This part supplements the international logistics policies established in DoD Directive 5100.27, Delineation of International Logistic Responsibilities, December 29, 1964;1 DoD Directive 5132.3 (28 FR 7611); DoD Instruction 2000.8, Cooperative Logistic Support Arrangements, February 14, 1964;1 Part 258 of this subchapter; DoD Instruction 2015.4, Mutual Weapons Development Data Exchange Program and Defense Development Exchange Program, November 5, 1963;1 DoD Directive 2100.3, "U.S. Policy Relative to Commitments

to Foreign Governments Under Foreign Assistance Programs, July 11, 1963.1 Its purpose is to prescribe general policies and principles governing international co-production projects negotiated under agreements between the U.S. Government and eligible foreign govern

1 Copies available from Naval Supply Depot, 5801 Tabor Avenue, Philadelphia, Pa. 19120, Attention: Code 300.

ments, international organizations, foreign producers, or other approved agencies. Policy guidance pertaining to the general areas of the Military Assistance Program (MAP), Foreign Military Sales (FMS), and international Cooperative Logistics Support Arrangements (CLSA) is not affected by this part.

§ 194.2 Applicability and scope.

The provisions of this part are applicable to those offices responsible for negotiation, implementation, monitorship and financial and management control of the co-production projects within OSD, DSA, and the Departments of the Army, Navy, and Air Force.

§ 194.3 Concept.

(a) The term "co-production" as used herein encompasses any program wherein the U.S. Government, under the aegis of an international diplomatic level or Ministry of Defense-to-Department of Defense agreement, either directly through the FMS program, or indirectly through specific licensing arrangements by designated commercial firms, enables an eligible foreign government, international organization or designated commercial producer to acquire the "know-how" to manufacture or assemble, repair, maintain and operate, in whole or in part, a specific weapon, communication or support system, or an individual military item. The "know-how" furnished may include research, development production data and/or manufacturing machinery or tools, raw or finished materiel, components or major subassemblies, managerial skills, procurement assistance or quality-control procedures. Third country sales limitations and licensing agreements are also included as required.

(b) Co-production may be limited to the assembly of a few end-items with a small input of local country parts, or it may extend to a major manufacturing effort requiring the build-up of capital industries.

§ 194.4 Objectives and policies.

(a) The major objectives to be attained through co-production projects are to:

(1) Enable eligible countries to improve military readiness through expansion of their technical and military support capability.

(2) Promote United States-Allied standardization of military materiel and equipment, which, in turn, would generate the establishment of uniform logistics support, procedures and expanded multinational operational capabilities.

(b) Co-production programs directly benefit the United States through:

(1) Creating in-country compatability with the U.S. standardized equipment, thereby creating Allied capability of supporting deployment of U.S. forces.

(2) Promoting the standardization of materiel or equipment to integrate and strengthen international military operations in times of emergency or hostilities.

(3) Encouraging multinational acceptance of strategic and tactical concepts and doctrine through the utilization of common military materiel.

(4) Encouraging the creation of complementary forces in Allied countries.

(5) Establishing or broadening the base for common and interchangeable logistics among free or Allied nations.

(6) Serving to improve procurement, production, contract administration and mutual support capability of friendly Allied nations.

(c) Co-production is considered to be an important component of the U.S. military foreign sales program and, as such, represents an essential element of U.S. foreign policy. Accordingly, it is DoD policy that initiation of co-production project agreements will be encouraged and supported by all elements of DoD under the following circumstances. When they:

(1) Advance the objectives outlined in paragraphs (a) and (b) of this section.

(2) Supplement and reinforce the U.S. FMS program.

(3) Are in the best interest of the United States.

§ 194.5 Responsibilities and procedures.

(a) Co-production projects may be initiated by ASD(ISA) or, subject to prior ASD(ISA) approval, by the Military Departments; the Military Assistance Advisory Groups; and by authorized representatives of foreign governments and international organizations.

(1) The cognizant DoD component will ensure appropriate coordination with ASD(ISA) and furnish technical and negotiating assistance as required.

(2) After the agreement is signed, the appropriate DoD component will perform necessary managerial and reporting functions.

(b) In conformance with responsibil ities assigned in DoD Directive 5100.27.

(1) The Assistant Secretary of Defense (International Security Affairs) will:

(i) Develop and coordinate DoD positions for the negotiation of co-production agreements with foreign governments and international organizations; and

(ii) Either conduct negotiations for specific agreements, or delegate this responsibility to an appropriate DoD component.

(2) The Assistant Secretary of Defense (Installations and Logistics) will: (i) Assure during coordination of formal agreements, that the materiel to be committed under the co-production project will not adversely affect the U.S. defense supply or production base, or further limit critical materiel; that consideration had been given to the future logistical support of the equipment to be produced; and

(ii) Monitor and act as OSD coordinator for implementation of co-production projects under formal agreements, in coordination with other elements of the Office of the Secretary of Defense, as required.

(3) The Office of the General Counsel of the Department of Defense will assure necessary legal clearance, as required, prior to formalization of coproduction project agreements.

