The Excess Defense Articles (EDA) program is one of many tools an AFRICA OSC can use to provide its partner nation with assistance in acquiring equipment for its military. Through this program equipment and items can be procured directly through the EDA program with a request submitted through the AFRICA OSC office then onward to the Defense Logistics Agency (DLA) disposition services.
This blog post has seven goals. The first is to provide the AFRICA OSC with an understanding of the EDA program, to include the authorities which authorize the program. Next, it will cover the steps that the AFRICA OSC and the partner nation should follow to establish an account to select and acquire EDA items. It will also explain the FMS case process to acquire EDA; the difference between a blanket and defined lines of EDA equipment; and the types of EDA available through FMS. Lastly, it will explain how to estimate the Rough Order of Magnitude (ROM) for EDA product costs to include shipping, and what options an AFRICA OSC might want to recommend to the partner nation when EDA is a viable option. This blog will focus on DLA Disposition services, which is the primary area through which African countries will acquire EDA. A full disclaimer should be given up front – this blog is highly technical and is by far not the end all to this incredibly complex system.
Is EDA good for your partner nation?
Before diving into the programmatic of the program, you should first be cautious when thinking about EDA and our African partners. It has been successful in some African countries, but it has also been disastrous in others. The success of EDA in an African country depends on six factors.
1) The partner nation must assign an intelligent, knowledgeable, and English speaking person to the program.
2) The partner nation must understand the process usually takes around two years.
3) The partner nation must own the program, not the AFRICA OSC. If the AFRICA OSC, or their NCO, departs station and the partner nation has not bought into the program, then all their efforts will be for not.
4) Site visits are worth the effort for Significant Military Equipment (SME); however, money must be “in the bank” before traveling to a Defense Logistics Agency (DLA) Disposition Services site or military equipment location.
5) An assessment of each item and its transferability into the partner nations supply system must be done beforehand. Simple issues such as 110volt vs. 220 volts can make 5k electrical rechargeable forklifts very large paperweights in Africa. Other problems such as parts acquisition, maintenance repair kits, and whether or not the transfer of vehicle-mounted technology should be considered. For example, U.S. vehicle’s alternators produce a different electrical current, and more than likely if your partner nation hooks their radios into a U.S. vehicle, it will fry it. This all takes time to research, most of which the AFRICA OSC cannot do.
6) The partner nation must be willing to pay for the costs incurred with EDA. Be it shipping, refurbishment, or acquisition – the partner nation cannot rely on the U.S. to pay for this. If they are, EDA is not appropriate for them, even if they are a Grant EDA country. There is one exception to this that I have observed, and even then there were issues; however, with that country, the juice was worth the squeeze.
What is EDA?
According to the Defense Institute of Security Cooperation Studies (DISCS) Green Book EDA is items and equipment “Identified by the Military Department (MILDEP) or DoD agency as authorized for sale using the Foreign Military Sales (FMS) authority in section 21, AECA, and FMS processes identified within the SAMM for property belonging to the USG.” Under the EDA system equipment is available for acquisition that ranges from five to fifty percent of its original acquisition value, which is dependent on the equipment’s current condition. When the U.S. military determines a piece of equipment is no longer needed or has been replaced with a more modern piece of equipment, it offers the equipment for sale through the EDA system. The single key thing to know as an AFRICA OSC here is – EDA fresh off the shelf is not immediately available to our African partners. By law all EDA assets must be made available to all U.S. Federal, State, and Local Government entities before offering them to foreign partners, any smaller assets (i.e., those with lower reactivation and operational costs) that may have remaining utility are claimed before they ever make it out for an offer to international partners. If the piece of equipment can be used for a law enforcement purpose, it probably won’t be available. For example, U.S. Coast Guard small boats – those are grabbed up before our foreign partners even see them.
All EDA sales are to strategic partners of the U.S., a majority of which are for the prorated costs of the equipment in its current condition. Section 516 of the Foreign Assistance Act authorizes the President of the United States to transfer EDA on a grant basis to eligible countries which are identified by a joint DoD/DoS letter submitted annually to Congress. Therefore, EDA can be transferred at no-cost under the EDA Grant authority; however, the recipient must pay for transportation charges. The overall objective of the EDA program is to maximize the reuse of excess property and also the return of funds to the U.S. Treasury. This is done through selling excess equipment at auctions in the U.S. (think uniforms and boots that then end up in military surplus stores), and to partner nations to meet U.S. national security objectives.
