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RCG Definitions

Above-the-Line Costs. Specific line item costs for articles or services (including Contract Administrative Services (CAS), Logistics Support Charge (LSC) and royalty fees, as appropriate), as part of a specific line on a Letter of Offer and Acceptance (LOA).

Accelerated Case Closure Procedures (ACCP). The standard closure method. Enables Foreign Military Sales (FMS) Supply Services Complete (SSC) cases to interim close before all financial transactions are finalized. All countries that have cases financed with Foreign Military Financing (FMF) must participate in ACCP; other countries are strongly encouraged to participate. Case may contain an unliquidated obligation (ULO) at closure. Contracts supporting the FMS case may remain open at ACCP closure.

Acceptance. Purchaser signature on the LOA document, evidencing purchaser agreement with all terms and conditions therein.

Acceptance Date. The date the Purchaser signs the LOA.

Accessorial Charges. A cost that is not included in the line value of the LOA; a below the line cost. Packing, Crating and Handling (PC&H) and certain transportation costs associated with the movement of defense articles provided under the FMS program are the most common accessorial charges.

Accounting Classification Reference Number (ACRN). A two position alphanumeric field which identifies a specific line of accounting within a contract or funding document.

Accrued Expenditures. Represents completed obligations, both paid (known as "funds disbursed") and unpaid (known as "accounts payable").

Adjustment Reply Code (ARC). A code that identifies the type of action being taken in reply to the Purchaser Supply Discrepancy Report (SDR). Codes are transmitted to the Defense Integrated Financial System (DIFS) by the Implementing Agency (IA) during FMS delivery/performance reporting.

Administrative Contracting Officer (ACO). The U.S. Government (USG) official assigned the responsibility for the administration of USG contracts.

Administrative Cost. The cost associated with the administration of FMS program and cases; below the line cost.

Adverse Financial Condition (AFC). An out of balance condition on the case that indicates one of the four following conditions has occurred: 1) Obligational Authority (OA) exceeds case or line item level values, 2) commitments or obligations exceed OA at case or line item level, 3) total disbursements exceed obligations at case or line level, or 4) Expenditure Authority (EA) is not requested prior to disbursement.

Allotment. Authority issued to a Department of Defense (DoD) Component to incur commitments and obligations within a specified amount.

Amendment. A contracted scope change to an existing LOA; requires purchaser acceptance.

Arms Export Control Act (AECA). The basic U.S. law providing the authority and general rules for the conduct of FMS and commercial sales of defense articles, defense services, and training.

Audit. The systematic examination of records and documents to determine:

  1. the adequacy and effectiveness of budgeting, accounting, financial, and related policies and procedures;

  2. compliance with applicable statutes, regulations, policies, and prescribed procedures;

  3. the reliability, accuracy, and completeness of financial and administrative records and reports; and

  4. the extent to which funds and other resources are properly protected and effectively used.

Below-the-line Costs. Packing, Crating, and Handling (PC&H), administrative charge, transportation, and other costs that are displayed on lines 9-12 of the LOA.

Billing Statement. The DD Form 645 FMS Billing Statement issued by DFAS Indianapolis represents the official claim for payment by the USG referred to in the LOA. It also furnishes an accounting to the Purchaser for all costs incurred on its behalf under each agreement. A special billing arrangement authorized by DSCA may also serve as an official billing statement for a purchaser.

Blanket Order LOA. An agreement between a purchaser and the USG for a specific category of items or services (including training) with no definitive listing of items or quantities. The LOA specifies a dollar ceiling against which orders may be placed. The value of LOA determines scope.

Budget Authority. Authority provided by law to incur financial obligations (in support of cases) that will result in outlays. Specific forms of budget authority applicable to the FMS program are contract authority (direct cite) and spending authority from offsetting collections (reimbursable).

Building Partner Capacity (BPC). Building Partner Capacity (BPC) programs encompass security cooperation and security assistance activities that are funded with U.S. Government (USG) appropriations and administered as cases within the Foreign Military Sales (FMS) infrastructure. BPC programs executed through existing security assistance processes are accomplished on pseudo Letter of Offer and Acceptance (LOA).

Contract Authority (Direct Cite). A type of budget authority that permits obligations in advance of cash being available to liquidate the obligations. Section 22 of the AECA provides permanent indefinite contract authority for new procurement for Purchasers. When the foreign country or international organization provides a dependable undertaking, the USG is authorized to enter into contracts in advance of receiving cash.

Case. An LOA which has been accepted by an authorized purchaser. A contractual sales agreement between the US and an eligible foreign country or international organization. One FMS LOA identifier is assigned for the purpose of identification, accounting, and data processing for each Offer.