(4) The Assistant Secretary of Defense (Comptroller) will assist the ASD(ISA) and the ASD(I&L) during coordination, as required, of formal coproduction agreements by providing

necessary DoD representation and financial guidance with respect to pricing policies for U.S. military services and equipment, cost sharing, and reporting requirements under co-production agreements as they relate to international balance of payments.

(5) Other OSD organizational elements will assist ASD(I&L), as required, in assuring that the terms and conditions of co-production project agreements are met.

§ 194.6 Security.

(a) Classified information and materials will be treated as exchanges between those governments involved and will be safeguarded by each government in accordance with existing

agreements.

(b) In addition to adherence to existing security agreements, a security annex or clause will be developed as a part of the co-production agreement which will cover all security factors involved.

§ 194.7 Reports required.

(a) A short narrative type report will be submitted to ASD(I&L) by the cognizant DoD component on a quarterly basis covering all formalized co-production projects and agreements including pending agreements with a high potential of being finalized within the next three (3) quarters. The report will briefly state project, project officer, background highlights, current production and status including anticipated and approximate monetary return to the United States, current problem areas (if any) and future major events or milestones. This reporting requirement has been assigned Report Control Symbol DD-I&L (Q)834.

(b) This report will be submitted in triplicate to OASD(I&L) by the close of the last working day of the month following the close of the quarter. The first report under this part will cover the quarter ending March 31, 1968, and be due April 30, 1968. In addition, copies will be forwarded to the appropriate Unified Commands and MAAG's of the countries involved. Further distribution may be prescribed by the Military Department concerned.

(a) Configuration. The functional and physical characteristics of materiel as described in technical documents and achieved in a product.

(b) Configuration items. Materiel items designated by DoD Components for configuration management. They may differ widely in complexity, size, and kind. Examples are an aircraft, ship, mobile test unit, navigation system, embedded computer, computer program, facility, electronic system, test meter or a round of ammunition.

(c) Configuration management. The engineering management procedure that includes the following:

(1) Configuration identification. Selection of the documents which identi

baselines of other configuration items under development, in production or in supply; or, if the item is required to be compatible with an existing or planned maintenance program.

(3) Appropriate DoD configuration management shall be applied to any item to be developed wholly or partially with Government funding, immediately following approval for full-scale engineering development, Milestone

II.

(4) For configuration items wholly developed with private funding and procured by the Government, appropriate configuration management shall be applied to the configuration baseline when the procurement is initiated.

(5) During the deployment/oper ation/support phase, appropriate configuration management shall be continued to the extent required for readiness support.

1

(6) In the acquisition of major systems, any intended exception to this Part or any intended deviation from the fundamental elements of configuration management required by this Directive and as further set forth in the Joint DoD Services/Agencies Regulation 2 shall be proposed, with justification, in the System Decision Paper (DoD Directive 7920.1,1 and in the Acquisition Strategy Plan (DoD Directive 5000.2, "Major Systems Acquisition Process," January 18, 1977), by the cognizant DoD Component to the Office of the Secretary of Defense. For other than major systems acquisitions, any such intended exceptions or deviations shall be proposed for approval by the appropriate authority delegated to act for the Head of the cognizant DoD Component. For any acquisition, tailoring of the application of specifications and standards specified in the Joint DoD Services/ Agencies Regulation 2 shall be in accordance with DoD Directive 4120.21.1 § 195.5 Responsibilities.

(a) The Under Secretary of Defense for Research and Engineering (USDR&E) shall prescribe overall management policy for DoD configuration management practices.

(c) The Secretary of the Navy or a designee shall:

(1) In coordination which the other DoD Components, maintain the Joint DoD Services/Agencies Regulation 2 and any other joint documents considered necessary.

(2) Provide the Chairperson for the DoD Configuration Management Committee.

(d) The Head of each DoD Component shall:

(1) Designate for specific, individual items or categories of items, the technical organization, office or individual having authority and responsibility for configuration management during each life-cycle phase of the items being procured. When more than one DoD Component is involved in the acquisition, modification or support of an item, the DoD Component designated by the Secretary of Defense to have primary responsibility shall develop and document intercomponent joint agreements for configuration management of the item.

(2) Provide a representative for membership and active participation on the DoD Configuration Management Committee.

(e) The DoD Configuration Management Committee shall provide necessary support in the conduct of the DoD Configuration Management Program in accordance with this Directive and the Joint DoD Services/Agencies Regulation.

(1) Membership of the committee includes one representative of each DoD Component. Each member is authorized and responsible for presenting the consolidated position of the respective DoD Component on matters concerning DoD configuration management policy, implementation and standard

2See footnote 2 to § 195.3.

'Authority for the above actions has been delegated by the Secretary of the Navy to the Chief of Naval Material.

practices. When solicited, the committee provides comments to the DoD acquisition program reviewing authorities regarding the application of configuration management.

(2) A representative from the national Aeronautics and Space administration participates in the activities of the committee in a consulting capacity.