[Inside Front Cover
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SECURITY COOPERATION BILLING HANDBOOK
Jointly Developed By
Defense Security Cooperation
University (DSCU)
Defense Finance and
Accounting Service (DFAS)
Security Cooperation
Accounting (SCA)
Current as of January 2021
Acknowledgements
Defense Security Cooperation
University (DSCU)
Defense Finance and Accounting
Service (DFAS) Security
Cooperation Accounting (SCA)
Mr. David Sobyra
Acting President
Ms. Melissa Jacobs
Director
Authors and Contributors
Mr. John O’Connor, DSCU/DC
2475 K Street
Wright-Patterson Air Force Base, Ohio 45433
Mr. Colin Nowling, DFAS SCA
8899 East 56th Street
Indianapolis, Indiana 46249
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The Security Cooperation Billing Handbook is intended to provide insights and references on Security
Cooperation (SC) case delivery/performance transaction reporting and billing. While the U.S. Department of
Defense (DoD) is always receptive to suggestions to improve SC case financial procedures, readers of this
publication should observe that many such procedures are followed because of legal requirements contained in
U.S. public law. As a result, DoD very often has little flexibility in the financial administration and billing of the
SC case programs.
This publication does not take precedence over officially published U.S. government regulations, directives,
instructions, or manuals and is intended as a textbook and guide only. Additionally, this publication goes to press
in a time of dynamic changes in the Security Cooperation enterprise. Some changes may even occur while this
handbook is being printed.
Any requests for clarification or suggestions for improvement or content should be addressed to the
following:
Defense Security Cooperation University
(DSCU)
Defense Finance and Accounting Service
Security Cooperation Accounting
(DFAS SCA)
Mail:
2475 K Street
Wright-Patterson Air Force Base, Ohio 45433
Mail:
8899 East 56th Street
Indianapolis, Indiana 46249
POC/Email:
John O’Connor
john.b.oconnor12.civ@mail.mil
POC/Email:
Doug Flanagan
douglas.o.flanagan.ci[email protected]
Phone:
DSN 713-3256
Commercial (937) 713-3256
Phone:
DSN 699-3281
Commercial (317) 212-3281
2
Table of Contents
PART I—GENERAL OVERVIEW 6
CHAPTER 1 THE SECURITY COOPERATION BILLING SYSTEM FOR CASES 6
Purpose 6
The Security Cooperation Billing Cycle 6
Inputs to DFAS SCA 7
Payment Schedules 7
Delivery Transactions and Peformance Reporting 7
Cash Accounting 8
Foreign Military Sales Trust Fund 8
Foreign Military Sales Customer Funds 9
DFAS SCA Reports 11
Foreign Military Sales Billing Statement (DD Form 645) 11
Foreign Military Sales Delivery Listing 13
Foreign Military Sales Financial Forecast 13
Foreign Military Sales Reply Listing to Customer Requests for Adjustments 13
Holding Account Statement 14
Foreign Military Sales Accelerated Case Closure Suspense Account 14
Special Billing Arrangements (SBA) 14
Foreign Military Sales Case Closure 15
Case Closure Procedures 15
Summary 16
CHAPTER 2 DFAS SCA CUSTOMER ASSISTANCE 17
Purpose 17
Visits to DFAS SCA 17
Policy 17
Visit Requests 17
DFAS SCA Visits to Customer Site 17
DFAS SCA Automated Delivery Listing Products 17
PART II—BILLING DOCUMENTS 26
CHAPTER 3 FOREIGN MILITARY SALES BILLING STATEMENT (DD FORM 645) 26
Purpose 26
Introduction 26
General Information Regarding DD Form 645 26
Function and Content 26
Cycle 27
Explanation of Entries on the DD Form 645 28
Entries on DD Form 645 [FMR Table 8-1 and Figure 3-1] 29
Summary 36
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CHAPTER 4 FMS DELIVERY LISTING 37
Purpose 37
General Information 37
Function and Format 37
Cycle 37
Explanation of Entries on the Foreign Military Sales Delivery Listing 37
Summary 45
CHAPTER 5 FOREIGN MILITARY SALES FINANCIAL FORECAST 46
Purpose 46
General Information Function and Format 46
Cycle 46
Explanation Of Entries On The FMS Financial Forecast 46
Summary 47
CHAPTER 6 FMS REPLY LISTING TO CUSTOMER REQUEST FOR ADJUSTMENTS 48
Function and Format 48
Cycle 48
Summary 50
CHAPTER 7 HOLDING ACCOUNT STATEMENT 52
Purpose 52
General Information 52
Function 52
Cycle 52
Explanation Of Entries On The Holding Account Statement 52
Summary 54
CHAPTER 8 ACCELERATED CASE CLOSURE SUSPENSE ACCOUNT STATEMENT 56
General Information 56
APPENDICES 59
Appendix A: Document Identifier (DOC ID) Codes 59
General Description 59
Delivery Listing Codes 59
Delivery Cost Total Codes 60
Appendix B: Routing Identifier Codes (RIC) 61
Appendix C: Price Code (Prc Cd) 67
Code Meaning 67
Appendix D: MILSTRIP Document Number (SC) 69
Appendix E: Implementing Agency (IA) Codes 71
Appendix F: Delivery Term Codes (DTCs) 73
NOTES: 75
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Appendix G: Generic Codes Table 76
NOTES: 77
Appendix H: Transportation Bill Codes (TBC) 79
Appendix I: Transportation based on Transportation Bill Codes (TBCs) for Inventory Items Shipped by DWCF 83
Appendix J: Transportation Charges based on TBCs for Inventory Items NOT Shipped by DWCF 87
Appendix K: Types of Assistance (T/A) Codes 91
Appendix L: Julian Date Calendar 93
Appendix M: Unit of Issue Codes 95
Appendix N: Offer/Release Codes 97
Appendix O: Mode of Shipment (MOS) Codes 99
Appendix P: Adjustment Reply Codes (ARC) 101
Adjustment Reply Codes (ARC): Denial 101
Adjustment Reply Codes (ARC): Reason Request Granted and Instructions for Disposition of Any Materiel Shipped in
Error 102
Adjustment Reply Codes (ARC): Advisory Codes That Do Not Require Billing or Supply Action 103
Adjustment Reply Codes (ARC) Codes: To Request Additional Data from Country 103
Adjustment Reply Codes (ARC): USG reimbursement to Foreign Countries to Recover Transportation Costs those
Countries Incurred to Return Items to USG 104
Appendix Q: Delivery Source Codes (DSC) and Accessorial Computation Matrix 106
Delivery Source Code: Sale of Articles Under AECA Section 21 106
Delivery Source Code: Performance of DoD Services Under AECA Section 21 or 22 107
Delivery Service Codes: Unique FMSO Charges 107
Delivery Source Codes: Procurement for FMS Purchasers Under AECA Section 22 108
Delivery Source Code: Miscellaneous Charges 109
Delivery Source Code: Special Defense Acquisition Fund 109
Delivery Source Codes (DSC) Surcharge Matrix 110
Appendix R: Abbreviations And Acronyms 114
Appendix S: Glossary Of Selected Terms 119
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Part I—General Overview
CHAPTER 1
The Security Cooperation Billing System for Cases
Purpose
The Arms Export Control Act (AECA Sections 21 through 24) provides the legal basis for Foreign Military
Sales (FMS) billing policies and procedures. These policies and procedures are further delininated in the DoD
Financial Management Regulation (FMR—DoD 7000.14R Volume 15 [Security Cooperation Policy]); the
Security Assistance Management Manual (SAMM - DSCA 5105.38-M Chapter 9 [Financial Policies and
Procedures]); and the United States of America Foreign Military Sales (FMS) Letter of Offer and Acceptance
(LOA) Standard Terms and Conditions (SAMM Chapter 5 Figure 4). The purpose of this chapter is to provide a
high-level description of the Defense Finance and Accounting Service Security Cooperation Accounting (DFAS
SCA) functions in the billing cycle, cash management, and reports/products provided to the SC case customers
while also describing the responsibilities of the DoD Implementing Agencies (IAs) to provide the required inputs
to DFAS SCA.
The Security Cooperation Billing Cycle
DFAS SCA issues quarterly billing statements (e.g., DD Form 645 “Foreign Military Sales Billing
Statement” along with additional attachments and information described later in this Handbook) to SC Case
customers per the billing timeline documented in SAMM Table C9.T25 (FMS Billing Timeline), and the FMR
VOL 15, Chapter 8, Section 0803 (FMS Billing Statement). That SAMM and FMR information is depicted in the
following table. The information in those billing statements and attachments is consolidated from multiple data
inputs, including the current implemented LOA data (e.g., case, line, payment-schedule data, etc.), performance /
delivery reporting data reported to DFAS SCA by the applicable IA, collected case funds, etc. DFAS SCA bills
for costs related to defense articles, services, and training that have been sold pursuant to the Arms Export Control
Act (AECA). IAs report SC deliveries and performance of case material, services, training, accrued expenditures
(work in process), and other related costs to DFAS SCA for the purposes of obtaining reimbursement or reporting
performance under an allotment of trust fund budget authority.
PERIOD ENDED ON FMS
BILLING STATEMENT
Approximate Date
DD 645
Mailed by DFAS
SCA
PAYMENT DUE AT DFAS
INDIANAPOLIS
FOR PERIOD
COVERING
December 31st January 15th March 15th April–June
March 31st April 15th June 15th July–September
June 30th July 15th September 15th October–December
September 30th October 15th December 15th January–March
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Inputs to DFAS SCA
To prepare an accurate bill (DD Form 645) for a given FMS case, DFAS SCA must have certain information
from the IAs. When an LOA is sent to the FMS customer, a copy is also provided to DFAS SCA, and the LOA
payment schedule is entered into the Defense Integrated Financial System (DIFS) information system. After the
customer accepts the LOA and provides DFAS SCA with signed copies of the LOA and the applicable initial
deposit, DFAS SCA updates its system and prepares for case implementation and IA delivery reports. The initial
deposit accompanying most SC cases provides sufficient cash advance to cover disbursements from the time the
case is accepted until the first billing payment due date.
Payment Schedules
The purpose of the LOA payment schedule is to supplement and amplify LOA Financial Terms and
Conditions that are documented in the Section 4 of the FMS LOA Standard Terms and Conditions (SAMM
Chapter 5, Figure 4), and to provide a clear understanding between the United States government and the
purchaser as to the estimated rate and timing of the payments to be made. The payment schedules for LOA
documents are prepared (based on inputs by the Implementing Agencies) by the DSCA Case Writing Division
(CWD) during the case-development process. Payment schedules are prepared using pricing estimates and
estimated dates for when purchasers will accept the LOA, the estimated dates (e.g., when the LOA will be
implemented, requisitions will be initiated, contracts will be awarded, payments will be made to contractors,
deliveries will occur, personnel costs will be incurred, etc.) of acceptance and execution of the the applicable
LOA. DoD LOA payment schedule policy essentially fulfills dual objectives:
1. Provide the FMS purchaser with sound budgetary information
2. Increase probability of the USG receiving required funds in advance of anticipated expenditures
Payment schedules are a consolidated formal presentation to the FMS customer of the estimates of cash
requirements and potentially consist of two financial categories:
1. An initial deposit
2. Estimated quarterly billing amounts (when authorized and required).
If initial deposits are required upon acceptance of a sales agreement, the amount of the initial deposit should
be sufficient to cover all costs and contingencies (e.g., contract holdback, potential termination liability, costs of
materials and services planned to be provided, etc.) anticipated to be incurred until the first billing statement can
be rendered and monies collected. IAs are expected to closely monitor and manage the accuracy of payment
schedules on all cases to ensure that cash is available when the necessity for disbursements arises. When it is
known that the current payment schedule does not accurately reflect the financial requirements for the case, the
Implementing Agency should prepare a modification (if there is no “SCOPE” change on the case per SAMM,
Chapter 6.7—Amendments and Modifications), or an amendment (if there is “SCOPE” change on the case) to
update the payment schedule.
Delivery Transactions and Peformance Reporting
IAs must report the performance and execution (e.g., deliveries from DoD stock and procurement,
progress payments, etc.) of the SC LOAs to DFAS SCA by use of the delivery transactions. IAs shall report
accrued expenditures (work in process [WIP]) and physical deliveries to DFAS SCA within 30 days (per FMR
Volume 15, Chapter 8, Section 080203) of occurrence (i.e., date of shipment or performance) through the billing
and reporting procedures. Among other things, the delivery transactions typically document the MILSTRIP
document number, the stock or part number, quantity, mode of shipment, delivery source code, transportation bill
code, and dollar value. For many FMS case types (e.g., Cooperative Logistics Supply Support Arrangements
[CLSSA], Blanket Order, etc.), there are thousands of delivery transactions, which are received by DFAS SCA on
a monthly basis. The delivery data transmissions are batched upon receipt and are typically due to arrive at DFAS
8
SCA by the 16th calendar day of the month following the end of the month being reported. The delivery
transactions provide the basis for the detailed entries, which appear in the FMS delivery listing and further prompt
reimbursement/liquidation of transactions reported by the implementing agencies. DIFS processes delivery
transactions/performance reporting 20 times per year. There are two performance cycles in each month without a
quarterly bill, but just one performance cycle in the four months (Jan, Apr, Jul, Oct) a quarterly bill is issued.
Cash Accounting
Foreign Military Sales Trust Fund
The FMS country trust fund is credited with receipts earmarked by law and held in trust or in a fiduciary
capacity by the United States government for use in carrying out specific purposes and programs. The FMS trust
fund (accounting classification 97-11X-8242) represents the aggregation of cash received from purchaser
countries, international organizations, and the USG that are credited to open SC cases and/or country/program
accounts (e.g., funds that are excess to closed FMS-case financial requirements, funds held pending
implementation of new cases or other agreed financial arrangements, etc.).
DFAS SCA is responsible for recording transactions that impact the FMS trust fund. FMS customer cash
deposits for defense articles and services sold under Sections 21 and 22 of the AECA are normally (unless an
exception is approved) made in advance of delivery, performance, or progress payments to contractors. DD Form
645, Special Billing Arrangements (SBAs), and LOA financial instructions direct that foreign purchasers forward
payments (initial deposits on basic LOAs, amounts due with LOA amendments, or official billing statement
payments) by: (a) wire transfers (preferred method for the foreign purchaser to forward payments) to American
Bankers Association (ABA) #021030004, U.S. Treasury NYC, Agent Location Code 00003801, Beneficiary
DFAS-IN/JAX Agency, payment from (country or international organization) for Letter of Offer and Acceptance
(Identifier at the top of the first page of the LOA); or (b) checks made payable to the U.S. Treasury mailed to the
Defense Finance and Accounting Service, ATTN: Disbursing Operations-FMS Processing; Col 135D, 8899 E
56th Street, Indianapolis, IN 46249, USA, payment from (country or international organization) for Letter of
Offer and Acceptance (Identifier at the top of the first page of the LOA). Any recipient of a check from an FMS
purchaser is responsible for depositing the check into a U.S. Treasury account within 1 working day of receipt.
[FMR VOL 15, CH 4, Section 0408 (Deposit of Purchaser Cash into Treasury Accounts)]
Wire transfers should be sent to the Department of the Treasury Account at FRBNY, using the standard
Federal Reserve Funds Transfer (FRFT) format. The Federal Reserve System (FRS) will accept wire transfers
only from banks that are members of the FRS. Foreign banks must go through a U.S. correspondent bank that is a
member of FRS. DFAS SCA retrieves wire transfers daily from the Treasury Financial Communications Systems
and prepares collection vouchers from this data for crediting FMS purchasers. [FMR VOL 15, CH 4, Section
040801.A (Wire Transfers)]
All payments should properly identify the customer country making the payment, FMS case designator,
amounts being paid on each case, and the U.S. service responsible for managing the case(s).
DSCA and DFAS SCA exercises stringent controls over the FMS trust fund to ensure proper visibility and
accountability are maintained for all payments made by a customer for every FMS case. There are certain
principles of trust fund management, including the following:
• One FMS customer’s trust fund balance cannot be used to finance another customer’s programs. The
integrity of customer country and security cooperation program funds is strictly observed.
• Cash disbursements are controlled on a country/organization/program basis, although accounting for SC
transactions are maintained on an SC-case basis. In other words, cash deposits of a given
country/organization/program are used to pay U.S. government or contractors for costs associated with
any of that country’s/organization’s/program’s cases, but the accounting will be maintained and reported
on individual cases. All cash disbursements for a purchaser shall not exceed the customer’s cash deposits.
9
• Dollars received into the FMS trust fund are subject to United States Treasury accounting system controls
from the date of receipt to the date of expenditure or refund. DFAS SCA, as the accounting agency,
renders periodic reports to the United States Treasury and performs a monthly reconciliation of balances.
Foreign Military Sales Customer Funds
The FMS customer is billed for United States Government requests for payments (initial deposits, quarterly
billing statements, or special billing arrangements) and, if applicable, direct commercial contract progress
payments. The customer may make payments in the form of United States dollars directly to DFAS SCA or, when
authorized, utilize foreign military financing (FMF) funds through the U.S. government. There are presently two
types of FMS financing programs authorized by the AECA, as described below:
1. DoD Guaranteed Loans. (Section 24, AECA). This kind of financing constituted the major portion of
the FMF program prior to FY 1985. Under the guaranteed loan concept, DoD (DSCA) submitted a
guarantee (against all political and credit risks of nonpayment) for principal and interest installments
defaulted by the borrower to the Federal Financing Bank (FFB—an agency of the Treasury Department).
The FFB was responsible for signing the loan agreement with the borrowing country and for disbursing
loan funds upon receipt of drawdown requests from the borrower. The FMS customer will normally be
required to make semi-annual payments of interest and (once the grace period expires) principal. Current
loan repayments should be sent directly to the FFB; however, repayments of arrearages on FFB loan
installments should be sent to DFAS SCA, since the FFB has already been paid by DFAS SCA under
provisions of the guarantee noted above.This form of financing was terminated at the end of FY 1984.
2. DoD Direct Credit. (Section 23, AECA). With the exception of a few direct credits in the early 1970s,
this form of financing commenced in FY 1985. The source of funding to finance this program is
appropriated by Congress through annual Foreign Operations legislation. Direct Credit can be provided
either in the form of grants (non-repayable) or loans (repayable). A discussion of these funding categories
is provided below:
o FMF Grants. FMS grant funds are availed upon apportionment of country-level funds. If a
country is authorized to use FMF funds to finance direct commercial purchase, a grant agreement
certifying compliance with various requirements must be implemented prior to the utilization of
funds for commercial contacts. If countries cannot use FMF for direct commercial purchases, no
agreement is required. In this latter instance, DFAS SCA can unilaterally disburse funds for
LOAs financed with FMF in accordance with billing procedures for that country.
o FMF Loans. FMF loan funds are availed upon implementation of a bilateral loan agreement,
signed by the USG and the borrower. Generally, loan repayment terms are a total of 12 years (7
of which are principal); interest rates are determined by the Department of the Treasury. The
FMS customer will normally be required to make semi-annual payments of interest and, once the
grace period expires, principal. FMF loan repayments should be sent directly to DFAS SCA.
Once an FMF loan or grant has been established, all requests for disbursement of those funds must be
submitted by the borrower to DFAS SCA for processing/approval. For commercial contract disbursements, the
requests must be accompanied by relevant invoices, bills of lading, various certificates, and other documentation
as prescribed in the Annexes and Attachments to the loan agreement. Regarding FMS cases, the customer also
issues a disbursement request for LOA initial deposits or DD Form 645 billing requirements.
Whenever an FMS case has multiple financing, FMF funds are considered to be applied first and cash funds
second. If the case is closed and excess funds exist, the excess cash funds would be considered available to the
FMS customer absent arrearages or funding shortfalls on other cash cases. Excess FMF funds, however, cannot be
refunded to the FMS customer. The FMF funds can be used to pay down arrearages on FMF loan installments;
DFAS SCA will normally not initiate this action and must have DSCA authorization prior to doing so.
10
Cross-Leveling is an accounting technique by which DFAS SCA transfers excess funds (i.e., cash receipts)
from one FMS case to another FMS case. This transfer permits the FMS purchaser to minimize payments due on
a billing by fully utilizing all funds previously paid on FMS cases. For example, if DFAS SCA has collected
excess funds on a case, or a case has been closed and there are excess funds, these funds may be transferred to
other open cases, thereby reducing the amount due on the bill.
There are two methods through which cross-leveling of excess funds may be accomplished. In the first
method, the customer conducts a cash analysis and, in a letter (usually with a payment), requests DFAS SCA
make specific cash transfers among designated FMS cases. The second method authorizes DFAS SCA to
automatically cross-level based on case needs.
In order for DFAS SCA to perform cross-leveling automatically on a recurring basis, a written Memorandum
of Agreement (MOA) must be accomplished between DFAS SCA and the FMS customer. In order to initiate this
action, the customer should advise DFAS SCA of an interest in entering into a cross-leveling arrangement and
specify the name and office of the individual to sign a Memorandum of Agreement (MOA) on behalf of the FMS
customer. DFAS SCA will prepare the agreement in duplicate, sign, and forward it for the customer’s signature.
Upon receipt of the signed agreement, DFAS SCA will begin cross-leveling on the next succeeding billing
statement.
In order to provide the FMS customer with a complete record of cross-leveling transactions, the transfer of
excess cash is processed to the country holding account and then withdrawn from the holding account to be
applied to a case requiring payment. For example, consider the situation where FMS case ABC is in a $10,000
overpayment surplus status but case ABD is underpaid by $10,000. Under cross-leveling, DFAS SCA could
transfer, via the Holding Account, $10,000 from case ABC to ABD. The basic procedure is to record such
transfers (as the $10,000 amount above) as a withdrawal (i.e., debit) transaction to the cash position of the FMS
case with a surplus (case ABC) and as a deposit (i.e., credit) to the Holding Account. Simultaneously, $10,000 is
recorded as a deposit to the underpaid case (ABD) and a withdrawal is recorded against the Holding Account. In
other words, the $10,000 is “washed through” the Holding Account for control and reporting purposes.
See Figure 1-1 below for a sample Cross-Leveling Memorandum of Agreement (MOA). DFAS SCA will
also honor individual FMS cross-leveling in lieu of blanket authorizations based on letter or message requests
from an authorized representative of the FMS customer.
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Figure 1-1: Sample Cross Leveling Memorandum of Agreement
DFAS SCA Reports
The basic FMS billing document is the DD Form 645, which is prepared at the end of each calendar quarter.
The DD Form 645 serves as both a billing document and a statement of account. Numerous attachments, as
applicable, accompany the DD Form 645, to include the “FMS Delivery Listing,” the “FMS Financial Forecast,”
the “FMS Reply Listing to Customer Requests for Adjustments,” the “Holding Account Statement,” and the
“Accelerated Case Closure Suspense Account Statement.” Each of those document types are discussed in
significant detail in Part II (Billing Documents) chapters 3 through 8 of this Security Cooperation Billing
Handbook. Following, though, is an executive summary of each of those documents.
Foreign Military Sales Billing Statement (DD Form 645)
DoD billings to Security Cooperation case customers are issued by DFAS SCA. A computer-produced DD
Form 645 and/or Special Billing Arangement (SBA)—official claim for payment by the U.S. government—is
used in billing the Security Cooperation case customer. In addition, it furnishes an accounting to the Security
Cooperation purchaser for all costs incurred under each LOA agreement.
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Detail on the face of the billing statement segregates the cost elements in a manner parallel to the
presentation of line item detail on the LOA. Physical performance of services or delivery of materiel is shown
against the item number of the LOA. Administrative charges, accessorial costs, and work in process are separately
listed at the case level.
Billing statements are prepared and forwarded to the FMS purchaser on a quarterly basis (i.e., for quarters
ending in March, June, September, and December). The billing cycle [FMR VOL 15 Chapter 8 Section 080301
(FMS Billing Statement) and SAMM C9.T25], which is depicted in the following table.