Case Closure Certificate. Formal notification to DFAS Indianapolis that the IA has certified the case as ready for closure.

Case Closure Certificate Inventory (CCCI). A module of DIFS that receives the 'C1" closure transaction from the IAs and which provides the status of the corresponding closure request.

Case Closure Status Report. The Case Closure Status report tracks closure objectives, actual closure progress during each quarter of a given fiscal year; resource allocations to the closure function, when available; the number of ACC cases not closed after more than two years supply complete; and the number of cases to remain open based on the FMS purchaser's request.

Case Closure Suspense Account (CCSA). Country level account maintained by DFAS Indianapolis that summarizes disbursement activity and ULO balance for each closed case.

Case Identifier. A unique six digit identifier assigned to a case for the purpose of identification, accounting and data processing of each accepted LOA. The case identifier consists of the two letter country code, a one letter designator for the DoD IA, and a three letter case designator.

Case Manager (CM). An official within an IA who is responsible for all financial and logistical aspects of a case throughout its life cycle.

Central Case Manager (CCM) Logistic Management Specialist (Army). When all lines on an Army FMS case are certified, the CCM Logistics Management Specialist conducts a final review of all lines on the case and below the line costs to confirm that all logistical and financial actions are complete and the lines and case are in balance in all the logistic and financial databases, to include CISIL, PBAS and DIFS. They initiate an amendment or notice when action is required.

Change in Scope. Changes that modify the quantity, revise period of performance, significantly adjust the dollar value of the case, or substantially expand or reduce an FMS program. Changes in scope require an LOA Amendment.

Closed Case/Closure. A case for which all materiel has been delivered, services have been performed, other requirements of the LOA satisfied, known financial transactions (including collections) have been processed (except for ACCP interim closed cases), and the purchaser will receive a final statement of account in the next DD Form 645 FMS Billing Statement.

Closure Inhibitors. Codes that indicate conditions preventing closure.

Closure Transactions. A series of transactions submitted between the Military Department (MILDEP) systems and DIFS to update closure status of a case. The individual case closure transactions are defined as follows:

  1. C1'. A system generated transaction submitted by the MILDEP system to DIFS to indicate the case has been certified for closure, and to signify IA completion of all actions required for DFAS Indianapolis to close the case in DIFS.

  2. (2) 'C3'. A system generated transaction submitted from DIFS to the MILDEP system to provide notification that the case is closed in DIFS. The MILDEP system will use this transaction to update closure status. The 'C3' is sent from DIFS to the MILDEP system after DIFS processes a 'C8' closure transaction.

  3. (3) 'C4'. A system generated transaction submitted by the MILDEP system to DIFS to cancel closure action on a case that was previously submitted for closure, but not yet closed.

  4. (4) 'C5'. A system generated transaction submitted by the MILDEP system to DIFS to initiate reopening of a non-ACCP case that was previously closed, or to revert an ACCP case from final to interim closure status. The 'C5' is converted into a DIFS 'CF' transaction that changes the applicable case status in the Case Control Summary Master File in DIFS.

  5. (5) 'C8'. A DIFS generated transaction that closes the case within DIFS and sends a 'C3I' transaction to the MILDEP system. All inhibitors within DIFS must be cleared prior to submission of the 'C8'.

Collection. Receipt in U.S. dollar currencies, checks, or other negotiable instruments from a purchaser country to pay for defense articles or services, based on accepted LOAs and USG official billing statements.

Commitment. An administrative reservation of funds based upon procurement directives, orders, requisitions, authorizations to issue travel orders, or requests that authorize the recipient to create obligations without further recourse to the official responsible for certifying the availability of funds. The act of entering into a commitment is usually the first step in the process of spending available funds. Commitments are intended to reserve funds for future obligations. A commitment is subject to cancellation by the approving authority if it is not already obligated.

Gross Commitment. The cumulative value of commitments on the case, which includes net commitments, net obligations and total expenditures.

Net Commitment. The value of commitments that has not yet been obligated or disbursed

Constructive Delivery Reporting. The reporting of quantities of items on a line having a unit of issue of each (EA) for the following Generic Codes: A1 through A5 and A9B (Aircraft); B1 through B4 (complete missile lines only, Missiles); C (Ships); D (Combat Vehicles); E3 (Tactical and Support Vehicles); F2 through F4 (Weapons); G2, G4, G5 (less M & Y) and G6A (Ammunition); and H4 (Communications Equipment).

Contract. A mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the USG to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications.

