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UNCLAS ANKARA 003593 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: MARR MASS MCAP PREL TU
SUBJECT: R&D HIGHLIGHTS THE 18TH TURKISH/AMERICAN DEFENSE 
INDUSTRIAL COOPERATION MEETING 
 
REF: 2005 ANKARA 1565 
 
¶1. (SBU)  SUMMARY:  The 18th Defense Industrial Cooperation 
(DIC) meeting and subsequent Defense Industry Day on May 
23-24 underscored a continued impasse over the barriers to US 
defense industry participation in Turkish defense contracts 
but highlighted R&D as a potential area for closer 
cooperation.  Depot-level maintenance, performance-based 
logistics, and defense space cooperation were also addressed. 
 MND Deputy U/S MG Inak listed Turkey's defense procurement 
priorities and challenged both governments to find a way to 
work together.  DOD Acquisition, Technology and Logistics 
(AT&L) Director of Armaments Cooperation Robert Bruce noted 
that this was only the second DIC to be followed by an 
industry day and encouraged Turkish and US defense industries 
to work together, saying that most successful cooperative 
development relationships start with industry-to-industry 
partnerships.  At the DIC, progress was made in identifying 
joint research opportunities.  During an industry day visit 
to the Turkish equivalent of the National Science Foundation, 
US Army, Navy and Air Force research specialists identified 
several potential opportunities for further exploration.  END 
SUMMARY. 
 
¶2. (SBU) Ministry of National Defense (MND) Deputy 
Undersecretary for Economic and Technical Affairs MG Omer 
Inak opened the 18th DIC meeting on May 23 by reminding the 
participants that the genesis of the DIC meetings is the 1980 
Defense Economic Cooperation Agreement (DECA), the US "SOFA" 
agreement with Turkey, which requires the US to assist Turkey 
to develop its industrial base to the best of the US' 
ability.  He claimed that Turkey has spent over $20B in 
defense R&D since the 1970's (Turkish defense R&D was $300M 
in 2005) to increase its defense industrial capabilities.  As 
a result of Turkey's increased industrial base, the 
government's procurement priorities have shifted.  He stated 
that the greatest value of the DIC is in providing a regular 
forum for discussion, whether or not we agree on any 
particular subject. 
 
TAPPING JOINT RESEARCH OPPORTUNITIES 
------------------------------------ 
 
¶3. (SBU) Following up on discussions held at the 2005 DIC 
meeting, both sides reiterated their interest in joint R&D 
projects.  Mr. Bruce noted USG interest in concluding a 
Research, Development, Test and Evaluation (RDT&E) umbrella 
MOU with Turkey but underscored that the USG requires 
concrete project opportunities that have the support of one 
of the military services or another DOD agency before 
entering into an MOU.  He asked for MG Inak's assistance to 
identify specific projects.  MG Inak stated that, while 
Turkey would prefer to sign the MOU first and then identify 
project opportunities, he is aware of several potential 
projects, including a Turkish Navy project and a Center Of 
Excellence for the Defense Against Terrorism 
(COE-DAT)-sponsored counter-IED (improvised explosive device) 
development program which Turkish Land Forces will lead, with 
MND coordination.  Dendis added that the US Army is interest 
in cooperation on a tactical missile MOU.  MG Inak agreed to 
consider this idea.  Both sides agreed that any project must 
benefit both countries. 
 
¶4. (SBU)  Representatives of the Office of Naval 
Research-Global and the US Army International Technology 
Center-Atlantic (USAIT-Atlantic) outlined opportunities for 
scientist exchanges and joint research and listed specific 
research areas of interest.  USAIT-Atlantic also outlined the 
mission of the US Air Force's European Office of Aerospace 
Research and Development (EOARD) and noted the possibility of 
basic research opportunities with that organization.  MG Inak 
responded that Turkey is doing a lot in the NATO arena, 
investing in EU projects and evaluating several projects with 
Asian countries.  He offered to forward the USG science and 
technical opportunities to Turkish universities and research 
centers and requested the establishment of a working group to 
identify additional areas of cooperation.  BG Birol Erdem, 
MND Technical Services Department Chief inquired about 
possible research into dual use items.  Mr. Bruce offered to 
provide MND with a contact at the US Defense Threat Reduction 
Agency, which handles this issue. 
 
¶5. (SBU) The Turkish side suggested two additional areas for 
cooperation -- the certification of military aircraft and the 
 
certification of all Turkish-manufactured weapons systems. 
According to MND, Turkey plans to establish military aviation 
and defense system certification authorities and would like 
US consultation assistance.  Col Dendis requested additional 
specifics in order to identify the appropriate DOD office for 
these tasks.  Regarding the certification of military 
aircraft, he also recommended MND contact or visit the US 
Federal Aviation Administration for information on commercial 
aviation air-worthiness certifications, as well as applicable 
US military facilities.  Regarding NATO certification for 
ammunition, Mr. Bruce recommended that MND work with NAMSA 
and NATO HQ on specific procedures for Turkish ammunition 
manufacturing companies. 
 