The Process to find equipment
Equipment and property entering into the EDA chain must be a property that is no longer needed or that DoD has too many of a specific item in its stock. Once the property is deemed excess, it is scheduled for turn-in at one of the Defense Logistics Agency (DLA) Disposition Services or at one of the many different appropriate military facilities. Once property enters this inventory, it begins a forty-two-day screening cycle during which time Foreign Military Service customers and U.S. Federal agencies may view and select items for purchase. After the screening cycle is complete items which weren’t chosen for transfer to FMS customers or U.S. Federal agencies are made available to the general public through auctions, or the items may be destroyed and sold as scrap.
To deal with partners in Africa and limitations that come about in terms of buying and refurbishing specific military equipment or weapon systems (aircraft, boats, missiles) it is recommended that the AFRICA OSC steer the host nations towards buying equipment from DLA Disposition Services. DLA disposition services are the arm of the DLA that receives stocks of excess military material to include those items most of our host nation partners in Africa will benefit. Articles and equipment generally cover classes of equipment such as textiles, computer equipment, vehicles, maintenance equipment, and other general use items.
DLA Disposition Services has a couple of methods that can assist our partner nations in finding the property that is best suited to them. The two best ways to support our partners include access to DLA Disposition services web portal or site visits where the partner can take a look and put “eyes on” with regards to specific military equipment at a DLA disposition site. When selecting equipment through the DLA portal, once an AFRICA OSC gains access to the portal, the best thing they can do is work with the partner members to get them access or have the partner logistics point of contact come to the Embassy once a week and work to search for equipment with the OSC Chief and NCO through the portal. When selecting equipment using the “eyes on” method during a visit, partner members should make note of the control number of the equipment, provide that information to their POC from the U.S. Embassy, have the information relayed back to the AFRICA OSC or NCO who can go ahead and get it selected from DLA Portal. In the event the partner sees equipment that hasn’t yet been released to the portal the AFRICA OSC or NCO can work with the DLA site manager to find out when the equipment is going to be processed for release to the portal, the control number of the equipment, and when it is anticipated to show up so that the AFRICA OSC can work to get it for the partner. If a POC from the partner nations ever tells the AFRICA OSC that during previous visits to a DLA Disposition site they were allowed to choose equipment or given a machine that allowed them to tag equipment that would be held for them, this is not the truth nor is this the authorized way that the partner is able to receive equipment.
Property in the DLA system is in a wide range of conditions because DoD considers the property excess. For example, some pieces of equipment are in mint condition, just out of the unit that was maintaining it, and others are no longer functioning upon on arrival, which could be used for spare parts if there are any left.
Who determines the condition of the property?
The U.S. military unit turning in the item determines the condition of the property. The condition of the property ranges from new and in original packaging to items whose only value is scrap. DLA Disposition Services has taken extra measures to assist the purchaser in determining condition because the agency realizes the inherent problem of identifying the usability of property based upon pictures or codes in a website. The DLA Disposition Services may upload photos of actual items so that potential purchasers will have a better idea of the condition of the item. Additionally, DLA Disposition Services personnel can check the basic functioning of the item; however, since all EDAs are “as is, where is,” purchasers are encouraged to visually inspect all major items to ensure each piece is in an acceptable condition. The purchaser cannot obtain overhauls and repairs from DLA of material available in the DLA Disposition Services inventory.
The Process to buy equipment
The process to acquire EDA is relatively straight forward as EDA is sold through the Foreign Military Sales (FMS) system. Partners, with some assistance from the AFRICA OSC, can utilize the FMS process to procure DLA Disposition Services property. All FMS EDA cases surrounding DLA disposition services equipment are prepared and management by DLA HQ in Battle Creek, Michigan. Upon making a decision to procure and establish a EDA FMS case to obtain DLA Disposition services equipment, the partner, through their respective AFRICA OSC, submits a Letter of Request (LOR) to DLA HQ with applicable the applicable 4 digit Federal Supply Codes (FSC) supply classes and a dollar amount that they would like to have as a starting amount for their EDA account. (A Google search with the terms of “FSC Codes” will provide sites with different lists. A recent search came across http://everyspec.com/FSC-CODE/ with a list of supply codes and equipment types under each FSC which can be viewed by downloading the H2 at http://everyspec.com/DoD/DoD-HDBK/CATALOGING_HDBK_H2_FEB2003_37910/) Once the LOR has been submitted, DLA will provide an LOA for the Partner Nation to sign. Once the partner nation has signed, the AFRICA OSC should return the LOA so that the FMS cases can be established.
