U.S.-Israel Formal Agreements: Memorandum of Understanding Concerning Development of Night Targeting System (NTS) for Cobra Aircraft

SECTION I: INTRODUCTION

1.1 The Government of the United States of America (USG) , represented by the Department of the Navy (DON), and the Government of Israel (GOI), represented by its Ministry of Defense, have a common interest in increasing their defense capabilities through the efficiencies gained by cooperation in the development and acquisition of defense equipment.

1.2 Both the USG and the GOI have identified a requirement for a night targeting capability for AH-1 (Cobra) series helicopters. In connection therewith, the GOI has been working on the development of an improved M-65 Telescopic Sight Unit (TSU) with night vision capability, and the Tamam division of Israel Aircraft Industries (IAI) has been conducting such development for the GOI.

1.3 The USG conducted a survey or industries capable or meeting the DON requirement. As a result of this evaluation a night targeting system (NTS) designed by IAI was identified as being able to provide the most cost effective solution for both countries while also meeting the Initial Operational Capability (ION requirements of both countries. The IAI NTS consists of an improved M-65 TSU with a Forward Looking Infrared (FLIR) sensor and laser designator.

1.4 Both governments wish to pursue joint development, integration and production of a night targeting system by taking advantage of the benefits of GOI/IAI's development to date by incorporating and improving already developed items and adding a laser designator. This cooperative effort Is undertaken with the expectation that the two governments working together will realize economies of both time and money.

1.5 Accordingly, the two governments have reached the following agreement:

SECTION II: SCOPE

2.1 The project to be executed under this Memorandum of Understanding (MOU) consists of the following:

2.1.1 Development, integration and production of a night targeting system (80 systems for the USG and 40 for GOI), Incorporating common core requirements, which will also include configurations and interfaces unique to the needs and to the Cobra aircraft of each participant;

2.1.2 Establishment of a second NTS production source in the United States; and

2.1.3 Configuration management of the NTS.

2.2 The major components of the NTS are listed in Annex A to this MOU.

2.3 Each government is responsible for the installation and logistic support of its own NTS acquired pursuant to this MOU. However, the contract with IAI shall include options for installation kits, installation, and integrated logistics support (ILS) for NTSs purchased under this MOU (80 USG, 40 GOI).

2.4 Both governments recognize that implementation of this MOU will be subject to their national laws, regulations, policies and procedures.

SECTION III: JOINT ACQUISITION PLAN

3.1 The USG will place a contract with IAI in accordance with standard USG procedures for the development and integration of the NTS, including options for the USG and GOI production requirements, which may be independently exercised. Both the contract for development and the options for production will be firm fixed priced. The statement of work and specifications will be jointly approved by the USG and GOI. The contract for NTSs for the USG shall be F.O.B. destination and acceptance shall take place in the U.S.

3.2 IAI will be required to select a U.S. contractor through competition and qualify it as a second source. In no event will qualification of the U.S. contractor occur later than the production of the 120th NTS. The U.S. contractor will participate in all phases of the program. The competition has been announced in advance in the Commerce Business Daily. The final selection of the U.S. contractor will be subject to the consent of the USG. The contract with IAI will indicate that payment to any first tier U.S. subcontractor will be made by the United States Navy's Naval-Air Systems Command directly to that U.S. subcontractor upon certification by IAI that such payment is correct and due, without limiting the rights and responsibilities of IAI.

3.3 Any USG contracting on behalf of the GOI and, provision of services and/or hardware to the GOI, shall be pursuant to the Arms Export Control Act, implementing regulations and letters of offer and acceptance (LOAs) between the two governments. The LOAs shall reflect the terms of this MOU. In the case of any inconsistency between this MOU and any LOAs issued thereunder, the terms and conditions of the LOAs will govern.