PERIOD ENDED ON FMS
BILLING STATEMENT
Approximate Date
DD 645
Mailed by DFAS
SCA
PAYMENT DUE AT DFAS
INDIANAPOLIS
FOR PERIOD
COVERING
December 31st January 15th March 15th April-June
March 31st April 15th June 15th July-September
June 30th July 15th September 15th October-December
September 30th October 15th December 15th January-March
For example, the 31 December (period ending) bill reflects physical deliveries and cash collections recorded
for the SC case through the December “cut-off” for entries into the DFAS SCA FMS accounting system. It also
contains a forecast of estimated advance cash requirements for the work estimated to be conducted from 1 April
through 30 June. This period’s bill is mailed on or about January 15, with a due date for payment of March 15.
The March, June, and September statements follow the same basic time frames. The FMS Delivery Listing will
only include delivery data received in DFAS SCA by the end of each quarter of the period ending.
As stated in the previous paragraph, in addition to identifying deliveries (or performance of services) made
on the FMS purchaser’s behalf, the DD Form 645 also reflects the estimated forecasted costs that relate to a given
FMS case. These estimated forecasted costs equate to a number of factors, including anticipated progress
payments/advances, contractor holdbacks, termination liability reserve, accrued and future deliveries, pro rata
share of non-recurring charges, contract administration costs, and administrative/ accessorial costs, as applicable.
Previous schedule of payment amounts on requisition-type cases may be replaced by military department
reporting of open requisition values on hand or anticipated.
Essentially, the DD Form 645 provides current period (i.e., the calendar quarter preceding the period ending
date) delivery costs as well as cumulative delivery costs for all prior periods and work-in-process costs for the
period subsequent to the period ending date. The bill normally requests funds to cover the planned deliveries for
the forecast quarter (the calendar quarter subsequent to DFAS SCA payment due date). This concept is illustrated
in Figure 1-2 (The “Four Periods of the DD 645” Example). Refer to Chapter 3 of this Handbook for additional
details on the Foreign Military Sales Billing Statement (DD Form 645).
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Figure 1-2: The “Four Periods” of the DD 645 Example
Foreign Military Sales Delivery Listing
This is a listing of the performance reporting of articles, services, Supply Discrepancy Reports (SDRs), etc.,
which have been reported to DFAS SCA by the IAs. An FMS Delivery Listing will be provided if deliveries have
been received in DFAS SCA during the Current Quarter Period (column 9) of the DD Form 645.
The FMS Delivery Listing provides delivery information by case and by LOA line-item number. Detailed
information regarding articles/services transactions, administrative/accessorial transactions, and a summary of
delivery costs for each item number’s (i.e., LOA line number) reported transaction(s) is provided. Refer to
Chapter 4 of this Handbook for additional details on the Foreign Military Sales Delivery Listing Statement.
Foreign Military Sales Financial Forecast
This is a listing that reflects future forecast amounts of payments due, by quarter, for the FMS case. It
essentially portrays the same information as the LOA’s payment schedule. Refer to Chapter 5 of this Handbook
for additional details on the Foreign Military Sales Financial Forecast.
Foreign Military Sales Reply Listing to Customer Requests for Adjustments
This is a listing that reflects all transactions relating to the final disposition/action taken with respect to any
customer requests for adjustments requested by Supply Discrepancy Reports (SDRs) that the FMS customer
submits, and it may also contain other internal USG billing transactions, which also require an Adjustment Reply
Code (ARC) and are being billed the FMS customer. Close review should be made to ascertain that the
adjustment does or will satisfy a SDR requirement in the event the SDR number is not present.
In the event a customer review of the DD Form 645 and/or the supporting FMS Delivery Lists identifies the
necessity for an adjustment, the FMS customer should submit a formal request for adjustment. Requests for
billing and supply adjustments for materiel and service performance should be submitted to the IA. FMS
customers should submit all requests for billing and supply adjustments on a Standard Form (SF) 364 per the
LOA Standard Terms and Conditions, Section 5.4 [SAMM Chapter 5 Figure 4—C5.F4], clearly indicating the
specific adjustment or billing action requested. The form, instructions for completion, and definitions are
prescribed in DLM 4000.25, Defense Logistics Management System (DLMS) Volume 2 (Supply Standards and
Procedures), “Chapter 17 (Supply Discrepancy Reporting),” and the related Appendices 2 and 3. After resolution
14
of SDRs applicable to materiel and services, Implementing Agencies (IAs) report the action being taken to DFAS
SCA. DFAS SCA will prepare a consolidated listing of the actions taken in response to the SDRs, and this listing
will be mailed with the DD Form 645 to the country involved. All responses to SDRs are listed separately for
each country, Service, Case, and Item Number. The Reply Listing is prepared in the same basic sequence as the
billing statement and FMS Delivery Listing. All SDRs appearing on the FMS Delivery Listing are included in the
Reply Listing. Refer to Chapter 6 of this Handbook for additional details on the Foreign Military Sales Reply
Listing to Customer Requests for Adjustments Statement.
Holding Account Statement
As a convenience to the FMS purchaser, procedures are available for the establishment of purchaser holding
account(s). The holding account(s) is/are sub-account(s) of funds not identified to a specific FMS case, reserved
for identified cases (but not yet deposited in those cases) and/or funds not required when a case is closed. The
FMS customer may request DFAS SCA to “draw upon” their holding account for transfers to specific cases as the
need arises. The holding account balances are not included in the totals of the DD Form 645. A separate statement
is provided to the country showing deposits and withdrawals to the holding account and is considered an offline
statement. Refer to Chapter 7 of this Handbook for additional details on the Holding Account Statement.
For those FMS customers receiving holding account statements, the combination of the DD Form 645 FMS
Billing Statement(s) and holding account statement will reflect the total FMS Trust Fund activity for the
accounting period for that international country/organization.
The FMS customer needs to advise DFAS SCA of its requests relative to the controls over holding account
transactions. For example, DFAS SCA needs to know if the customer will allow automatic use of the funds for
other open FMS cases, if the customer requests automatic refunds, or if the customer wants to request refunds on
a case-by-case basis. Please note that funds temporarily held for new case implementation are not available for
cross-leveling or refund. DFAS SCA will state the total reserved balance for each account. Refer to Chapter 7 of
this Handbook for additional details on the Holding Account Statement.
Foreign Military Sales Accelerated Case Closure Suspense Account
This is a country-level account that shows FMS cases of participating countries where all ordered goods and
services have been provided (i.e., Logistically/Supply and Services Complete—SSC) and only final financial
reporting is necessary. It depicts the country, IA, case, and closure date with the previous quarters unliquidated
obligations (ULO) and current quarters activity. The “CUR QTR BAL” column documents the balance at the end
of the reporting period. Refer to Chapter 8 of this Handbook for additional details on the Foreign Military Sales
Accelerated Case Closure Suspense Account Statement.
Special Billing Arrangements (SBA)
There are two official forms of FMS billing: the quarterly DD Form 645, Foreign Military Sales, Billing
Statement issued by DFAS, and the DSCA issued Special Billing Arrangement (SBA) statements, referred to as
Special Bill Letters (SBL). A Special Bill Letter supersedes the DD 645 Billing Statement and serves as the
official claim for payment issued to the FMS purchaser. The purpose of the SBA is to improve cash management
for eligible FMS partners. This is done by more accurately projecting cash requirements, including reserves for
termination liability, as agreed in the LOA. The SBA does not supersede the need for accurate LOA payment
schedules; however, LOA payment schedules will not be adjusted to reflect revised payments requested in the
Special Bill. The payment schedule on the basic LOA is imperative for partner nation budgeting and must be as
accurate as possible. FMS partners eligible for Dependable Undertaking may submit a request for an SBA to the
DSCA Principal Director for Business Operations for consideration. DSCA (Directorate of Business Operations
[DBO] Country Financial Management Division [CFM]) will negotiate the SBA with the FMS partner as
appropriate and will coordinate all prospective agreements with DSCA (Office of the General Counsel [OGC]),
15
the applicable Integrated Regional Team, and DSCA (Directorate of Business Operations [DBO] Financial Policy
& Analysis Division [FPA]) prior to presenting the SBA to the Principal Director for approval. SBAs must
specify the frequency at which billing will occur. This can be on a monthly, quarterly, or semi-annual basis
depending on the USG and FMS partner requirements defined and agreed to in the SBA. After an SBA is
established, DSCA will, on the date and at the frequency specified in the SBA, provide the FMS partner an SBL
requesting payment. The SBL is the official billing document that supersedes the quarterly DD 645 billing
statement when an SBA is established. The amount due and payable in the SBL supersedes Column 14 (“Amount
Due and Payable”) of the DD 645 Billing Statement. See SAMM Table C9.T27 for an example of the SBL
calculation. [SAMM C9.10.2]
Foreign Military Sales Case Closure
A logical follow-on event to a case that has been completely delivered and billed is case closure. FMS
customers are encouraged to request status from the IA on undelivered/unbilled items prior to case closure. A
Security Cooperation case is considered closed when all material has been delivered and/or all services have been
performed, the IA has certified the final delivered cost, all financial transactions (including all collections) have
been completed, and the customer has received a Final Statement of Account (i.e., a Final DD Form 645). DFAS
SCA is the final determining organization for case closures; however, an IA may consider their records as
logistically closed at the time a closure certificate is released to DFAS SCA. After processing, DFAS SCA
confirms closure data to the IAs to ensure that records are logistically and financially complete. Two broad
categories (both of which are discussed in greater detail in the following paragraphs) of closure exist: Accelerated
Case Closure Procedures (ACCP) and non-ACCP.
Case Closure Procedures
[SAMM C16.4]
Once a case is Supply/Services Complete (SSC), and the requisite verification steps for SSC reconciliation
are complete, the case is eligible to be submitted for closure. Case closure is the final phase of the SC Case life
cycle and is extremely important to the USG and purchaser. Reconciliation for closure involves extensive
communication between various logistics, financial, and contract organizations (including the FMS Purchaser) to
ensure associated closure transactions are completed. It is imperative that case and line reconciliation be initiated
upon implementation of the LOA to make the closure process described herein timely and easier. By reconciling
during case execution, case closure becomes an event instead of a process. A case is submitted for closure once it
is reconciled according to procedures for the appropriate closure method.
Closed cases are identified by an asterisk on the DD Form 645 (Billing Statement) and a separate case-level
DD Form 645 (Final Statement of Account) is printed for distribution to appropriate parties. Once a case appears
with the closed case asterisk, it will be dropped from future DD 645 forms unless the IA or DFAS SCA has cause
to reopen the case.
Closure Types: Accelerated Case Closure Procedures (ACCP) and non-ACCP.
ACCP applies to all countries/programs that have cases financed with Foreign Military Financing (FMF)
funds, or those countries that elect to participate. For cases closed with ACCP, all commitments and obligations
must be completed; however expenditures do not have to be finalized prior to closure. The non-ACCP category
exists to accommodate those countries whose FMS programs are completely financed with national funds (cash)
and have elected to not participate in ACCP. In addition, Building Partner Capacity (BPC) programs that use
various funding where the period of funds availability expires/cancels must utilize non-ACCP. A brief synopsis of
ACCP and non-ACCP criteria follows:
• ACCP: This type of closure allows a case to be closed after SSC, even if there are outstanding
Unliquidated Obligations (ULOs) on the case. Purchaser funds are placed in a country-level Case
Closure Suspense Account (CCSA) pending final resolution of the ULOs. This program is voluntary,
16
except for those countries that have Foreign Military Financing (FMF)-funded cases, which requires
mandatory participation in ACCP for all FMS cases regardless of the funding source. Most
countries/international organizations participate or are automatically (if they receive FMF) included in
the ACCP process. The DSCA (Business Operations Directorate, Financial Policy, and Analysis
Division) maintains the master list of countries and international organizations that participate in ACCP.
That list is documented in the SAMM Table C4.T2 (Security Cooperation [SC] Customer and Regional
Codes and FMS Eligibility Table), and also in the SAMM Appendix 7 (Reconcilliation and Closure
Guide [RCG]), Chapter 3 Table A7.C3.T1 (Master ACCP Participating Country Table [sorted by
country code]). For ACCP, purchaser funds are placed in the applicable country-level case closure
suspense account pending final resolution of the ULOs.
• Non-ACCP: Non-ACC procedures are used to accommodate those countries that have not elected to
participate in the ACCP process and whose FMS programs are completely financed with national funds
(vice with FMF). While ACCP case closure always has a higher priority, non-ACCP cases with no
supporting contracts should be closed as quickly as possible. BPC program cases are also closed under
non-ACCP procedures.
• Reopening and Reinstating Activity on Cases: Reopening a closed case is performed on an exception
basis only. Reinstating activity applies to a case not yet closed, but which is in the financial
reconciliation/closure process or, at a minimum, is not currently active from a logistical perspective.
Cases may be reopened or reinstated for additional processing (e.g., disbursements or SDRs). [SAMM
C16.4.16.]
Summary
The FMS Billing System provides a mechanism of complying with the AECA. Through the LOA and its
included Payment Schedule, the FMS customer is able to determine the required initial deposit and programmed
estimated quarterly financial requirements.
DFAS SCA, through its FMS Trust Fund–accounting and related cash-accounting procedures, is able to
collect and track country monies by case. The basic FMS billing document is the DD Form 645, which is prepared
at the end of each calendar quarter. The DD Form 645 serves as both a billing document and a statement of
account. The “FMS Delivery Listing,” the “Foreign Military Sales Forecast,” the “FMS Reply Listing to
Customer Requests for Adjustment,” the “Holding Account Statement,” and the “Accelerated Case Closure
Suspense Account” are all documents that can be included with the DD Form 645 when applicable.
Case closure is accomplished once all necessary logistical and financial actions have been completed on the
part of both the U.S. government and the foreign purchaser.
17
CHAPTER 2
DFAS SCA Customer Assistance
Purpose
There are certain initiatives Security Cooperation customers may take that can facilitate their understanding
of the financial documents received from DFAS SCA. These initiatives consist of writing or calling DFAS SCA
points of contact and arranging visits. This chapter provides the information necessary to arrange for a visit to the
Center, or a visit by DFAS SCA to a customer site.
Visits to DFAS SCA
Policy
FMS customers are encouraged to visit DFAS SCA when appropriate. A visit may be warranted for any
number of reasons, including the following:
• To resolve problems or misunderstandings
• To discuss the realignment/redistribution of billing products sent to country addresses
• To meet with your country manager and other DFAS SCA officials for orientation purposes
Visits, of course, are most productive when DFAS SCA is afforded sufficient advance notification and time
for preparation. Please attempt to furnish advance agenda items on specific problem/subject areas to DFAS SCA
for research.
Visit Requests
In order for DFAS SCA to make the proper preparations for a visit, to include building/parking clearances,
etc., the following information should be provided to DFAS SCA via the Foreign Visit System (FVS) 30 days in
advance of the intended visit: [SAMM C3.4]
• Name, rank, and position of visitor(s). Equivalent rank should be
furnished if military rank does not apply
• Desired visit dates
• Lodging and protocol requirements
• Topics to be discussed
DFAS SCA Visits to Customer Site
Based on resource availability, DFAS SCA is available to send a representative to a country’s
embassy/mission in Washington, D.C. In circumstances where extensive/extraordinary services or assistance are
needed, it may be necessary to have the associated costs directly funded through a “services line” on an FMS
case. All requests for in-country visits will be reviewed on a case-by-case basis.
DFAS SCA Automated Delivery Listing Products
The customer may also request that DFAS SCA provide additional data to support the FMS Delivery
Listings. Specific data formats prepared by DFAS SCA based upon Delivery Transactions are shown in Figures 2-
1 through 2-6 for the following transactions:
18
• Articles/Service Transaction (Figure 2-1)
• Training Transaction (Figure 2-2)
• Administrative Transaction (Figure 2-3)
• Accessorial/Additional Cost Transaction (Figure 2-4)
• Articles/ Services Transaction (Figure 2-5)
• Administrative/Accessorial Cost Transactions (Figure 2-6)
Figure 2-1: Data Tape Format for Articles/Service Transaction
1
The majority of data in this transaction is perpetuated from the Delivery Transaction report.
2
Document identifier code will be FKA for debits, FKB for credits, and FKG for reply to customer requests for
adjustments. FKG cards may contain either debit or credit values and are financial information relating to the
original FKA/FKB transaction.
3
A credit value is indicated by a CR or “-” after the value.
4
Numeric year and month in which processed at DFAS SCADFAS SCA.
5
Second position of original code.
Data Tape Format for Articles/Service Transaction
1
Transaction Position Field Contents
1-3 Document Identifier Code
2
4-6 Routing Identifier Code
7 Price Code
8-22 Stock or Part Number/SDR Response
23-24 Unit of Issue
25-29 Quantity Shipped
3
30-43 Document Number
44 Suffix Code
45-50 Supplemental Address
51 Mode of Shipment
52-53 Adjustment Reply Code
54-57 Accounting Date
4
58 Transportation Bill Code
5
59-60 Delivery Source Code
19
Figure 2-2: Data Tape Format for Training Transaction
Data Tape Format for Training Transaction
TransactionPosition Field Contents
1-3 Document Identifier Code (FKA, FKB)
4-6 Routing Identifier Code
7 Price Code
7
8-22 Course Number or Brief Description
23-24 Unit of Issue
8
25-29 Quantity
30-43 Document Number
9
44 Suffix Code or Blank
45-50 Supplemental Address
10
51-53 Blank or Zero
54-57 Accounting Date
58 Normally Blank
59-60 Delivery Source Code
61-64 Course Commencement Date or Blank
6
For items which exceed $99,999.99 in unit price, the extended value and unit price fields contain dollars only.
7
Normally “A.”
8
Normally “XX.”
9
Normally contains zeros in cc 33-35 and ITO date and/or number in cc 36-43.
10
Normally contains zeros in cc 46-47.
61-64 Date Shipped
65-73
Extended Value
3,4
74-80 Unit Price
6
81-83 Item Number
84 Cost Identification Code
85 In-Country Service
21
Figure 2-3: Data Tape Format for Administrative Transaction
Data Tape Format for Administrative Transaction
TransactionPosition Field Contents
1-3 Document Identifier Code
13
4-6 Routing Identifier Code
14
7 Blank
8-19 Contains constant “ADM COST,” left-justified
20-29 Value to which cost applies, if applicable
30 U.S. IA Code
31-32 FMS Country Code
33-44 Blank
45 FMS Country Service
46-47 Blank
48-50 FMS Case Designator
51 Blank
52-53 Adjustment Reply Code, if applicable
54-57 Accounting Date
58-60 Generic Code (L6A)
61-64 Blank
65-73 Value of Administrative Cost
74-80 Percentage rate used, if applicable
81-83 Item Number
84 Cost Identification Code
85 In-Country Service
13
FKC for debits, FKD for credits.
14
Code of activity for reported materiel/services to which administrative costs apply.
22
Figure 2-4: Data Tape Format for Accessorial/Additional Cost Transaction
Data Tape Format for Accessorial/Additional Cost Transaction
Transaction Position Field Contents
1-3 Document Identifier Code
15
4-6 Routing Identifier Code
16
7 Blank
8-19 Phrase identifying type of cost
17
20-29 Value to which cost applies, if applicable
30 U.S. IA Code
31-32 FMS Country Code
33-44 Blank
45 FMS Country Service
46-47 Blank
48-50 FMS Case Designator
51 Blank
52-53 Adjustment Reply Code, if applicable
54-57 Accounting Date
58-60
Generic Code for type of cost as prescribed by the Security
Assistance Management Manual (SAMM)
61-64 Blank
65-73 Value of Accessorial Cost
74-80 Percentage rate used, if applicable
81-83 Item Number
84 Cost Identification Code
85 In-Country Service
15
FKE for debits, FKF for credits.
16
Code of activity for reported materiel/services to which accessorial costs apply.
17
E.g., “CONUS T,” “OSEAS T,” “P POST,” “PCH,” “STAGING,” “MEDICAL,” etc.
23
Figure 2-5: Data CD Format for Articles/Service Transaction
Data CD Format for Articles/Service Transaction
18
Transaction Position
Field Contents
1-3
Document Identifier Code
4-6
Routing Identifier Code
7
Price Code
8-22
Stock or Part Number/SDR Response
23-24
Unit of Issue
25-30
Quantity Shipped
31
Blank
32-45
Document Number
46
Suffix Code
47-52
Supplemental Address
53
Mode of Shipment
54-55
Adjustment Reply Code
56-59
Accounting Date (numeric year and month in which processed at
DFAS SCADFAS SCA)
60
Transportation Bill Code (second position of original code)
61-62
Delivery Source Code
63-66
Date Shipped
67-79
Extended Value
19,20
80-88
Unit Price
19,20,21
89-91
Item Number
92
Cost Identification Code
22
93
In-Country Service
18
The majority of data in this transaction is perpetuated from the Delivery Transaction report.
19
The sign positions are “0” for positive and “-“ for negative quantities.
20
For items that exceed $9,999,999.99 in the extended value field, the extended value is expressed as rounded
whole dollars only (no cents).
21
For items that exceed $99,999.99 in the unit price field, the extended value and unit price fields contain dollars
only.
22
This field always contains an “A” (above-the-line costs, articles, and services).
24
Figure 2-6: Data CD Format for Administrative and Accessorial Transactions
Data CD Format for Administrative and Accessorial Transactions
18
Transaction Position Field Contents
1-3
Document Identifier Code (DIC)
4-6
Routing Identifier Code of activity which reported materiel/services
to which administrative/accessorial costs apply
7
Blank
8-19
Cost Description
20-31
Extended Value Total
19,20,21
32
U.S. IA Code
33-34
FMS Country Code
35
Type Cost 5
36-46
Blank
47
FMS Country Service
48-49
Blank
50-52
FMS Case Designator
53
Blank
54-55
Adjustment Reply Code, if applicable
56-59
Accounting Date
60-62
Generic Code (L6A)
63-66
Blank
67-77
Value of Administrative/Accessorial Cost
20,21
78-85
Percentage rate used, if applicable
21
86-88
Blank
89-91
Item Number
92
Cost Identification Code
93
In-Country Service
If the DIC is FKC or FKD, “ADMIN-COSTS” should appear this space. If DIC is FKE or
FKF, the generic description of the accessorial charges (i.e., CONUS TRANS, PCH, P Post,
etc) should appear in this space.
25
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26
Part II—Billing Documents
CHAPTER 3
Foreign Military Sales Billing Statement (DD Form 645)
Purpose
The purpose of this chapter is to introduce the reader to the format of, and the types of information contained
in, the Foreign Military Sales (FMS) Billing Statement, DD Form 645.
Introduction
The FMS Billing Statement, DD Form 645, and attachments (which are described in detail in the subsequent
chapters of this Handbook), are produced by DFAS SCA on a quarterly basis. The Defense Integrated Financial
System (DIFS) billing subsystem is where those transactions are compiled and the DD Form 645 is created.
Customized print packets are generated by DFAS SCA for specific customer addressees (utilizing the
Country Address/Distribution file which can be revised upon a county’s formal request to DFAS by an authorized
country POC). Each country’s packets contain only the reports or portions of the reports in the number and sort
sequence required by a specific country addressee. The select and variable sort sequence parameters used are Bill
Code, IA Code, In-Country Service Code, and Report Type. The proper mailing label is also printed for each
packet. All report copies printed are originals and the special form required for the DD Form 645 is formatted
within the computer system.
General Information Regarding DD Form 645
Function and Content
The DD Form 645, prepared by DFAS SCA, represents the official claim for payment by the U.S.
government referred to in the United States of America Letter of Offer and Acceptance (LOA). In addition, it
furnishes accounting records to the FMS Purchaser for all costs incurred under each LOA. Details on the DD
Form 645 segregate the cost elements in a manner parallel to the presentation of line item number detail on the
LOA with physical performance of services or delivery of materiel being shown for each of the LOA’s item
number(s) (i.e., LOA Line number[s]). Administrative surcharges, accessorial costs, and a forecast of future
performance/deliveries are also provided, but at case, as opposed to line-item number level.
27
Cycle
The DD Form 645 is prepared and forwarded to the FMS Purchaser on a quarterly basis in accordance with
the billing timeline documented in SAMM Table C9.T25 (FMS Billing Timeline), and the FMR VOL 15, Chapter
8, Section 0803 (FMS Billing Statement), which is depicted in the following table.
