This chapter is for Building Partner Capacity (BPC) Programs that use BPC Letters of Offer and Acceptance (LOAs) (also known as BPC cases) and training grants developed in the Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC) for Title 10 BPC appropriations beginning with Fiscal Year (FY) 2025, and for FY 2024 Counter-Islamic State of Iraq and Syria (ISIS) Train and Equip Fund (CTEF). Refer to C15 – Legacy Building Partner Capacity Letter of Offer and Acceptance Development, Implementation, and Execution Process Using the Defense Security Assistance Management System Case Module for guidance on previous Title 10 BPC programs and all Non-DoD BPC programs using the DSAMS Case Module (this chapter is not applicable to any BPC cases funded under an Interagency Agreement pursuant to section 632(b) of the Foreign Assistance Act (i.e., Peacekeeping Operations (PKO), etc.)). Programs that are subject to the BPC LOA process for program execution will be identified as such in Appendix 8.

C15.1.1. Definition of Building Partner Capacity. Building Partner Capacity (BPC) programs are USG security cooperation (SC) projects, programs, activities, and engagements, funded by USG appropriations for the purpose of building partner security force capability. Program authorizations originate in Title 10 of the U.S. Code or in annual National Defense Authorization legislation and are funded under annual appropriations legislation. The SC community designs, coordinates, and centrally manages each BPC Program to achieve a certain set of objectives, in accordance with its statutory authorization. See Chapter 11 for a listing and description of SC and security assistance (SA) BPC authorities executed and administered by DSCA and for the relationship of the SC program, SC project or program, and activity overview and relationships.

C15.1.1.1. Building Partner Capacity Program Execution Methods. There are two different methods to execute a BPC effort: a BPC case and a BPC training grant. A single BPC program that uses BPC Letters of Offer and Acceptance (LOAs) (also known as BPC cases) and training grants may require the development and implementation of multiple BPC cases and training grants executed by multiple Implementing Agencies (IAs). The SC community follows the process outlined in this chapter for executing and managing BPC programs that require a BPC case and/or training grant.

C15.1.2. Assessment, Monitoring, and Evaluation During the Title 10 Building Partner Program Lifecycle. BPC programs authorized under Title 10 must comply with Assessment, Monitoring, & Evaluation (AM&E) policies and guidance. Assessments must be conducted prior to BPC case and training grant development and implementation, monitored during execution, and evaluated after BPC case or training grant closure. AM&E is conducted at the Initiative, Program, and Authority levels. DSCA-managed BPC equipping programs must be provided pursuant to a BPC case, absent a waiver approved by the Director, DSCA, for the following:

C15.1.3. Department of Defense Building Partner Capacity Cases. The DoD utilizes BPC cases to provide defense articles, services, and training to partners, and to facilitate the DoD’s ability to meet other statutory requirements such as reporting, AM&E, and audit readiness. Unlike Foreign Military Sales (FMS) cases which are funded with partner national funds or Foreign Military Financing (FMF) funds and signed by the partner, BPC cases are only funded using U.S. appropriated funds unless otherwise authorized by U.S. law. A BPC case is not signed by the Benefitting Partner. As a result, BPC case terms and case notes do not provide a means to obtain a legally binding commitment from the Benefitting Partner. DoD does not utilize BPC cases to execute training-only programs as eligible in Section C15.3.2.

C15.1.3.1. DSCA-managed BPC equipping programs must be provided pursuant to a BPC case, absent a waiver by the Director, DSCA, for the following:

C15.1.4. Appropriation Lifecycle. BPC cases and training grants are funded through appropriated funds and are subject to the appropriation lifecycle. Typically, an appropriation has three distinct phases of availability: current or unexpired, expired, and cancelled. (See DoD Financial Management Regulation (DoD FMR), DoD 7000.14-R, Volume 3, Chapter 13, Paragraph 3.2.1.2. for additional details.)

C15.1.4.1. Current or Unexpired Funds. The period of availability (POA) of funds is the period of time in which budget authority is available to incur new obligations (see DoD FMR, Volume 3 Chapter 13, Paragraph 3.2.1.1.) During the period of availability (see DoD FMR, Volume 3 Chapter 13, Paragraph 3.2.1.2.1.), IAs and Program Offices have the authority to utilize current funds for new obligations, obligation adjustments, expenditures, and outlays. BPC authorities typically receive Operations and Maintenance (O&M) appropriations with a POA of one or two fiscal years (FYs). At the end of the specific FY, which is September 30th, after an appropriation expires, absent an explicit ad hoc approval to use prior years funds, an IA is not permitted to create new obligations with expired funds.