SECTION IV: PROGRAM MANAGEMENT

4.1 The USG shall have management responsibility and authority for the program. The USG program office will be located at the Naval Air Systems Command and headed by a USG program manager. The GOI may designate a deputy program manager who will be resident at the Naval Air Systems Command (NAVAIR) at least during the development phase of the project. The GOI deputy program manager shall have full and continuous involvement in the management of the program with appropriate visibility for such purposes. The GOI deputy program manager will represent the interests of the GOI. In addition to the USG primary program office, there shall be a program office in Israel within the GOI for liaison purposes, headed by a GOI official. The USG may designate a deputy program manager to represent the USG primary program office within the GOI program office, at least during the development phase of the project. The USG deputy program manager will be resident at the GOI program office. The USG program manager shall consult with the GOI program officer and promptly develop interaction procedures in accordance with this MOU.

SECTION V: CONFIGURATION MANAGEMENT

5.1 The governments of the U.S. and Israel intend to maintain a common configuration of the NTS to the maximum extent practicable. Establishment of common core requirements will be mutually agreed to prior to signing of an LOA for this project.

5.2 The functional and allocated' baseline for common core and unique requirements will be defined by the statement of work and specifications described in paragraph 3.1.

5.3 The USG will provide for configuration control on behalf of both governments, in accordance with DOD-STD-480A, Configuration Control Engineering Changes, Deviations and Waivers.

5.4 Design changes may be proposed by either government during the joint development phase of the program. Each government will give prompt consideration to a change, modification or improvement proposed by the other. Functional and allocated baseline changes requiring additions, deletions or modifications of common core requirements, or impacting delivery schedule, shall be mutually agreed upon by the USG and GOI. Without agreement, incorporation of a change to the functional or allocated baseline of the common core requirements will be considered unique in nature and will only be allowed so long as there is no significant adverse schedule impact to the other government. Any costs associated with a unique change will be borne solely by the requiring government.

5.5 A Configuration Control Board (CCB) to be chaired by the program manager will be established at the Naval Air Systems Command (NAVAIR) to process all configuration changes through full scale development. Upon completion of the physical configuration audit, which establishes the product baseline, all Class I changes and requests for major deviations and waivers shall be processed via NAVAIR's CCB In accordance with current instructions. Should a resident deputy program manager be designated by the GOI as described in paragraph 4.1, the GOI resident deputy will be a voting member of both CCB's with full voting rights.

SECTION VI: FINANCIAL MATTERS

6.1 The execution of this MOU is subject to the availability of USG appropriated funds and GOI compliance with the financial obligations stipulated in the accepted letter of offer. Each government will notify the other promptly if funds have not or will not be made available. GOI's participation in this program is dependent upon the Defense Security Assistance Agency's approval of its use. of foreign military sales (FMS) credit funds.

6.2 Neither government will charge the other any proportionate share of the jointly funded nonrecurring development cost of the NTS in purchases of production NTSs for their own use.

6.3. In the event that the requesting government requires any change to supplies or services. being provided under the program, it will notify the other government. The USG then will, after consultation with the contractors involved, determine the implications of such change in terms of estimated cost, schedule and performance characteristics.

6.4 Nonrecurring costs of any such' change will be apportioned on the following basis:

6.4.1 Nonrecurring costs of any change incorporated exclusively in one

government's supplies or services will be paid by that government;

6.4.2 Nonrecurring costs of any change adopted by both governments will be shared on a proportionate (determined by the number of systems incorporating the change) basis;

6.4.3 No nonrecurring costs associated with effecting a change will be paid by a government which declines to adopt that change when such change is incorporated exclusively in supplies or services of the other government; and

6.4.4 Each government will pay the recurring costs of incorporating any change in its supplies and services.

6.5 Program costs shall be divided as follows with the GOI portions of the costs implemented in applicable letters of offer and acceptance.