Contract Administrative Services (CAS) Surcharge. FMS CAS is comprised of three basic elements: (1) quality assurance and inspection, (2) contract audit, and (3) contract administration. The majority of the tasks associated with items (1) and (3) are performed by the Defense Contract Management Agency (DCMA) and the majority of the tasks associated with item number (2) are performed by the DCAA. The surcharge percentage depends upon the implementation date of the basic LOA, the actual CAS functions being performed, and any contract administrative reciprocal agreements with a particular purchasing country.

Contract Administration. All the activities associated with the performance of a contract from pre-award to closeout.

Contracting Activity. Each service designates certain commands as contracting activities. The subordinate command is that in which a principal contracting office is located. It may include the program office, related functional support offices, and contracting offices. The head of the contracting activity has certain approval and authority responsibilities.

Contracting Officer's Representative (COR). An individual designated and authorized in writing by the contracting officer to perform specific technical or administrative functions.

Contract Line Item Number (CLIN). A four position alphanumeric field associated with a specific delivery line of a contract.

Contract Reconciliation System (CRS). CRS is a fully integrated contract reconciliation tool. It supports both full and limited scope reconciliations. Contract reconciliation is the identification and creation of adjustments to eliminate quantity, price, or accounting classification differences between contract line items, obligations and disbursements. The reconciliation includes generation of corrective actions transmitted to Mechanization of Contract Administration Services (MOCAS).

Cooperative Logistics Supply Support Arrangement (CLSSA). The CLSSA is a cost sharing stock replenishment program available to purchasers, whose planning data and financial resources are combined with DoD demand data and financial resources to obtain improved supply support for weapons systems. Under CLSSA, purchaser requirements are given equal treatment as compared to DoD requirements with the same Force Activity Designator (FAD

Credit Case. The use of USG appropriated funds from the FMF 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.

Cross Leveling. The process by which DFAS Indianapolis transfers funds (i.e., collections), from one FMS case to another FMS case for the same purchaser. Usually requested by the purchaser, unless a blanket cross leveling agreement exists.

Curves. Predetermined schedules that can be used as a basis for developing a payment schedule for a given case or line on a case.

Curve Validation Methodology. The process by which payment schedule curves/profiles maintained in DSAMS are validated. All curves must be validated every two years, using the following process: random sampling of cases that used each curve at any point during the preceding five years; obtaining of actual performance data; comparing actual performance with forecasts as shown on curves/profiles; determining whether allowable variations are exceeded; and adjusting the curve/profile, as appropriate.

DD Form 645. See Billing Statement.

Defense Article. 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 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 article listed above, but shall not include merchant vessels, major combatant vessels (10 U.S.C.7307), or as defined by the Atomic Energy Act of 1954, as amended (42 U.S.C.2011), source material, by product material, special nuclear material, production facilities, utilization facilities, or atomic weapons or articles involving Restricted Data. [Section 644(d), FAA and Section 47(3), AECA]

Defense Services. Includes any service, test, inspection, repair, training, publication, technical or other assistance, or defense information (as defined in section 644(e) of the Foreign Assistance Act (FAA) of 1961), used for the purposes of making military sales, but does not include design and construction services under section 29 of the Arms Export Control Act of 1976, as amended.

Defense Cash Accountability System (DCAS). The cash accountability system for DoD. Cash accountability is the reporting of disbursements, reimbursements, deposits and receipts to the United States Treasury. Expenditure data reported to Treasury includes the processing of Transactions by Others (TBO) and Transactions for Others (TFO), as well as other transactions affecting the status of funds. It is the standardized system IAs use for receipt of financial expenditures.

Defense Contract Audit Agency (DCAA). DCAA is responsible for performing all contract audits for the DoD, and providing accounting and financial advisory services regarding contracts and subcontracts to all DoD Components responsible for procurement and contract administration. These services are provided in connection with negotiation, administration, and settlement of contracts and subcontracts.

Defense Contract Management Agency (DCMA). DCMA is the DoD component that works directly with Defense suppliers to help ensure that DoD, Federal, and allied government supplies and services are delivered on time, at projected cost, and meet all performance requirements.

Defense Federal Acquisition Regulation Supplement (DFARS). The DFARS is the DoD supplement to the FAR. It provides DoD unique acquisition regulations.

Defense Finance and Accounting Service (DFAS). DFAS is responsible for the DoD centralized billing, collecting, and trust fund accounting for the FMS program.

Defense Integrated Financial System (DIFS). The DFAS accounting system supporting the corporate Security Assistance accounting business area, specifically the FMS program

Defense Security Assistance Management System (DSAMS). System used to develop Price and Availability (P&A) and develop and implement LOI, LOA and lease documents.

