157. Memorandum From the Acting Assistant Secretary of Defense for International Security Affairs (Selden) to Secretary of Defense Laird1
SUBJECT
- Saudi Arabian Naval Expansion Program
Since early in 1968, the U.S. has been assisting Saudi Arabia to develop a limited naval force in the Red Sea and the Persian Gulf. Initially, we were asked to review Saudi requirements for naval equipment and shore facilities. That review concluded that an effective naval force should be developed to safeguard and protect the seacoasts and harbors of the Kingdom against a seaborne threat, to protect Saudi vessels in the Red Sea and Persian Gulf, and to provide a sea/air rescue capability. In December 1969 the Saudis formally requested U.S. Government assistance in expanding their six-ship naval force by an additional 19 vessels, constructing and equipping associated shore facilities, and training of Saudi naval personnel. This concept was approved by King Faisal and is understood to have a very high priority in Saudi defense planning. In light of the recommendations of a second Department of Defense evaluation team, the Deputy Secretary of Defense—with Department of State concurrence—informed the Saudis in September 1970 (Tab A)2 that we were prepared to discuss with them more precisely their requirements. These discussions have now been completed.
The expansion program contemplated will involve virtually a complete reconstruction of the Saudi naval force. Ship acquisition, base construction, and training will be phased over an eight to ten year period. All ships and training are to be purchased from the United States. Prince Sultan, the Saudi Arabian Minister of Defense and Aviation, has requested that the U.S. Army Corps of Engineers, currently engaged in several military construction projects for the Saudi Arabian Army, also undertake supervision of the shore facilities construction effort. The program costs are estimated at $200 million, all of which will be borne by Saudi Arabia. U.S. financial assistance, if any, would be limited to Foreign Military Credits, principally DoD guarantees of commercial loans.
The Saudis have indicated that they prefer a government-to-government arrangement using Foreign Military Sales procedures [Page 503] rather than having to deal directly with one or more industrial contractors. Under this arrangement we visualize that the United States Navy would be tasked to serve as overall manager and contracting agent for plans and programs relating to ship procurement and training. The United States Army Corps of Engineers, in coordination with the Navy, would supervise design and construction of shore facilities.
The Defense Security Assistance Agency (DSAA), has developed a Memorandum of Understanding (MOU)—Tab B3—through interagency consultation with the Department of State, our country team in Saudi Arabia, the Joint Staff and the Departments of Army and Navy. The Memorandum sets forth the nature of the technical and advisory assistance to be provided by the Department of Defense. It stipulates the Saudi Arabian Government’s responsibilities for planning, programming, management, and implementation of this program including funding, staffing, and support services. Procurement, as mutually agreed, of individual vessels, associated equipment, training and other services will be the subject of separate Defense Letters of Offer. These will be negotiated on a case-by-case basis and will remain subject to the same kind of joint State–Defense screening applied to all Foreign Military Sales cases. The Memorandum of Understanding, however, acts as the umbrella under which ongoing actions would be taken and defines the parameters of the United States Assistance under this program.
The MOU has been revised by Ambassador Thacher and his Country Team and Secretary Rogers has granted authority to our Ambassador to sign the MOU. Once final USG approval is given, the Ambassador will present the draft MOU to the Saudis, refer any Saudi proposed changes to State/DoD and, when agreement is reached, sign the MOU for the U.S. Government. Before the MOU is signed, State will give its customary notification to the Senate Foreign Relations Committee and House Foreign Affairs Committee. OSD(LA) will inform the Senate and House Armed Services Committees.
All these steps are consistent with the undertaking spelled out to the Saudis in Mr. Packard’s letter to Prince Sultan in September 1970. Nevertheless, I want to apprise you of the current status of the program and to ensure that the proposed actions meet your full approval before we commence negotiations with the Saudis.4
- Source: Washington National Records Center, OASD/ISA Files: FRC 330–4–083, Box 25, Saudi Arabia 1971. Confidential.↩
- Document 144.↩
- Not attached and not found.↩
- Laird approved on November 13. Telegram 34 from Jidda, March 21, reported that Saudi Arabia had accepted the MOU. (National Archives, RG 59, Central Files 1970–73, DEF 6–2 SAUD)↩