PERIOD ENDED
ON FMS
BILLING
STATEMENT
Approximate
Date DD 645
Mailed by DFAS
SCA
PAYMENT DUE
AT DFAS
INDIANAPOLIS
FOR PERIOD
COVERING
December 31st January 15th March 15th April–June
March 31st April 15th June 15th July–September
June 30th July 15th September 15th October–December
September 30th October 15th December 15th January–March
Types of Statements
The DD Form 645 has two basic variations:
1. Billing Statement. The Billing Statement variation serves as a bill and statement of account for all open
FMS cases and those cases which are closed during that quarterly period. Block 2, in the first instance,
states, “This is a Billing Statement based on cash (financial) requirements. Payment is due by: _____.”
2. Final Statement of Account. Each FMS case reflecting a closed status on the quarterly Billing Statement
will be accompanied by a Final Statement, the latter of which may be conveniently detached by the FMS
Purchaser and filed in any locally maintained case files. A closed case is depicted by an asterisk (*) at the
beginning of the case designator in Column 6 of the Billing Statement and Final Statement. Block 2, in
this second variation, states, “This is a Final Statement of Account.”
a. Once a Final Statement has been submitted for an FMS case, no subsequent adjustment of such
billings (upward or downward) is authorized, except under the following instances (Note: This
information appears in the “Explanatory Notes” at the bottom of a Final Statement):
i. Discovery of latent errors, such as obvious errors in addition or multiplication,
unauthorized deviations from DoD policy, or computer errors in establishing unit prices.
ii. To provide charges/credits for Supply Discrepancy Reports (SDR) submitted by the
purchaser in accordance with terms and conditions of the LOA.
iii. Discovery by the United States that it has shipped an item or rendered a service for a case
but has failed to submit a bill.
iv. Discovery by the United States that the final price paid to a U.S. contractor for an item
provided in accordance with Section 22 of the Arms Export Control Act is different from
the final amount billed for that item.
28
Explanation of Entries on the DD Form 645
Following is an explanation of how to interpret and understand entries on the DD Form 645 Foreign Military
Sales (FMS) Billing Statement using Figure 3-1 (“DD Form 645 Billing Statement Example for BN-D-YCY
LOA”) below as as an example billing statement document. The form field numbers are identified in the
descriptions above to assist in correlating the information with the example form.
Figure 3-1 – DD Form 645 FMS Billing Statement Example
29
Entries on DD Form 645 [FMR Table 8-1 and Figure 3-1]
Foreign Military Sales
Billing Statement
Upper Left-Hand Corner. Title of DD Form 645.
United States Of
America
Department Of
Defense/Air Force
Upper Right-Hand Corner. Identifies the U.S. Department of
Defense Component acting as the Implementing Agency (IA) for the
cases shown on the statement. In this example, the U.S. Air Force is
the IA.
1. To: Bandarian Army
Data Field #1. Identifies the FMS Purchaser Service who is the
recipient of the statement. Reflects full country/activity name
followed by Military Service within country or special paying office.
In this example, the example has the Bandaria Army.
2. This Is A Billing
Statement Based On
Cash Requirements.
Payment Is Due By: 21
SEP 15
Data Field #2. Identifies the statement as a “Billing Statement based
on cash requirements” or a “Final Statement of Account,” whichever
is applicable. If the statement is a Billing Statement, this block also
indicates the date payment is due. The due date is about 60 days after
the preparation date in Block 5 but, in any event, will be the 15th day
of the last month of the quarter. The format is YEAR MONTH
DAY with the year being the first two numbers to identify the year.
In the billing form example, the “21 SEP 15” indicates the next
Bandria payment for this LOA is due 2021, September 15th.
3. Statement Number
21-06DB
Data Field #3. Statement number is assigned mechanically and is
composed of the numeric year and month representing the period
ended followed by an alphabetic management code assigned by
DFAS SCA. The management code (also referred to as the “bill
code”) is used to sort cases for distribution and normally identifies
the paying office. The foreign customer can request and obtain
billing sorted in some other manner. In this example, the statement
number is “21-06DB” with “21” indicating the calendar year 2021;
“06” indicating the sixth month (June); and “DB” standing for the
applicable management (USAF) and/or paying office (Bandaria
Army) bill code.
4. For Period Ended
21 JUN 30
Data Field #4. Contains the last calendar day of the month for which
the statement is prepared. It is normally the last day of the month at
the end of each calendar quarter, e.g., 2021, June 30th, in this
example.
5. Date Prepared
21 JUL 15
Data Field #5. Reflects the actual date on which the statement was
prepared/mailed, e.g., 2021, July 15th, in this example.
30
Case Identification And Delivery Status
23
Middle-Left Portion. Descriptor for
Columns 6 through 9.
1. Case & Item Number:
YCY
001
002
003
004
005
006
007
008
009
010
011
012
013
014
700
701
702
989
L6A
L00
WIP
Case
Total
Data Field #6. Consists of the following
information:
a. Identifies the FMS case designator
(YCY in this illustration), and the item
number (i.e., LOA Line numbers)
identification (e.g., 001, 002) from the
LOA. Immediately below and slightly to
the right of each item number in
Column 7, is the abbreviated/short title
of articles/services taken from the
Military Articles and Services List
(MASL, as documented in the Defense
Security Assistance Management
System [DSAMS] that the LOA was
developed in). As an example, in the
Figure 3-1, Item Number 001 is
identified as “HUMDINGER
MISSILES.”
b. Additionally, this column contains
identification of “ADMINISTRATIVE
FEE” (Generic Code L6A),
“ACCESSORIAL COSTS”s (Generic
Code L00), “WORK IN PROCESS”
(WIP), which is defined in Block 10,
related to the case as well as the “CASE
TOTAL.”
c. As noted earlier, an asterisk (*)
preceding the case designator indicates
a completed case (closed). A case which
has been closed since the previous
Billing Statement was issued will
appear on the current Billing Statement
with an asterisk. Concurrently, a Final
Statement of Account is prepared
mechanically for the case and presented
following the billing statement. Once a
case is closed, that case will not appear
on a subsequent DD Form 645 unless
the case is re-opened.
23
NOTE: In illustrating columns 6 through 14, Case Designator YCY from Figure 3-1 is used.
31
7.Total Value Ordered: 103,986,740.00
HUMDINGER MISSILES 78,683,170.00
LAUNCHERS 619,300.00
SPARE PARTS 2,017,000.00
TRAINING MISSILES 488,840.00
TECHNICAL DATA PKG 181,800.00
CONTAINERS 3,017,692.00
SUPPORT EQUIPMENT 1,563,480.00
CONTRACTOR SPT 2,163,402.00
PARTS/SPT EQUIP 2,021,000.00
AF TECH ORDERS 12,372.00
AIRLIFT, AMC 1,636,316.00
R&R OTHER 1,008,500.00
R&R MISSILES 631,250.00
WARRANTY 2,694,188.00
TECH ASSISTANCE 657,000.00
SITE SURVEYS 73,338.00
OTHER SERVICES 2,514,403.00
TRAINING 260,000.00
ADMINISTRATIVE FEE 3,508,507.00
ACCESSORIAL COSTS 235,182.00
CASE TOTAL 103,986,740.00
Data Field #7. Contains the dollar value
of articles/services associated with each
item number, along with the generic
description from DSAMS of each item
number, and the value of the entire case.
These dollar values come from the
current implemented version of the
applicable Letter of Offer and
Acceptance (LOA).
32
8. Cumulative Delivery Cost End Prior Period
TECHNICAL DATA PKG 181,800.00
SUPPORT EQUIPMENT 143,319.00
CONTRACTOR SPT 198,311.85
PARTS/SPT EQUIP 185,258.33
AF TECH ORDERS 1,790.68
R&R OTHER 92,445.83
R&R MISSILES 57,864.58
TECH ASSISTANCE 54,750.00
SITE SURVEYS 61,115.00
OTHER SERVICES 209,533.58
TRAINING 59,583.33
ADMINISTRATIVE FEE 43,602.03
ACCESSORIAL COSTS 21,558.35
CASE TOTAL 1,310,932.58
Data Field #8. Dollar value of
cumulative delivery costs as of the
end of the prior statement period (e.g.,
deliveries cumulative from the
implementation of the basic version of
the LOA through March 31, 2021, in
this BN-D-YCY example). No value
is shown in this column for progress
payments applicable to undelivered
items. Listing on the table on the left,
only includes the line items that have
had reported deliveries.
9. Current Period Delivery Cost
(ATTACHMENT 1)
SUPPORT EQUIPMENT 78,173.00
CONTRACTOR SPT 108,170.10
PARTS/SPT EQUIP 101,050.00
AF TECH ORDERS 976.74
R&R MISSILES 31,562.50
TECH ASSISTANCE 32,850.00
SITE SURVEYS 12,223.00
Data Field #9. Dollar value of
delivery costs reported since the end
of the prior statement period (i.e.,
those delivery transactions received in
and accepted by DFAS SCA during
the current period [April through June
2021 in this example]). Values shown
in this column are supported in
(transaction) detail by the FMS
Delivery Listing (identified in the
Column 9 heading as Attachment 1).
In Chapter 4, the FMS Delivery
Listing documents the transactions
which account for the $78,173 amount
shown for Line 007 in Column 9. No
value is shown in this column for
work in process applicable to items,
services, and training that have not yet
33
OTHER SERVICES 125,720.15
TRAINING 32,500.00
ADMINISTRATIVE FEE 20,077.77
ACCESSORIAL COSTS 11,759.10
CASE TOTAL 605,487.35
been reported to DFAS SCA as
delivered by the Implementing
Agencies (IAs).
Financial Status
Middle-Right Portion. Descriptor for
Columns 10 through 14.
10.Cumulative Delivery Cost & Work in Process
TECHNICAL DATA PKG 181,800.00
SUPPORT EQUIPMENT 221,492.00
CONTRACTOR SPT 306,481.95
PARTS/SPT EQUIP 288,308.33
AF TECH ORDERS 2,767.42
R&R OTHER 142,870.83
R&R MISSILES 89,427.08
TECH ASSISTANCE 87,600.00
SITE SURVEYS 73,338.00
OTHER SERVICES 335,253.73
TRAINING 92,083.33
ADMINISTRATIVE FEE 63,679.79
ACCESSORIAL COSTS 33,317.45
WORK IN PROCESS 23,786,978.07
CASE TOTAL 25,703,398.00
Data Field #10. This column contains
the cumulative totals of values shown
in Columns 8 and 9, plus work in
process applicable to undelivered
items.
The value in Column 10 for Work In
Process (WIP) represents accrued
costs incurred on behalf of the FMS
Purchaser that are not yet supported
by physical or constructive deliveries.
These costs include contractor
holdbacks on work in process made to
contractors, potential termination
liabilities, and any other applicable
authorized charges (e.g., Government
Furnished Material—GFM from
inventory, etc.).
34
11. Forecasted Requirements (Note A)
10,277,127.00
Data Field #11. Contains the
forecasted requirements for the case,
i.e., the value of potential costs to be
incurred during the calendar quarter
following the payment due date of the
current statement. This value appears
on the “Case Total” line only and may
be derived from one of two different
sources:
1. The quarterly deposit
identified in the payment
schedule for the case, which
has a due date that coincides
with the payment due date of
the current statement. In this
example, the $10,277,127.00
figure comes from the
payment schedule of the
current implemented version
(Modification 1) of the BN-
D-YCY LOA.
2. For all requisition type cases,
the Defense Component may
provide DFAS SCA with a
“Committed Values for
Requisition Cases” report.
This report (when provided)
would reflect the current
value of on-hand, unfilled
requisitions for each
applicable case. That report
will be submitted to DFAS
SCA by automated means.
These inputs will be
submitted to DFAS SCA by
the 15th day of the last month
of each calendar quarter,
reflecting the most recent
status for each case. The
committed value will be used
as the forecasted requirements
in Column 11 for the case in
lieu of the quarterly deposit in
the payment schedule when
the committed value is less
than the payment schedule
quarterly deposit. Forecasted
amounts may be adjusted by
35
DFAS SCA based on
documented information.
The Column 11 heading makes
reference to “Note A,” which is one of
the “EXPLANATORY NOTES” at
the bottom of the certification page of
the actual DD-645 Billing Statements.
While it is not included in the Figure
3-1 example above, the exact wording
of the “Note A” reference is as
follows: “THE TERMS OF THE U.S.
PUBLIC LAW, THE ARMS
EXPORT CONTROL ACT,
REQUIRE THE DEPARTMENT OF
DEFENSE TO COLLECT
PAYMENTS FROM FOREIGN
PURCHASERS IN ADVANCE OF
THE TIME THAT DOD INCURS
COSTS ON THE PURCHASER’S
BEHALF. THEREFORE, THIS
BILLING STATEMENT
REQUESTS PAYMENT OF
MONIES THAT ARE
ANTICIPATED TO BE EXPENDED
BETWEEN THE TIME THIS
BRANCH CHIEF: BILLING
STATEMENT IS PAID AND THE
FOLLOWING BILLING
STATEMENT IS PAID.”
12. Total Financial Requirements
35,980.525.00
Data Field #12. A value appears in
this column on the “Case Total” line
only. It represents the cumulative total
of the Column 10 (“CUMULATIVE
DELIVERY COSTS & WORK IN
PROCESS”) and Column 11
(“FORECASTED
REQUIREMENTS”) values for the
case.
13.Cumulative Payments Received
25,703,398.00
Data Field #13. A value appears in
this column on the “Case Total” line
only. It represents the total amount of
payments received (as of the report
date documented in Block 5 (“DATE
PREPARED”) by DFAS SCA in
behalf of the FMS customer for each
applicable case.
36
14. Amount Due And Payable
10,277,127.00
Data Field #14. A value appears in
this column on the “Case Total” line
only. It represents a calculation—
Column 12 value minus Column 13
value—and is the additional payment
due from the customer. If the
calculation is less than $1 or is a
negative amount due, no amount will
be shown.
Summary
The DD Form 645 is prepared and distributed to the FMS Purchaser on a quarterly basis. This document has
two variations: a “Billing Statement” and a “Final Statement of Account” for each closed case.
37
Chapter 4
FMS Delivery Listing
Purpose
In this chapter, the FMS Delivery Listing (which is an attachment to the DD Form 645) is addressed. The
discussion centers on how to read the Delivery Listing and how such listing relates to the DD Form 645.
General Information
Function and Format
An FMS Delivery Listing (see Figures 4-1 through 4-2 below for examples) is prepared in support of entries
in Column 9, “Current Period Delivery Costs,” for each of the DD Form 645 documents and Item Numbers (i.e.,
LOA Line Numbers) that have deliveries reported by the IAs to DFAS SCA in the just completed reporting
period. The document identifies items physically or constructively delivered and services performed that are
received and accepted by DFAS SCA during the reporting period. It is cross-referenced to specific document
numbers and allows FMS customers to validate receipt of the materiel or services. This FMS Delivery Listing
also includes DFAS SCA’s computations of authorized charges applied by that organization in accordance with
established pricing policy. Those performance-reporting items rejected back to an IA must be researched by them
for determination of errors, correction and/or re-input in subsequent reporting. The FMS delivery list is in item
number (i.e., LOA line number) sequence, and then the sorting sequence in each FMS Delivery Listing document
is by Delivery Source Code (DSC)which is subtotaled by DSC, and then by Accounting Date (ACTG DATE).
Transactions on the report are categorized by the “ARTICLE/SERVICES TRANSACTIONS” (i.e., the “Above-
the-Line” transactions), and then the “ADMINISTRATIVE/ACCESSORIAL TRANSACTIONS” (i.e., the
“Below-the-Line” transactions).
Cycle
The FMS Delivery Listing, being an attachment to the DD Form 645, is prepared and distributed on the same
quarterly basis as the DD Form 645 (Foreign Military Sales Billing Statement).
Explanation of Entries on the Foreign Military Sales Delivery Listing
The FMS Delivery Listing essentially consists of four sections or groupings of information:
1. Header Information includes the identification of country, service, statement number, case, item
number, dates (period ended, and date prepared), and the U.S. Department/Agency.
2. Articles/Services Transactions provides a listing of each “Above-the-Line” transaction reported (during
the current billing reporting period) by the IA to DFAS SCA for the CASE and Item Number identified in
the report’s Header information.
3. Administrative/Accessorial Transactions provides a consolidated listing of
administrative/accessorial costs (i.e., the ‘Below-the-Line’ transactions) by generic code and the
accounting date/month.
4. Summary of Delivery Costs documents the “ARTICLES/SERVICE COSTS” (categorized by “FKA,”
“FKB,” and “NET TOTAL”), “ADMINISTRATIVE COSTS” (categorized by “FKC,” “FKD,” and “NET
TOTAL”), and “ACCESSORIAL COSTS” (which includes categorization by “FKE,” “FKF,” and each
individual applicable transportation segments).
38
Figure 4-1: FMS Delivery Listing Example
The sections of the FMS Delivery List and associated data fields are discussed below
[Reference: Figure 4-1]
Header Information
Country: Bandaria
Service: Army
Top Left-Hand Portion. Identifies the FMS
recipient country and Service within that
country that received the applicable materials,
services, and training listed on the report.
FMS Delivery Listing Statement Number:
21-06DB
Case: YCY ITM NBR: 007
Top Center Portion. Identifies the type of
listing, the statement number, and the case and
item (i.e., LOA Line) number. In this example
(“21-06DB,” the report is for the 2021 June
transactions reported by the U.S. Air Force to
DFAS SCA for their support to the Bandaria
Army for the execution of FMS Case BN-D-
YCY Line Number 007 (“CASE: YCY ITM
NBR: 007”).
For Period Ended: 21 JUN 30
Date Prepared: 21 JUL 15
U.S. Dept/Agency: Air Force
Top Right-Hand Portion. Identifies the period
ended date of 2021, June 30th (“21 JUN 30”),
the actual date prepared of 21, July 15th (“21
JUL 15”), and the U.S. Dept/Agency as the
U.S. “Air Force.”
39
ARTICLES/SERVICES TRANSACTIONS
[Reference: Figure 4-1]
DOC ID
Document Identifier (DOC ID). The DOC ID identifies the type of
transaction. Refer to Appendix A of this Billing Handbook for additional
Delivery Listing Codes details and references. In the “Articles/Services
Transactions” section, there are two possibilities:
1. FKA: Materiel/Service Transaction (Debit).
2. FKB: Materiel/Service Transaction (Credit).
o In the event of an FKB, the abbreviation for credit (CR)
follows the quantity in the QUAN SHIP column and the
dollar amount in the EXTENDED VALUE column.
RIC
Routing Identifier Code (RIC).
Three-position (alpha/numeric) code identifies the shipping depot or
activity performing services as established in MILSTRIP procedures.
“FGZ,” for example, is the Depot Storage Facility at Hill Air Force Base,
Utah.
Refer to Appendix B of this Billing Handbook for additional Routing
Identifier Codes (RICs) details and references.
PRC
CD
Price Code (PRC CD). An alpha code identifies the price as being one of
the following:
• A = An actual price. A blank in the PRC CD field is also treated
as an actual price.
• E = An estimated price. Used to report physical deliveries at an
estimated price. This transaction will eventually be reversed when
an actual price (PRC CD “A”) is submitted by the implementing
agency (IA).
• N = Incremental Billings. Used to report incremental billings
(such as WIP to contractors or provision of government furnished
materiel (GFM) to a contractor). Code “N” may also be
considered to be a Contract Administration Service (CAS)
computing code under specific rules.
Refer to Appendix C of this Billing Handbook for additional Price Code
details and references.
Stock Number
Stock Number. Shows the National or Nato Stock Number (NSN) for
material that have NSNs. If there is no applicable NSN for the transaction,
there will be an appropriate applicable description (e.g.,
“CONTRACTORSVCS” for Contractor Services,
“GOVT0SRVCS000000” for Government Services, etc.)
40
UNIT
ISSUE
Unit of Issue. Abbreviation for unit of issue, e.g., “EA” equates to Each.
Refer to Appendix M of this Handbook for additional Unit of Issue
Abbreviations details and references.
QUAN
SHIP
Quantity Shipped. Self-explanatory. For FKB transactions, the quantity
is followed by the abbreviation “CR” standing for Credit.
DOCUMENT
NUMBER
Document Number. Composed of 14 alpha/numeric characters
identifying the transaction. Refer to Appendix D of this Handbook for
additional Document Number details and references.
Position 1: Implementing agency code, For example, “D” equates to U.S.
Air Force.
Position 2-3: Country or Building Partner Capacity program code (e.g.,
BN equates to fictitious country of Bandaria).
Position 4: Customer mark-for code. Comes from customer-provided
information on the first page of the LOA, e.g., code “A” in the BN-D-
YCY LOA example.
Position 5: Delivery Term Code as shown in Appendix G, of this
Handbook. This is the negotiated/anticipated method of movement of the
material.
Position 6: Type of Assistance Code as shown in Appendix K of this
Handbook.
Position 7-10: Four numeric characters representing calendar year and
Julian date. As an example, for the date “0229,” the following is true: 0 =
calendar year 2020, and 229 = the 229th calendar day of 2020, or 16
August, 2020, as shown in Appendix L of this Handbook.
Position 11-14: Serial number of the transaction/requisition. In the
illustration above, the serial numbers are 7003, 7132, 2310, 7130, and
7128.
41
DOC
SFX
Document Suffix Code (DOC SFX). The code shows partial action by
supplier without losing the identity of the original requisition. The codes
must be considered in combination with dates and quantities shipped
when accounting for split transactions.
Processing Source Assigned Suffix Codes
Initial Source A through E
First Secondary Source F through H, J, and K
Second Secondary Source L, M, Q, T, and U
Third Secondary Source V through X
Fourth Secondary Source Z through 9
SUPL
ADRS
Supplementary Address (SUPL ADRS) provides additional
transportation information and identifies the case designator of the FMS
LOA. In the supplementary address “BA2YCY,” for example, the
following information is contained in each position:
Position 1: In-country Service Code (e.g., “B” = Bandaria Army)
Position 2: Offer/release code from column (6), LOA (e.g., “A” in this
illustration), which advises that “Freight and parcel post shipments will be
released automatically by the shipping activity without advance notice
(Notice of Availability). Refer to Appendix K of this handbook for
additional Offer Release Code details and references.
Position 3: Freight Forwarder Code from the LOA (e.g., “2” in these
examples). The code comes from customer-provided information on the
first page of the LOA (e.g., code “2” in the BN-D-YCY LOA example).
Freight Forwarder codes and additional information is documented in the
DLA Military Assistance Program Address Directory (MAPAD). Refer to
the DSCU MILSTRIP for FMS Handbook Chapter 5 for training on how
to interpret and use the MAPAD.
Position 4-6: Case designator (e.g., “YCY” in this example).
MS
Mode of Shipment (MS) codes are listed in Appendix O of this
Handbook. Code “B,” for example, indicates transportation was
accomplished by “ Motor, less truckload.”
42
ARC
Adjustment Reply Code (ARC) may be used to explain material cost or
quantity adjustment, either as the result of a SDR or some other billing
adjustment input to DFAS SCA by the shipper. A list of ARCs is
contained in Appendix P of this Handbook.
Code “BZ” in this example indicates that “ Exhibit analysis completed—
credit adjustment will be processed.” Some MILSTRIP adjustments may
also be coded that do not directly relate to a SDR; therefore, further
comparison to the stock-number field is recommended to determine the
validity.
ACTG
DATE
Accounting Date (ACTG DATE) indicates calendar year (e.g., “21” =
2021) and month (e.g., 04 = April) that a transaction is processed by
DFAS SCA.
TBC
Transportation Bill Code (TBC) is an alpha character used by DFAS
SCA to recognize the necessity to charge for the transportation of
materiel.
TBCs are listed in Appendix H of this Handbook.
DSC
Delivery Source Code (DSC) is comprised of two alpha characters.
Codes in this field provide an audit trail between delivery transactions and
Security Cooperation pricing policies. Code is also used by DFAS SCA to
recognize the necessity to charge for packing, crating, and handling
(PC&H), transportation, and contract administration on procurement
contract disbursements.
DSCs are listed in Appendix Q of this Handbook. Code “AB,” for
example, relates to a Defense Working Capital Funds (DWCF) non-
excess (including technical data packages and publications) from
inventory other than matured FMSO items.
DATE
SHIP
Date Shipped (DATE SHIP) are four numeric characters with the first
being the last digit of the calendar year (e.g., “1” = 2021) followed by the
three-position Julian Date (e.g., 111 = 21 April) that indicates the date
that the material listed was shipped.