C15.1.4.2. Expired Funds. Expired funds retain their FY identity for five years after the appropriation’s POA ends (see DoD FMR, Volume 3 Chapter 13, Paragraph 3.2.1.2.2.). IAs must only utilize funds for obligation adjustments, expenditures, and outlays during the expired period. The DSCA Country Portfolio Director (CPD), Regional Portfolio Director (RPD), and Country Finance Director (CFD) in coordination with the IA will work to identify and return any unused or residual funds prior to the end of the FY of which funds cancel.

C15.1.4.3. Cancelled Funds. The appropriation is considered cancelled on September 30th of the fifth FY after the POA ends (see DoD FMR, Volume 3 Chapter 13, Paragraph 3.2.1.2.3.). Funds are no longer available for any purpose. Program Offices must seek appropriated funds currently available for the same purpose if an obligation adjustment or payment is required. See Section C15.6.1.1. Prior Year Adjustments for more information.

C15.1.5. Overview of the Building Partner Capacity Case and Training Grant Processes. BPC case and training grant development and execution is organized into six phases. The IAs manage appropriated funds in accordance with the appropriation lifecycle and ensure communication with the Benefitting Partner, which must occur in each phase.

C15.1.5.1. Planning and Requirements Definition. The Requesting Authority (RA) generates the plan and documents the associated performance requirements necessary to build the desired capability for the Benefitting Partner to support U.S. objectives. (See Section C15.2. for more details).

C15.1.5.2. Building Partner Capacity Case and Training Grant Development. See Section C15.3. for details on BPC case and training grant development.

C15.1.5.3. Building Partner Capacity Case and Training Grant Implementation. Defense Finance and Accounting Service Security Cooperation Accounting (DFAS-SCA) does not have oversight of BPC case or training grant funds. Upon implementation, funds are not transferred into the FMS trust fund or accounted for in the Defense Integrated Finance System (DIFS) (see Section C15.4. for more details).

C15.1.5.4. Building Partner Capacity Case and Training Grant Execution. See Section C15.5. for more details on BPC case and training grant execution.

C15.1.5.5. Building Partner Capacity Case and Training Grant Amendments. IAs make all administrative updates and scope changes to the BPC case or training grant via amendment. BPC documents do not require Benefitting Partner acceptance or signature, therefore these changes will be accomplished via a BPC case or training grant amendment. Modifications may not be used for BPC documents as there is no meaningful difference between a modification and amendment for documents funded with USG appropriations (see Section C15.6. for more details).

C15.1.5.6. Building Partner Capacity and Training Grant Case Closure. Closure begins once the BPC case or training grant is Supply/Services Complete (SSC). See Section AP7.C2.13.1.1. and Section AP7.C2.13.1.2. for SSC criteria. The IA expends BPC program funds no later than July 31st of the funds’ cancelling FY or other deadline specified in funding documents to complete closure before appropriated funds cancel. (See Section C15.7. for more details.)

C15.1.6. Responsibilities. General roles and responsibilities that pertain to the planning, development, execution, and management of BPC programs are summarized below.

C15.1.6.1. Funding Authority. The Funding Authority is the organization responsible for administering BPC program funding and exercising management oversight of program requirements. See Section C11.2.4. and Section C11.3. for details on Legislative Authority and Funding Sources. DSCA, a Military Department (MILDEP), or the Office of the Under Secretary of Defense for Policy (OUSD(P)) serves as the Funding Authority upon receipt of funding through appropriation. Non-DoD agencies serve as the Funding Authority for appropriations they provide to DSCA under the Economy Act or Section 632(b) of the Foreign Assistance Act (FAA), as amended. See Appendix 8 program-specific entries for the organization that serves the Funding Authority role.

C15.1.6.2. Requesting Authority. The RA is the organization responsible for planning and monitoring program execution of regional or partner capacity building activities. The geographic Combatant Commands (CCMDs) serve as RAs for Title 10 authorities. The RA communicates detailed requirements to DSCA and the IA as part of pre-planning document for a BPC program (e.g. Memorandum of Request (MOR), Training and Equipment List (TEL), etc.) planning, and receives IA feedback in order to complete the MOR, TEL, etc. The RA must ensure the IA has the necessary information for BPC case or training grant development, and the RA must approve any proposed substitutions or program adjustments due to cost overages if a requested article cannot be procured to enable timely obligation of expiring funds.

