US State Dept. clears sales of Dutch weapons, South Korean F-35 support

WASHINGTON — The U.S. State Department on Friday OK’d a pair of foreign military sales that could bring in $715 million for American firms.

The first sale, covering support and services for South Korea’s planned procurement of the F-35 Joint Strike Fighter, comes with an estimated price tag of $675 million. The second sale involves 199 Excalibur Increment IB M982Al tactical projectiles going to the Netherlands, with an estimated price tag of $40.55 million.

The notifications were posted on the website of the Defense Security Cooperation Agency. DSCA notifications are not final sales; once cleared by Congress, the sales enter negotiations, during which quantities and costs can shift.

The South Korean package requests “follow-on support and services for its F-35 aircraft, engines, and weapons; publications and technical documentation; support equipment; spare and repair parts; repair and return; test equipment; software delivery and support; pilot flight equipment; personnel training equipment; U.S. Government and contractor technical and logistics support services; and other related elements of program support,” according one of the notifications.

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The prime contractors are Lockheed Martin, which produces the fifth-generation fighter, and Pratt & Whitney, which makes the F135 engine used on the jet. Any offset arrangements are yet to be decided.

The Dutch munitions procurement would be put in the field alongside conventional artillery units equipped with the German-made PzH2000NL self-propelled howitzer “to provide precision fires capability in order to reduce collateral damage and increase effectiveness in various areas of operation,” according to the DSCA announcement. Raytheon is the prime contractor.

In an April 6 note to subscribers, analyst Roman Schweizer of Cowen noted that the number of FMS cases so far this year are largely tracking similar to last year, even if the year-to-date dollar figures — $24.2 billion in fiscal 2020 versus $19.9 billion in fiscal 2019 — are slightly higher.

Asian allies and partners continue to drive big-ticket items, he noted, but cautioned that the COVID-19 outbreak may cause slowdowns across the board — or drive countries to look toward internal procurement as a way to jump-start economies.

Schweizer also highlighted that it has been 10 months since an FMS case was sent to Capitol Hill.

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