6.5.1 Other than as specifically set forth elsewhere in this MOU, the cost of joint development, design and integration work, technical data, computer software and M's cost of qualifying a U.S. production source shall be shared 1/3 GOI, 2/3 USG;

6.5.2 Both the USG and 'GOI shall fully fund their respective costs associated with program management, configuration management and related services;

6.5.3 The full cost of development, design and integration work, technical data and computer software of any unique Annex A requirements, unique ILS requirements, unique testing and any other unique items or services shall be borne by the government acquiring each unique Item or service;

6.5.4 The full cost of any option for a technical data package adequate for competitive procurement shall be borne by the acquiring government;

6.5.5 The full cost of any hardware or items, e.g., models and prototypes of the NTS or components thereof, shall be borne by the government receiving such hardware;

6.5.6 The full production cost of defense articles and services in the production phase shall be borne by the government receiving such goods and services; and 

6.5.7 The full cost of such other charges as may be required by U.S. laws or regulations as of the date of acceptance of any LOA hereunder, as shown in the LOA, shall be borne by the GOI.

6.6 All monetary transactions relative to this program shall be made in U.S. currency.

SECTION VII: TECHNICAL DATA, COMPUTER SOFTWARE AND PATENTS

7.1 Contracts awarded by the USG in furtherance of this MOU will provide for the acquisition for the USG and the GOI of technical data, computer software, copyrights and inventions and rights therein in accordance with USG laws and regulations in effect at the time of contract award. The USG will request a priced option to secure non-exclusive unlimited data rights for competitive procurement of the NTS to include all components or processes depicted in the technical data pertaining to the NTS. Cost of any option to obtain the data rights will be borne by the acquiring government.

7.2 Should unlimited data rights to all components not be obtained by the USG as provided for In paragraph 7.1 above, the GOI will ensure that those items produced by Israeli contractors will be provided to the USG for USG purposes, including security assistance, at a cost not to exceed that which would be paid by the GOI for those items. Additionally, the GOI will use its best efforts to ensure that those items produced by other than Israeli contractors will be provided on fair and reasonable terms to the USG for USG purposes, including security assistance.

7.3 In addition to the rights described in paragraph 7.1 and 7.2, each participant may advise the other of proposed improvements or modifications outside the scope of this MOU and offer that participant the opportunity to participate in the improvement or modification.

SECTION VIII: THIRD PARTY TRANSFERS AND SALES

8.1 The GOI agrees not to transfer title to or possession of any NTS or component thereof, developed and produced or furnished in connection with this project, or related technical data or computer software developed, produced, or furnished in connection with this project, to anyone not an officer, employee or agent of, the GOI, and not to use or permit the use of any such NTS related technical data or computer software developed, produced or furnished in connection with this project for purposes other than those specified in paragraph 2 of the U.S.-Israel Mutual Defense Assistance Agreement of July 23, 1952, without the prior written consent of the USG. The GOI further agrees that it will not use or permit the use of the NTS or components thereof or technical data developed in connection with this project for manufacture of NTS's for transfer or sale to anyone not an officer, employee or agent of the GOI without the prior consent of the USG. The restrictions set forth in this section do not apply to the following:

8.1.1 Any subsystem or component of the NTS, or any part thereof, which was developed solely by use of GOI national funds or any other third party funds;

8.1.2 Any subsystem or component of the NTS, or any part thereof, which was not furnished to the project by the USG;

8.1.3 Any subsystem or component of the NTS, or any part thereof, which was not furnished to the GOI outside the framework of this project by the USG; and

8.1.4 Any subsystem or component of the NTS or any part thereof, which was not derived in whole or part from or by the use of U.S. technical data or technology.

8.2 The USG will fully consider the GOI's national security interests before approving a third party sale of the Night Targeting System, related technical data or computer software, or components thereof.

8.3 In the event of any sale by the GOI or any contractor on behalf of the GOI to any third country, the seller shall pay to the USG a proportionate share of the nonrecurring research, development and production costs incurred by the USG as determined by the USG in accordance with USG laws and regulations. Any payment for non-recurring costs by the GOI to the USG shall be made by check payable to the Treasurer of the United States. Any recovery of nonrecurring costs by the GOI for its own benefit shall be returned by the GOI to its FMS trust fund account.

.8.4 In the event of any sale by the USG or any contractor on behalf of the USG to any third country, the seller shall pay to the GOI -a proportionate share of the nonrecurring research, development and production costs incurred by the GOI as determined by the USG in accordance with USG laws and regulations. Any payment for nonrecurring costs to the GOI shall be deposited in the GOI's FMS Trust Fund Account in accordance with USG regulations.