C15.1.6.3. Department of State, Bureau of Political and Military Affairs. Department of State, Bureau of Political and Military Affairs (State (PM)) negotiates and concludes Section 505 agreements with Benefitting Partners in receipt of U.S. grant assistance. Section 505 of the FAA requires that any partner receiving assistance under the FAA, as amended, sign such an agreement. This requirement applies to the provision of assistance under some Title 10 authorities as a matter of law, (e.g., assistance provided under 10 U.S.C. 331 or 10 U.S.C. 333) and others as a matter of policy. State (PM) reviews all BPC cases and training grants to ensure that BPC programs align with foreign policy objectives and approves each BPC case or training grant on the daily State List Report provided by DSCA (Office of International Operations, Global Execution and Development Directorate, Case Writing and Development Division (IOPS/GEX/CWD)).

C15.1.6.4. Under Secretary of Defense for Policy. In accordance with 10 U.S.C. 382(a) the Secretary of Defense (SECDEF) assigned the Under Secretary of Defense for Policy (USD(P)) the responsibility to provide oversight of the strategic policy and guidance and overall resource allocation for SC programs and activities funded by O&M, defense-wide appropriated funds allocated to DSCA. USD(P) generates guidance and directs the prioritization of SC resources through the Significant Security Cooperation Initiative (SSCI)-centric planning process. USD(P) tasks the geographic CCMDs with assistance from DSCA, the Joint Staff (JS), and relevant OUSD(P) offices to develop and submit SSCI objectives, Initiative Design Documents (IDDs), Performance Monitoring Plan (PMP), and five-year plans for demand signal for resources and forces required to achieve DoD objectives. OUSD(P), through the Security Cooperation Policy Executive Council (SCOPEC), reviews, prioritizes, and generates recommended resource allocation courses of action for SC activities contained in the SSCIs to USD(P). USD(P) resource allocation responsibilities also include determinations for redirection and diversion of Title 10 assistance. See Section C15.6.2. for additional details on redirection and diversion.

C15.1.6.4.1. Defense Security Cooperation Agency. DSCA supports DoD components on the appropriate use, integration, and execution of SC programs to develop comprehensive, full-spectrum, and sustainable approaches building allied or partner defense and security capabilities and capacity, and to achieve other USG defense policy goals. DSCA provides guidance to DoD components, Security Cooperation Organizations (SCOs), and IAs on the development, administration, and execution of BPC program activities. DSCA guidance includes supporting the generation of MOR, TEL, etc. documents, defining requirements with IAs, feasibility, proposal development, BPC case and training grant development and closure guidance. The MILDEP IAs maintain primary responsibility for BPC case and training grant preparation and execution, however, in specific circumstances, DSCA acts as the IA in the case of direct-funded programs. DSCA oversees program-level logistics planning, performs program and financial management for BPC programs, develops and implements program policies, monitors obligations of funds, deliveries, and execution, and otherwise assists RAs in achieving BPC program objectives. DSCA is responsible for notifications and other reporting to Congress in respect to certain authorities. DSCA maintains responsibility for the FMS and BPC data infrastructure and Information Technology (IT) systems of record. See Appendix 8 for BPC program-specific guidance and restrictions.

C15.1.6.5. Office of the Under Secretary of Defense (Comptroller). The Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) is responsible for establishing and updating guidance on the use of DoD funds. For select authorities (See Appendix 8) OUSD(C) reviews and submits Congressional Notification (CN) packages to the Office of the Under Secretary of Defense for Legislative Affairs (OUSD(LA)) to forward to appropriate Congressional committees. OUSD(C) authorizes the release of DoD funds for BPC programs and reports to Congress on the use of funds.

