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Table C9.T4.

 

Charge Description How Priced Applied by - for billing References

Acceleration Rates

To recover full cost of providing USG services.

Included in the line item value on the LOA.

Specific to (Building Partnership Capacity (BPC) cases: Do not charge unfunded civilian retirement.

Implementing Agency

FMS: DoD FMR, Volume 15, Chapter 7, paragraph 0702

BPC: DoD FMR, Volume 11A, Chapter 1, Addendum 1

Attrition / Liability Statement

To recover the cost of training/ operational equipment used as training aids lost as the result of student negligence.

Include as a percentage as part of tuition Rate A:

  • 1% for flying and non-flying training courses (effective FY 96 - FY 16
  • 0% effective beginning with FY17 tuition rates

Include the liability statement for:

  • Tuition Rates B, C, and D
  • Dedicated training programs unless a negotiated percentage is specifically stated in program documentation
  • Non-tuition based training that includes training/ operational equipment used as training aids

Implementing Agency

DoD FMR, Volume 15, Chapter 3, 030408.D., and Chapter 7, 071002.D.3.a.

FMS Administrative Surcharge

Cost of administering FMS and FMS-like programs

Included as a percentage of applicable line items as a below-the-line charge on the LOA.

  • 3.5% for both standard and nonstandard articles/services (for LOA lines accepted on or after 1 November 2012).
  • 3.8% for both standard and nonstandard articles/services (for LOA lines accepted on or after August 1, 2006 and before 1 November 2012).
  • 2.5% for standard articles/ services (for LOA lines implemented on or after June 1, 1999 and before August 1, 2006).
  • 3% for standard articles/ services (for LOA lines implemented on or after October 1, 1977 and before June 1, 1999.)
  • For cases signed prior to October 1, 1977, the FMS Administrative Surcharge was 2%.
  • 5% for non-standard articles/ services (for LOA lines for non-standard items implemented before August 1, 2006).
  • 5% for Foreign Military Sales Order (FMSO) I cases.

The FMS Administrative Surcharge does not apply to Program Management Lines (PMLs). Per the AECA Section 21(g), the FMS Administrative Surcharge may be excluded from non-dedicated training lines applicable to reciprocal pricing agreement countries (refer to Section C10.T13. and Section C10.T14.). However, if excluded, the MILDEP is responsible for the cost.

The FMS Administrative Surcharge does not apply to Small Case Management Lines (SCMLs).

See Section C9.4.7.2. for information on minimum collection requirements for FMS Administrative Surcharge costs.

Does not apply to EDA Grant Lines.

DFAS Indianapolis

AECA, sections 21(e)(1)(A) (22 U.S.C. 2761(e)(1)(A)) and 43(b) (22 U.S.C. 2792(b))

DoD FMR, Volume 15, Chapter 7, paragraph 0706

BPC: The cost of administering these cases is no different than FMS cases.

Contract Administration Services (CAS) Surcharge

CAS is comprised of three basic elements:

  1. quality assurance and inspection;
  2. contract management; and
  3. contract audit.

For cases implemented on or after October 1, 2002 that have contracts administered overseas, an additional element (OCONUS CAS) applies.

For United States Army Corps of Engineers (USACE) contracts, quality assurance and inspections and other contract administrative services costs are included in its supervision and administration costs charged to the case line, so CAS(1) and CAS(2) do not apply to USACE.

Included in value of procurement line items (Source of Supply (SOS) of "P" or "X") on the LOA. A surcharge applies to each element.

May be waived if reciprocal agreements exist.

For cases implemented before October 1, 2002, a surcharge of .5% applies to each element for a maximum of 1.5% if all elements apply to a given FMS case.

For cases implemented on or after October 1, 2002, a surcharge of .65% applies to contract administration/ management, .65% to quality assurance and inspection, .20% to contract audits, for a total of 1.5%.

For contracts administered overseas an additional .20% (OCONUS CAS) applies to the entire case.

For USACE cases implemented before October 1, 2002, a surcharge of .5% for contract audit is applied.

For USACE cases implemented on or after October 1, 2002, a surcharge of .2% for contract audit is applied.

The .2% OCONUS CAS does not apply to USACE contracts administered overseas.

For cases implemented on or after December 1, 2014, a surcharge of .50% applies to contract administration/ management, .50% to quality assurance and inspection, .20% to contract audits, for a total of 1.2%.

For contracts administered overseas an additional .20% (OCONUS CAS) applies to the entire case.

DFAS Indianapolis

AECA, sections 21(e), 21(h), 43(b) (22 U.S.C. 2761(e), 2761(h), and 22 U.S.C. 2792)

DoD FMR, Volume 15, Chapter 7, paragraph 070405

BPC: Applicable CAS charges are no different than FMS cases.

Logistics Support Charge (LSC)

Cost of logistics support.

Included in the value of logistics line items on the LOA (excludes Working Capital Fund items). 3.1%

The specific Military Articles and Services List (MASLs)/generic codes where LSC applies is maintained by the DSCA (Business Operations Directorate) in the DSCA 1200 System.

For any items delivery reported on or after April 1, 1987 and prior to October 1, 2007 that qualify.

