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DSCA 04-41

Memo Status : Active
DoD Shield

DEFENSE SECURITY COOPERATION AGENCY
201 12th STREET SOUTH, STE 203
ARLINGTON, VA 22202-5408

9/13/2004

MEMORANDUM FOR :

SEE DISTRIBUTION

SUBJECT :

Pricing Military Personnel Reimbursement in Support of Foreign Military Sales (FMS) (DSCA 04-41)

On 3 Sep 2004, USD(C) issued the attached memorandum revising the policy for pricing military personnel services reimbursement in support of an FMS case. Effective I Oct 2004, the Annual Department of Defense Composite Rate which includes permanent change of station (PCS) expense will be used to price these reimbursements and adjustments to collect actual PCS expenses will not be required. This change will be included in the next update to the Department of Defense Financial Management Regulation, Volume 15, Chapter 7.

The DSCA point of contact is Ms. Patricia Higgins, (703) 604-6570, DSN 664, patricia.higgins@dsca.mil.

Keith B. Webster
Director
Business Operations/Comptroller

ATTACHMENT :
As stated

DISTRIBUTION :

DEPUTY ASSISTANT SECRETARY OF THE ARMY
FOR DEFENSE EXPORTS AND COOPERATION
DEPARTMENT OF THE ARMY
ATTN : SAAL- NP

DIRECTOR, NAVY INTERNATIONAL PROGRAMS OFFICE
DEPARTMENT OF THE NAVY

DEPUTY UNDER SECRETARY OF THE AIR FORCE
(INTERNATIONAL AFFAIRS)
DEPARTMENT OF THE AIR FORCE

DIRECTOR, DEFENSE LOGISTICS AGENCY

DIRECTOR, NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY

DIRECTOR, DEFENSE THREAT REDUCTION AGENCY

DIRECTOR, DEFENSE REUTILIZATION AND MARKETING SERVICE

DIRECTOR, DEFENSE CONTRACT MANAGEMENT AGENCY

DIRECTOR, DEFENSE INFORMATION SYSTEMS AGENCY

DIRECTOR, DEFENSE LOGISTICS INFORMATION SERVICE

DEPUTY DIRECTOR FOR INFORMATION ASSURANCE,
NATIONAL SECURITY AGENCY

DIRECTOR FOR SECURITY ASSISTANCE
DEFENSE FINANCE AND ACCOUNTING SERVICE - DENVER CENTER

CC :

USASAC
SATFA/TRADOC
NAVICP
AFSAC
DISAM
STATE/PM-RSAT

MEMORANDUM FOR BUSINESS OPERATIONS/COMPTROLLER, DEFENSE SECURITY COOPERATION AGENCY

SUBJECT :

SUBJECT: Pricing Military Personnel Reimbursements in Support of Foreign Military Sales (FMS)

Effective with fiscal year (FY) 2005, military personnel services reimbursement in support of a FMS case shall be priced using the Annual Department of Defense Composite Rate that includes permanent change of station expense (PCS) and shall no longer be adjusted to collect actual PCS expense, see attached example. For PCS moves that started in a previous FY, actual PCS expense shall be used for that FY and the composite rate adjusted accordingly.

This change in policy will be codified in the next update of the "Department of Defense Financial Management Regulation," Volume 15, Chapter 7, subparagraph 070203. Please ensure that this change in policy is given widest distribution to the FMS community.

My point of contact is Ms. Becky Allen. She can be contacted via email at becky.allen@osd.mil or phone at 703-697-0718.

Robert J. Henke
Principal Deputy and Deputy
Under Secretary of Defense
(Management Reform)

MILITARY PERSONNEL SERVICES PRICE COMPUTATION FMS CASE. FULL TIME FMS WITH PCS

Assumptions: Navy 0-4 and E- 7 performing full-time services for two years at an overseas location FY 2004 and FY 2005.

2004

  0-4 E-7 Total
Annual DoD Composite Rate (note 1) $126,240.00 $78,918.00  
Other Personnel Support Costs Accelerated Rate 8% 16%  
Other Personnel Support Costs (note 2) $10,099.20 $12,626.88  
Subtotal $136,399.20 $91,544.88  
       
Less PCS factor included in Composite Rate $3,909.00 $1,543.00  
Subtotal   $90,001.88  
       
Actual PCS to Installation:      
Outbound Trip Transportation of Member and Family $5,000.00 $5,000.00  
Outbound Trip Movement of Household Goods $16,000.00 $16,000.00  
Subtotal for FY 2004 $153,430.20 $111,001.80  

2005

  0-4 E-7 Total
Annual DoD Composite Rate (note 1) $137,459.00 $83,708.00  
Other Personnel Support Costs Accelerated Rate 8% 16%  
Other Personnel Support Costs (note 2) $10996.72 $13,393.28  
Subtotal for FY 2005 148.455.72 97,101.28  
       
FMS Selling Price (note 4) $301,885.92 $208,103.16 $59,909.08

Notes:

  1. Refer to http://www.dod.mil/comptroller/rates/index.html to obtain the current annual DoD composite rate. To compute hourly rate multiply Annual DoD Composite Rate by .00055 which includes a 14% leave and holiday factor.
  2. Accelerate total military costs by 8% for officers and 16% for enlisted personnel for Other Personnel Support Costs. These costs are reimbursed to Defense Health Program (97*0130)
  3. Effective FY 2005 the Annual DoD Composite Rate is no longer adjusted to reflect actual PCS expense.
  4. Administrative surcharge is additive to the FMS selling price