Once the FMS case has been established, the AFRICA OSC and partner can then request and achieve access to DLAs EDA system, look, review, and choose from blanket and defined line items based on approved supply codes, select the appropriate equipment, await for DLA to provide an updated Letter of Offer and Acceptance (LOA) with updated equipment lists, have LOA signed off by the partner nation, and finally receipt for and turn over equipment to partner upon arrival. Key to the success of the EDA ordering process is that the AFRICA OSC needs to ensure that they communicate to the partner nation the importance of the specifics with regards to logistics and finance actions associated with DLA Blanket and Defined EDA FMS cases. Partners will find that there are times when blanket equipment ordered will ship and arrive before the partner receiving their updated EDA Blanket Order FMS case. Partners requesting defined line equipment are required to received congressional notification and approval which does take time. However with determined line equipment, once the partner has tagged it and ordered it, DLA must hold it until it can be delivered to the partner, which could be up to two years.
The Fine Print
While the process from ordering to reception of equipment in a country might look relatively straightforward on paper; however, when it comes down to it, there are unique fine print distinctions that the AFRICA OSC and partners need to be aware of. The fine print itself is codified with many different nuances, pieces of information, and questions that the AFRICA OSC and partner nation leadership should consistently ask themselves when ordering and procuring EDA items. While the cost of grant EDA equipment will be a fraction of the original value, both the AFRICA OSC and the partner nation will find that it is essential to be aware of the logistics, transportation, and receipt actions associated with EDA process.
Both the AFRICA OSC and partner nation should account for where equipment is being procured. This is important in itself because the length of location and distance that a specific type of item has to travel the potential for high transportation costs. Related costs for transportation of equipment are based on the total “measurement ton.” Measurement tons are a combination of the room and weight that the equipment takes up on a transportation vessel. Other areas of concern for the partner nation might include import rules or restrictions. Examples of such regulations might include limitations on the import of specific equipment types or classes, specific partner packing requirements, and possibly U.S. Export limitations. Finally, the partner nations should consider the delivery location of where they want equipment shipped. This is important because it determines the cost partner nations will want to spend to have the item delivered or choose to pick-up equipment and transport themselves from the nearest port. Also, the pick-up location (port or airfield) will be one of the factors in considering what type of transportation that a partner nation needs to use to receive equipment. Usually, while the DAO or the OSCs will have no stake in worrying about the partners shipping costs, the AFRICA OSC might want to diplomatically provide a soft recommendation to the partner and let them know that they are willing to make suggestions that can help maximize the EDA resources the partner are spending to receive equipment.
Caveat Emptor (Buyer Beware)
There is one key rule as part of the EDA process that both the AFRICA OSC and partner nation should know. Within the scope of the EDA program, laws exist that limit and restrict certain types of EDA equipment that countries are not authorized to receive. These limitations are in place to keep the partner from obtaining specific equipment types such as weapons, weapon systems (1300 and 1400 FSC), or other specific military equipment that might contain technologies that the U.S. might be reluctant to allow our partners to have. One of the biggest types of equipment that partner nations like to ask for, but are not authorized to order or receive for, are those in construction and fire equipment classes. Per the National Defense Authorization Act (NDAA) for FY 1993, 10 U.S.C. section 2552 was amended to restrict the sale or transfer of excess construction or fire equipment. Under the purview of this new provision, the term “construction” or “fire equipment” includes and is not limited to: Tractors (FSCs 2320, 2410, 2420, 2430, 3830, 3930), scrapers (FSC 2430,3805), loaders (FSCs 3805, 3830), graders (FSC 3805), bulldozers (FSC 3830), dump trucks, generators (FSCs 1040, 1680, 2920, 2925, 3740, 4470, 4920, 6115, 6116,6125), pumpers (FSCs 1420, 1650, 2810, 2840, 2910, 2915, 2930, 2935, 2995, 4310, 4320, 4930, 6116), fuel and water tankers, crash trucks, utility vans, rescue trucks, ambulances (FSC 2310), hook and ladder units, compressors, and miscellaneous firefighting equipment (FSC 4210). This rule is important because many times AFRICA OSCs seem to find partners always inquire or ask about these types of equipment or supply classes.