C15.1.6.6. Geographic Combatant Commands. Each geographic CCMD conducts multi-year planning of SC activities and strategies for the regions and partners within its area of responsibility, documented in the security cooperation annex (Annex C) and associated country-specific security cooperation (CSCS) appendices of the Combatant Command Campaign Plan. Each of these documents supports geographic CCMD goals and objectives for regional security and is coordinated with the U.S. Missions’ plans for SA. Geographic CCMDs are the RA for Title 10 resources controlled by the USD(P). Geographic CCMDs generate a demand signal for Title 10 resources through generation of SSCIs, which include IDDs, Multi-Year Plans, and objective trees, PMPs as applicable to 10 U.S.C. 333, 10 U.S.C. 332, Indo-Pacific Maritime Security Initiative (MSI) and Women, Peace, and Security (WPS) authorities. State is the RA for Title 22 BPC and provides solicitations to the SCOs each year for the following FY. The SCOs generate a demand signal for Title 22 BPC resources through generation of proposals to State and inform the geographic CCMD SC planners. The geographic CCMD also has overall responsibility for prioritizing, assessing, coordinating, monitoring, and evaluating the success of SC activities in-theater. The geographic CCMD is responsible for semi-annual reviews of Security Cooperation Information Portal (SCIP)/Security Cooperation Management Suite (SCMS)/Shipment Tracking Reports to ensure that the materiel transfer documents are uploaded in SCIP/SCMS within 30 days of title transfer (see Table C15.T1. - Row #10). If the documents are not uploaded, the CCMD informs DSCA (Office of International Operations, Global Capability Development Directorate (IOPS/GCD)).

C15.1.6.6.1. Security Cooperation Organization. The SCO within each Benefitting Partner supports the RA through each phase of the BPC process from planning to the transfer of materiel or provision of services and interacts closely with Benefitting Partner security forces. The SCO is entrusted with communicating BPC program objectives and requirements to Benefitting Partner representatives and soliciting information from the Benefitting Partner. The SCO is ultimately responsible for tracking and reporting all BPC-provided assistance back to DSCA. Table C15.T1. provides a summary listing of SCO responsibilities unique to all BPC programs.

C15.1.6.7. The Implementing Agency. The IA has overall responsibility for BPC case and training grant development, timely funds obligation, execution, and closure. IAs must communicate frequently with stakeholders such as the DSCA CPD, the DSCA RPD, the DSCA CFD, the RA, the Procuring Office, the United States Transportation Command (USTRANSCOM), and the SCO to facilitate information sharing of program plans, status, and changes. The IA collaborates closely with the RA during planning and verifies that the MOR, TEL, etc. is complete before initiating a BPC case or training grant in Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC) (see Table C15.T2.). The IA must be aware of the nature and limitations of the appropriated funds being used to ensure its activities meet obligation, expiration, and cancellation timelines.

C15.1.6.8. United States Transportation Command. The IA has overall responsibility for ensuring materiel is transported and delivered to the SCO. However, USTRANSCOM manages DTS, which moves materiel from the point of origin to the final destination within the Benefitting Partner. If materiel is delivered to a central Port of Debarkation (POD) in-theater, USTRANSCOM may coordinate with the geographic CCMD to arrange for materiel to be moved to the destination depending on the delivery term code (DTC) applied to the BPC case. The SCO may need to contact the POD or USTRANSCOM Deployment Distribution Operations Center, (commercial phone (618) 220-7700), to determine the shipping status if the articles are not in a tracking system such as SCIP.

C15.2.1. General. The Requesting Authority (RA) is responsible for planning and requirements definition of Building Partner Capacity (BPC) efforts to support specific USG objectives. The Implementing Agency (IA) may conduct a feasibility assessment to determine the most appropriate solution. See Section C15.2.6.4. "Feasibility Assessment" for verification requirements to determine if a memorandum of request (MOR), Training and Equipment List (TEL), etc. is actionable and if desired materiel and training can be provided in accordance with the restrictions of the authorizing legislation. The security cooperation (SC) community reviews, prioritizes, approves, and resources the plans for development and execution. This phase often begins prior to the appropriation of funds but may also continue during the current period of availability (POA) of the appropriation. The RA completes this phase by submitting an actionable MOR, TEL, etc. to DSCA as soon as possible so that the program remains on the appropriate development timeline. The BPC MOR, TEL, etc. is analogous to the Foreign Military Sales (FMS) Letter of Request (LOR), which is submitted by the purchaser.

C15.2.1.1. If a BPC Letter of Offer and Acceptance (LOA) (also known as a BPC case) or training grant benefits more than one Benefitting Partner, the RA must identify how to allocate Services (e.g., by number of students, percentage of service by participating nation, etc.) to each Benefitting Partner in order for there to be only one Benefitting partner on each line of the BPC case or training grant, with the exception of training funding lines for multiple Benefitting Partners (low dollar lines will be established to track training in this instance).

C15.2.2. Appropriations.