Defense Security Cooperation Agency (DSCA). DSCA provides timely and effective direction, supervision, and oversight of security cooperation programs in support of U.S. national security and foreign policy objectives; and promotes stable security relationships with friends and allies through military assistance.

Defense Working Capital Fund (DWCF). A revolving fund using a business like buyer and seller approach with a goal of breaking even over the long term. Stabilized rates or prices are generally established each fiscal year. DWCF stabilized rates or prices are adjusted for sales to Purchasers to include PC&H, first destination transportation, unfunded civilian retirement and post retirement health benefits costs.

Defined Order LOA. Characterized by separate line items containing a specified period of performance which may include individually listed items or dollar value lines for which requisitions (for hardware lines) are initiated by the IA following LOA implementation.

Delivery, Actual. The delivery of material to the purchaser or the purchaser's designated freight forwarder at a point of production, testing, or storage at dockside, at staging areas, or at airports.

Delivery, Constructive (Physical). Completion of delivery of material 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.

Delivery Reporting (FMS). The process whereby performing activities (usually Implementing Agencies) report physical deliveries to DFAS Denver. Delivery reporting affirms that defense articles were delivered to and/or defense services were performed for the purchaser.

Delivery Source Code (DSC). This code is used to assess applicable surcharges to the purchaser. The surcharges applied for each DSC are based on funding source, stock fund/Defense Working Capital Fund or appropriation, and section of the AECA (21 or 22).

Delivery Term Code (DTC). This code specifies who is responsible for transportation and how far items are transported. The percentage associated with this code is used to compute the transportation charges on the LOA.

Department of Defense Financial Management Regulation (DoD FMR). Provides all DoD components with the policy regulation, and procedures within the area of responsibility of the DoD Comptroller. Volume 15 of this regulation establishes the accounting, pricing, budgeting and reporting policy and procedures necessary to implement the financial management requirements of the AECA and FAA.

Dependable Undertaking. Pursuant to Sections 22(a) and 29 of the AECA, a firm commitment by the purchaser to (1) pay the full amount of a contract which assures the USG against any loss on the contract, and (2) make funds available in such amounts and at such times as may be required to meet the payments required by the contract and any damages and costs that may accrue from the cancellation of such contract, in advance of the time such payments, damages or costs are due.

DFAS Corporate Database (DCD). The DCD provides shared, controlled storage and retrieval of DFAS standard transactional data. Transactional data are the current active values of finance, accounting, and other DFAS standard data elements.

Direct Cite. Citation of the Trust Fund (97-11X8242) as the financing source on funding documents.

Disbursements. Funds paid from the FMS Trust Fund for bills submitted from contractors and the Implementing Agencies. Represents the fourth stage of the FMS funding process.

Gross Disbursements. Represents the amount of checks issued, cash, or other reimbursable transactions processed, payments made, less refunds received.

Net Disbursements. Represents gross disbursements less income collected and credited to the appropriation of fund account, such as amounts received for goods and services provided.

Electronic Document Access (EDA). EDA uses the Internet to provide DoD online access to share, store and retrieve contracts and other documents electronically. EDA offers read only access to official contracts, contract modifications, vouchers, Government Bills of Lading and accounting and finance documents. EDA provides one common file format that eliminates the need to maintain hard copy files, reducing the need to print, mail, file, and manage paper.

Enhanced Accelerated Case Closure (EACC). A component within Accelerated Case Closure Procedures (ACCP). EACC is designed to target the closure of those cases that are more than 24 months supply services complete (SSC) yet are still open. EACC was suspended in Dec 2008.

Estimated Performance Billing (E-Bills). An estimated performance delivery transaction (based on an actual shipment) processed in advance of receiving the actual performance delivery transaction. Used to minimize shipped, not delivery reported, values.

Executive Committee (EXCOM) for Case Closure and Reconciliation. The EXCOM provides final resolution after all existing policies/procedures have been utilized on financial discrepancies and imbalances relating to FMS cases/lines. Specific functions of the EXCOM include approving discontinued research, finalizing case closure values/cost components and resolving force closure value discrepancies.

Expenditure Authority (EA). Authority issued by DFAS Indianapolis to a certifying officer/disbursing activity authorizing the subsequent disbursement of an FMS country's funds.

Federal Acquisition Regulation (FAR). The FAR is the primary regulation for use by federal executive agencies for the acquisition of supplies and services with appropriated funds.