8.5 Subject to USG laws, regulations and policy, the USG shall use its best efforts to extend to IAI the opportunity to compete with other qualified contractors with respect to follow-on sales of the NTS to the USG.

SECTION IX: SECURITY AND ACCESS TO ESTABLISHMENTS

9.1 Any classified information or material exchanged under the terms of this MOU will be protected in accordance with the U.S.-Israel General Security of Information Agreement of 10 December 1982, and the Industrial Security Protocol of 3 March 1983.

9.2 Each Government will take all lawful steps -available to it to keep information exchanged in confidence under this MOU free from disclosure under any legislative provision, unless the other Government consents to such disclosure.

9.3 To assist in providing the desired protection, each Government will mark such information furnished to the other with a legend indicating the country of origin, the security classification, the conditions or release, and, if unclassified, the fact that the information relates to this MOU and that it is furnished in confidence.

9.4 Unclassified information provided by either Government to the other in confidence, and information produced by either Government pursuant to this MOU requiring confidentiality will be safeguarded In a manner that ensures its proper protection from unauthorized disclosure.

9.5 Requests for visits by representatives of one country to a government or contractor facility in the other country will be arranged in accordance with existing bilateral approval procedures.

SECTION X: TERMINATION

10.1 It is the intention of both governments to carry out the joint acquisition plan contemplated by this MOU until the initial requirements for purchases of NTSs by both governments have been satisfied (80 USG and 40 GOI). However, either government may withdraw from this MOU at any time subject to giving the other government prompt notice in writing of its intention to do so.

10.2 In the event of withdrawal from this MOU by either government, if the other government wishes to have continued work being performed in the withdrawing government's country, the withdrawing government will use its good offices, subject to its own laws, regulations, policies and defense requirements to allow the work to continue.

10.3 Notwithstanding subsection 10.1, this MOU will terminate upon (1) withdrawal from the MOU by either government, (2) acquisition of 80 NTSs for the USG and 40 for the GOI, or (3) ten years after the date of the last signature to this MOU, whichever is earlier. If the governments wish to extend this MOU they may do so by amendment to this MOU.

10.4 Notwithstanding termination of this MOU, the provisions concerning "Technical Data, Computer Software and Patents", Section VII, "Third Party Transfers and Sales," Section VIII, and "Security and Access to Establishments," Section IX, will continue to apply.

SECTION XI: EFFECTIVE DATE

This MOU, in two original texts in English, will come into effect on date of later signature by the authorized representatives of both governments.

ANNEX A

MAJOR COMPONENT LIST

Sensor/Turret (S/T)

Stabilized assembly

Direct View Optics-(D.V.O.)

Forward Looking Infrared (FLIR) Sensor

Laser designator/Range Finder (R.F.)

Boresight assembly

Charged Coupled Device (CCD) Camera

Multiple Integrated Laser Engagement System (MILES)

NTS Electronics

Tube-Launched, Optically-Tracked, Wire-Guided (TOW) 2 electronics (AH-1W)

M-65 Telescopic Sight Unit (TSU) electronics

Forward Looking Infrared (FLIR) Electronics Unit

Video Tracker Electronics

Laser Electronics

Night Targeting System (NTS) power supply

Cables and Harnesses

Video Cassette Recorder (VCR)

Cathode Ray Tube (CRT) Electronics

Gunner Station Components

Optical relay tube (with 4 digit LED readout)

Cathode Ray Tube (CRT) Display

Left-hand Grip (LHG) and Sight-hand Control (SHC) (IAH-IS)

LHG and Right Hand Grip (RHG) (AH-1W)

IAH-IS NTS Control Panel(s)

TOW Control Panel (IAH-1S)

TOW Hellfire Control Display Panel (AH-1W)

Interface Components

TOW Missile System

HELLFIRE Missile-System (AH-1W)

Sidewinder Missile System (AH-1W

Head-up Display (HUD)

Cockpit Control Systems (AH-1W)

Fire Control Computer (IAH-1S)

Sources: Israeli Foreign Ministry