UNIT PRICE and
EXTENDED
VALUE
Unit Price. Derived in DFAS SCA by dividing quantity shipped into
extended value reported by IA. An asterisk (*) in this Column means that
the extended value is “not divisible” (in whole dollars and cents by
quantity shipped).
Extended Value. Quantity times Unit Price.
43
Administrative/Accessorial Transactions
[Reference: Figure 4-1]
DOC ID
Document Identifier (DOC ID). The document identifier indicates
whether the transaction is a debit or credit of an administrative or
accessorial cost. Refer to Appendix A of this Handbook for additional
Delivery Listing Codes details and references.
FKC—Administrative Costs (Debit).
FKD—Administrative Cost Adjustments (Credit).
FKE—Accessorial Costs (Debit).
FKF—Accessorial Cost Adjustments (Credit).
Generic Code
Generic Code. Identifies the cost category. Refer to Appendix G
(Generic Code—Authorized Charges Table) for additional details and
references on the potential Generic Codes that can be listed.
COST
DESCRIPTION
Cost Description provides a generic short title of cost. See discussion
immediately preceding this block.
Document Number
Document Number is comprised of three positions which indicate one
of the following:
Position 1: U.S. Implementing Agency (e.g., “D” = U.S. Air Force).
Position 2-3: Country code of recipient (e.g., BN).
Adjustment Reply
Code (ARC)
Adjustment Reply Code (ARC) has the same meaning as in
“Articles/Services Transactions” discussion. Normally, no entries are
shown here because this is a summation of many entries in the
“ARTICLES/SERVICES TRANSACTIONS” portion of the Delivery
Listing. See Appendix P of this Handbook for listing of ARCs.
Actg Date
Accounting Date (SDR DATE) has the same meaning as in
“Articles/Services Transactions” discussion. Note that all
administrative/accessorial costs are summarized in terms of document
identifier, generic code(s) relevant to that document identifier, and
accounting date/month.
Type Of Cost Type of Cost. Can be of two types:
1. Computed—Meaning that the routine percentage charge is
used. The type of computation is denoted by the word
“COMPUTED.”
2. Actual—Meaning that actual, in lieu of percentage derived,
charges are applicable. This type of computation is denoted by
the word “ACTUAL.”
Percent Factor Percent Factor is the percentage applied for “Computed” charges
44
Total Value Applied
Total Value Applied is the base number used for the applicable
document ID for the determination of the Admin/ACSRL Cost that
appears in the next column
Admin/ACSRL Cost
Admin/ACSRL Cost is the amount that is either computed (based on
the listed Percent Factor and the Total Value Applied), or the actual
based on the Total Value Applied
Figure 4-2: FMS Delivery Listing Summary Of Delivery Costs Example
Summary Of Delivery Costs
[Reference: Figure 4-2]
SUMMARY OF DELIVERY COSTS:
• NET TOTAL OF ARTICLES/SERVICES
COSTS
• NET TOTAL OF ADMINISTRATIVE COSTS
• NET TOTAL OF ACCESSORIAL COSTS
• TOTAL DELIVERY COSTS
In this portion of the Delivery
Listing, the aggregated costs for
each of the categories listed in the
box on the left are identified
(irrespective of accounting
date/month), to their document
identifier (e.g., FKA, FKB, FKC,
FKD, FKE) and the Net Total for
each category is shown.
Accessorial costs are further
displayed by generic code (e.g.,
L1A, etc.).
“Total Delivery Costs” equal to the
net totals of articles/services costs,
45
administrative costs, and accessorial
costs.
Cost Information Summary.
Cost Information Summary
displays the costs in terms of
“ACTUAL COST,” “COMPUTED
COSTS,” and “TOTAL COSTS.”
Note that the “Net Total of
Articles/Services Costs”
($78,173.00 in this example)
equates to the amount for that FMS
case/item number in Column 9 of
the DD Form 645 for this LOA Line
item (007).
The “Net Total of Administrative
Costs” ($2,501.54 in this example)
represents the LOA line 007’s
portion the Case’s L6A
ADMINISTRATIVE FEE figure
(i.e., $20,077.77 in Column 9
(“Current Period Delivery Costs”)
of the DD Form 645 (See Figure 3-1
of this Handbook).
Summary
The Delivery Listing is a very significant attachment to the DD Form 645 Billing Statement. An FMS
delivery listing is prepared in support of entries to “Current Period Delivery Costs,” on the DD 645 for the
specific LOA Item Number (i.e., Line Number) identified in the report’s header information. The delivery listing
is an itemized listing of all items physically delivered and services performed during the reporting period along
with all their associated authorized charges that were calculated by DFAS SCA. It is cross-referenced to specific
document numbers and allows FMS purchasers to validate receipt of the materiel or services. An FMS Delivery
Listing is prepared based on IA FMS Integrated Control System (FICS) delivery transactions that have an “E”
(estimated), “A” (actual), or “N” (incremental billing) price code.
46
CHAPTER 5
Foreign Military Sales Financial Forecast
Purpose
The purpose of this chapter is to provide information on how to read and understand the Foreign Military
Sales (FMS) Financial Forecast, which is an optional attachment to the DD Form 645.
General Information Function and Format
An FMS Financial Forecast can be prepared to show the anticipated forecast amounts, which will eventually
be posted to Column 11 (Forecasted Requirements) of the DD Form 645. The amounts contained in the FMS
Financial Forecast are extracted from the most recent amended/modified Payment Schedule. Also refer to the
Payment Schedule for further clarity and understanding.
Cycle
This report can be produced quarterly, along with the DD Form 645.
Figure 5-1: FMS Financial Forecast Example
Explanation Of Entries On The FMS Financial Forecast
The first quarterly forecast entry equates to the DD Form 645. Block 2 (Payment Due Date), plus 90 days. If
the DD Form 645, Block 2, date is 21 SEP 15 (September 15, 2021), then the first quarterly forecast entry on the
47
FMS Financial Forecast will equate to the 21 DEC 15 (December 15, 2021) amount from the payment schedule.
The second quarterly forecast entry in this example will be 22 MAR 15 (March 15, 2022), and so on.
Header Information
U.S. DEPT/Agency:
Country:
Service:
Upper Left-Hand Portion. Self-explanatory.
FMS Financial Forecast
Statement NR:
Upper Center Portion. Statement number is
assigned mechanically and is composed of the
numeric year and month representing the
period ended followed by an alphabetic
management code assigned by DFAS SCA.
The management code (also referred to as the
“bill code”) is used to sort cases for
distribution, and normally identifies the paying
office. The foreign customer can request and
obtain billing sorted in some other manner. For
example, if the statement number is “21-06,”
the “21” indicates the calendar year 2021; “06”
indicates the sixth month (June). There will be
statements for each combination of the U.S.
Dept/Agency and country service(s) that have
FMS cases.
For Period Ended:
DATE PREPARED:
Upper Right-Hand Portion. Self-explanatory.
The Header Information, illustrated above,
follows essentially the same pattern as the FMS
Delivery Listing and no further discussion is
needed.
Case: Identifies the FMS Case(s) on the report
FORECAST BY QUARTER
There is space on this report for 19 future
quarterly forecasts—normally enough for most
cases.
TOTAL STATEMENT
Provides the total amount of all the cases on
the report for each of the 19 quarters and lists
the total for each quarter separately.
Summary
The FMS Financial Forecast is a rather straightforward report. It reflects anticipated, future payments,
starting with a payment due date 90 days beyond the date reflected in Block 2 of the DD Form 645.
48
Chapter 6
FMS Reply Listing To Customer Request For Adjustments
Function and Format
The Reply Listing is a consolidated listing of the actions/dispositions taken in response to Supply
Discrepancy Reports (SDRs) Standard Form 364 that are submitted by the purchaser. SDR dispositions are
commonly referred to as “FKG transactions” inasmuch as the Document Identifier on the Reply Listing is FKG.
Refer to Appendix A (Delivery Listing Codes) for additional details on the Delivery Listing Codes such as FKG.
Each FKG transaction contains many of the same data elements as the FKA/FKB transaction shown on the
FMS Delivery Listing. The FKG is a management/non-financial transaction generated from an original FKA/FKB
transaction. The Reply Listing is prepared in the same basic sequence as the Billing Statement and the FMS
Delivery Listing. If the FMS Purchaser uses mechanized procedures, the FKG data (upon request) may be mailed
with the Reply Listing.
Cycle
The Reply Listing is prepared quarterly in the same cycle as the DD Form 645 FMS Billing Statement.
49
Figure 6-1: FMS Reply Listing to Purchaser Request for Adjustments Example
Explanation of Entries on the Reply Listing
[Reference: Figure 6-1]
Header Information
The header information as shown in the Figure
6-1 example is essentially the same types of
information that is documented (and previously
explained in Chapter 4 of this Handbook) as
the FMS Delivery Listing, and no additional
explanation is provided.
Country: Bandaria
Service: Air Force
Upper Left-Hand Portion. Self-explanatory.
Statement Number: 21-07NB
Statement number that documents the year and
month that the statement was prepared. In this
example, the statement number (21-07NB)
indicates that the report was prepared in the
seventh month (July) of the year 2021. The
“NB” indicates the applicable management
and/or paying office bill code.
Date Prepared: 21 JUL 15
U.S. Dept/Agency: Air Force
Upper Right-Hand Portion.
Report prepared 2021 July 15 for a U.S. Air
Force–managed FMS case.
CASE
Case. Identifies the FMS case designator that
the Customer Requests for Adjustments were
submitted on. In this example, there is only one
entry for CASE KCX.
ITM NBR
ITM NBR. Identifies the FMS LOA line
number (for the case previously identified) that
the Customer Requests for Adjustments were
submitted on. In this example, the single entry
is for Item Number 001 (i.e., LOA Line
Number 001) for FMS Case BN-D-KCX.
50
DOC ID
RIC
PRC
DOC ID, RIC, and PRC. Refers to the
Document ID, Routing Identification Code
(RIC), and Price Code (PRC) that were
previously discussed in Chapter 4 of this
Handbook. The meanings and definitions for
each of those codes are listed in the
Appendices A (Document ID), B (Routing
Identifier Code), and C (Price Code),
respectively.
SDR SERIAL NUMBER
SDR Serial Number. It documents and refers
to the specific Supply Discrepancy Report
(SDR) that the customer submited that is
referred to on that line entry.
UNIT ISSUE
QUAN SHIP
DOCUMENT NUMBER
DOC SFX
SUPL ADRS
MS
ARC
ACTG DATE
TBC
DSC
UNIT PRICE
EXTENDED VALUE
Refers to the terms that were previously
discussed in Chapter 4 of this Handbook.
See the applicable Appendicies (M, D, O, P, H,
and Q) including Appendix P for a listing and
additional details and references for Adjust
Reply Codes (ARCs).
Summary
The FMS Reply Listing to Customer Requests for Adjustments (commonly referred to as the Reply Listing)
is a consolidated listing of the actions taken in response to the FMS customer’s request(s). SDR debit/credit
transactions will appear both on the FMS Delivery Listing (as an FKA/FKB transaction) and the Reply Listing (as
an FKG information transaction).
51
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52
Chapter 7
Holding Account Statement
Purpose
The purpose of this chapter is to provide information on how to read and understand the Holding Account
Statement(s).
General Information
Function
Cash payments are often received, for an individual FMS case, which are determined to be in excess of the
final value of that particular case at time of closure. Also, there are instances where purchaser funds are received
prior to receipt of an accepted LOA or other identifying documentation. Since these funds must be promptly
deposited/recorded to the U.S. Treasury account for control purposes, they are deposited to the country’s Holding
Account pending identification. Unreserved funds in this account may be retained, applied to other FMS cases, or
refunded at the purchaser’s written request, provided there are no collection delinquencies for other FMS cases.
Cycle
Transactions that effect a purchaser’s holding account(s) will be recorded on a Holding Account
Statement(s) and forwarded with the DD Form 645, during the period in which the charge/credit occurred.
Explanation Of Entries On The Holding Account Statement
Referring to Figure 7-1 (Bandaria Holding Account Example) below, the following comments are applicable:
• If no transactions are processed during a given quarter, a Holding Account Statement is prepared
stating, “NO ACTIVITY DURING BILLING CYCLE.”
• There is at least one Holding Accounts for the country, and some countries have multiple holding
accounts (e.g., one for each of their military departments plus one country-level account, etc.). An
account designator (which is different than the designator system used for LOAs) is assigned by
DFAS SCA for each holding account. This three-position Holding Account designator is structured
as follows:
o The first position (numeric) describes the type of funds in the Holding account. See the table
on the next page of this Handbook for reference on the holding account type of funds
designations.
o The second position (alpha) identifies the applicable U.S. Implementing Agency (IA). In
some instances, DFAS SCA may code the second position “Q” (or some other alpha) to either
reduce the number of accounts (e.g., to consolidate that category of holding account funds at
the country level), or to satisfy some other customer country request. For a complete
understanding of the coding of a specific Holding account, the customer should contact
DFAS SCA country manager.
o The third position (alpha) identifies the applicable purchaser’s in-country service (e.g., “B for
the Bandaria Army), or can be a “Q” if the account is managed by that country’s government
vice a country service.
• Holding Account transactions are recorded by date, detail, and amount of deposit/withdrawal. A
Holding Account Statement is required on a calendar quarter basis
53
• The acccount(s) account for the opening and closing balances, and all applicable transactions (both
credit and debit) that occurred during the documented quarter.
• Funds reserved for specific purposes/cases are not available for redistribution by the FMS customer.
Numeric Type of Funds in the Holding Account
0 Federal Reserve Bank (FRB) interest-bearing account
1 Regular FMS payments by purchaser
2
Military Assistance Program (MAP) funds (MAP is non-refundable to FMS
Customer)
3 Third-country recoupments
4 Buybacks
5 Credit FMS funds (non-refundable to FMS Customer)
6 Worldwide Redistribution Services (WWRS)
7 ULO (Participating Countries) refundable to customer
8 Supply Discrepancy Report (SDR) Transportation Reimbursement
9 Commercial Bank Account (CBA)
Example: Holding Account “BN-D-1DD,” illustrated in Figure 7-1, indicates regular FMS payments by
Purchaser (numeric “1”), applicable to U.S. Air Force managed FMS Cases (Alpha “D”), and the purchaser’s
(e.g., Bandaria) Air Force (Alpha “D”) is the country’s manager (i.e., controls) the funds in that holding account.
54
Figure 7-1: Bandaria Holding Account Example
Summary
The Holding Account Statement(s) is/are prepared and provided (for each account) on a quarterly basis.
The Holding Account concept provides a simplified method for accounting for funds awaiting further disposition
instructions. Each country can have multiple Holding Accounts.
55
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56
Chapter 8
Accelerated Case Closure Suspense Account Statement
General Information
The Accelerated Case Closure Suspense Account statement depicts closed Foreign Military Sales (FMS)
cases of participating countries as designed in SAMM C4 Table 2, and also in SAMM Appendix 7
(Reconciliation and Closure Guide) Table A7.C3.T1 (Master ACCP Participating Country Table (Sorted by
Country Code). Participation is mandatory for countries and organizations receiving Foreign Military Financing
(FMF), and optional for other countries. These “Interim Closed (IC)” cases documented in this report have had all
required ordered goods and services delivered and/or provided (i.e. “SSC”—Logistically complete), and only
final financial reporting is necessary (i.e., logistically complete but NOT financially complete) to final close the
case(s).
See the Figure 8-1 below for an example of an Accelerated Case Closure Suspense Account Statement. Note
also the text at the bottom of that statement example that, for the current quarter, positive amounts represent
reserve for future disbursements; negative amounts represent underestimated Unliquidated Obligation (ULO) for
this case.
The country’s report will be accompanied by an official letter from the Defense Finance and Accounting
Service. The letter will state the following:
Accelerated Case Closure (ACC) was developed to expedite Foreign Military Sales (FMS) case closure.
Many cases on which all material has been delivered are held in open status for many years for potential
contract liability, which cannot be determined until the final audit is completed and the final costs are
negotiated. This potential liability is identified as Unliquidated Obligations (ULOs) and represents the
estimated value of final contract cost less payments made on your behalf. Many of these contracts remain
open for many years until deliveries on all contract lines are made and the final costs determined.
Under ACC procedures, a case could be closed with a ULO value. Normally, once cases have been supply
complete for at least 2 years, the case is billed for the ULO and the case is closed. The value of the ULO
is accounted for separately in a customer’s ACC Suspense Account to cover actual costs received on
closed cases. The quarterly statement is enclosed to provide ACC Suspense Account balance information.
The statement’s columnar headings contain the following information:
a. CLSR TYPE—2 = Interim Closure, 3 = Final Closure
b. CC—Country Code
c. IA—Implementing Agency
d. CASE—Three-digit FMS Case Identifier
e. STATUS Change—An asterisk (*) in this column indicates the CLSR TYPE status changed or
that the case was either interim or final closed during the quarter.
f. DT-CLSR—Date Closure. The Julian date on which the case was closed. DT-FNLZ—Date
Finalized. The Julian date on which the case was final closed. Only one date shows in this report
column; if the CLSR TYPE = 2, DT CLSR is the interim closure date. If the CLSR TYPE = 3,
DT FNLZ applies and is when the case was moved to final closure status.
g. ORIG ULO VALUE—Original ULO Value. Original ULO value assigned when the case was
closed.
h. CUR QTR Activity—Current Quarter Activitiy. Amount of the adjustment to the ULO value for
that case during the current quarter.
57
i. CUR QTR BAL—Current Quarter Balance. Indicates the ending ULO balance for the current
quarter. This balance is the original ULO value (Column A) minus previous quarter’s activity
(Column B) minus current quarter activity (Column C)
j. ICS—In-country Service.
k. SUBTOTAL BY TYPE. Subtotals the case activity corresponding to each CLSR TYPE. This a
separate section for CLSR TYPE “2” cases and one for the “3” cases.
l. SUBTOTAL by ICS—Subtotal by In-Country Service. Subtotals the case activity for each in-
country service.
m. Totals by CC—Totals for the entire country.
Please provide a copy of the ACC Suspense Account statement to any other offices that need the statement.
If the statement should be sent to a different address, rather than your address, please send the appropriate
address to the following:
DFAS-IN Security Cooperation Accounting
ATTN: JAX/IN
8899 E. 56th Street
Indianopolis, IN 46249-6300
USA
If you have any questions regarding the enclosed ACC Suspense Account statement, please contact the
DFAS SCA POC at the listed phone number.
58
Figure 8-1: Accelerated Case Closure Suspense Account Example
59
Appendices
Appendix A: Document Identifier (DOC ID) Codes
General Description
Codes are assigned by DFAS SCA to identify the Delivery Listing transactions and whether the transaction
is a debit or credit. Following is a listing of the “Delivery Listing” and “Delivery Cost Total” codes that can be
used, along with additional explanations of how they are used and how to interpret their meaning:
Code Title Debit or Credit
FKA Articles/Service Transactions Debit
FKB Articles/Service Transactions Adjustment Credit
FKC Administrative Costs Debit
FKD Administrative Cost Adjustment Credit
FKE Accessorial Costs Debit
FKF Accessorial Cost Adjustments Credit
FKG Reply to Purchaser Request for Adjustments Debit or Credit
Delivery Listing Codes
FKA—Articles/Services Cost Total of detail FKA (Debit) transactions
FKB—Articles/Services Cost Total of detail FKB (Credit) adjustment transactions
Net Total of Articles/Services Cost
All FKA and FKB transactions equal the net total of
articles/services cost
FKC—Administrative Costs
Total of detail FKC Administrative Costs and total of
detail FKD Administrative Cost Adjustment
(a) If DFAS SCA computes the cost, the value against
which the percentage factor is applied, the percentage
factor used, and the applied charge (under
ADMIN/ACSRL COST) are shown. The charge is
shown as a debit (FKC) or credit (FKD) amount
(b) If actual costs have been applied, the words
“ACTUAL CHARGE” are shown as Type of Cost.
FKC transactions are applied against FKA
transactions. FKD (credit Administrative Cost
Adjustments) transactions are applied against FKB
transactions
Net Total of Administrative Costs All FKC and FKD transactions equal the net
administrative costs
60
Delivery Cost Total Codes
Notes: (FMS Delivery Listing)
1. FKE Accessorial Costs and FKF Accessorial Cost Adjustments:
a. FKE transactions are applied against FKA transactions; FKF transactions are applied against FKB
transactions.
b. Each “below-the-line” cost applied is identified by a generic code and a description of cost below
the FKE/FKF headings. Generic codes and descriptions are in FMR VOL 15 CH8 Table 8-5
c. All FKE transactions (debit) and FKF transactions (credit) equal the net total accessorial costs.
d. The sum of net totals for article/service costs, FMS administrative surcharge, and accessorial
costs equals total delivered costs.
61
Appendix B: Routing Identifier Codes (RIC)
The Routing Identifier Code (RIC) identifies the item manager, the supply depot or vendor from which the
materiel is issued, or the ILCO. In FEDLog, PubLog or WebFLIS, the RIC is reflected as the Source of Supply
(SOS). All sources of supply have RICs, but not all RICs are sources of supply. Supply transactions may contain
more than one RIC to identify the implementing agency, the item manager, or the depot from which the materiel
is released. The following in this Appendix B are only a sample of available RICs extracted from DLM 4000.25-
1, Military Standard Requisitioning and Issue Procedures (MILSTRIP). If a RIC appears in the supply requisition
that is not identified here, you may also look it up online at the following DLA website:
https://www.transactionservices.dla.mil/DAASINQ/
.
RIC
(RP 4-6)
Explanation
AKZ
U.S. Army Tank, Automotive and Armaments Command (TACOM-W),
Warren, Michigan.
AQ5 DLA Distribution Depot, San Joaquin, California (DDJC)
AN5 DLA Distribution Depot, Susquehanna, Pennsylvania (DDSP)
AXF U.S. Army Security Assistance Training Field Activity (SATFA), Fort
Monroe, Virginia.
A12 U.S. Army Soldier Systems Command, Natick, Massachusetts.
BAM U.S. Army Simulation, Training & Instrumentation (PEO-STRI), Orlando,
Florida.
BY7 U.S. Army Security Assistance Command (USASAC), New Cumberland,
Pennsylvania.
B14, BKZ U.S. Army Joint Munitions Command (JMC), Rock Island, Arsenal, Illinois.
B16 U.S. Army Communications-Electronics Command (CECOM), Aberdeen
Proving Ground, Maryland.
B17
U.S. Army Aviation and Missile Command (AMCOM), Redstone Arsenal,
Alabama (Aviation Equipment).
B56 National Security Agency (NSA) COMSEC Logistics, Tobyhanna,
Pennsylvania.
B64 U.S. Army Aviation and Missile Command (AMCOM), Redstone Arsenal,
Alabama (Missile Equipment).
B69 U.S. Army Medical Materiel Agency (USAMMA), Fort Detrick, Maryland.
62
RIC
(RP 4-6)
Explanation
CAT,
M31
Caterpillar Inc. Defense and Federal Products Division, Moosville, Illinois.
CLC Thales-Raytheon Systems Co., El Segundo, California.
F01 Lockheed-Martin Aeronautical Systems, Marietta, Georgia.
F06 Lockheed-Martin Aeronautical Systems, Keesler AFB, Mississippi.
F13 Pratt & Whitney Corp. West Palm Beach, Florida.
F16 Rolls-Royce Corp. Indianapolis, Indiana.
F28 The Boeing Company, Fort Walton Beach, Florida.
F50 The Boeing Company C-130 Avionics Modification Program, St. Louis,
Missouri.
F78 Northrop-Grumman, San Diego, California.
F85 ITT Industries, Patrick AFB, Florida.
DN6 Aviation Maintenance and Recoverability Group (AMARG), Tucson,
Arizona.
DPO
Used by U.S. Army when USASAC transfers funds to another agency via a
Military Interdepartmental Purchase Request (MIPR).
FGZ, FG5 Ogden Air Logistics Complex, Hill AFB, Ogden, Utah.
FHZ Oklahoma Air Logistics Complex, Tinker AFB, Oklahoma City, Oklahoma.
FJ0 U.S. Air Force Security Assistance Training Squadron (AFSAT), Randolph
AFB, Texas.
