WSS- Philadelphia where there is an approximate population split of 40% Traditionalists (born 1925-1945) who are ready for retirement; 30% Baby Boomers (born 1945-1964) which some are also retiring while the rest hold most of the upper management positions; 20% Generation X (born 1965-1980)- a group that are usually in middle management and are team leaders; and 10% Generation Y (born 1981 and after) who are currently completing their trainee programs or were just promoted to lead their own teams.

Based on the descriptions of each generation’s qualities (Table 3) referenced from a training guide of the Executive Office of the United Nations Join Staff Pension Fund, the Traditionalists group fairs well in a traditional instructor lead classroom based training, while the Baby Boomers do better in team oriented, interpersonal and interactive training methods where an entire group is involved. Generation X and Generation Y will do better in online based training.

Figure 3: Association of age with methods of training

A telephone survey conducted from April to July of 2004 and published in 2005 by James Danzinger and Debora Dunkle of the Center for Research on Information Technology and Organizations (CRITO) of the University of California- Irvine’s School of Social Sciences identified four training methods used by the three working generations. The sample survey (Figure 3) of 1150 individuals divided in to the ages of 18-34 (Generation X and Y), 35-54 (Baby Boomers) and 55 and over (Traditionalists) use variations of instructor led training, online based training and self-guided training via manuals, and trial and error. According to the survey all age groups (18-34, 35-54 and – over) used instructor based training the most, which the Traditionalists and Baby Boomers using slightly more of this method than its Generation X and Y counterparts. On-line based training came in second, but this time the Generation X and Y are the groups with the highest percentage users and the Traditionalists lagged 7.6% behind them in terms of usage. Self-training methods was the least preferred by all age groups, where the Baby Boomers had the least percentage usage. This is a bit surprising considering the personality traits described by the U.N. study stating that this group was described as independent, disapproves structure and likes self gratification. A self-training method would have been a perfect choice, but given the fact that this group functions well in team oriented activities might be the reason why this method is the Baby Boomers’ least favorite.

Based on the two studies conducted by the United Nations and the University of California- Irvine, it is best to use all three training methods in order to reach all four generations. At NAVSUP- WSS, training manuals and process desk guides have already been available for both Codes 02 and 03 to use and are available in electronic form and as a hard copy. But since the U.N. study shows that this method is the least liked by all four generations, the Command should also conduct traditional classroom trainings and collaborative and interactive team based training that is used by agencies of the Department of Defense such as the Defense Acquisition University, Defense Institute of Security Assistance Management, and various Department of the Navy Continuous Process Improvement Teams.

QUESTION 3: “Will the availability of information and its delivery be enough to change the perception of the employees of Codes 02 and 03 about the FMS program?” The lack of information about FMS has not deterred personnel from Codes 02 and 03 from processing FMS sales orders and contracts. If it did, then the problem would have been bigger since no FMS work would have been completed. The issue is matching the work output with the priority number that the Command puts on every FMS sales order and contracts. It is accepted by the International Programs community that FMS will never take priority over U.S. Navy and Marine Corps domestic requisitions and contracts, but if the priority number given to a requisition and contract is 3, then the work output should be that of a priority 3 and not delay it to a point that the work output seemed like it was a priority number 8.

Revisiting the two theories presented in Chapter 1 on motivating government employees in doing their FMS workload helped determine the right approach in order to determine if the availability of information on the FMS program alone helped motivate NAVSUP-WSS Code 02 and 03 personnel in improving process time. One of the two theories is presented in Chapter 1 is McGregor’s Theory X and Y. Since it has been determined that NAVSUP-WSS employees has been slowly working their FMS sales orders and contracts even at the current lack of available information to motivate them to do so is enough evidence that the Code 02 and 03 group fall within Theory Y, which states that workers by nature can be motivated to do their job and enjoy productivity and eventually become independent and responsible member of an organization (Kopelman, Prottas, & Falk, 2010). Knowing this, Foreign Military Sales management and Logistics Management Specialists can give more trust to the Code 03 Item Managers and Code 02 Contract Specialists instead of the current practice of constantly threatening their supervisors if an FMS task is not done after several notices. Since it was found in Chapter 1 that this negative practice has very little or no impact on the Contract Specialists’ and Item Managers’ performance since FMS has no real power to reprimand individuals from other Codes or divisions it is better for FMS management and personnel to change their attitudes and accept the Theory Y approach in order to further motivate their colleagues in the two non-FMS Codes.

To complement McGregor’s Theory, it was decided that Vroom’s Expectancy Theory will be referenced to understand what motivates the two groups to work FMS orders and contracts. Vroom’s Theory believes that individuals will be motivated due to their belief that they can get what their desired outcome (rewards) from performance and efforts (Redmond, 2012). This theory works when the individual is give the right tools and information plus support from colleagues to do his or her job well, which is why it is imperative that information is available in order to further motivate Codes 02 and 03 personnel. Also, in order sustain and keep the motivation going FMS management need to extend its reward programs such as recognition certificates, time-off awards, and monetary awards given to high performing individuals to keep the motivation high. This combination should cover both individuals that value monetary rewards and intangible recognition.

Summary

summary of chapter-4 (required) 2-3 sentences

The availability of information will help change the perception of non-FMS employees of the FMS process which will motivate them to work FMS requirements. The Financial benefits of FMS which shows its sales revenue per year and the jobs created by the program paired with the intangible benefits are solid information that shows non-FMS personnel that there benefits to having a strong FMS program throughout the Department of Defense, Department of the Navy and NAVSUP- WSS. Although the availability of information can have a positive impact on the way Code 02 and 03 work their FMS workload, it would be smart to disburse this information to all age groups that are currently working for the Command by using self-paced, traditional classroom, team oriented, and electronic training methods. Add motivation and trust to this equation, the goal to get personnel of both Codes to work FMS orders and contracts in a timely matter can be achieved.