Financial Closure Line Manager (Army). Army FMS cases are managed at the line level by Financial Line Managers located within USASAC, the Army Life Cycle Management Commands (LCMC), COE, TRADOC, PEO STRICOM, MEDCOM, etc. They are responsible for directing the distribution of funds for their lines; processing financial transactions; processing 1517 N cards; actively monitoring contractual and financial actions to meet proper execution and line closure. They advise the CCM when an amendment or modification is required.

Financial Management Regulation (FMR). See DoD FMR.

A meeting sponsored by DSCA with the purchaser to reconcile financial records, review the financial status of FMS cases, ensure continued solvency of the purchaser accounts, improve cycle times, identify cases requiring intensive financial management and formulate financing strategies for existing and prospective FMS purchases. DSCA works with the Implementing Agencies, SCOs, DFAS, and purchaser in planning and executing FMRs.

Financially Troubled Case (FTC). A condition that results when commitments, obligations and/or expenditures exceed OA issued.

Financing, Type of. The method by which the USG is authorized to sell defense articles and services under the AECA (e.g., cash with acceptance, dependable undertaking, credit). The type of financing is reflected through entry of the proper term(s) of sale on the LOA.

FMS Reviews. Meetings (usually in a conference format) held to discuss the status of a purchaser's FMS program. A review can be either external (with the purchaser) or internal (USG only) in nature. Reviews vary in terms of scope, level of detail and composition of attendees.

Forecasting (Projection Methodology). The basis by which estimates are derived to reflect future financial performance and associated funds owed the USG. For example, contractor furnished progress payment/disbursement schedules, historical requisitioning activity, analysis of past performance of similar cases, lead times, delivery schedules and periods of performance are factors for estimating future financial requirements.

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.

Foreign Military Financing (FMF). FMF is the USG program for financing the procurement of defense articles, defense services and design and construction services through loans or grants to eligible foreign countries and international organizations.

Foreign Military Sales (FMS). That portion of US security assistance authorized by the AECA, as amended, and conducted on the basis of formal contracts or agreements between the USG and an authorized recipient government or international organization. FMS includes government to government sale of defense articles or defense services, from DoD stocks or through purchase under DoD managed contracts, regardless of the source of financing.

Foreign Military Sales Order (FMSO). These are letters of offer and acceptance (LOAs) that implement Cooperative Logistics Supply Support Arrangements. Two LOAs are written: an FMSO I and an FMSO II. The FMSO I, Part A, represents the on hand value of DoD Continental United States (CONUS) inventories required to support Purchaser requisitions. The FMSO I, Part B, provides the obligational authority to fund the remaining portion of the order. The FMSO II is the consumption case, and all FMSO deliveries are reported against this case.

Funding Document. Any financial instrument used as the basis to incur obligations to fulfill the requirements of the FMS case. Funding documents include both contracts (direct cite funded), as well as reimbursable documents, such as work requests, project orders, Military Interdepartmental Purchase Requests (MIPRs), etc.

Generic Code. A three digit code identified in the Military Articles and Services List (MASL) which represents the type of materiel or services to be furnished, according to a specific budget activity/project account classification.

Holding Account. An account established within the FMS Trust Fund for each country/ international organization for the purposes of recording and safeguarding funds not allocated to a specific case.

Implementing Agency (IA). The U.S. Military Department or Defense Agency responsible for the execution of security cooperation programs.

Interfund. A process used for billing and reimbursement of supply system (i.e., stock) sales. Under interfund processing, the selling activity will credit (reimburse) the appropriation or fund which owns the material or finances any associated accessorial costs, and charge (bill) the fund of the ordering activity. The generation of the interfund bill is based on constructive (physical) delivery reporting.

Internal Review. A comparison of case level financial and logistical data between the DIFS and IA systems.

In-Transit Disbursement. A disbursement transaction that has been transmitted by a disbursing office to an accounting office, but has not yet been received by the accounting office.

Inventory Control Point (ICP). The organizational element within a DoD system which is assigned responsibility for materiel management of a group of items, including such management functions as the computation of requirements, the initiation of procurement or disposal actions, distribution management, and rebuild direction.

Invoice. A contractor's bill or written request for payment under the contract for supplies delivered or services performed.

The time interval (usually stated in months) from LOA implementation to final delivery. Comprised of two elements: administrative lead time (from LOA implementation to contract award) and procurement lead time (interval between contract award and final delivery).

Lease. An agreement for temporary transfer, with or without a rental charge, of the right of possession and use of a defense article to an FMS eligible foreign government or international organization, with the transferee agreeing to maintain, protect, repair, or restore the article.