FLZ Warner Robins Air Logistics Complex, Robins AFB, Georgia.
FNH U.S. Air Force Security Assistance and Cooperation Directorate (AFSAC),
Wright- Patterson AFB, Ohio.
FPD Cryptologic Systems Group (CPSG),San Antonio, Texas.
FWW
World Wide Warehouse Redistribution Services (WWRS), Wright-Patterson
AFB, Ohio.
63
RIC
(RP 4-6)
Explanation
FXC Air Force Parts and Repair Ordering System (PROS IV).
GSA General Services Administration (GSA), Washington, D.C.
HB1 Missile Defense Agency (MDA), Washington, D.C..
HGD Honeywell Federal Manufacturing & Technologies, Kansas City, Missouri
HM8 DLA Distribution Mapping Activity, Richmond, Virginia.
JCD Local Purchase.
L05, M05 BAE Systems Marine, LTD. Barrow-in-Furness, Cumbria, UK.
LA9,
MA9
Oshkosh Truck Corp. Oshkosh, Wisconsin.
LB4 Navistar International Corp. Springfield, Ohio.
LC5 General Dynamics Amphibious Systems, Woodbridge, Virginia.
LC6, M00 Raytheon Company, McKinney, Texas.
LC7, M20 United Defense Ground Systems, York, Pennsylvania.
LC9,
MA8
AM General, Mishawaka, Indiana.
LD6 Harris Corp. GCSD, Palm Bay, Florida.
MBB Materiel Division, Marine Corps Logistics Base, Barstow, California.
MPB ILS Directorate, Marine Corps Logistics Base, Albany, Georgia.
N21 Naval Air Systems Command (NAVAIR), Washington, D.C..
N23, N24 Naval Sea Systems Command (NAVSEA), Washington, D.C..
N32 Naval Supply System Command-Weapon System Support- Philadelphia
(NAVSUP-WSS-P).
64
RIC
(RP 4-6)
Explanation
N35 Naval Supply System Command-Weapon System Support-Mechanicsburg
(NAVSUP-WSS-M).
N36 Naval Education & Training Security Assistance Field Activity (NETSAFA),
Pensacola, Florida.
N47 Navy Fleet Material Support Office, Mechanicsburg, Pennsylvania.
N65 Naval Supply System Command-Weapon System Support, International
Programs Directorate (NAVSUP-WSS-N52), Philadelphia, Pennsylvania.
N77
Space and Naval Warfare Systems Command (SPAWAR), San Diego,
California.
NCB Naval Ordnance Center, Mechanicsburg, Pennsylvania.
NFZ Naval Publications and Forms Center (NPFC), Philadelphia, Pennsylvania.
NRP Naval Supply System Command-Weapon System Support, (NAVSUP-WSS),
Philadelphia, Pennsylvania.
P64 Crane Division Naval Surface Warfare Center, Code 1121, Crane, Indiana.
S9G DLA Aviation, Richmond, Virginia.
S9C, S9E DLA Land and Maritime, Columbus, Ohio.
S9F DLA Energy, Ft. Belvoir, Virginia.
S9M,
S9P, S9T,
S9I,
DLA Troop Support, Philadelphia, Pennsylvania.
S9D DLA Disposition Services, Battle Creek, Michigan
S6J Defense Contract Management Agency (DCMA), Fort Belvoir, Virginia.
S9L DLA Logistics Information Service, Battle Creek, Michigan.
SCJ DLA Distribution Depot, Pearl Harbor, Hawaii (DDPH)
SDA DLA Distribution Depot, Albany, Georgia (DDAG)
65
RIC
(RP 4-6)
Explanation
SDA DLA Distribution Depot, Albany, Georgia (DDAG)
SDB DLA Distribution Depot, Anniston, Alabama (DDAA)
SDC DLA Distribution Depot, Tobyhanna, Pennsylvania (DDTP)
SDD DLA Distribution Depot, Warner Robins, Georgia (DDWG)
SDF DLA Distribution Depot, Norfolk, Virginia (DDNV)
SDH DLA Distribution Depot, Cherry Point, North Carolina (DDCN)
SDM DLA Distribution Depot, Jacksonville, Florida (DDJF)
SDN DLA Distribution Depot, Red River, Texas (DDRT)
SDS DLA Distribution Depot, Corpus Christi, Texas (DDCT)
SDT DLA Distribution Depot, Hill Air Force Base, Utah (DDHU)
SDU DLA Distribution Depot, Oklahoma City, Oklahoma (DDOO)
SDX DLA Distribution Depot, San Diego, California (DDDC)
SEB DLA Distribution Depot, Puget Sound, Washington (DDPW)
SG2 DLA Distribution Depot, Barstow, California (DDBC)
SGA DLA Transaction Services, Wright-Patterson AFB, Ohio.
SMS DLA Enterprise Business Systems (EBS).
SRR DLA Distribution Depot, Richmond, Virginia (DDRV)
XFS DFAS-IN SCA uses both XFS and XFX as RICs for adjustment inputs done
by DFAS.
XFX DFAS-IN SCA uses both XFS and XFX as RICs for adjustment inputs done
by DFAS.
ZIC U.S. Coast Guard Supply Center, Curtis Bay, Baltimore, Maryland.
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67
Appendix C: Price Code (Prc Cd)
The Price Code field contains a one-position alpha code that identifies the report as a charge to Work In
Process (WIP), a physical delivery, or the performance of requested DoD services. Three Price Codes are
authorized:
Code Meaning
1. Code “A” is used to report physical delivery of items or performance of DoD services at actual costs. If
correcting a previously reported actual cost, use Price Code “A” with a credit value to reverse the
previously submitted actual cost report; then enter a separate actual cost report with the corrected
information.
2. Code “E” is used to report physical delivery of items at an estimated price. The use of an “E” price code
in reporting the deliveries of major end items is allowed if an actual price code is not available within 30
days of date of shipment. Furthermore, “E” price code usage is required in reporting the deliveries of
major end items if an actual price is not available within 90 days of date of shipment. Use of the estimated
price code is encouraged to expedite physical delivery reporting.
a. When updating estimated information, use “E” with a credit value to reverse a previously
submitted estimated “E” report, and then enter a separate “E” report with the updated estimated
information.
b. The reversal of “E” prices and replacement with “A” prices should be done as soon as the actual
prices are known.
3. Code “N” is used to report incremental billings (such as Work in Progress (WIP) to contractors or
provision of government furnished materiel (GFM) to a contractor). Code “N” may also be considered to
be a Contract Administration Service (CAS) computing code under the following rules:
a. Contractor progress payments must be reported with DSC “DE” or “DK” only using price code
“N” if CAS is applicable. The reimbursement code must be a code other than “N” when CAS is
not applicable. This rule applies to all services.
b. All IAs and applicable DFAS activities will report physical deliveries with any “delivery” DSC,
an “N” reimbursement code, and price code of “E” (estimated) or “A” (actual).
c. When contracts require no progress payment reports, such as might be the case on small
contracts, use a DSC “DA” through “DD,” “BB” or “ED,” and if CAS is to be computed, use an
“N” price code. The “N” price code will not be reflected in the delivery listing.
d. An “N” price code reported in any transaction with an “N” reimbursement code will reject.
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69
Appendix D: MILSTRIP Document Number (SC)
An additional reference and instructional tool is the DSCU “MILSTRIP AND MAPAD HANDBOOK FOR
SECURITY COOPERATION,” Chapter 2 (“Preparing Requisitions, Modifications, and Follow-Ups”), which can
be accessed and downloaded at the DSCU website via either the “Resources….Publications” links at that website,
or directly at the following URL: https://www.dscu.mil/pages/resources/publications.aspx?id=0
PURPOSE: To provide a document record under which order, performance, and billing can be traced (by
means of a standard 14-digit number). The document number should be traceable from the country’s requirement
to the billing transaction on the Delivery Listing attached to the DD Form 645.
Position Description of Data
Number of
Digits
MILSTRIP RP
(Record
Position)
1 Implementing Agency (IA) Code 1 30
2 and 3
Applicable Security Cooperation (SC)
customer code (i.e., Country Code for FMS
and Program Code for BPC) as prescribed
in the SAMM C4.T2 and C15.T2
2 31–32
4 Mark-For Code 1 33
5 Delivery Term Code (DTC) 1 34
6 Type of Assistance Code (TA) 1 35
7–10 Requisition Date (Julian Date—YDDD) 4 36–39
11–14 Serial Number of Requisition 4 40–43
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71
Appendix E: Implementing Agency (IA) Codes
[SAMM C5.T2 (IA’s Authorized to Receive LORs)
[https://samm.dsca.mil/table/table-c5t2]
Implementing
Agency (IA) Code
Implementing Agency (IA)
B U.S. ARMY (USA)
P U.S. DEPARTMENT OF THE NAVY (USN/USMC/USCG)
D U.S. AIR FORCE (USAF)
F DEFENSE CONTRACT MANAGEMENT AGENCY (DCMA)
C DEFENSE INFORMATION SYSTEMS AGENCY (DISA)
R DEFENSE LOGISTICS AGENCY (DLA)
Q DEFENSE SECURITY COOPERATION AGENCY (DSCA)
Z DEFENSE THREAT REDUCTION AGENCY (DTRA)
I MISSILE DEFENSE AGENCY (MDA)
U NATIONAL GEOPSPATIAL-INTELLIGENCE AGENCY (NGA)
M NATIONAL SECURITY AGENCY (NSA)
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73
Appendix F: Delivery Term Codes (DTCs)
[SAMM C9 Table T4a (DTCs and Percentage), https://samm.dsca.mil/table/table-c9t4a
[C5.F5 (LOA Information), https://samm.dsca.mil/figure/figure-c5f5]
[DSAMS Reference Pricing DTC Transportation Rates]
[DIFS Table 23 (Generic Surcharge) and Table 29 (DTC Component)]
DTC
GENERIC
CODE(S)
PERCENTAGE
(DWCF/Non
DWCF)
DESCRIPTION
0 0%
Zero (0) is assigned to all non-FMS Security Cooperation
Program (SCP) procedure non shipment transactions (e.g.,
services) to fill the DTC position.
2
L1A
0.00%/2.75%
(Note #1)
CONUS Inland Transportation: DoD/USG delivers to a
CONUS inland point (or to an overseas inland point when a
shipment’s origin and destination are within the same
geographic area). Recipient country is responsible for
unloading at named point and subsequent arrangements and
costs.
4 0.00%/0.00%
(Note #1)
Supply Operations: Delivery at origin. Material is made
available to the FMS purchaser country at the point of origin
(i.e., a depot’s or vendor’s loading dock). The FMS purchaser
is responsible for taking title as well as custody (and all
subsequent transportation responsibility) at that point.
5
L1A
0.00%/2.75%
(Note #1)
CONUS Inland Transportation: Delivery to a CONUS-
located freight forwarder, FMS purchaser country facility, or
commercial port. DoD is responsible for transportation to the
POE. The FMS purchaser is responsible for unloading the
material from the inland carrier’s equipment at the port of
debarkation (POD), delivery alongside the vessel/aircraft, and
all subsequent onward movement.
8
L1A
L2B
2.50%/5.25%
(Note #1)
CONUS POE Onboard: DoD delivery on board an FMS
purchaser country controlled ship or aircraft at a DoD-
controlled POE. DoD is responsible for transportation from the
point of origin to an FMS purchaser country controlled ship or
aircraft at a DoD-controlled POE, including unloading
material from the inland carrier, port handling, and storage
aboard FMS purchaser country controlled ship or aircraft. The
FMS purchaser country is responsible for all subsequent
movement.
9
7.25%/10.00%
(Notes #1 and 2)
Overseas POD Alongside: DoD delivery to the overseas air
or ocean POD closest to the purchaser’s country. This POD
74
L1A
L2B
L1B
L2C
9.00%/11.75%
(Notes #1 and 3)
may or may not be in the purchaser’s country. The shipment
can originate from a U.S. or overseas source and may be made
either by using DoD assets or DoD contracted commercial
carriers. The purchaser is responsible for all handling and
onward movement of the material from the POD.
7
L1A
L2B
L1B
L2C
L1F
10.25%/13.00%
(Notes #1 and 2)
12.00%/14.75%
(Notes #2 and 3)
Overseas Inland Point (IP): DoD delivery through DTS to a
delivery address designated by the FMS purchaser. The
shipment can originate from a U.S. or overseas source and
may be made either by using DoD assets or DoD contracted
commercial carriers. The shipment will be delivered to a
specified location in the FMS purchaser country. Upon arrival
at the specified location in country, the FMS purchaser may be
responsible for the reception and staging of the shipment and
is responsible for onward movement.
A Notes #4 and #5
Overseas POE—Overseas POD Onboard: DoD is
responsible for transportation from designated overseas POE
to a CONUS destination and subsequent return to a designated
overseas POD. The FMS purchaser is responsible for overseas
inland transportation of materiel to or from the overseas POE
or POD and overseas port handling.
B Notes #4 and #5
Overseas POE—CONUS POE Onboard: DoD is
responsible for transportation from a designated overseas POE
to a CONUS destination, return to a CONUS POE and
CONUS port handling. The FMS purchaser country is
responsible for overseas inland transportation to the overseas
POE, overseas port loading, and all return transportation from
the CONUS POE to ultimate destination.
C Notes #4 and #5
CONUS POD—CONUS POE Onboard: DoD is responsible
for CONUS port unloading from the FMS purchaser arranged
carrier, transportation to and from a designated CONUS
destination, and CONUS port loading of FMS purchaser
arranged carrier. The FMS purchaser is responsible for
movement of materiel to and from the CONUS POD or POE.
E Notes #4 and #5
Supply Operations: The FMS purchaser is responsible for all
transportation from overseas point of origin to CONUS
destination and return to an overseas destination. Delivery is to
a CONUS-located freight forwarder, FMS purchaser country
facility or commercial port.
F Notes #4 and #5
From Overseas IP to Overseas IP: DoD is responsible for
transportation from an overseas inland location to an overseas
POE, overseas port handling, transportation to a CONUS
POD, CONUS port handling, inland transportation to a
75
designated CONUS destination, and return to an overseas
destination.
G Notes #4 and #5
From Overseas POE to Overseas POD Alongside: DoD is
responsible for overseas port handling through an overseas
POE, transportation to a CONUS POD, CONUS port
handling, inland transportation to a CONUS destination, return
to an overseas POD and overseas port handling. The FMS
purchaser country is responsible for overseas inland
transportation to and from the overseas POE or POD.
H Notes #4 and #5
Classified to CONUS POE: The FMS purchaser country is
responsible for all transportation from overseas point of origin
to the CONUS repair facility. DoD/USG is responsible for
transportation from CONUS repair facility to CONUS POE.
The FMS purchaser country is responsible for CONUS POE
port handling and all further movement to overseas
destination.
J Notes #4 and #5
Classified Crypto to Overseas IP: The FMS purchaser
country is responsible for all transportation from overseas
point of origin to CONUS repair facility. DoD/USG is
responsible for all transportation from CONUS repair facility
to the overseas inland destination.
NOTES:
1. Percentage to the right of the slash (“/”) is applicable for “Other than DWCF” (Defense Working Capitol
Fund - DWCF) materiel
2. Rate Area #1: To Europe, Hawaii, Latin America (Central America and Caribbean Basin), and
Mediterranean port
3. Rate Area #2: To Newfoundland, Labrador, Thule, Iceland, South America (East and West Coasts), Far
East, African ports (other than Mediterranean), and Near East
4. The DTC codes used in connection with Return and Repair Codes (i.e., “Alpha” DTCs) are defined in the
SAMM C5.F5 (Letter of Offer and Acceptance [LOA] information). The applicable Alpha DTCs
percentages are not listed in the FMR or SAMM (except for a description of those DTCs in the SAMM
C5.F5), but they are programmed and documented inthe Defense Security Assistance Management
System (DSAMS) and the Defense Integrated Financial System (DIFS).
5. The FMR VOL 15, Chapter 8, Section 080901.3b. (PERFORMANCE AND DELIVERY
REPORTING…Reports…“Below the Line” Transportation Charges) states, “Report the return of
repaired materiel using TBC “L.” The Transportation Bill Codes (TBCs) are listed and defined in the
FMR VOL 15, Chapter 8, Table 8-3. TBC “L” indicates that “substitutes for any other standard codes
whenever actual transportation costs will be reported in accordance with Chapter 7.”
76
Appendix G: Generic Codes Table
[DIFS Table 23 (Generic Surcharge) and Table 29 (DTC Component)]
[DSCA Policy Memo 18-37 (Decrease to Delivery Term Codes Percentage Rates for “Below-the-Line”
Transportation on Foreign Military Sales and Building Partnership Capacity cases)]
Generic Code
(Notes Generic 1,2,4,
and 5) Generic Long Title Generic Short Title Percent
L1A
INLAND TRANSPORT
CONUS
CONUS TRANS 2.75
L1B
OCEAN
TRANSPORTATION
OCEAN TRANS 3.75/5.50 (Note #3)
L1C
AIR
TRANSPORTATION
AIR TRANS 4.00/6.00 (Note #3)
L1D PARCEL POST PARCEL POST 3.75
L1E
COMMERCIAL PKG
CARRIERS
COMM PKG 3.75
L1F
INLAND TRANSPORT
OVERSEAS
OS INLAND 3.00
L1O
TRANSPORTATION
COSTS
TRANS COSTS N/A (Note 7)
L2A
PACKING, CRATING,
& HANDLE (PC&H)
PC&H
3.5% of unit cost up to
$50,000 per unit cost and
then 1.0% for the
remaining unit cost that
exceeds $50,000
L2B
CONUS PORT
HANDLING
CONUS PORT 2.50
L2C
OVERSEAS PORT
HANDLING
OS PORT 1.00
L4A
STORAGE (FMSO II
ONLY)
STORAGE 1.50 Actual Cost
L4B
STORAGE (ALL
OTHER STORAGE)
STORAGE Actual Cost
L4O STAGING STAGING 3.00
77
Generic Code
(Notes Generic 1,2,4,
and 5) Generic Long Title Generic Short Title Percent
L6A
ADMINISTRATIVE
COSTS
ADMIN COSTS 3.2 (current rate)
N7E MEDICAL MEDICAL 0.00
N7F QUARTERS QUARTERS Actual Cost
R9D TDP ROYALTY FEE TDP ROYALTY 0.00
R9H ASSET USE CHARGE ASSET USE 1.00 (on inventory issues)
U1O
NORMAL INVENTORY
LOSS
INV LOSS Actual Cost
NOTES:
1. The above authorized charges appear in the FMS Delivery Listing.
2. Generic Code LOO, which appears on the face of the DD Form 645 (in column 6), represents the
summation (or roll-up) of the above L1_, L2_, and L4_ authorized charges for a given FMS Case.
Generic Code L6A appears on both the face of the DD Form 645 and the FMS Delivery Listing.
3. The first percentage relates to Delivery Rate Area 1 and the second percent to Delivery Rate Area 2. Each
FMS country is designated as either Delivery Rate Area 1 or 2; considering such factors as the
distance/accessibility from the U.S. for shipment purposes. The applicable information is programmed
into the DSAMS and DIFS computer system for each Security Cooperation country.
a. Rate Area 1 includes Europe, Hawaii, Latin America (Central America and Caribbean Basin), and
Mediterranean ports
b. Rate Area 2 includes Newfoundland, Labrador, Thule, Iceland, South America (East and West
Coasts), Far East, African ports (other than Mediterranean), and Near East
4. Standard PC&H rates of 3.5%/1.0% apples unless RIC begins with “G,” then rate provided by GSA
applies.
5. DWCF Pricing Policy changed the computation of generic code L1A for CONUS transportation and
generic code L2A for Packaging Crating and Handling (PC&H). The following logic is now in place:
Effective October 1, 1990, if Delivery Source Code equals AA, AB, AC, AD, AH, AJ, AK, CA, EF, or
EG and the ship date is greater than or equal to October 1, 1990, bypass generic code L1A and generic
code L2A.
6. Effective October 1, 1991, if Delivery Source Code equals AA, AB, AC, AD, AH, AJ, AK, CA, EF, or
EG and the ship date is greater than or equal to October 1, 1991, bypass generic code L1D and generic
code L1E.
78
7. Transportation Cost Look-Up Table as documented in SAMM Appendix 2, and programmed in the
DSAMS and DIFS information systems.
79
Appendix H: Transportation Bill Codes (TBC)
[FMR Table 8-3 (Transportaton Bill Codes)]
This field is one alpha character. Transportation Bill Codes (TBCs) are used to bill FMS purchasers for
below-the-line transportation costs, if the actual method of transportation is different than that identified by the
DTC. A below-the-line charge is applied based on the DTC within the delivery transaction. However, if the
delivery transaction includes an optional TBC, the TBC will supersede the DTC in determining the transportation
to be assessed. Also, if the delivery transaction contains a DTC of “8” or “9,” the transportation cost look-up table
rate will be used if the item is included within the transportation cost look-up table. Normally, the return of
repaired materiel was reported through the use of TBC “L.” Applicable codes follow:
TBC Description
A
Materiel moved by parcel post to an inland CONUS/Canada (except Newfoundland
and Labrador) destination or freight forwarder, or to an overseas destination through
the APO or international mail. The FMS purchaser makes all subsequent
arrangements.
B
Materiel moved by commercial package carrier to an inland CONUS/Canada
(except Newfoundland and Labrador) destination or freight forwarder when all
subsequent arrangements are made by the FMS purchaser. However, see TBC “Z.”
C
Materiel moved by GBL, AMC channel airlift, Air Force organizational airlift,
MSC sealift, and combinations thereof, to an overseas POD in rate area one or two,
including overseas carrier discharge. The FMS purchaser makes all subsequent
arrangements.
D
Any form of materiel for which the FMS purchaser is totally responsible, such as
materiel moved by a collect commercial bill of lading to an inland CONUS
destination, free alongside ship (FAS), an overseas carrier at a CONUS POE,
freight forwarder, a CONUS POE, or an inland overseas destination. Also used if
transportation costs are not applicable.
E
Materiel moved by GBL, AMC channel airlift, Air Force organizational airlift,
MSC sealift, and combinations thereof, to an inland CONUS destination, FAS an
overseas carrier at a CONUS POE, a freight forwarder, or a CONUS POE when all
subsequent arrangements are made by the FMS purchaser.
F
Materiel moved by GBL, AMC channel airlift, Air Force organizational airlift,
MSC sealift, and combinations thereof, to an overseas POD in rate area one or two,
when overseas carrier discharge and all subsequent arrangements are made by the
FMS purchaser.
G
Materiel moved by GBL, AMC channel airlift, Air Force organizational airlift,
MSC sealift, D.C.S, MOM, Weapons System Pouch Service, and combinations
thereof, to the ultimate FMS consignee at an overseas inland destination in rate area
one or two.
80
TBC Description
H
Materiel moved by GBL, AMC channel airlift, USAF organizational airlift, MSC
sealift, and combinations thereof, to a CONUS POE when all arrangements
subsequent to loading the vessel are made by the FMS purchaser.
J
Materiel moved by AMC channel airlift to an overseas aerial port of debarkation
(APOD) in rate area one or two when the use of inland CONUS transportation is
not required in effecting delivery to the CONUS POE. The FMS purchaser makes
all arrangements subsequent to carrier discharge.
K
Materiel moved by AMC SAAM within CONUS to an overseas APOD or inland
FMS consignee base within an overseas area or between overseas areas. The FMS
purchaser makes any arrangements subsequent to carrier discharge.
L
Substitute for any other standard codes whenever actual transportation costs will be
reported in accordance with Volume 15, Chapter 7.
M Materiel moved by FMS country-owned aircraft from a U.S./DoD staging area.
N
Materiel moved by GBL or other CONUS inland mode to a CONUS staging or
aggregation area, staging or aggregation of the materiel; and onward movement of
the materiel to a freight forwarder by a collect commercial bill of lading or country-
owned or provided aircraft or by AMC or by commercial SAAM.
P
Materiel moved by GBL or other CONUS inland mode to a CONUS staging or
aggregation area, staging or aggregation of the materiel; onward movement of
materiel by GBL or other prepaid (reimbursable) CONUS transportation to an aerial
or water POE, FAS an overseas carrier at a CONUS POE, or arrangements are
made by the FMS purchaser.