DEFENSE COOPERATION -PROBLEM OR OPPORTUNITY? 
-------------------------------------------- 
 
¶6. (SBU) MG Inak said Turkey's primary goal is 100% Turkish 
production of armaments.  Absent Turkey's ability to 
indigenously produce an item, it will opt for co-production 
with a foreign firm.  Only as a last resort will Turkey buy a 
foreign defense item outright.  A Turkish company will be the 
prime contractor but will be "free" to choose its 
sub-contractors, according to Inak, who added that  he would 
like US/Turkish defense industry cooperation to be a model 
for Turkey's cooperation with other countries.  Mr. Bruce 
responded that the most successful cooperation begins with 
industry and moves to government -- not the other way around 
-- and highlighted the importance of the May 24 Defense 
Industry Day for US and Turkish firms to connect with each 
other. 
 
¶7. (SBU) Undersecretariat for Defense Industries (SSM) 
Aviation Department Head Sedat Guldogan led a discussion 
entitled "Problems and Restrictions in Turkish Industrial 
Cooperation," which he said reflected the US view of the 
situation, noting that Turkey views defense cooperation as an 
"opportunity."  Guldogan enumerated Turkey's defense industry 
priorities, reflected in SSM's new standard contract, as 
follows: 1) up front foreign government commitment to the 
project, 2) use of Turkish industry to realize the project, 
3) sustainment of workshare, 4) Turkey's sovereign right to 
use of the finished armaments "as required." 
 
¶8. (SBU) Guldogan denied that Turkey requires "unlimited 
usage rights for transferred technical data."  When asked for 
his definition of "technology transfer", Guldogan 
differentiated between design source codes, which he 
considered "technology," and the technical data packages 
required for the installation of TU-origin equipment onto a 
US platform, which he suggested were less sensitive and did 
not constitute "technology transfer."  Regarding Turkey's 
requirement for approval to modify a foreign-origin platform, 
Guldogan said that any restriction on modifications for 
Turkey's use of an item after purchase "is unacceptable." 
Addressing contractor liability for force majeure actions, 
Guldogan insisted that a foreign contractor should bear the 
responsibility for its government's decisions and should 
resolve with its government any damages resulting from that 
government's actions.  According to Guldogan, Turkey is 
bearing the liability for problems which occur up until 
actual production begins.  Therefore it is fair to ask the 
contractor to bear any subsequent liability. 
 
US EXPORT CONTROLS AN UNACCEPTABLE SECURITY RISK 
--------------------------------------------- --- 
 
¶9. (SBU) According to Guldogan, absent an easing of USG 
restrictions on foreign manufacturing, using and improving 
US-origin equipment, Turkey will consider doing business with 
the US "an unacceptable security risk."  He complained of 
difficulty identifying "the right address" in the US 
government to discuss the export licensing process and said 
that the USG and US firms each lay blame for export license 
restrictions (provisos) on each other, leaving Turkey unsure 
where to turn.  Noting that Turkey is working on an 
indigenous UAV and will look for international partners and 
that SSM will issue in June a tender for a surveillance 
satellite, Guldogan suggested that these programs will be 
closed to American firms unless the export license issue is 
"resolved."  Mr. Bruce offered to connect SSM with export 
licensing experts to discuss the USG process.  He also 
requested detail on specific restrictions placed on recently 
approved licenses in order to determine if the restrictions 
 
are USG-origin or industry-specific. 
 
¶10. (SBU) Guldogan also expressed frustration over US 
contractors' differing definitions of a show stopper term or 
condition (T&C), saying that a show stopper for one company 
is not a problem for another company.  Inak added that Turkey 
is willing to review those T&Cs that don't meet USG 
regulations but, in his view, most of the US company concerns 
are based on business decision. 
 
DECLARATION OF PRINCIPLES 
------------------------- 
 
¶11. (SBU) To clear the way ahead for industrial cooperation, 
Guldogan suggested drafting a bilateral "Declaration of 
Principles" to pledge the efforts of both governments to 
expedite the export licensing process; avoid "irrational" 
restrictions; define and increase areas of collaboration; and 
increase the level of inter-operability.  Mr. Bruce responded 
that any such document would be, at most, an expression of 
our governments' goodwill for cooperation -- not a 
legally-binding document.  A "Declaration of Principles" is 
unnecessary, he emphasized. 
 
