Mandatory for LOAs that utilize the Section 333 authority.
Mandatory for any Modifications and Amendments if not included on the basic case.
10 USC 333(g)(2)(A) provides Cross Fiscal Year (CFY) authority.
CFY allows the period(s) of performance for Section 333 programs that begin in the fiscal year in which funds are available to continue until the end of the second fiscal year thereafter.
In order for a program* to qualify for the use of CFY, the program's planned period(s) of performance may not exceed the time period authorized by CFY. The period of performance begins when the program incurs its first financial obligation. If the period of performance of any line on any case (or any Direct Funds equivalent) associated with the program exceeds that which is authorized by CFY, then all case lines in all cases (and direct funds equivalent) associated with the program must revert back to standard laws and policies governing federal appropriations.
Only funds legally obligated on contract, project order, travel order, or by the Defense Working Capital Fund (DWCF) before the appropriation expires are eligible for CFY authority under 10 USC 333(g)(2)(A)**.
10 USC 333(g)(2)(B) provides Full Operational Capability (FOC) authority.
For a program to qualify for FOC, the program must first meet the requirements of CFY authority. Then, the U.S. Government must receive all equipment requiring follow-on support and/or services to ensure the foreign partner achieves full operational capability for such equipment before the end of the fiscal year after the fiscal year in which the program incurs the first financial obligation. If all such equipment is delivered to the U.S. Government during this time, the U.S. Government may provide the foreign partner with defense articles, training (including Human Rights training), defense services (i.e. field service representatives contractor logistical support), supplies, and small-scale military construction (subject to $1,500,000 limit) associated with the previously-delivered equipment. These FOC activities may begin in the fiscal year when the equipment is delivered to the partner nation, and may continue until the end of the second fiscal year thereafter.
If the U.S. Government does not receive all equipment requiring follow-on support and/or services before the end of the next fiscal year after the first obligation, the program does not qualify for FOC and must revert to the period of performance authorized under CFY authority. The U.S. Government will make every effort to deliver the equipment to the partner nation within 120 days after acceptance of the items by the U.S. Government.
Note that FOC authority is not available to extend the period of performance for training-only programs, and that the Economy Act limitations outlined in footnote 2 below also apply to the use of FOC authority.
*A Section 333 program is defined as the provision of a particular capability to a specific country (or countries) within a tranche of a Congressional Notification. Defense Security Cooperation Agency (DSCA), Building Partner Capacity (BPC), Capability Development Division (CDD) oversees the development and execution of Section 333 programs. The scope of a Section 333 program is dictated by the notification to Congress. A Section 333 program may be executed by multiple Implementing Agencies and recipients of Direct Funds, with multiple LOAs and direct funds transfers, all of which will share a common program start date based on when the program incurs its first financial obligation.
**DSCA transfers funds to Implementing Agencies and Direct Funds Recipients to execute Section 333 programs under the authority of the Economy Act (31 USC 1535). The Economy Act requires the supporting organization to deobligate and return to the ordering agency any funds for services (to include training services) not provided or requirements not legally obligated on contract, project order, travel order, or by the Defense Working Capital Fund (DWCF) before the appropriation expires.
Support services provided by U.S. Government personnel, except when operating under a project order or DWCF, are considered obligated only when the support service is actually provided, not when funds are provided.
Travel orders for a foreign partner or U.S. Government personnel not operating under a project order or DWCF cannot be issued after the appropriation expires.
Implementing Agencies and Direct Funds Recipients must return deobligated and unused funds to DSCA no later than the end of the first quarter following the expiration of the funds' period of availability (POA).