https://crsreports.congress.gov
August 10, 2021
Security of Supply Arrangements (SOSAs): Background and
Issues
The U.S. defense industrial base (DIB) sources goods,
services, and raw materials from the global marketplace to
support national security and defense requirements. To
facilitate the unhindered access to some key supplies, the
Department of Defense (DOD) has entered into bilateral
Security of Supply Arrangements (SOSAs) with selected
foreign governments to secure the mutual timely provision
of defense-related goods and services during peacetime,
emergency, and armed conflict. SOSAs allow DOD to
request prioritized performance of contracts from
companies in SOSA-signatory nations, and for SOSA
signatories to request the same from U.S. firms.
This In Focus considers the background of SOSAs in the
context of a globally integrated defense industrial base, as
well as potential policy considerations for Congress to
advance national security and homeland defense.
Background
SOSAs are non-binding international agreements that
provide a framework for the U.S. to receive and provide
priority support for defense-related goods and services with
signatory nations. SOSAs are conducted under bilateral
“Declarations of Principles for Enhanced Cooperation in
Matters of Defense Equipment and Industry,” that establish
a framework for the signatories to follow in order to assure
supply. SOSAs are the practical extension of these
principles and are negotiated by DOD (in coordination with
other executive branch agencies, particularly the State and
Commerce Departments) with a counterpart foreign
government agency—usually the defense ministry (MoD).
Currently, the U.S. has active SOSAs with: Australia
(signed in 2011); Finland (2007); Italy (2003); the
Netherlands (1978); Norway (2018); Spain (2015); Sweden
(1987); and the United Kingdom (UK, 2017). Although
Canada does not have a SOSA, the Department of
Commerce has a Memorandum of Understanding (MOU)
with Public Services and Procurement Canada to mutually
prioritize defense purchases (signed in 1998). This MOU
operates like a SOSA.
SOSAs represent one of many potential mechanisms for
multinational DIB cooperation. In addition to SOSAs, these
mechanisms can include broad defense cooperation
agreements (which provide the framework for SOSAs), as
well as more targeted agreements known as Reciprocal
Defense Procurement and Acquisition Policy (RDP)
MOUs, which allow DOD to exempt designated countries
from procurement constraints under the Buy American
statute (see 41 U.S.C. §§83, et seq.).
Canada may be the United States’ closest international
defense partner, due in part to interdependencies that grew
from the Second World War and the Cold War.
International treaties and integration policies provide
Canada with various benefits and export control
exemptions, notably including some exemptions to the
International Traffic in Arms Regulations (ITAR). The
U.S., meanwhile, has special access to supply chains and
productive capacity based in Canada. In some respects,
SOSAs may be seen as intermediate DIB cooperation
arrangements more specific and intensive than RDP MOUs
or broader defense cooperation agreements, but less
exclusive compared to the U.S.-Canada relationship
primarily, or the National Technology and Industrial Base
(NTIB)—a statutorily established designation that includes
the U.S., Australia, Canada, and the UK.
DPA Regulations and SOSAs
Under Title I of the Defense Production Act (DPA), the
President has the authority to prioritize the performance of
a contract for the promotion of the national defense, broadly
defined. Title I authorities are governed under Executive
Order (E.O.) 13603, which delegates DPA authorities to
certain cabinet secretaries across multiple sectors of the
civilian economy. Those delegations are:
1. the Secretary of Agriculture with respect
to food resources, food resource facilities,
livestock resources, veterinary resources,
plant health resources, and the domestic
distribution of farm equipment and
commercial fertilizer;
2. the Secretary of Energy with respect to all
forms of energy;
3. the Secretary of Health and Human
Services (HHS) with respect to health
resources;
4. the Secretary of Transportation with
respect to all forms of civil transportation;
5. the Secretary of Defense with respect to
water resources; and
6. the Secretary of Commerce with all other
materials, services, and facilities,
including construction materials.
Under the same E.O., each Secretary is required to develop
regulations to prioritize and allocate resources and establish
standards and procedures to promote the national defense.
Although E.O. 13603 governs these standing designations,
they may be amended or superseded at the President’s
discretion. Six such regulations exist, which in totality are
known as the Federal Priorities and Allocations System
(FPAS) and encompass: (1) the Agriculture Priorities and
Allocation System, by the Department of Agriculture (7