Any deliveries reported on or after October 1, 2007 will not be assessed the LSC.

DFAS

DoD FMR, Volume 15, Chapter 7, paragraph 0720

BPC: Same as FMS.

Nonrecurring Cost (NC)

Pro rata recovery of Research, Development, Test, and Evaluation (RDT&E) and Production startup costs.

Included in value of applicable Major Defense Equipment (MDE) line items on the LOA. (The requirement to recover NC on non-MDE was eliminated on June 26, 1992.)

Estimated value included in value of MDE line items when the NC charge applies but is not yet established or approved.

May be waived by DSCA under specific circumstances.

Per the AECA and Foreign Assistance Act (FAA), LOAs fully financed with Military Assistance Program (MAP) Merger or non-repayable FMF are not assessed an NC charge.

NC charges apply only to Government-to-Government sales (to include Government-to-International Organization). (The requirement to recover NC on direct commercial sales was eliminated on October 7, 1992.)

May include special recoupment - costs incurred under FMS, paid by a foreign customer to develop a special feature or unique or joint requirement.

Implementing Agency

AECA, section 21(e)(1)(B) (22 U.S.C. 2761(e)(1)(B))

DoD FMR, Volume 15, Chapter 7, paragraph 070305

DoD Directive 2140.2

BPC: NC does not apply. DoD FMR, Volume 11A, Chapter 1, Addendum 1

Packing, Crating and Handling (PC&H)

Costs incurred for labor, materiel, or services in preparing non-Defense Working Capital Fund (DWCF) materiel for shipment from the storage or distribution point.

Included as a percentage of applicable line items as a below-the-line charge on the LOA.

For blanket order lines - 3.5%.

For defined order lines - 3.5% for the first $50,000 in unit cost and 1% for the portion of the unit cost that exceeds $50,000.

When provided as a unique service, these charges may be included as a separate line on the LOA.

DFAS Indianapolis

DoD FMR, Volume 15, Chapter 7, paragraph 070502

BPC: DoD FMR, Volume 11A, Chapter 1, Addendum 1

Prepositioning

Supply distribution costs incurred by locations outside the United States in anticipation of support to other authorized purchasers.

Included as a separate line item on the LOA.

These costs are applicable when shipments are made from overseas storage and distribution points.

No positioning costs shall be assessed on “long supply” stocks.

Implementing Agency

 

Royalty

Incremental payments for the use of intellectual property.

If required to be collected for intellectual property that is subject to contractor proprietary rights restrictions, include in the pricing of the item.

Prior to January 1, 1998, charges for Technical Data Package (TDP) usage were included as a separate line item on the LOA.

Discontinued for cases implemented on or after January 1, 1998 for U.S.-owned TDPs that are not subject to contractor proprietary rights restrictions.

BPC: Apply only to the extent that the cost is included in the contract.

Implementing Agency

DoD FMR, Volume 15, Chapter 7, Table 701-1

BPC: DoD FMR, Volume 11A, Chapter 1, Addendum 1

Staging

Costs for consolidating or prepositioning materiel in U.S. facilities within CONUS.

Included as an estimated actual cost above or below the line on the LOA. It is below the line if the appropriate DTC is used. It is above the line if a staging MASL is used.

DFAS Indianapolis

 

Storage (FMSO)

Cost of storing on-hand inventory.

Included in the line item value on the LOA.

1.5% annually on value of stored assets, unless a separate fee is negotiated with the storage facility.

.125% monthly on value of stored assets, unless a separate fee is negotiated with the storage facility.

Implementing Agency

DoD FMR, Volume 15, Chapter 7, paragraph 070704

BPC: Does not apply

Storage (Other)

Cost of storing items.

Included above the line on the LOA.

1.5% annually on value of stored assets, unless a separate fee is negotiated with the storage facility.

.125% monthly on value of stored assets, unless a separate fee is negotiated with the storage facility.

Implementing Agency

DoD FMR, Volume 15, Chapter 7, paragraph 070801

BPC: DoD FMR, Volume 11A, Chapter 1, Addendum 1

Transportation

Cost to the United States of transporting purchaser materiel using the Defense Transportation System (DTS) or a Bill of Lading. (Includes costs for labor, materiel, or services at ports of embarkation or debarkation.)

Included as a percentage of applicable line items as a below-the-line charge on the LOA.

See Chapter 5 for a complete list of Delivery Term Codes (DTCs).

For blanket order lines – the DTC %.

For defined order lines – the DTC % for the first $10,000 in unit cost and 25% of the DTC % for the portion of the unit cost that exceeds $10,000.

See Table C9.T4a. for DTC percentages.

DFAS-Indianapolis

DoD FMR, Volume 15, Chapter 7, paragraph 070503

BPC: DoD FMR, Volume 11A, Chapter 1, Addendum 1

A Transportation Bill Code (TBC), if used, overrides the DTC for both blanket and defined order line entries.

Estimated/actual pricing for transportation may be used if known

Implementing Agency

 

Unanticipated services related to detention and demurrage.

When provided as a unique service, this charge may be included as a separate line on the LOA.

Implementing Agency

 

Actual charges are applied to the applicable line. The case must be modified to reflect the additional costs to the line.

 

See Section C7.12.