Foreign military sales financial challenges: how improving financial accountability and transparency can enhance competitiveness

The U.S. Administration’s 9th April 2025, Executive Order, “Reforming Foreign Defence Sales to Improve Speed and Accountability,” notes its policy is to “improve accountability and transparency throughout the foreign defence sales system,” including “developing metrics for accountability” and “achieving cost and schedule efficiencies.” Partners using Foreign Military Sales (FMS) to purchase American defence equipment inevitably become entangled in its antiquated financial system. They discover their payments are not directly correlated with vendor billing nor deliveries. Instead, estimated payment schedules used for billing typically result in an over-collection of funds, which can easily grow to hundreds of millions, or even billions of dollars. This paper provides a macro-level review of U.S. government processes used to bill and collect payments from FMS partners, and the problems they cause for partners’ budgeting. It concludes with recommendations to improve that system’s accountability and transparency, including transparency through the development of a financial dashboard.