Letter of Offer and Acceptance (LOA). The authorized document for use by the USG to offer to sell defense articles and/or defense services to a foreign country or international organization. Signature by the purchaser represents acceptance of the offer.

Line Manager (Air Force). Air Force FMS cases are managed at the line level by Line Managers located within the Air Force Major Commands. These individuals receive direction from the Security Assistance Program Manager (SAPM) (or Case Manager (CM), if no SAPM is assigned). They are responsible for directing the distribution of funds for their lines; processing and initiating orders for articles and services; actively monitoring contractual and financial actions to meet proper execution and line closure; and advising the SAPM or CM when a case amendment, notice or other action is required.

LOA Implementation. Occurs when the purchaser accepts the LOA (via signature thereon) and the initial deposit is received in the purchaser's Trust Fund or other designated account. (On an exception basis, DSCA can authorize emergency implementation of an LOA in advance of initial deposit receipt.)

Letter of Request (LOR). A written request from eligible FMS participants for the purchase of defense articles and/or defense services.

Line Item Number. A code which identifies a detail line item on the LOA. This code is perpetuated on the Purchasers' bill.

Logistics Closure Line Manager (Army). Army FMS cases are managed at the line level by Logistical Line Managers located within USASAC, the Army Life Cycle Management Commands (LCMC), COE, TRADOC, PEO STRICOM, MEDCOM, etc. These individuals are responsible for ensuring the line is Supply Service Complete (SSC) to include all materiel shipped, all services completed and all warranty periods are expired. They advise the CCM when an amendment or modification is required.

Logistics Support Charge (LSC). A surcharge intended to recover the cost of logistics support involved in providing non-DWCF spares and other items required to maintain a weapon system. These support costs are associated with production control, requisition processing, inventory maintenance, administration of SDRs and logistics management. The LSC is applied by DFAS Indianapolis to delivery costs for those lines in FMS cases which have been identified as support lines based on the Military Articles and Services List (MASL) included in the LOA.

Logistics. Planning and executing for those aspects of military operations which deal with: (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; and (d) acquiring or furnishing of services.

Major Defense Equipment (MDE). Those items of significant military equipment, as identified in the International Traffic in Arms Regulation U.S. Munitions List, that have incurred a nonrecurring cost for RDT&E of $50 million or a total production cost of $200 million or more.

Mechanization of Contract Administration Services (MOCAS). MOCAS is the automated system jointly used by DFAS, DCMA and other activities. The system provides payment, management, financial and delivery data to purchaser offices, funding offices and inventory managers.

Military Articles and Services List (MASL). Identifies and categorizes defense articles and defense services for each LOA line item. There are two separate MASLs – one for materiel and one for training.

Military Standard Requisitioning and Issue Procedures (MILSTRIP). A uniform DoD procedure to govern requisition and issue of materiel within standardized priorities.

Military Standard Contract Administration Procedures (MILSCAP) Master File (MMF). MMF is a database in CCSS that contains acquisition files to include total dollars obligated by appropriation, ACRN and CLIN. MMF also includes modifications issued and contracts closed.

Modification, LOA An administrative or price change to an existing LOA, without revising the scope. Does not require acceptance by purchaser.

Negative Unliquidated Obligation (NULO). A disbursement transaction that has been matched to the cited detail obligation, but the total disbursement(s) exceeds the amount of that obligation.

Net Case Value. Total estimated cost reflected on the "Net Estimated Cost" of the LOA. Includes CAS and LSC. Does not include accessorials or the administrative surcharge.

Non-ACCP. FMS countries whose programs are completely financed with national funds (cash) and have not elected to participate in ACCP. A case is eligible for closure only when SSC, no ULOs exist on contract ACRNs associated to the case and the case is financially complete. Closure is usually delayed by several years to complete case/contract audits and contract close-out.

Nonrecurring Costs (NC). Those costs funded by a Research, Development, Testing and Evaluation (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.

Obligational Authority (OA). The authorized amount (funding) received by the IA on a DD Form 2060 (FMS Obligational Authority) (or automated equivalent) in advance of commitments and obligations to be incurred against a given FMS case in an amount not to exceed the value specified (line 20 of the DD Form 2060). The IA records reimbursable orders against an appropriation or directly cites the FMS Trust Fund while executing the FMS case. Line 10 of the DD Form 2060 displays the amount programmed as reimbursable authority and line 11 displays the direct cite authority.

Obligations. A binding reservation of funds, to include amounts or orders placed, contracts awarded and services received. The amount of obligations incurred is segregated into undelivered orders and accrued expenditures – paid or unpaid. Represents the second stage of the FMS funding process.