What Can the Partner Nation Buy?
DLA Disposition Services generally provides EDA items and equipment consisting of non-lethal non-SME excess government property. Some of these types of includes those that would be considered support equipment that is used to aid in support of military forces conducting missions. Certain EDA classes also include major end items that might consist of vehicles, trucks, trailers and other machinery that the partner nation might add to enhance or support differing missions. Generally most EDA items support equipment (tires, spare parts, stocks, kitchen items and/or consumable items (subsistence items, toiletries) that military services no longer use are turned into DLA disposition services and are then made available to most partners in Africa and provided as a grant to the country free of charge or provided to a non-grant eligible country at a reduced cost, with the actual cost of the equipment based on the condition of the item. One of the big selling points of EDA that an AFRICA OSC can make is that the country (if grant eligible) can receive items and equipment literally for free.
All EDA FMS cases come in two types, Blanket and Defined. Blanket items are those that fall into Standard Supply Classes (SSC) of equipment that are outside of SSCs that are considered Special Military Equipment (SME) that consist of any types of vehicles and rolling stock which is Defined Line equipment. Examples of blanket case equipment might be uniforms, tires, vehicle parts, or mobile kitchens. Items that are considered defined line include vehicles, trucks, trailers, and police cars.
How does the partner buy it?
If you are at the point where you have buy-in from the partner nation, and they would like to procure EDA equipment through DLA disposition services, the next step is to gain access to the DLA portal. First, before the AFRICA OSC or partner can access the portal, the partner must submit a Letter of Request (LOR) to DLA Disposition Services asking for an EDA case to be established. As part of the LOR, the partner should work with the AFRICA OSC to ensure that they provide the appropriate FSC that they will want to select equipment from. In the event, the partner finds they are unfamiliar or unsure of what supply/equipment codes they would like to add to the LOR, it is recommended that they sit down and seek advice from DAO and OSC as they will have a pretty good understanding of the partners existing equipment and defense capabilities. A positive takeaway that both the AFRICA OSC and partner can benefit from establishing an EDA FMS case is the many opportunities it presents to work with local partners, logistics POCs, and/or department to build trust, foster learning, and possibly set the course for future necessary logistics training events that could consist of best practice exchanges or events. Potential training opportunities that an AFRICA OSC might want to look at over a period of time with EDA could include basic training on NSNs, item classes and specific training on the differences between Blanket and Defined Line military equipment, and the different types of FSCs each kind of material applies. This route allows the partner to become more self-sufficient when it comes to EDA procurement.
Once DLA has provided the partner with the FMS Case EDA Letter of Offer and Acceptance (LOA) and the partner has signed and returned the LOA, DLA should then establish the AFRICA OSC and Partners portal account, allowing them the opportunity to start selecting equipment. To view equipment and items in the DLA Disposition Services portal, users must set-up an account. Personnel must register for access at the web site https://business.dla.mil/landing/ds.jsp to gain access to the system. Once registration is complete staff must then access the site: https://amps.dla.mil/ampssplashscreen/faces/index.jspx?_adf.ctrl-state=zks9yiik4_4 to establish an EDA account. (NOTE: AFRICA OSCs should always manage expectations with the partner and ensure they realize that access to DLA Business portal can take time and access isn’t instantaneous.). If you find that you’re in a country around Africa where access to military sites can is restricted, the AFRICA OSC with the partner might need to reach out and work with the local communications company and or government communication agency to solve the issue.