Q
Materiel moved by GBL or other CONUS inland mode to a CONUS staging or
aggregation area, staging or aggregation of the materiel; out movement of the
materiel from the staging area by GBL, or other prepaid (reimbursable) CONUS
transportation to an aerial or water POE; port handling of the materiel, and onward
movement by GBL, AMC channel airlift, Air Force organizational aircraft, MSC
sealift, and combinations thereof, to an overseas POD in rate area one or two, when
overseas carrier discharge and all subsequent arrangements are made by the FMS
purchaser.
R
Materiel moved by GBL or other CONUS inland mode to a CONUS staging or
aggregation area, staging or aggregation of the materiel; out movement of the
materiel from the staging area by GBL or other prepaid (reimbursable) CONUS
transportation to an aerial or water POE; port handling of the materiel, and onward
movement by GBL, AMC channel airlift, Air Force organizational aircraft, MSC
sealift, and combinations thereof, to an overseas POD in rate area one or two;
overseas port handling of the materiel; and onward overseas inland movement to the
ultimate FMS consignee at an overseas, inland destination rate area one or two.
81
TBC Description
S
Materiel moved by GBL or other CONUS inland mode to a CONUS staging or
aggregation area, staging or aggregation of the materiel; out movement of the
material from the staging area by GBL or other prepaid (reimbursable) CONUS
transportation to an aerial or water POE; and loading of the materiel aboard a
country-owned or provided aircraft or vessel when all arrangements subsequent to
loading the aircraft or vessel are made by the FMS purchaser.
U
Materiel moved by parcel post or commercial package carrier to CONUS POD
when all arrangements subsequent to loading the vessel are made by the FMS
purchaser. (Mode of shipment determines whether parcel post or commercial
package carrier is used.)
V
Materiel moved by parcel post or commercial package carrier to an overseas POD
in rate areas one or two, including overseas carrier discharge, when arrangements
subsequent to loading the vessel are made by the FMS purchaser. (The mode of
shipment determines whether parcel post or a commercial package carrier is used.)
W
Materiel movement charged according to rates listed in the transportation cost look-
up table (see section 0805).
X
Materiel moved by parcel post or commercial package carrier to an overseas POD
in rate areas one or two, when the FMS purchaser makes overseas carrier discharge
and subsequent arrangements. (The mode of shipment determines whether parcel
post or commercial package carrier is used.)
Y
Materiel moved by parcel post or commercial package carrier to the ultimate FMS
consignee at an overseas inland destination in rate areas one or two. (The mode of
shipment determines whether parcel post or commercial package carrier is used.)
Z
Materiel moved within the CONUS by commercial carrier with a published
maximum rate of $25 (e.g., as published by United Parcel Service).
82
[This Page Left Intentionally Blank]
83
Appendix I: Transportation based on Transportation Bill Codes (TBCs) for
Inventory Items Shipped by DWCF
[FMR VOL 15, Chapter 8, Table 8-1)]
[DSCA Policy Memo 18-37 (
Decrease to Delivery Term Codes Percentage Rates for “Below-the-Line”
Transportation on Foreign Military Sales and Building Partnership Capacity Cases
)]
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item Priced
by Generic Code Total Percentage
A
L1D (Parcel Post)
0.0
24,25
0.0
B
L1E (Commercial Package
Carriers)
0.0
24,25
0.0
C
L1A (CONUS) 0.0
25
7.25, 9.0/7.5, 9.50
26
L2B (Port Handling)
2.5
L1B (Ocean) / L1C (Air)
26
3.75, 5.50
27
/4.0, 6.00
28
L2C (Overseas Port
Handling)
1.0
D
N/A
0.0
0.0
E
L1A (CONUS)
0.0
25
0.0
L1A (CONUS) 0.0
25
24
The costs of L1D (Parcel Post), L1E (Commercial Package Carriers), and L40 (Staging) are included in the
DWCF item price. If the item is shipped to a staging location, the rate must be charged.
25
The L1A (Inland CONUS) transportation charge of 2.75 percent does not apply to DWCF shipments with
shipping dates after September 30, 1990. L1A is computed once on DWCF items shipped to a CONUS staging or
aggregation area and then on to the CONUS water or aerial port. The first CONUS movement is included in the
DWCF item price. The second movement TBCs (P, Q, R, or S) are charged at the normal rate.
26
Wherever “L1B/L1C” appears, if the Port of Embarkation (POE) code is “A” L1C is computed; otherwise L1B is
computed.
27
L1B is computed at 3.75 percent for rate area one, or 5.50 percent for rate area two.
28
L1C is computed at 4.0 percent for rate area one, or 6.0 percent for rate area two.
84
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item Priced
by Generic Code Total Percentage
F
L2B (Port Handling) 2.5
6.25, 8.00/ 6.50,
8.50
26
L1B (Ocean) / L1C (Air)
26
3.75, 5.50
27
/4.00, 6.00
26
G
L1A (CONUS) 0.0
25
10.25,12.0/ 10.5,
12.5
26
L2B (Port Handling) 2.5
L1B (Ocean) / L1C (Air)
26
3.75, 5.50
27
/4.0, 6.0
28
L2C (Overseas Port
Handling)
1.0
L1F (Inland Transport
Overseas)
3.0
H
L1A (CONUS) 0.0
2
2.5
L2B (Port Handling) 2.5
J
L2B (Port Handling) 2.5 7.5/9.5
L1C (Air Transportation) 4.0/6.0
28
L2C (Overseas Port
Handling)
1.0
K
L1C (Air Transportation)
N/A
Actual amount billed
by USAF Air
Mobility Command
(AMC)
L
As Applicable
N/A
Actual amount
computed by shipper
M
L40 (Staging)
3.0
24
3.0
L1A (CONUS) 0.0
25
3.0
85
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item Priced
by Generic Code Total Percentage
N
L40 (Staging)+
3.0
24
P
L1A (CONUS) 0.0
25
5.75
L40 (Staging) 3.0
24
L1A (CONUS) 2.75
25
Q
L1A (CONUS) 0.0
25
12.00, 13.75/12.25,
14.25
26
L40 (Staging) 3.0
24
L1A (CONUS) 2.75
25
L2B (Port Handling) 2.5
L1B (Ocean) / L1C (Air)
26
3.75, 5.50
27
/4.0, 6.0
28
R
L1A (CONUS) 0.0
25
16.00, 17.75/16.25,
18.25
26
L40 (Staging) 3.0
24
L1A (CONUS) 2.75
25
L2B (Port Handling) 2.5
L1B (Ocean) / L1C (Air)
26
3.75, 5.50
27
/4.0, 6.0
28
L2C (Overseas Port
Handling)
1.0
L1F (Inland Transport
Overseas)
3.0
S
L1A (CONUS)
0.0
25
8.25
L40 (Staging)
3.0
24
L1A (CONUS)
2.75
25
L2B (CONUS Port
Handling)
2.5
86
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item Priced
by Generic Code Total Percentage
U
L1D (Parcel Post)
0.0
24,25
2.5
L2B (CONUS Port
Handling)
2.5
V
L1D (Parcel Post)
0.0
24
,
25
7.25, 9.00/7.5, 9.5
26
L2B (CONUS Port
Handling)
2.5
L1B (Ocean)/L1C
(Air)
26
3.75, 5.5.0
27
/4.0, 6.0
28
L2C (Overseas Port
Handling)
1.0
W
L1O (Transportation
Costs)
N/A
Transportation Cost
Look-Up Table
X
L1D (Parcel Post)
0.0
24
,
25
6.25, 8.00/6.5, 8.5
26
L2B (CONUS Port
Handling)
2.5
L1B (Ocean)/L1C
(Air)
26
3.75, 5.50
27
/4.0, 6.0
28
Y
L1D (Parcel Post)
0.0
24
,
25
10.25, 12.00/10.5,
12.5
26
L2B (CONUS Port
Handling)
2.5
L1B (Ocean)/L1C
(Air)
26
3.75, 5.50
27
/4.0, 6.0
28
L2C (Overseas Port
Handling)
1.0
L1F (Inland Transport
Overseas)
3.0
87
Appendix J: Transportation Charges based on TBCs for Inventory Items NOT
Shipped by DWCF
[DSCA Policy Memo 18-37 (Decrease to Delivery Term Codes Percentage Rates for “Below-the-Line”
Transportation on Foreign Military Sales and Building Partnership Capacity Cases
)]
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item
Priced by Generic
Code Total Percentage
A
L1D (Parcel Post)
3.75
27
3.75
B
L1E (Commercial
Package Carriers)
3.75
29
3.75
C
L1A (CONUS) 2.75 10.00, 11.75
/10.25, 12.25
30
L2B (Port Handling)
2.5
L1B (Ocean)/L1C (Air)
28
3.75, 5.50
29
/ 4.0,
6.0
30
L2C (Overseas Port
Handling)
1.0
D
N/A
0.0
0.0
E
L1A (CONUS)
2.75
2.75
F
L1A (CONUS) 2.75 9.00, 10.75/9.25, 11.25
30
L2B (Port Handling) 2.5
L1B (Ocean) / L1C (Air)
30
3.75, 5.50
31
/ 4.0,
6.0
32
27
Amounts collected for L1D (Parcel Post), L1E (Commercial Package Carriers), and L40 (Staging) shall be
reimbursed to the shipping depot shown in the delivery transaction. SF Form 1080 billings for actual costs are not
required.
28
Wherever “L1B/L1C” appears, if the Port of Embarkation (POE) code is “A” L1C is computed; otherwise L1B is
computed.
29
L1B is computed at 3.75 percent for rate area one or 5.50 percent for rate area two.
30
L1C is computed at 4.0 percent for rate area one or 6.0 percent for rate area two.
33
L1A is computed twice on non-DWCF items shipped to a CONUS staging or aggregation area, and then on to the
CONUS water or aerial port for TBCs P, Q, R, and S
88
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item
Priced by Generic
Code Total Percentage
G
L1A (CONUS) 2.75 13.0, 14.75/13.25, 15.25
30
L2B Port Handling 2.5
L1B (Ocean)/L1C (Air)
30
3.75, 5.50
31
/ 4.0,
6.0
32
L2C (Overseas Port
Handling)
1.0
L1F (Inland Overseas
Transport)
3.0
H
L1A (CONUS) 2.75 5.25
L2B (Port Handling) 2.5
J
L2B (Port Handling) 2.5 7.5/9.5
L1C (Air Transportation) 4.0/6.0
32
L2C (Overseas Port
Handling)
1.0
K
L1C (Air Transportation)
N/A
Actual amount billed by
USAF Air Mobility Command
(AMC)
L
As Applicable
N/A
Actual amount computed by
shipper
M
L40 (Staging)
3.0
29
3.0
N
L1A (CONUS) 2.75 5.75
L40 (Staging) 3.0
29
P
L1A (CONUS)
2.75
8.50
L40 (Staging)
3.0
29
L1A (CONUS)
2.75
33
L1A (CONUS)
2.75
14.75, 16.50/15.0, 17.0
30
89
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item
Priced by Generic
Code Total Percentage
Q
L40 (Staging)
3.0
29
L1A (CONUS)
2.75
33
L2B (CONUS Port
Handling)
2.5
L1B (Ocean)/L1C
(Air)
30
3.75, 5.50
31
/ 4.0,
6.0
32
R
L1A (CONUS)
2.75
18.75, 20.50/19.0, 21.0
30
L40 (Staging)
3.0
29
L1A (CONUS)
2.75
33
L2B (Port Handling)
2.5
L1B (Ocean)/L1C
(Air)
30
3.75, 5.50
31
/ 4.0,
6.0
32
L2C (Overseas Port
Handling)
1.0
L1F (Inland Overseas
Transport)
3.0
S
L1A (CONUS)
2.75
11.0
L40 (Staging)
3.0
29
L1A (CONUS)
2.75
33
L2B (CONUS Port
Handling)
2.5
U
L1D (Parcel Post)
3.75
6.25
L2B (CONUS Port
Handling)
2.5
L1D (Parcel Post)
3.75
29
11.00, 12.75/11.25, 13.25
30
90
Transportation Bill
Code
Transportation Generic
Code
Percentage of Item
Priced by Generic
Code Total Percentage
V
L2B (Port Handling)
2.5
L1B (Ocean)/L1C
(Air)
30
3.75, 5.50
31
/ 4.0,
6.0
32
L2C (Overseas Port
Handling)
1.0
W
L1O (Transporation
Costs)
N/A
Transportation Cost Look-
Up Table
X
L1D (Parcel Post)
3.75
29
10.00, 11.75/10.25, 12.25
30
L2B (CONUS Port
Handling)
2.5
L1B (Ocean) / L1C
(Air)
30
3.75, 5.50
31
/4.0, 6.0
32
Y
L1D (Parcel Post)
3.75
29
14.0, 15.75/14.25, 16.25
30
L2B (CONUS Port
Handling)
2.5
L1B (Ocean) / L1C
(Air)
30
3.75, 5.50
31
/ 4.0,
6.0
32
L2C (Overseas Port
Handling)
1.0
L1F (Inland Overseas
Transport)
3.0
Z
L1A (CONUS)
2.75
(Charge may not exceed
$25.00)
91
Appendix K: Types of Assistance (T/A) Codes
[SAMM Chapter 5, Figure C5.F5 (LOA Information)]
[DLM 4000.25-1-M]
T/A CODES MEANING
3
Source Code S, R, or E; Cash Sale from Stock with Payment in
Advance, based on Arms Export Control Act (AECA) Section 21(b).
(Sale of DoD inventory or services. Cash to be deposited by FMS
purchaser in advance of delivery or performance).
4
Source Code X; Source Undetermined with Payment in Advance,
AECA Sections 21(b), 22(a), 29. (Source of supply not determined.
Cash to be deposited by FMS purchaser in advance of delivery or
performance.)
5
Source Code P; Cash Sale from Procurement with Payment in
Advance, AECA Section 22(a). (Cash sale from procurement. Cash to
be deposited by FMS purchaser in advance to meet contract payment
requirements.)
6
Source Code S, R, or E, Payment on Delivery; AECA Section 21(d).
(Sale of DoD inventory or services. Cash to be deposited by FMS
purchaser upon delivery. Requires a written statutory determination by
the Director, DSCA. Reimbursement to the DoD Components is made
after FMS purchaser payment received.)
7
Source Code P, Dependable Undertaking with 120 days Payment after
Delivery; AECA Section 22(b). (Cash sale from procurement. Payment
from FMS purchaser is due 120 days after delivery. Payments to
contractors are financed by special emergency appropriation.)
8
Source Code S, R, or E, Stock Sales with 120 days Payment after
Delivery; AECA Section 21(d). (Sale of DoD inventory or services.
Payment from FMS purchaser is due 120 days after delivery. Payments
to the DoD Components are financed by special emergency
appropriation.)
A
FAA Excess Defense Articles - non-reimbursable, provided under the
authority of Section 516 of the Foreign Assistance Act (FAA) of 1961,
as amended.
M
MAP Merger/USG Grant; FAA Section 503(a)(3). (FMS funded by
Military Assistance Program.)
N
FMS Credit (Nonrepayable); AECA Sections 23 or 24. (Source of
supply not determined; FMS non-repayable credit, AECA sections 23
and 24.)
92
T/A CODES MEANING
U
Source Code P; Cooperative Logistics Supply Support Arrangement
(CLSSA) Foreign Military Sales Order (FMSO) I. (FMSO I Purchase
of equity in
1
SDAF (Special Defense Acquisition Fund) Source Code F
93
Appendix L: Julian Date Calendar
[For Regular Years]
(use in 2017-2019, 2021-2023, 2025-2027, etc.)
[https://landweb.modaps.eosdis.nasa.gov/browse/calendar.html]
Julian Date Calendar
94
[For Leap Years Only]
(use in 2020, 2024, 2028, 2032, etc.)
[https://landweb.modaps.eosdis.nasa.gov/browse/calendar.html]
95
Appendix M: Unit of Issue Codes
[DoD 4100.39-M, Vol 10, (Federal Logistics Information System (FLIS) Procedures Manual]
This field contains a two-alpha code. Applicable Unit of Issue (Unit of Measure) abbreviations are listed in FMR
Table 8-14 and are also included below:
Code Description Code Description Code Description
AM Ampule FT Foot PR Pair
AT Assortment FV Five PT Pint
AY Assembly FY Fifty PZ Packet
BA Ball GL Gallon QT Quart
BD Bundle GP Group RA Ration
BE Bale GR Gross RL Reel
BF Board Foot HD Hundred RM Ream
BG Bag HK Hank RO Roll
BK Book IN Inch SD Skid
BL Barrel JR Jar SE Set
BO Bolt KG Kilogram SF Square Foot
BR Bar KP
Kilowatt Hour
(KWH)
SH Sheet
BT Bottle KT Kit SK Skein
BX Box KW Kilowatt SL Spool
CA Cartridge L5
Liters at 15C
Degrees
SO Shot
CB Carboy LB Pound SP Strip
96
Code Description Code Description Code Description
CD Cubic Yard LG Length SV Service
CE Cone LI Liter SX Stick
CF Cubic Foot LT Lot SY Square Yard
CL Coil MC
Thousand Cubic
Feet
TD Twenty-Four
CM Centimeter ME Meal TE Ten
CN Can MR Meter TF Twenty-Five
CO Container MW
Megawatt-Hour
(MWH)
TN Ton
CY Cylinder MX Thousand TO Troy Ounce
CZ Cubic Meter OT Outfit TS Thirty-Six
DH
Dekatherm
(DTH)
OZ Ounce TU Tube
DR Drum PD Pad VI Vial
DZ Dozen PG Package YD Yard
EA Each PM Plate
97
Appendix N: Offer/Release Codes
[SAMM Chapter 5, Figure C5.F5 (LOA Information)]
Based upon agreement between the DoD component and the FMS purchaser, offer/release codes are used for
each line involving defense articles, as follows. The Offer/Release Code appears in Field # “(6)” of the Letter of
Offer and Acceptance line items, and record position #46 of the DD Form 1348 (MILSTRIP) requisition, which is
part of the Supplementary Address.
Offer Release Code Definition
A
Freight and parcel post shipments will be released automatically by the shipping
activity without advance notice of availability.
Y
Advance notice is required before release of shipment, but shipment can be
released automatically if release instructions are not received by shipping activity
within 15 calendar days. Parcel post shipments will be automatically released.
Z
Advanced notice is required, before release of shipment. Shipping activity will
follow up on the notice of availability until release instructions are furnished.
Parcel post shipments will be automatically released.
X
The IA and country representative have agreed that the following will occur:
• IA will sponsor the shipment to a country address. Under this agreement,
the Freight Forwarder Code must also contain “X” and a Customer-
within-country (CC) Code must be entered in the Mark For Code on the
front page of the LOA. The MAPAD must contain the CC Code and
addresses for each type of shipment (parcel post or freight).
• Shipments will be made to an assembly point or staging area as indicated
by clear instructions on exception requisitions. Under this agreement, the
Freight Forwarder Code must contain “W.” A Mark For Code may be
entered in the Mark-For Code space on the front page of the LOA, and the
MAPAD must contain the Mark-For Code if the Mark-For Address is to
be used on the shipment to the assembly point or staging area.
98
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99
Appendix O: Mode of Shipment (MOS) Codes
This field is a one alpha or numeric code showing the mode of shipment provided for in the LOA. This position is
left blank when reporting actual accessorial costs. The codes are also listed below:
MOS Code Initial Method of Movement by Shipper
A
Motor, truckload
B
Motor, less truckload
C
Van (unpacked, or uncrated personal or government property)
D
Drive-away, truck-away, tow-away
E
Bus
F
Air Mobility Command (Channel and Special Assignment Airlift
Mission)
G
Surface, parcel post
H
Air, parcel post
I
Government truck for shipments outside local delivery area
J
Air, small package carrier
K
Rail, carload includes trailer or container-on-flatcar (excluding SEA
VAN)
L
Rail, less than carload includes trailer or container-on-flatcar
(including SEA VAN)
M
Surface, Freight Forwarder
O
Organic military air (includes aircraft of foreign governments)
P
Through government bill of lading (TGBL)
Q
Commercial air freight; includes regular and expedited service
(provided by major airlines), also includes charters and air taxis
R
European Distribution System (EDS)/or Pacific Distribution System
(PDS)
100
MOS Code Initial Method of Movement by Shipper
S
Scheduled Truck Service (applies to contract carriage, guaranteed
traffic routings, or scheduled ervice)
T
Air freight forwarder
U
Quick Response Transportation System (QUICKTRANS)
V
SEA—VAN Service
W
Water, river, lake, or coastal (commercial)
X
Bearer walk through (FMS purchaser pickup of materials)
Y
Military intra-theater airlift services
Z
Military Sealift Command (MSC) (controlled/contract/arranged
space)
2
Government watercraft, barge/lighter
3
Roll-on or roll-off (RORO) service
4
Defense Courier Service (DCS)
5
Surface, small package carrier
6
Military ordinary mail (MOM)
7
Express mail
8
Pipeline
9
Local delivery by government or commercial truck including
deliveries between air or water terminals and adjacent activities.
101
Appendix P: Adjustment Reply Codes (ARC)
Adjustment Reply Codes cover most replies to FMS purchaser requests for billing or adjustments. When
a situation arises not covered by these codes, a reply by letter is appropriate. Submit requests for codes to cover
additional transactions to DFAS SCA at DFAS-JAX/IN, 8899 E. 56th St., Indianapolis, IN 46249.
