Comparative Analysis of the Use of Foreign Military Sales (FMS) and Direct Commercial Sales (DCS) in the Procurement of US Defense Articles by the Philippine ... Government for the Use of the Armed Forces

The Philippine government may use two methods to procure defense articles from the United States, either Foreign Military Sales (FMS) or Direct Commercial Sales (DCS). This thesis examined the differences between FMS and DCS as methods of procurement used by the Philippine government in the acquisition of U.S. defense articles. The study identified the processes involved in using each of the two methods as well as the advantages and disadvantages of each when used within the socioeconomic and political environment of the Philippines. Issues and considerations that influence selection decision are also discussed. DCS may offer the lowest fixed price, timely/earlier delivery, easier countertrade arrangements, and penalty for non-compliance to the provisions of the contract. FMS is preferable because it is a government-to-government sale, provides opportunities for Philippine military training in the United States and enhances interoperability among coalition forces. In addition, FMS allows for financing of defense articles from the U.S. using Foreign Military Financing, thus conserving Philippine government funds.