Once AFRICA OSC and partner have access to the DLA Disposition Services portal, either the AFRICA OSC and partner should be able to screen available material by viewing the DoD listings in the Reutilization/Transfer/Donation (RTD) section of the DLA Disposition Services website. With access, customers can search inventory by NSN, item name or federal supply class, location or condition code. Upon performing a search, a listing of all the available assets meeting the search criteria is visible, and in certain instances, photos of the existing item might be included. A benefit to using the RTD system for EDA is that customers can submit lists for things that may become available in the future. Under this system, when an item becomes available, the user is notified by e-mail. Once a piece of equipment has been ordered, it is processed by the DLA site and prepared for shipping. Once items are shipped, it is the responsibility of the country to pay for transporting the property to the final destination. NOTE: AFRICA OSCs will want to advise partners that EDA items not considered vehicles/rolling stock will end up being ordered using with the blanket order EDA case.
How do I Price out Property?
Now that the AFRICA OSC and partner have access to the DLA system, the partner might ask how much is this going to cost. The best answer that can be provided to the Partner is that “it depends” as the final cost per items depends on many different factors. The actual price of equipment for countries not able to receive EDA grant is based on the condition code of the item. Generally most countries not EDA grant will have to pay from 5 to 50 percent of original acquisition value based on condition class (A, B, C, D, E, F, G, H, and S) and a disposal code (1, 2, 3, 4, 5, 6, 7, 8, 9, X, and S) with additional accessorial charges of packaging, crating, handling (PCH), and transportation and administrative expenses. Countries considered EDA grant eligible receive requested equipment on a grant from the USG and don’t have to worry about paying 5 to 50 percent of the original acquisition value. This means that the partner is only responsible for paying for packaging, crating, handling, and transportation (PCH&T). Specific information regarding depreciation values of EDA equipment can be found chapter 12 page 12-19 of the DISCS Green Book (http://www.discs.dsca.mil/documents/green book/12_Chapter.pdf?id=1).
In most instances AFRICA OSCs and Partners will see PCH&T costs lumped together as part of the total expenses, realistically these are two separate costs for equipment that need to be discussed separately.
Packing, Crating, and Handling (PC&H)
PC&H costs are those incurred by DoD for labor, material, or services in preparing material for shipment. PC&H expenses do not apply to sales from procurement unless the item is processed through a DoD depot/distribution center. Usually, the PC&H rate of 3.5 percent of the unit price based on the depreciation cost of the condition code of the equipment being requested is added to the selling price of material with a unit price of $50,000 or less. For Grant EDA countries, actual procurement prices of the equipment are different. As the USG provides the equipment to the country as a grant, the country is only responsible for paying 3.5% of the depreciated value of the item. So let’s say a Grant EDA partner comes to the AFRICA OSC and states that they would like to order a 48 ft military trailer. The AFRICA OSC goes to the portal and finds a trailer with a Condition Code C and Disposal Code 4. A review of the depreciation chart on 12-19 of the Green Book, the EDA cost for this item would be 30% of the original value. If the price in the EDA portal for the trailer states an original cost of $110,000, the EDA cost at 30% of the initial value based on Condition and Disposal Codes would be $33,000. As stated earlier Grant EDA countries are only responsible for paying a 3.5% PC&H of the equipment, so the total cost of the trailer based on a PC&H price of 3.5% of the depreciation value would be $1,155. When using a math formula to figure PC&H would look something like this (Original equipment cost x Depreciation Value x 3.5%).
In addition to PC&H costs, grant EDA partners must be aware that they are responsible for the transportation costs of equipment. The goal of finding the actual/estimated appropriate transportation costs is very much an art of its own and needs to be one of the key decision factors that the AFRICA OSC and partner must look at when ordering EDA equipment. The best way to estimate or come to finding the transportation cost for equipment is to see the “measurement ton” cost from different ports around the world along with the total measurement ton for each piece of EDA equipment. The best folks to talk with in regards to the “measurement tons” cost is to reach out to the MILDEP and have them get you in touch with the appropriate POCs in the Defense Transportation System (DTS). When obtain “measurement ton” costs for equipment the AFRICA OSC will want to ask about the per cost of “measurement ton” from locations to include: US East Coast, US West Coast, US Gulf Coast, Eastern Europe, Southern Europe (Greece, Italy, Spain, & Portugal), Western Europe (Germany, Netherlands, & U.K), Japan, Korea, Middle East, and Southeast Asia. You should be provided with a different figure based on each of these locations. Next, you will want to figure out the measurement tons of the equipment. This is done by taking the Length (in feet) * Width (in feet) * Depth (in feet) NOTE: if provided dimensions in inches divide by 12. You will then want to take the total and dividing by 21.6 (the number of cubic feet in a ton). Once you figured out the “measurement ton” of your equipment, you will then want to multiply the total measurement ton for each piece of equipment by the cost per measurement ton from each location to determine the total estimated transportation cost per piece of equipment. When attempting to figure out the transportation costs per piece of equipment as a math formula would look something like this: (L (in feet) * W (in feet) * D (in feet)/21.6*by cost of measurement ton from the location.) Once you’ve determined your total transportation costs, you should be able to add the transportation and PC&H expenses to get the total cost for each piece of grant EDA equipment based from different ports around the world. NOTE: Finding actual dimensions of military equipment can be difficult; there are databases out there that do have information to include Length, Width, and Depth of material in inches. If you find that you’re running into issues when attempting to look for this information, it is recommended to ask the MILDEP or other logistics organizations that might be able to assist.