Adjustment Reply Codes (ARC): Denial
Code Description
AA
Duplicate billing and/or shipment resulted from receipt of duplicate requisition and duplicate
supply action
AB Bill reflected correct unit or extended price of materiel shipped
AE
Supplier adjusted to unit pack since requisition did not prohibit this action, or shipment made in
accordance with instructions in requisitions
AF Authorized substitute in latest supply manual. Requisitions did not prohibit substitutions
AG Claims less than $200, loss or gain, are to be absorbed by FMS purchaser
AI Local records indicate prior reversal of duplicate credit or charge in bill number cited
AJ Credit was granted as a result of prior request and processing in billing
AK Shipment made via commercial bill of lading; USG not responsible for damaged shipments
AL Copies of shipping document evidencing proof of shipment/acceptance are attached
AM Exhibit analysis completed—SDR denied
AN Claim less than $25, loss or gain, to be absorbed by FMS purchaser
AO
Request cannot be granted because discrepancy report was not received within allowable
timeframe
AP
Request cannot be granted because item was procured specifically for FMS purchaser. Section 6
of the LOA, “Warranties,” applies (see SAMM, Figure C5.F4, LOA Information)
102
Adjustment Reply Codes (ARC): Reason Request Granted and Instructions for
Disposition of Any Materiel Shipped in Error
Code Description
BA Materiel subject to local disposal
BB Materiel to be returned to activity designated in the shipping depot field for subsequent credit
BC
Hold unacceptable shipment quantity pending disposition instructions to be submitted via separate
communication
BD Materiel to be returned to a Defense Reutilization and Marketing Office for disposal
BE Materiel to be sent to nearest U.S. turn-in point for redistribution
BF Materiel to be returned to contractor facility
BR Materiel to be returned to USG facility for repair or replacement
BV Materiel to be returned to contractor facility for repair or replacement
BX Materiel to be returned for evaluation as an exhibit
BY Exhibit analysis completed—asset repaired or replaced
BZ Exhibit analysis completed—credit adjustment will be processed
CA Requested debit adjustment will be made and bill issued
CB Requested credit adjustment will be made and amended bill issued
CF
Request granted for financial adjustment not directly related to materiel shipments (e.g., repair
costs)
CW Credit adjustment granted on accessorial charges—only FKF transactions
CX Credit adjustment granted on administrative charges—only FKD transactions
CY Debit adjustment granted on administrative charges—only FKC transactions
CZ Debit adjustment granted on accessorial charges—only FKE transactions
103
Adjustment Reply Codes (ARC): Advisory Codes That Do Not Require Billing or
Supply Action
Code Description
DA Request previously processed and credit granted
DB Request previously processed and credit not granted
DD Billing previously rendered
DG Duplicate billing will be furnished
DI Letter of explanation follows
DJ No record of previous request. Resubmit
DK Copies of shipping documents evidencing proof of shipment and acceptance are attached
DM Reply delayed 30 days. Matter is being investigated
DX Request for SDR cancellation approved
Adjustment Reply Codes (ARC) Codes: To Request Additional Data from Country
Code Description
EB Document number incomplete. Resubmit
EC Bill number incomplete/missing. Resubmit
EF
Records do not indicate duplicate shipment and/or billing on bill number cited. If duplication
occurred on another bill, resubmit citing both bill numbers
EI Claim should be supported by appropriate documentation. Resubmit
EJ Claim should be supported by confirmation of cancellation. Resubmit
104
Adjustment Reply Codes (ARC): USG reimbursement to Foreign Countries to
Recover Transportation Costs those Countries Incurred to Return Items to USG
Code Description
FA
Transportation reimbursement from freight forwarder to FMS purchaser final destination on
shipment of discrepant materiel (5 percent of discrepant materiel billed value)
FB
Transportation reimbursement from CONUS POE via DTS to final destination on shipment of
discrepant materiel (reversal of accessorial costs)
FC
Transportation reimbursement from FMS purchaser final destination to turn-in point for
discrepant returns (3 percent of discrepant materiel billed value)
FD
Transportation reimbursement for local disposal of discrepant materiel (5 percent of discrepant
materiel billed value for inland transportation and disposal costs)
FE
Transportation reimbursement for return of discrepant item or items to be repaired (5 percent of
discrepant materiel billed value)
FF
PC&H reimbursement for discrepant materiel returns (3.75 percent of discrepant materiel billed
value)
FG
Transportation reimbursement from freight forwarder to FMS purchaser final destination on
shipment of discrepant materiel (5 percent of discrepant materiel billed value); and PC&H
reimbursement for discrepant materiel returns (3.75 percent of discrepant materiel billed value)
FH
Transportation reimbursement from CONUS POE via DTS to final destination on shipment of
discrepant materiel (reversal of accessorial costs), and PC&H reimbursement for discrepant
materiel returns (3.75 percent of discrepant materiel billed value)
FI
Transportation reimbursement from freight forwarder to FMS purchaser final destination on
shipment of discrepant materiel (5 percent of discrepant materiel billed value); transportation
reimbursement from FMS purchaser final destination to turn-in point for discrepant returns (3
percent of discrepant materiel billed value); and PC&H reimbursement for discrepant materiel
returns (3.75 percent of discrepant materiel billed value)
FJ
Transportation reimbursement from CONUS POE via DTS to final destination on shipment of
discrepant materiel (reversal of accessorial costs); transportation reimbursement from FMS
purchaser final destination to turn-in point for discrepant returns (3 percent of discrepant materiel
billed value); and PC&H reimbursement for discrepant materiel returns (3.75 percent of
discrepant materiel billed value)
FK
Transportation reimbursement for return of discrepant item or items to be repaired or replaced (5
percent of discrepant materiel billed value); and PC&H reimbursement for discrepant materiel
returns (3.75 percent of discrepant materiel billed value)
FL Actual Transportation reimbursement (actual charge)
105
Code Description
FM
Reversal of transportation reimbursement transaction previously processed (percentage dependent
on transaction being reversed)
106
Appendix Q: Delivery Source Codes (DSC) and Accessorial Computation Matrix
[DSCA Policy Memo 18-37 (Decrease to Delivery Term Codes Percentage Rates for “Below-the-Line”
This field is a two-alpha code. Codes in the field provide an audit trail between performance and the pricing
requirements. The code is used by DFAS SCA to recognize USG earnings for work done for the FMS Purchaser;
therefore, it is imperative that the correct codes be used. An incorrect code could result in the FMS purchaser
being over or under-charged.
The full list of all the current authorized (per the FMR) Delivery Source Codes (DSC), along with their associated
charges in the “Accessorial Computation Matrix,” are listed on the following pages for your reference.
Delivery Source Code: Sale of Articles Under AECA Section 21
DSC Description
AA
DWCF, non-excess items, including technical data package (TDP) and publications, from
inventory for a matured FMSO.
AB
DWCF, non-excess items, including TDP and publications, from inventory for other than a
matured FMSO.
AC
DWCF non-excess items diverted from procurement initiated to maintain stock inventory for a
matured FMSO.
AD
DWCF non-excess items diverted from procurement initiated to maintain stock inventory for other
than a matured FMSO.
AE
Procurement-funded item, including TDP and publications from inventory, which requires
replacement.
AG
Procurement-funded item, including TDPs and publications from inventory, which does not require
replacement.
AH Excess DWCF for a matured FMSO.
AJ Excess DWCF for other than a matured FMSO.
AK
Excess Procurement–Funded Item from Inventory (applicable PC&H computed on original
acquisition cost of item and included in price of item).
AL
Use of this code eliminated beginning FY 2001. Items (other than DWCF item) sold from
inventory that are not subject to normal PC&H charge. This code must only be used when the case
has a transportation line, a PC&H line, or a pricing exception granted by OUSD(C).
107
Delivery Source Code: Performance of DoD Services Under AECA Section 21 or 22
DSC Description
BA DoD-provided training course.
BB Contractor-provided training course.
BC
Repair or replace FMS purchaser equipment. IAs must include actual PC&H and transportation for
materiel consumed in overhaul in reported cost.
BD
Other DoD services. Does not include “above-the-line” transportation or “above-the-line” packing,
crating, handling and transportation (PCH&T) associated with repair or modification of consumer
owned equipment that is included in repair cost report using code “BC.”
BE Storage charge (for other than FMSO cases).
BF Depreciation associated with leases.
BG
LOA sales of articles and services in connection with lease, prior to, during, or after lease period
(includes transportation PC&H refurbishment).
BH
Actual PC&H charge. This report must accompany delivery transactions for items sold from
inventory with DSC “AK” and “AL.”
BK DWCF activity services.
BT
“Above-the-line” transportation to FMS purchasers that is included in the case. This code includes
“high-flight” or special airlift. It does not include the “above-the-line” transportation cost that is
included in the selling price of an item or service.
Delivery Service Codes: Unique FMSO Charges
DSC Description
CA
FMSO I materiel used to support a system obsolete to DoD use (buy out of unique repair parts to
support obsolete end items).
CB
Annual inventory maintenance and storage cost. Charge annually on current FMSO II cases. The
FMSO I case manager must input the FMS detail delivery transaction. There is no annual charge
for cooperative logistics supply support arrangements (CLSSAs) on DWCF items since the DWCF
standard (stabilized) price recoups all costs.
CC
Normal inventory loss on procurement appropriation–funded secondary items (physical inventory
gain or loss, expiring shelf life, and damage of stored parts). Charge assessed annually on current
FMSO II cases. The FMSO I case manager must input the delivery transactions. There is no annual
charge for CLSSAs on DWCF items since the DWCF standard (stabilized) price recoups all costs.
CD Cash advances for on-hand portion of FMSO I cases.
108
Delivery Source Codes: Procurement for FMS Purchasers Under AECA Section 22
DSC Description
DA Contractor services (other than training).
DB DWCF item, TDP, or publications from contractor.
DC Procurement appropriation–funded secondary item from contractor.
DD Procurement-funded principal or major item from contractor.
DE
1
Progress payment to contractor.
DF
1
DoD services in support of procurement. This code was previously applied to actual CAS hours
prior to establishment of the charge. It now applies to other than CAS services.
DG
1
Nonrecurring Cost (NC) Recoupment Charges (Research and Development and Production).
Identifies amount of NC financed by the FMS purchaser and may be used in calculating the Special
NC.
DJ
1
GFM shipped from inventory.
DK
1
GFM shipped from another contractor.
DL
1
PCH&T applicable to procurement appropriation funded GFM.
DX
Contractor efforts in overseas locations that are supported by FMS management lines rather than
through normal CAS effort.
NOTES:
1. DSCs DE through DL represent WIP transactions. The breakdown of these charges assures audit trail
visibility for pricing purposes. DFAS SCA must treat them as progress payments and report them as such
to the FMS purchaser. These charges must be liquidated by one of the contract delivery codes “DA”
through “DD” in combination with reimbursement code “N.”
109
Delivery Source Code: Miscellaneous Charges
DSC Description
EE Royalty charge—USG TDP.
EF Other Federal agency shipment from stock.
EG Other Federal agency shipment from contractor.
EH North Atlantic Treaty Organization Petroleum, Oil, and Lubricants.
EJ Redistributable Military Assistance Program property.
EK Collection of special nonrecurring production charge or license fee for a third country.
EL Prepositioning costs.
EM
Interest on arrearage computed in accordance with Volume 15, Chapter 5. This code is restricted to
use by DFAS SCA.
EN NC recoupment charge for sales from procurement or inventory.
Delivery Source Code: Special Defense Acquisition Fund
DSC Description
SA SDAF sales of items originally purchased from DWCF inventories.
SB SDAF sales of items originally purchased from DoD inventories other than DWCF.
SD SDAF sales of items procured from contractors for the fund.
110
Delivery Source Codes (DSC) Surcharge Matrix
DSC
Contract
Administration
31
PC&H
32
Admin
33
Transportation
34,3536
Parcel Post
AA N N Y A
AB N N Y A
AC N N Y A
AD N N Y A
AE N Y Y B
AG N Y Y B
AH N N Y A
AJ N N Y A
AK N N Y B
AL N N Y B
BA N N Y N
BB Y N Y N
BC N N
37
Y N
39
BD N N Y N
BE N N Y N
31
DFAS SCA will compute CAS if price code is “N” and reimbursement code is other than “N” unless statutory
waiver of contract administration has been made. See paragraphs 080502.D and 080502.P.
32
PC&H does not apply to DWCF items with ship dates after September 30, 1990.
33
Administrative costs will be computed unless administrative costs have been waived pursuant to statute.
34
The Inland CONUS transportation charge of 2.75 percent does not apply to DWCF shipments with shipping
dates after September 30, 1990. Computation for generic codes L1D and L1E for DWCF items was discontinued on
items with shipping dates after September 30, 1991.
35
In this column, “A” refers to items furnished from DWCF. “B” refers to inventory items that are not shipped
from DWCF. Transportation for inventory items furnished from DWCF to freight forwarders or Canada (except
Newfoundland and Labrador) is included in the price. Shipments beyond that point are computed according to
Table 8-27. Costs for items that are not furnished from DWCFs are also computed according to Volume 15,
Chapter 7, and Table 8-28.
36
Transportation costs are computed using the TBC of the transaction. However, if this position is blank,
transportation costs are computed using the DTC. If a DTC is not on the DTC Table, reject the transaction.
37
Included in actual or estimated actual repair cost.
111
DSC
Contract
Administration
31
PC&H
32
Admin
33
Transportation
34,3536
Parcel Post
BF N N N N
BG N N Y N
BH N N Y N
BK N N Y N
BT N N Y N
CA N N N N
CB N N Y N
CC N N Y N
CD N N N N
DA N N Y N
DB N N Y A
DC N N Y B
DD N N Y N
DE Y N Y N
DF N N Y N
DG N N Y N
DJ N N Y N
DK Y N Y N
DL N N Y N
DX N N Y N
EE N N Y N
112
DSC
Contract
Administration
31
PC&H
32
Admin
33
Transportation
34,3536
Parcel Post
EF N Y
38
Y B
39
EG N N Y B
41
EH N N Y N
EJ N Y Y Y
EK N N Y N
EL N N N N
EM N N N N
EN N N Y N
SA N N Y A
SB N Y Y B
SD N Y Y B
SE N N Y B
38
Computed standard PC&H except if RIC begins with “G.” RIC that begins with “G” will not have PC&H
computed.
39
For DSC “EF” and “EG” when transportation is by GSA (RIC begins with “G”) and the TBC is not blank or where
the TBC is blank and the DTC is other than “4,” the CONUS transportation add-on (generic codes L1A, L1D, and
L1E) is not computed. GSA includes CONUS transportation in the price of the item.
113
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114
Appendix R: Abbreviations And Acronyms
A
ACCP Accelerated Case Closure Procedures
ACRL Accessorial Cost
ADM Administrative Surcharge
AECA Arms Export Control Act
ARC Adjustment Reply Code
B
BPC Building Partner Capacity
C
CAS Contract Administrative Services
CCSA Case Closure Suspense Account
CI Case Identifier
CLSSA Cooperative Logistics Supply Support Arrangement
CONUS Continental United States
CWD Case Writing Division (DSCA)
CY Calendar Year/Current Year
D
DCN Document Control Number/Design Change Notice
DD Form 645 Department of Defense FMS Quarterly Billing Statement
DFAS Defense Finance and Accounting Service
DFAS SCA Defense Finance and Accounting Service Security Cooperation Accounting
DIFS Defense Integrated Financial System
DoD Department of Defense
DSAMS Defense Security Assistance Management System
DSC Delivery Source Code
115
DSCA Defense Security Cooperation Agency
DTC Delivery Term Code
DWCF Defense Working Capital Fund (see WCF)
F
FICS FMS Integrated Control System/Financial Integrated Control System
FMF Foreign Military Financing (Program)
FMFP Foreign Military Financing Program
FMS Foreign Military Sales
FMSA Foreign Military Sales Act of 1968 (now AECA)
FMSCR Foreign Military Sales Credit (also FMFP)
FMSO I Foreign Military Sales Order No. I (stock level case)
FMSO II Foreign Military Sales Order No. II (requisition case)
H
HNS Host Nation Support
I
IA Implementing Agency
IPC Indirect Pricing Components (DSAMS)
L
LOA Letter of Offer and Acceptance (DoD)/Lines of Activity/Line of Accounting
LOAD Letter of Offer and Acceptance Data
M
MASL Military Articles and Services List(s)
MILSBILLS Military Standard Billing System
MILSTRIP Military Standard Requisitioning and Issue Procedures
MILSVC Military Service
MOA Memorandum of Agreement
116
MOD Ministry of Defense (international equivalent of U.S. DoD)
MOU Memorandum of Understanding
N
NSN National Stock Number/NATO Stock Number
P
PC&H Packaging, Crating, and Handling
PCH&T Packaging, Crating, Handling, and Transportation
PN Part Number/Partner Nation
POD Port of Debarkation
POE Port of Embarkation/Port of Entry
R
R&R Repair and Return/Repair and Replace
ROR Repair of Repairable or Reparables
RSN Record Serial Number
S
SAAM Special Assignment Airlift Mission
SAMM Security Assistance Management Manual (DSCA Manual 5105.38-M)
SBLC Stand By Letter of Credit
SC Security Cooperation
SCO Security Cooperation Office/Officer
SDAF Special Defense Acquisition Fund
SDR Supply Discrepancy Report, SF 364
SF 364 Standard Form 364, Report of Discrepancy [SDR (ROD)]
SSC Supply and Services Complete
T
TA Type of Assistance (or Finance)
117
TAC Type of Address Code/Type of Assistance Code
TBC Transportation Bill Code
TRANSCOM U.S. Transportation Command
U
ULO Unliquidated Obligation
USA U.S. Army
USAF U.S. Air Force
USC U.S. Code (as in law)
USCG U.S. Coast Guard
USD (C) Under Secretary of Defense (Comptroller)
USG U.S. Government
USMC U.S. Marine Corps
USN U.S. Navy
W
WIP Work in Process
118
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119
Appendix S: Glossary Of Selected Terms
A
Above-the-line-cost. Costs and the related material/services that are summarized on the LOA filed
#8 (Net Estimated Cost), which are primarily the responsibility of the
cognizant implementing agency
during execution of an FMS and /or BPC case.
Accessorial cost. The cost of packing, crating, and handling (PC&H), and transportation which are incidental
to issues, sales, and transfers of materiel and are not included in the standard price or contract cost of materiel. An
exception to this is working capital fund (WCF) items.
Accrued costs. The financial value of delivered articles and services and incurred costs reported to DFAS–IN
via Delivery Transactions. Incurred costs represent disbursements for which no physical deliveries have yet
occurred. Examples include progress payments to contractors, GFM/GFE provided to contractors, and nonrecurring
costs.
Act. The term for legislation once it has passed both houses of Congress and has been signed (enacted) by the
president or passed over his veto, thus becoming law.
Actual cost. A cost sustained in fact, on the basis of costs incurred, as distinguished from forecasted or
estimated costs.
Adjustment reply code (ARC). A code that identifies the type of action being taken in reply to the FMS
customer supply discrepancy report (SDR [ROD]). ARCs are transmitted to DFAS–IN by an FMS case
Implementing Agency in FMS Delivery/Performance Reports.
Administrative cost. The value of costs associated with the administration of the FMS program. The
prescribed
administrative percentage cost for a case appears in the LOA. This percentage is applied against the case.
Expenses charged
directly to the FMS case (as prescribed by the LOA) are not included.
Amendment. An amendment of an FMS case constitutes a scope change to an existing LOA.
Apportionment. A determination made by the Office of Management and Budget that limits the amount of
obligations or expenditures which may be incurred during a specified time period. An apportionment may limit
all obligations to be incurred during the specified period, or it may limit obligations to be incurred for a specific
activity, function, project, or a combination thereof.
Appropriation. A part of an Appropriation Act providing a specified amount of funds to be used for designated
purposes. Each appropriation has a finite period of time for incurring obligations.
Appropriations act. Legislation initiated by the House and Senate Appropriations Committees that provides
authority for Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes.
An appropriation act is the most common means of providing budget authority. There are thirteen regular
appropriation acts for each fiscal year.
Arms Export Control Act (AECA). The basic U.S. law providing the authority and general rules for the
conduct of foreign
military sales and commercial sales of defense articles, defense services, and training. The AECA
came into existence with the passage of the Foreign Military Sales Act (FMSA) of 1968. An amendment in the
International Security Assistance and Arms Export Control Act of 1976 changed the name of FMSA to the AECA.
Published as 22 USC Sec. 2751 et seq.
Audit. The systematic examination of records and documents to determine the following:
a.
The adequacy and effectiveness of budgeting, accounting, financial, and related policies and
procedures
b.
Compliance with applicable statutes, regulations, policies, and prescribed procedures
120
c.
The reliability, accuracy, and completeness of financial and administrative records and reports
d.
The extent to which funds and other resources are properly protected and effectively used
Auditor [procurement]. A term used to represent the cognizant audit office designated by the Defense
Contract Audit Agency (DCAA) or military service audit activities for conducting audit reviews of the
contractor’s accounting system policies and procedures for compliance with the criteria.
Authorization act. Basic, substantive, legislation that establishes or continues the legal operation of a federal
program or agency, either indefinitely or for a specific period of time or which sanctions a particular type of
obligation or expenditure.
B
Bandaria. The imaginary country used by DSCU when making an example security assistance situation.
This country is not located in any real region of the world nor is it modeled after any real country. For security
assistance purposes, Bandaria’s country code is BN.
Below-the-line-costs. Costs identified on the LOA fields #9 (Packing, Crating, and Handling), #10
(Administrative Charge), #11 (Transportation), and #12 (Other). Normally, DFAS SCA and DSCA retains the
obligational authority necessary to execute those applicable costs.
Bill. A legislative proposal originating in either the House or Senate, which, if passed in identical form by both
houses and signed by the president, becomes an enacted law. Bills are designated by “HR” in the House of
Representatives or “S” in the Senate, according to the house in which they originate, plus a number assigned in the
order in which they are introduced during the two-year period of a Congressional term. Appropriations bills always
originate in the House.
Bill (or billing) code. This is a DFAS SCA country assigned code that divides FMS customer country
billings into management levels lower than a U.S. Implementing Agency or in-country service. This code often
correlates to an FMS customer paying office. It appears in Block 3 of the DD Form 645. Basic alpha codes are
derived from the LOA. The FMS customer should ensure that the proper bill code is indicated upon acceptance of
an LOA.
Billing statement. The DD Form 645 Billing Statement represents the official claim for payment by the U.S.
government referred to in Letters of Offer and Acceptance. It also furnishes an accounting to the FMS purchaser
for all costs incurred on his behalf under each agreement.
Blanket order case. An agreement between a foreign customer and the U.S. government for a specific
category of items or services (including training) with no definitive listing of items or quantities. The case specifies
a dollar ceiling against which orders may be placed.
Budget authority. The authority Congress gives to government agencies, permitting them to enter into
obligations that will result in immediate or future outlays (expenditures). Such budget authority does not include the
authority to ensure the
repayment of loans held by another person or government.
Budget year. The fiscal year following the current fiscal year, and for which the new budget estimate is
prepared.
C
Case. An FMS contractual sales agreement between the U.S. and an eligible foreign country or international
organization
documented by a DD Form 1513 or an LOA. An FMS case identifier is assigned for the purpose of
identification, accounting, and data processing for each offer.
Case description. A short title specifically prepared for each FMS case by the implementing agency.
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Case designator. A unique designator assigned by the implementing agency to each FMS case. The designator
originates with the offer of a sale, identifies the case through all subsequent transactions, and is generally a three-
letter designation, comprising the last element of the Case Identifier.
Case identifier. A unique six-digit identifier assigned to an FMS case for the purpose of identification,
accounting, and data processing of each LOA. The case identifier consists of the two-letter country code, a one-
letter designator for the implementing agency, and a three-letter case designator.
Case modification. Modification of a case documented by an LOA modification, which constitutes an
administrative or price change to an existing LOA, without revising the scope of the case.
Closed case. An FMS case for which all materiel has been delivered, all services have been performed,
all financial
transactions, including all collections, have been completed, and the customer has received a final
statement of account.
Collections. Receipts in U.S. dollars, checks, or other negotiable instruments from a purchasing country to pay
for defense articles, services, or military training based on accepted FMS cases.
Completed case. An FMS case for which all deliveries and collections have been completed, but for
which a final
accounting statement (DD Form 645) has not been furnished to the purchaser.
Constructive delivery [FMS]. Completion of delivery of materiel to a carrier for transportation to a consignee,
or delivery to a U.S. post office for shipment to a consignee. Delivery is evidenced by completed shipping
documents or listings of delivery at the U.S. post office. The delivery of materiel to the customer or the customer’s
designated freight forwarder at a point of production, testing, or storage at dockside, at staging areas, or at airports
constitutes actual delivery. Also referred to as physical delivery.
Continental United States (CONUS). United States territory, including the adjacent territorial waters, located
within the North American Continent between Canada and Mexico. Does not include Hawaii or Alaska.
Contract. An agreement between two or more persons who are legally capable of making a binding
agreement, which involves a promise (or set of promises); a consideration (i.e., something of value promised or
given); a reasonable amount of understanding between the persons as to what the agreement means; and a legal
means for resolving any breach of the agreement.
Contract administration. All the activities associated with the performance of a contract, from pre-award to
closeout.
Contract administration services. All those actions accomplished in or near a contractor’s plant for the
benefit of the U.S. government that are necessary to the performance of a contract or in support of the buying
offices, system/project managers, and other organizations, including quality assurance, engineering support,
production surveillance, pre-award surveys, mobilization planning, contract administration, property
administration, industrial security, and safety.
Contract administration services (CAS) charge. A surcharge applied to all FMS and BPC purchases from
procurement to cover
the cost of contract administration, quality assurance and inspection, and contract audit. The
surcharge percentage depends upon any contract administrative reciprocal agreements with a particular purchasing
country.
Contract termination. Cessation or cancellation, in whole or in part, of work under a prime contract, or a
subcontract there under, for the convenience of, or at the option of, the government, or a foreign purchaser (FMS),
or due to failure of the contractor to perform in accordance with the terms of the contract.
Contracting officer (CO). A person with the authority to enter into, administer, and/or terminate contracts
and make related determinations and findings. The term includes certain authorized representatives of the CO acting
within the limits of their authority as delegated by the CO.
Cooperative logistics supply support arrangements (CLSSA). Military logistics support arrangements
designed to
provide responsive and continuous supply support at the depot level for U.S.-made military materiel
possessed by foreign countries and international organizations. The CLSSA is normally the most effective means
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for providing common repair
parts and secondary item support for equipment of U.S. origin that is in allied and
friendly country inventories.
Country Liaison Officer (CLO). An officer or non-commissioned officer (NCO) of a foreign military
establishment selected by his or her government and attached to a MILDEP or DoD agency for the primary purpose
of helping administer IMS from his or her home country. For administrative purposes, the CLO is considered
in a student status. In State Department terms, the CLO is the Community Liaison Officer, similar to an MWR
officer in the military.