Gross Obligation. The cumulative value of obligations on the case, which includes net obligations and total expenditures.

Net Obligation. The value of obligations not yet disbursed.

Overseas Continental United States (OCONUS). All geographic areas outside the territorial boundaries of the continental United States of America.

Packing, Crating, Handling (PC&H). The labor, material and service costs related to preparing items for shipment to purchasers.

Payment on Delivery. An FMS term of sale in which the USG issues a bill to the 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 authorization by the Director, DSCA, who may authorize payment either on or up to 60 days after date of billing. Based on a Presidential determination, payment may be extended up to 120 days after delivery.

Payment Schedule. List of dollar amounts and when they are due from the foreign purchaser. The payment schedule is part of the LOA presented to the purchaser. After acceptance of the LOA, the payment schedule generally serves as the basis for billing to the purchaser.

Performance Based Payments. Payments to contractors based on successful completion of contract milestones.

Performance Reporting. The reporting of deliveries from MILDEP systems to DIFS. Also known as delivery reporting.

Performing Activity. An activity which is responsible for performing work or service, including the production of material and/or the procurement of goods and services from other contractors and activities.

Period of Performance. Indicates how long the requirement is planned to last, the duration of a service.

Pipeline. That portion of accepted security assistance program orders for defense articles and services, for which delivery, either construc¬tive or actual, has not occurred, or services have not been rendered.

Prevalidation The process of ensuring that sufficient valid obligations are available prior to disbursement of funds.

Positive Transaction Control (PTC). The interface between the MILDEP systems and DIFS is communicated via the FMS Integrated Control System (FICS). A feedback mechanism that reflects if transactions were received accurately or rejected. PTC is necessary to facilitate audit trails and corrective responses to erroneous conditions.

Problem Disbursement. Disbursements and collections made by disbursing officers, reported to the Treasury Department's Financial Management Service, but upon receipt at the official accounting station cannot be successfully matched to the original obligation or accounts receivable amount for liquidation purposes. The three types of problem disbursements are defined as follows:

  1. Unmatched Disbursement (UMD). A disbursement transaction that has been received and accepted by an accounting office, but has not been matched to the correct detail obligation. This includes transactions that have been rejected back to the paying office or central disbursement clearing organization by an accounting office.

  2. Negative Unliquidated Obligation (NULO). A disbursement transaction that has been matched to the cited detail obligation, but the total disbursement(s) exceeds the amount of that obligation.

  3. In-Transit Disbursement. A disbursement transaction that has been transmitted by a disbursing office to an accounting office, but has not yet been received by the accounting office.

Procuring Contracting Officer (PCO). The individual authorized to enter into contracts for supplies and services on behalf of the government by detailed bids or negotiations and who is responsible for overall procurement under such contracts.

Progress Payments. A form of contract financing to contractors as work progresses, on the basis of costs incurred.

Reconciliation. Conducted continually throughout the life of the case, from basic FMS case implementation until final closure. Reconciliation encompasses financial and logistical aspects of a case, to ensure proper accounting, accuracy of data, currency of schedules, timeliness and completeness of reporting. Facets of reconciliation include general case data, delivery data, expenditures, payment schedules, FMS reviews with the purchaser, and transactions to prepare a case for closure. It is an integral part of FMS case execution.

Reimbursable Order. An order for services, supplies, material, or equipment placed by a requiring DoD Component and furnished by another DoD Component or federal agency.

Reprogramming. The transfer of funds between program elements or line items within an appropriation.

Research and Development (R&D). 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. These costs include equipment cost funded under the RDT&E appropriation and related military construction appropriation costs. They exclude costs which appear in the military personnel, operation and maintenance, and procurement appropriations.

Responsible Contract Reconciliation Agent (RCRA). The person who is responsible for assigning, monitoring, approving and certifying accurate and complete contract reconciliations.

Security Assistance. Group of programs authorized by the FAA of 1961, as amended, and the AECA as amended, or other related statutes by which the US provides defense articles, military training, and other defense related services, by grant, credit, or cash sales, in furtherance of national policies and objectives.

Security Assistance Management Manual (SAMM). Provides guidance for the administration and implementation of Security Assistance and related activities in compliance with the FAA, the AECA, and related statutes and directives.

Security Cooperation Organization/Office (SCO). The generic term SCO encompasses all DoD elements, regardless of actual title, located in a foreign country with assigned responsibilities for carrying out security cooperation/assistance management functions.

Security Cooperation Information Portal (SCIP). A web-based portal that provides consolidated information/data from each military service's legacy systems to the purchaser and DoD user in a common format. Limited input capability is provided, as well.