Follow On Support
With regards to EDA equipment, the most critical decision a partner will want to look at is understanding what type of initial and follow-on support they will require. Both the AFRICA OSC and partner should work together to ensure they have the capabilities to make repairs, adequate parts on hand, and training to keep the equipment operational. As EDA does not follow the total package approach concept, the equipment or materials are considered “as is, where is” and does not include spares, support, publications, training or any other aspect of support. Partners looking to utilize EDA might want to consider it as one method instead of the preferred method to procure or introduce new equipment systems into their inventory. Partners that decide to use EDA should reach out to the AFRICA OSC to ensure all basic questions regarding infrastructure are answered when determining to acquire equipment. While selling the partner on EDA might open the door to provide a good value and ROI on initial investment, partners must be aware that any associated costs for refurbishment, subsequent packaging, crating, handling (PC&H), and transportation costs of the defense article need to be the determining factor as to whether or not should accept EDA equipment. Many of our African partners hoping to use EDA as a way to receive vital equipment or systems available on a grant basis come to find out that the costs to acquires such equipment and systems prove to be prohibitive to the point that many articles available are unserviceable and in the end require significant repair. This is one of the reasons that it is best to recommend that DAOs and AFRICA OSCs should look at steering our grant EDA partners towards procuring equipment and items through DLA Disposition Services. Most articles and material that are partners value are generally going to be smaller pieces of equipment or rolling stock that can be found or added to a Blanket or Defined Line EDA FMS case.
Many of our African partners recognized as being EDA Grant-eligible have found a great deal of usefulness and opportunities to receive great pieces of equipment or rolling stock at no cost by utilizing the DLA disposition services system. When looking through the portal, it is crucial to review the items and the respective condition code to ensure that the equipment can be used.
“I can share from the first-hand experience that many of our African partners are resourceful, very smart, and do a great job of getting additional years of use out of obsolete U.S. equipment. I remember a time in a country I served in that we provided a piece of EDA equipment to its military that had seen its better days. This piece of equipment was beaten up, had dents, looked as though it was falling apart and had seen better days. If I recall the equipment might’ve been a service code H and disposal code nine meaning that the total cost to the partner nation was 3.5% of 5% of the original value. One day while talking to the Logistics Chief from the military, I asked him if he had received the piece of equipment and if it was working. He responded in telling me yes. I then asked him how much it cost him to get it working and he answered that it only took approximately $58.00 in parts to get the equipment up and running. From this perspective, I’ve come to realize, even if equipment looks as though it has seen better days, our partners in Africa will either make it work or cannibalize it for spare parts.”
If you’ve read to the end of this blog, I am amazed. EDA is the most complex security assistance program in the book and can take up a lot of the AFRICA OSC’s time. It shouldn’t; instead it should take up the partner nations time and money. If your partner nation wants to use the EDA system do the following: 1) have them commit an officer and an NCO to the project at a minimum (both must speak English); 2) Send the officer at a minimum to the DISCS foreign purchasers course, so they understand the FMS system; 3) set them up a DLA / EDA internet accounts; and 4) they should be willing to put some money up from to some blanket EDA FMS accounts. If they aren’t willing to do these four, use your AFRICA OSC diplomatic skills and tell them it’s not a program for them.
Guest contributor to this blog: Bryce Englin