WORKSHARE DRIVING TURKISH JSF PARTICIPATION 
------------------------------------------- 
 
¶12. (SBU) The Joint Strike Fighter (JSF) project will be a 
priority for Turkey over the next decade, according to 
Guldogan.  He stated that, at the JSF meeting in Norway, the 
US had suggested it would consider a relaxation of technology 
transfer restrictions for this project, which he hopes is 
true.  Turkey has pledged $175M in JSF investments and has 
high expectations for its participation in the project, 
including $5-$6B in workshare in "technically-intensive" 
areas such as the mission control systems (Note: Guldogan 
said TurkQreceived positive signals about work in this 
area), weapons integration and the air vehicle.  The PM, MND 
and Chief of the General Staff will meet on June 27 to 
determine whether Turkey will commit to JSF. Their decision 
will be based in great part on Turkey's quality and level of 
workshare, according to Guldogan.  He claimed disappointment 
with the $2.4B in workshare opportunities offered to-date by 
Lockheed Martin (LM) and its partners.  (Note: We understad 
that LM has outlined a potential $5.4B in workshare, which 
could rise with the sale of additional aircraft.) 
 
¶13. (SBU) Guldogan acknowledged that Turkey does not have 
financing lined up to buy 100 aircraft and is looking for 
international credit or another source of funding.  He said 
Turkey is in discussions with Italy and the Netherlands for 
the joint establishment of a European logistics center and 
requested US support for this project. 
 
¶14. (SBU) Mr. Bruce stated that JSF has been a "best value" 
program from its inception.  All partners were aware of and 
agreed to those terms.  He noted AT&L receipt of Turkey's 
letter requesting high-tech JSF workshare and said the issue 
is being studied and may be discussed in upcoming final JSF 
negotiations.  He urged Turkish industry to continue its 
contacts with LM on the workshare issue. 
 
DEFENSE SPACE COOPERATION STYMIED 
--------------------------------- 
 
¶15. (SBU) SAF/IA International Program Analyst Aris Yortzidis 
outlined project opportunities in those areas where Turkey is 
seeking cooperation under the umbrella space cooperation MOU 
(Note: signed on November 9, 2005 on the margins of the High 
Level Defense Group meeting).  He emphasized that the US is 
ready to initiate a cooperative relationship with Turkey in 
the space area but is waiting for a White Paper from the 
Turkish Air Force that was promised in January 2006 but has 
not been delivered.  He underscored that no cooperation can 
begin until the US Air Force receives this non-paper defining 
the areas Turkey would like to explore, as well as the 
technologies and capabilities Turkey can contribute to 
cooperation projects.  When pressed, Turkish Air Force 
representatives suggested it might be ready in June, 2006 but 
provided no detail on its content. 
 
COMPETITION KEY TO PARTICIPATION IN US DEFENSE PROJECTS 
--------------------------------------------- ---------- 
 
¶16. (SBU) In response to an MND request for information on 
foreign involvement in US Military Depot Level Maintenance, 
Elizabeth Bieri, Staff Officer for the US Army Deputy Chief 
of Staff for Logistics explained the US Army Depot Level 
Maintenance process.  She emphasized that US Title 10 
restrictions limit the ability of foreign companies to 
participate and underscored that any foreign award will be 
made on a "best value" basis.  She and Mr. Bruce, who 
outlined the Performance-Based Logistics (PBL) system 
concept, emphasized the importance of competitive bids in US 
military programs and urged that Turkish companies actively 
pursue opportunities and demonstrate their price/value 
leadership in those areas where they believe they hold a 
competitive edge.  Guldogan said the PBL concept is new to 
Turkey and will be a challenge.  He expressed concern over 
the implementation of PBL on the JSF program and requested 
DOD to provide any PBL-specific wording that Turkey should 
include in its JSF sub-contractor agreements. 
 
SECOND ANNUAL INDUSTRY DAY 
-------------------------- 
 
¶17. (SBU) To ensure that Turkish companies received the same 
message presented to the Turkish MND regarding the need for 
Turkey to be aggressive and competitive and to demonstrate 
"best value" in any bid on USG military projects, 
representatives of Turkish and US defense firms were invited 
to the second annual Defense Industry Day on May 24 to 
receive briefings by Mr. Bruce, Ms. Biere and the DOD 
research specialists on depot level maintenance, 
performance-based logistics and USG research opportunities. 
At every opportunity the US briefers stressed the need for 
Turkish companies to take the lead to identify US partners 
and to investigate USG program opportunities. 
¶18. (SBU) Also on May 24, USG personnel visited TUBITAK, 
Turkey's equivalent of the US National Science Foundation 
(NSF), and reviewed the programs of two of TUBITAK's 15 
Istanbul and Ankara-based research institutes.  TUBITAK VP 
Professor Dr. Omer Anlagan expressed an interest in working 
with the USG and noted that TUBITAK and the US NSF have 
conducted 40 joint projects under an exchange of letters. 
TUBITAK had participated in past bilateral projects under a 
US/Turkey research agreement that had expired in 2004. 
TUBITAK institutes work on such projects as IED, remote 
sensing, cryptologic, small satellite, genetic engineering, 
fire arms identification and other sensitive technologies. 
US research representatives pledged to follow up with several 
of TUBITAK's Istanbul-based institutes to conduct a further 
review of missile development and other research projects. 
 
 
 
Visit Ankara's Classified Web Site at 
http://www.state.sgov.gov/p/eur/ankara/ 
WILSON