Shared Data Warehouse (SDW). SDW provides a central repository of uniform data for shared access to support the DoD network. SDW is a query only web site and is updated daily with MOCAS transaction data.

Special Billing Arrangement (SBA). An alternative to the DD Form 645 that serves as an official USG claim for payment to the purchaser. Usually computed at the country or in-country service level.

Spending Authority from Offsetting Collections (Reimbursable). A type of budget authority that permits the sales of defense articles and defense services under Section 21 of the AECA and the administrative functions financed with the FMS administrative surcharge and Logistics Support Charge (LSC) that is originally paid by the performing activity and later reimbursed by the requesting activity.

Standard Contract Reconciliation Tool (SCRT). SCRT is the single tool that supports the efficient reconciliation of contract data across all accounting, contracting and entitlement computer systems within the DoD.

Standby Letter of Credit (SBLC). A banking instrument which, for FMS, can be used in lieu of termination liability prepayment requirements, as authorized by DSCA.

Supply Discrepancy Reports (SDRs). A supply discrepancy includes any variation in goods received from data shown on the covering shipping documents; requisition; invoice/shipping document; authorized procurement delivery document or vendor's packing list; or other authorized shipping document, which is not the result of a transportation discrepancy or product quality deficiency. Supply discrepancies encompass variations in condition or quantity, incorrect and misdirected material, receipt of canceled requirements, improper or inadequate technical data or supply documentation, and any unsatisfactory condition due to improper packaging which causes the material to be vulnerable to loss, delay, or damage, or which imposes unnecessary expense to the USG, e.g., excessive packaging. A manual form (SF 364), or its electronic equivalent, used to report a supply discrepancy or other type of discrepancy specifically authorized by this guidance; e.g., specific types of product quality (including quality of service) or billing discrepancies in Security Assistance shipments.

Supply/Services Complete (SSC). An indication that all logistical actions are completed and all logistical conditions of the LOA are satisfied

Surcharge. Expenses incident to issues, sales and transfers of materiel that are not included in the standard price or contract cost of materiel. Surcharges include PC&H; transportation (second destination); administrative; LSC; CAS; storage and staging costs.

Termination Liability (T/L). The amount of prepayments required by Sections 22, 23 and 29, AECA, that cover payments required by the contract for any damages and costs that may accrue from the cancellation of such contract. Funds prepaid for T/L will convert to cover actual expenditures should the contract not be terminated prior to performance completion. T/L does not apply to articles/services procured under other authorities of the AECA or FAA.

Training. Formal or informal instruction of foreign students in the US or overseas by officers or employees of the US, contract technicians, contractors (including instruction at civilian institutions), or by correspondence courses, technical, educational or information publications and media of all kinds, training aid, orientation, training exercise, and military advice to foreign military units and forces. [Sec. 47(5), AECA].

Transportation Bill Code (TBC). This code is used to bill purchasers for "below-the-line" transportation costs. The applicable code is mandatory if the actual method of transportation is different than that identified by the delivery term code.

Transportation Cost Lookup Table (TCLT). A table containing estimated actual transportation costs for specifically identified items normally shipped in the Defense Transportation System (DTS) when costs using standard transportation percentages are significantly different from actual charges.

Transportation Surcharge. The cost to ship material to purchasers.

Trust Fund. An account established for receipts that are held in trust for use in carrying out specific purposes and programs in accordance with an agreement or statute. A separate trust fund was established for FMS. The FMS Trust Fund is "Advances for Foreign Military Sales, Executive" (97-11X8242). Each purchaser has a separate account within the FMS Trust Fund.

Type of Assistance (TA) Code. A code which can represent the source of supply, the method of funding, or even the type of case.

Type of FMS Case. The categorization of FMS cases. Four types apply: defined order; blanket order; CLSSA; and training.

Type of Assistance (TA) Code. A code which can represent the source of supply, the method of funding, or even the type of case.

Unliquidated Obligation (ULO). The amount by which obligations exceed articles/services disbursements.

Unmatched Disbursement (UMD). A disbursement transaction that has been received and accepted by an accounting office, but has not been matched to the correct detail obligation. This includes transactions that have been rejected back to the paying office or central disbursement clearing organization by an accounting office.

Wide Area Work Flow (WAWF). WAWF is a paperless application to eliminate paper from the receipt/acceptance and invoice/payment process of the DoD contracting life cycle. WAWF will provide government contractors and authorized DoD personnel the ability to generate, capture, and process payment related documentation via interactive web based applications. Besides supporting the paperless initiative, WAWF provides global accessibility, accuracy of documents, and secure and auditable transactions.