Credit case (FMS). The use of U.S. government–appropriated funds from the FMFP account to finance a
foreign country’s FMS purchases of U.S. defense articles or services. Credit funds may be in the form of repayable
loans or non-repayable grants.
Credit guarantee. A guarantee to any individual corporation, partnership, or other judicial entity doing business
in the United States (excluding USG agencies other than the Federal Financing Bank) against political and credit
risks of nonpayment arising out of their financing of credit sales of defense articles and defense services to eligible
countries and international organizations.
Current fiscal year. The fiscal year in progress but not yet completed ( e.g., between and including 01
October and 30 September for the United States).
Current year. The fiscal year in progress. See also budget year.
D
Defense article. As defined in section 644(d), FAA and section 47(3), AECA, includes any weapon,
weapons system, munitions, aircraft, vessel, boat, or other implement of war; any property, installation,
commodity, material, equipment, supply, or goods used for the purposes of furnishing military assistance or making
military sales; any machinery, facility, tool, material, supply, or other item necessary for the manufacture,
production, processing, repair, servicing, storage, construction, transportation, operation, or use of any other
defense article or any component or part of any articles listed above but shall not include merchant vessels, or as
defined by the Atomic Energy Act of 1954, as amended (42 U.S. Code 2011), source material, byproduct material,
special nuclear material, production facilities, utilization facilities, or atomic weapons, or articles involving
Restricted Data.
Defense Logistics Agency. A DoD inventory management agency responsible for approximately 95 percent of
consumable items and approximately 85 percent of all spare parts in the DoD supply system.
Defense Security Cooperation Agency (DSCA). The agency that performs administrative management,
program planning, and operations functions for U.S. military assistance programs at the DoD level under the policy
direction of the Assistant Secretary of Defense (International Security Affairs).
Defense service. As defined in section 644(f), FAA and section 47(4), AECA, the term “ defense service”
includes any service, test, inspection, repair, training, publication, technical, or other assistance or defense
information used for the purpose of furnishing military assistance or FMS but does not include military education
and training activities or design and construction services under section 29, AECA.
Defense stock. The term “defense stock” includes defense articles on-hand, which are available for prompt
delivery. It also includes defense articles under contract and on order that would be available for delivery within a
reasonable time from
the date of order by an eligible foreign government or international organization without
increasing outstanding contracts
or entering into new contracts.
Defense Transportation System (DTS). The collection of transportation activities and carriers belonging
to or under
contract to the DoD. The DTS includes commercial and organic aircraft and ships, and commercial small
package services under contract to the DoD as well as the operation of U.S. military air and ocean terminals in and
outside of the U.S.
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Delivery. Includes constructive or actual delivery of defense articles; also includes the performance of defense
services for the customer or requisitioner as well as accessorial services when they are normally recorded in the
billing and collection cycle immediately following performance.
Delivery forecasts. Periodic estimates of contract production deliveries used as a measure of the effectiveness of
production and supply availability scheduling and as a guide to corrective actions to resolve procurement or
production bottlenecks.
These forecasts provide estimates of deliveries under obligation against procurement from
appropriated or other funds.
Delivery Term Code (DTC). A single- character code that represents how far the USG is responsible
for arranging transportation of defense articles going to an international customer.
Depot level maintenance. Maintenance performed on material requiring a major overhaul or a complete
rebuilding of parts, assemblies, subassemblies, and end items, including the manufacture, modification, testing, and
reclamation of parts as required. Provides more extensive shop facilities and equipment and personnel of higher
technical skill than are normally available at the lower levels of maintenance (i.e., organizational and intermediate
level maintenance).
Direct cost. Any cost that is specifically identified with a particular final-cost objective. Such costs are not
necessarily limited to items that are incorporated into the end product as labor or material.
Disbursements [gross and net]. In budgetary usage, gross disbursements represent the amount of checks
issued, cash, or other payments made, less refunds received. Net disbursements represent gross disbursements less
income collected and credited to the appropriate fund account, such as amounts received for goods and services
provided. See also outlays.
DoD components. These include all of the following: the Office of the Secretary of Defense (OSD);
the military departments; the Joint Chiefs of Staff (JCS or Joint Staff); the combatant commands; the Office of the
Inspector General, Department of Defense (DoDIG); the Defense agencies, to include the Missile Defense Agency
(MDA); and DoD field
activities.
E
End item (EI). A final combination of end products, component parts, and/or materials, which is ready for its
intended use (e.g., aircraft, ship, tank, mobile machine shop).
Estimated actual charges. A systematic and documented estimate of actual costs. The procedure is used in
the absence of an established cost accounting system and the procedure is sometimes referred to as a cost-finding
technique.
Excess defense articles (EDA). Defense articles owned by the United States government that are neither
procured in anticipation of military assistance or sales requirements nor procured pursuant to a military assistance
or sales order. EDA are items (except construction equipment) that are in excess of the Approved Force Acquisition
Objective and Approved Force Retention Stock of all Department of Defense components at the time such articles
are dropped from inventory by the supplying agency for delivery to countries or international organizations.
Execution. The operation of carrying out a program as contained in the approved budget. Often referred to
as budget
execution.
Expenditures. The actual spending of money as distinguished from the appropriation of funds. Expenditures
are made by the executive branch; appropriations are made only by Congress. The two rarely are identical in any
fiscal year. In addition to some current budget authority, expenditures may represent prior budget authority made
available one, two, or more years earlier. See also disbursements.
F
Federal budget. The federal government’s budget for a particular fiscal year transmitted in January (first
Monday after 3 January) to the Congress by the president in accordance with the Budget and Accounting Act of
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1921. Includes funding requests for all agencies and activities of the executive, legislative, and judicial branches.
Also termed president’s budget.
Fences. Explicit limitations (ceilings and floors) established by Congress on the use of funds provided in an
appropriations act. See also earmarks.
Fiscal year (FY). Accounting period beginning 01 October and ending 30 September of the following year for
the United States. The fiscal year is designated by the calendar year in which it ends (e.g., Fiscal Year 1995 begins
on 01 October 1994 and ends 30 September 1995).
Fixed costs. Costs that do not vary with the volume of business, such as property taxes, insurance,
depreciation, security, and minimum water and utility fees.
Fixed price type contract. A type of contract that generally provides for a firm price or, under appropriate
circumstances, may provide for an adjustable price for the supplies or services being procured. Fixed price
contracts are of several types, and are so designed as to facilitate proper pricing under varying circumstances.
Foreign Assistance Act (FAA) of 1961. The basic law providing the authority and the general rules for the
conduct of foreign assistance grant activities/programs by the USG. Published as 22 USC Sec. 2151 et seq.
Foreign exchange. Foreign exchange refers to a system whereby the national currency of one country may be
exchanged for the currency of another country, thereby facilitating trade between countries.
Foreign military sales (FMS). That portion of U.S. security assistance authorized by the AECA, and
conducted on the basis of formal contracts or agreements between the United States government and an authorized
recipient government
or international organization. FMS includes government-to-government sales of defense
articles or defense services, from DoD stocks or through new procurements under DoD-managed contracts,
regardless of the source of financing.
Foreign military sales (FMS) case. A United States of America Letter of Offer and Acceptance (LOA) or a
“United States Department of Defense Offer and Acceptance,” which has been accepted by a foreign country.
Financial Management Regulation (FMR) [DoD 7000.14-R, volume 15, Security Assistance Policy and
Procedures]. A manual published by the Defense Finance and Accounting Service under the authority of DoDI
7000.14. It establishes basic financial procedures for security assistance activities involving management, fiscal
matters, accounting, pricing, budgeting for reimbursements to DoD appropriations accounts and revolving
funds, auditing, international balance of payments, and matters affecting the DoD budget.
Foreign Military Sales Order (FMSO). A term used to describe DD Forms 1513 or LOAs that implement
Cooperative Logistics Supply Support Arrangements. Two DD Forms 1513/LOAs are written: a FMSO I and a
FMSO II.
Foreign Military Sales Order I (FMSO I). Provides for the pipeline capitalization of a cooperative
logistics support arrangement, which consists of stocks on hand and replenishment of stocks on order in which
the participating country buys equity in the U.S. supply system for the support of a specific weapons system. Even
though stocks are not moved to a foreign country, delivery (equity) does in effect take place when the country pays
for the case.
Foreign Military Sales Order II (FMSO II). Provides for the replenishment of withdrawals of consumption-
type items (repair parts, primarily) from the DoD supply system to include charges for accessorial costs and a systems
service charge.
G
Government furnished equipment (GFE). Items in the possession of, or acquired by, the USG and
delivered to or otherwise made available to a contractor.
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Government furnished material (GFM). U.S. government property that may be incorporated into, or attached
to an end item to be delivered under a contract or consumed in the performance of a contract. It includes, but is
not limited to, raw and processed material, parts, components, assemblies, small tools, and supplies.
Grant. A form of assistance involving a gift of funds, equipment, and/or services, which is furnished by the
U.S. government to selected recipient nations on a free, non-repayable basis.
Grant aid (GA). Military assistance rendered under the authority of the FAA for which the United States
receives no dollar
reimbursement. Such assistance currently consists of the international military education and
training program (IMET), and pre-1990 MAP funding.
H
Holding account. An account established for each FMS country/international organization for the purpose
of recording and safeguarding unidentified and certain earmarked funds for future use.
I
Implementation date [FMS]. The date when supply action on an FMS case is initiated or directed by an
implementing
agency.
Implementing agency (IA). The military department or defense agency responsible for the execution of
military assistance
programs. With respect to FMS, the military department or defense agency assigned
responsibility by the Defense Security Cooperation Agency to prepare an LOA and to implement an FMS case.
The implementing agency is responsible for the
overall management of the actions that will result in delivery of
the materials or services set forth in the Letter of Offer and
Acceptance that was accepted by a foreign country or
international organization.
Indirect cost. Costs incurred for common or joint objectives that are not as readily subject to treatment as
direct costs. See also direct costs.
Initial deposit [FMS]. Money transferred to the credit of the Treasurer of the United States or other authorized
officer at the time of acceptance of an LOA as full or partial payment for defense articles, services, or training
contracted for by an eligible foreign country.
Interfund billing system (IBS). Under IBS, a selling activity will credit the appropriation or fund that owns
the materiel and/or finances the accessorial charges at the time of billing the ordering activity and will charge the
appropriations/funds of the ordering activity. IBS normally encompasses all supply system sales and purchases of
materiel, including perishable substances, bulk petroleum, oil, lubricants, and aviation fuel. Reimbursable sales will
be billed at the time items are dropped from inventory except that billings for sales under FMS and MAP will be
based on constructive delivery [DoDI 7420.12].
J
Joint resolution. A legislative resolution, designated H J Res (House) or S J Res (Senate), which requires
the approval of both houses and the signature of the president, just as a bill does, and which has the force of law
if approved. There is no practical difference between a bill and a joint resolution. A joint resolution generally is
used to deal with a limited
matter such as a single appropriation. Congressional rejection of a proposed arms
transfer, lease, third-country transfer, or a proposed international cooperative project takes the form of a joint
resolution of disapproval.
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L
Letter of offer and acceptance (LOA). U.S. Department of Defense letter by which the U.S. government
offers to sell to a foreign government or international organization U.S. defense articles and defense services
pursuant to the Arms Export
Control Act, as amended. The LOA lists the items and/or services, estimated costs, and
the terms and conditions of sale; it also provides for the signature of an appropriate foreign government official to
indicate acceptance.
Letter of request (LOR). The term used to identify a request from an eligible FMS participant country for the
purchase of U.S. defense articles and services. The request may be in message or letter format.
Life cycle cost. The total costs to the government of acquisition and ownership of a system over its useful life.
It includes the costs of development, acquisition, support, and, where applicable, disposal.
Line item number. A three-digit alpha/numeric code that identifies a detail line item on the LOA. This code is
perpetuated on the customer’s bill.
Loan. An agreement for the temporary transfer of the right of possession and use of a defense article or articles
not acquired with military assistance funds to a foreign government or international organization, at no rental
charge to the transferee, with the transferring U.S. military department being reimbursed from MAP funds, subject
to and under authority of section 503, FAA. Also, applies to loans to a NATO or major non-NATO ally of materials,
supplies, or equipment for the purpose of carrying out a program of cooperative research, development, testing, or
evaluation subject to and under the authority of section 65, AECA.
Logistics. The science of planning and carrying out the movement and maintenance of forces. In its most
comprehensive sense, involves those aspects of military operations which deal with the following:
a.
Design and development, acquisition storage, movement, distribution, maintenance, evacuation, and
disposition of materials
b.
Movement, evacuation, and hospitalization of personnel
c.
Acquisition or construction, maintenance, operation, and disposition of facilities
d.
Acquisitioning or furnishing of services
Long-lead items/long-lead time materials. Those components of a system or piece of equipment for which
the times to design and fabricate are the longest, and therefore, to which an early commitment of funds may be
desirable in order to meet the earliest possible date of system completion.
M
Maintenance. The upkeep of property, necessitated by wear and tear, which neither adds to the permanent
value of the property nor appreciably prolongs its intended life, but keeps it in efficient operating condition.
The term “preventive maintenance” involves deterring something from going wrong; the term “corrective
maintenance” involves restoring something to its proper condition.
Major line item. A program line for which the requirement is expressed quantitatively as well as in dollars.
These lines are identified in the military articles and services list(s) (MASL) by a unit of issue (XX) other than
dollars.
Memorandum of agreement (MOA) or memorandum of understanding (MOU). A written agreement
between governments or a government and international organization signed by authorized representatives and
signifying an intent
to be legally bound.
Military articles and services list (MASL). A catalogue of materiel, services, and training used in the
planning and programming of Military Assistance Program (MAP), International Military Education and Training
(IMET), and Foreign Military Sales (FMS). Separate MASLs are maintained for IMET and FMS training that
provides data on course identification, course availability, price, and duration of training.
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Military Department (MILDEP). One of the departments within the Department of Defense created by
the National Security Act of 1947, as amended. The Military Departments are the Department of the Air Force, the
Department of the Army, and the Department of the Navy.
Military Service (MILSVC). A branch of the Armed Forces of the United States, established by act of
Congress, in which persons are appointed, enlisted, or inducted for military service, and which operates and is
administered within a military or executive department. The Military Services are the United States Army, the
United States Navy, the United States Air Force, the United States Marine Corps, and the United States Coast
Guard.
Military standard requisitioning and issue procedures (MILSTRIP). A uniform procedure established by
the Department of Defense to govern the requisition and issue of materiel within standardized priorities.
Modification. Modification of a case constitutes and administrative or price change to an existing LOA,
without revising the scope of the case.
N
National stock number. A thirteen-digit stock number consisting of a four-digit federal supply classification
and a nine-digit national item identification number.
Nonrecurring costs (NRC or NC). Those costs funded by an RDT&E appropriation to develop or improve
a product or technology either through contract or in-house effort. Also, those one-time costs incurred in support of
previous production of a specified model and those costs incurred in support of a total projected production run.
Nonrepayable credits/loans. Grant funds appropriated by Congress for use in the Foreign Military
Financing Program to selected countries for their use in financing FMS acquisitions of defense articles, defense
services, and training under the authority of section 23, AECA. Additionally, certain countries may be authorized
these grant funds to finance direct commercial sales.
Nonstandard article. For FMS purposes, a nonstandard article is one that the DoD does not manage, either
because an applicable end item has been retired or because it was never purchased for DoD components.
Nonstandard service. For FMS purposes, a nonstandard service is a service that the DoD does not routinely
provide for itself or for purchase.
Notice of Availability (NOA). A written notification that material requiring special handling is ready to be
shipped. The NOA is sent by the shipper to the purchaser or freight forwarder for oversized, hazardous, explosive,
classified, or perishable material and requires a response from the recipient with delivery instructions.
O
Obligation. A duty to make a future payment of money. The duty is incurred as soon as an order is placed,
or a contract is awarded for the delivery of goods and the performance of services. An obligation legally encumbers
a specified sum of money that will require an outlay or expenditure in the future.
Obligational authority (OA, as used in FMS). A document or authority passed from DFAS–IN to an
implementing DoD component that allows obligations to be incurred against a given FMS case in an amount not to
exceed the value specified
in the obligational authority.
Operation & maintenance (O&M) costs. Costs associated with equipment, supplies, and services
required to train, operate, and maintain forces in a recipient country, including the cost of spare parts other than
concurrent spares and initial stockages, ammunition and missiles used in training or replacements for such items
expended in training or operations, rebuild and overhaul costs (excluding modernization) of equipment subsequent
to initial issue, training and other services that do not constitute investment costs, and administrative costs
associated with overall program management and administration.
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Outlays. Actual expenditures. Checks issued, interest occurred on the public debt, or other payments.
Total budget outlays consist of the sum of the outlays from appropriations and other funds in the budget, less
receipts (i.e., refunds and reimbursements).
Outside CONUS. All geographic areas not within the territorial boundaries of the continental United States.
OCONUS includes Hawaii and Alaska.
P
Packing, crating, handling, & transportation (PCH&T). The resources, processes, procedures, design
considerations, and methods to ensure that all system, equipment, and support items are preserved, packaged,
handled, and transported properly, including environmental considerations, equipment preservation requirements
for short- and-long-term storage, and transportability. One of the principal elements of integrated logistics support
(ILS).
Payment on delivery [FMS]. An FMS term of sale in which the U.S. government issues a bill to the FMS
purchaser at the time of delivery of defense articles or the rendering of defense services from DoD resources. This
term may only be used pursuant to a written statutory determination by the Director, DSCA, who may find it in
the national interest to authorize such payment. Based on presidential action, this term may also be modified to
read “Payment 120 Days After Delivery.”
Payment schedule. List of dollar amounts and when they are due from the foreign customer. The payment
schedule
supplements the Letter of Offer and Acceptance (LOA) presented to the customer. After acceptance
of the LOA, the payment schedule generally serves as the basis for billing to the customer. Changes in the estimated
costs of an FMS case
may require changes in the accompanying payment schedule.
Performing activity. An activity responsible for performing work or service, including the production of
material and/or the procurement of goods and services from other contractors and activities.
Port of Debarkation (POD). A military or commercial air or ocean port at which materiel is offloaded. Also
referred to as the Port of Discharge.
Port of Embarkation (POE). A military or commercial air or ocean port at which a carrier begins the
journey to deliver materiel to the consignee. This is also referred to as the Port of Exit.
Procurement lead time. The interval, in months, between the initiation of procurement action and receipt
into the supply
system of the production model (excluding prototypes) purchased as the result of such actions;
procurement lead time is composed of two elements, production lead time, and administrative lead time.
Production lead time. The time interval between the placement of a contract and receipt into the supply system
of materiel
purchased.
Progress payments. Those payments made to contractors or DoD industrial fund activities as work
progresses under a contract; payments are made on the basis of cost incurred or percentage of work completed,
or of a particular stage of completion accomplished prior to actual delivery and acceptance of contract items.
Q
Quality assurance (QA). A planned and systematic pattern of all actions necessary to provide confidence
that adequate technical requirements are established, that products and services conform to established technical
requirements, and that satisfactory performance is achieved.
R
Reimbursable expenditure. An expenditure made for another agency, fund, appropriation, or private
individual, firm,
or corporation, which will subsequently be recovered.
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Reimbursements. Amounts received by an activity for the cost of material, work, or services furnished to
others, for credit to an appropriation or their fund account.
Repair and replace [FMS]. Programs by which eligible customers return repairable carcasses to the U.S.
and receive a serviceable item without awaiting the normal repair cycle
time frame.
Repair and return. Programs by which eligible foreign countries return unserviceable repairable items for
entry into the U.S. military department repair cycle. Upon completion of repairs, the same item is returned to the
country and the actual cost of the repair is billed to the country.
Reparable item. An item that can be reconditioned or economically repaired for reuse when it becomes
unserviceable
Replenishment spare parts. Items and equipment, both repairable and consumable, purchased as spares
by inventory control points and which are required to replenish stocks for use in the maintenance, overhaul, and
repair of equipment, such as ships, tanks, guns, aircraft, engines, etc.
Reprogramming. The transfer of funds between program elements or line items within an appropriation.
Research and development. Those program costs primarily associated with research and development efforts,
including the development of a new or improved capability to the point where it is ready for operational use.
Revolving fund. A fund established to finance a cycle of operations to which reimbursements and collections
are returned for reuse in a manner that will maintain the principal of the fund (e.g., working capital funds and
industrial funds).
S
Security assistance (SA). A group of programs authorized by the Foreign Assistance Act (FAA) of 1961, as
amended, and the Arms Export Control Act (AECA) of 1976, as amended, or other related statutes by which the
United States provides defense articles, military training, and other defense-related services by grant, loan, cash
sale, or lease, in furtherance of national policies and objectives [Joint Pub 1-02, as amended through 14 April
2006]. Table C1.T1, SAMM, provides a listing of twelve major security assistance programs—seven of which are
administered by DoD, and five are administered by DOS. The seven programs managed by DoD are included in
the DoD-defined security cooperation program.
Security Assistance Management Manual (SAMM) [DSCA 5105.38M]. A manual published by the
Defense Security Cooperation Agency. It sets forth the responsibilities, policies, and procedures governing the
administration of security assistance within the Department of Defense (available online: https://samm.dsca.mil/).
Security cooperation. Activities undertaken by the DoD to encourage and enable international partners to
work with the U.S. to achieve strategic objectives. It includes all DoD interactions with foreign defense and security
establishments, including all DoD-administered security assistance programs that build defense and security
relationships and promote specific U.S. security interests and all international armaments cooperation activities and
security assistance activities that develop allied and friendly military capabilities for self-defense and multinational
operations and provide U.S. forces with peacetime and contingency access to host nations.
Security cooperation organization (SCO). Those DoD organizations permanently located in a foreign
country and assigned responsibilities for carrying out of security cooperation management functions under section
515 of the Foreign Assistance Act and under Joint Publication 1-02, regardless of the actual name given to such DoD
Component. The generic term SCO replaces the former term, security assistance office (SAO).
Services. Includes any service, test, inspection, repair, training, publication, technical or other assistance,
or defense information furnished as military assistance under the FAA, or furnished through FMS under the
AECA.
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Special Assignment Airlift Mission (SAAM). A dedicated U.S. military aircraft, chartered to deliver
sensitive, classified or explosive defense articles to a specific customer location when no commercial delivery
capability exists.
Staging cost. The cost incurred by the Department of Defense in consolidation of materiel before shipment
to an FMS customer. Includes costs incident to storage and control of inventory, consolidation of incoming
articles into a single shipment, and a break in CONUS transportation.
Supply Discrepancy Report (SDR). A process for international customers to file a complaint with the DoD
for product loss, quality deficiencies, damage, and various other problems associated with the delivery of material
under the FMS program.
T
Technical data package (TDP). Normally includes technical design and manufacturing information
sufficient to enable the construction or manufacture of a defense item component modification or to enable the
performance of certain maintenance or production processes. It may include blueprints, drawings, plans, or
instructions that can be used or adapted for use in the design, production, manufacture, or maintenance of defense
items or technology.
Technical manual. A publication containing instructions designed to meet the needs of personnel responsible
for (or being
trained in) the operation, maintenance, service, overhaul, installation, and inspection of specific items
of equipment and materiel.
Training/training support. Formal or informal instruction of IMSs in the United States or overseas by officers
or employees of the United States, contract technicians, contractors (including instruction at civilian institutions),
or by correspondence courses, technical, educational or information publications and media of all kinds, training
aids, orientations, training exercises, and military advice to foreign military units and forces. [Sec. 47(5), AECA]
Travel and living allowance (TLA). Those costs associated with transportation, excess baggage, and living
allowances (per diem) of IMSs which are authorized for payment under the IMET Program.
Trust fund. A fund credited with receipts which are earmarked by law and held in trust, or in a fiduciary
capacity, by the government for use in carrying out specific purposes and programs in accordance with an
agreement.
Type of assistance code. A code used to reflect the type of assistance (if any) and/or the planned source of
supply for items/services identified on the Letter of Offer and Acceptance. Also known as a type of finance code.
U
United States Code (U.S.C.). A consolidation and codification of the general and permanent laws of the
United States arranged according to subject matter under fifty title headings. The U.S.C. sets out the current
status of the laws, as amended. It presents the laws in a concise and usable form without requiring recourse to the
many volumes of the Statutes at Large containing the individual amendments.
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