C15.2.2.1. Department of Defense Appropriations. Congress appropriates funding to DoD for specific BPC authorities through annual DoD Appropriations. However, not all BPC authorities receive appropriated funds each year. Some BPC authorities may also be funded by DoD appropriations and executed by other USG agencies. DoD will use the Economy Act or 10 U.S.C. 2571 to seek reimbursable support from external organizations tasked with executing the program. The executing agency or performing activity receives the appropriated funds or obligation authority, obligates, and expends the funds to procure the desired articles and services.

C15.2.2.2. Other United States Government Agency Appropriations. Refer to Chapter 15-Legacy (found as a subset under the Chapter 15 section).

C15.2.3. End Use Assurances. BPC assistance cannot be provided unless the partner has concluded a binding bi-lateral agreement with the USG pursuant to Section 505 of the Foreign Assistance Act (FAA) (Section 505 Agreement). In addition to the requirement for a 505 agreement, the International Traffic in Arms Regulations (ITAR), 22 Code of Federal Regulations (CFR) 126.4(a)(4), requires the USG to obtain appropriate end-use and retransfer assurances from the partner before transferring a defense article or defense service for a DoD SC activity. If proposed BPC assistance is for a Benefitting Partner who lacks a Section 505 agreement and the relevant BPC transfer authority does not legally require a Section 505 agreement, the USG must still obtain appropriate end-use assurances from the partner, documented through a diplomatic note, a written commitment from a high-level official, etc., before transferring a defense article or defense service for a DoD security cooperation activity that address proper use, security, and retransfer restrictions, etc. The existence of a Section 505 agreement is not sufficient to satisfy the requirement to obtain partner end use assurances if the scope of the concluded 505 agreement is not broad enough to capture the proposed transfer pursuant to the applicable BPC assistance authority. Physical security requirements for transferred sensitive defense articles are not included in the terms of a BPC case because the Benefitting Partner is not a signatory to the BPC case.

C15.2.3.1. Principles of Use of Military Unmanned Aerial Systems. DSCA (Office of International Operations, Global Execution Directorate, End Use Monitoring Division (IOPS/GEX/EUM)) is the DSCA lead for tracking the development and coordination of Unmanned Aerial Systems (UAS) Principles of Use Agreement for the particular transfer.

C15.2.4. Building Partner Capacity Security Cooperation Customer Codes. BPC program implementation and appropriated funds execution must comply with authorizing legislation. Due to the shortage of Security Cooperation Customer Codes (SCCCs), DSCA determined that codes need to be used for more than one yearly consolidated or supplemental budget appropriation under a specific program authority (10 U.S.C. 333, Ukraine Security Assistance Initiative (USAI), etc.). Therefore, DSCA assigns a unique two-digit alphanumeric or alpha-alpha semi-permanent SCCC, also known as a program code, to each BPC Program Authority applicable appropriation to accurately track funds in support of each specific authorization. These codes will be used until case designators are no longer available, therefore making them semi-permanent and not tied to a single appropriation authority, but still identifying the overall program (e.g., 10 U.S.C. 333). When there are no more available case designators, a new semi-permanent code will be established for the same program authority. Table C11.T2. lists each SC and Department of State (State) security assistance (SA) BPC Program administered by DSCA. The Authority and Program Code Listings are provided in Section 8 of each program in Appendix 8, and a summary table is provided in Table AP8.T2. Security Assistance and Security Cooperation Programs Code Listing. Each BPC Program listed in Table AP8.T2. contains a Fund Source column that provides the source of funding associated with each code and indicates whether the funds are from a DoD or non-DoD agency, and whether the funds were provided via an Interagency Agreement (IAA) pursuant to the FAA, Section 632(b). The Appropriation Authority, Expiration Date, and Cancelling fiscal year (FY) columns indicate the FY that the appropriation was signed into law and its timeline.

C15.2.5. Planning and Coordination. Most BPC case and training grant planning occur in conjunction with annual geographic Combatant Command (CCMD) SC planning. The geographic CCMD’s J5 organizes this annual SC planning in a series of regional and partner-focused working groups, which is documented in the Theater Security Cooperation Plan (TSCP). Crises, targeted appropriations, and other events may make it necessary for the RA to begin BPC case and training grant planning outside the annual geographic CCMD’s planning process. Some authorities, such as Section 333 and Section 332, have their own annual coordination cycles. The RA must coordinate with the geographic CCMD, the Security Cooperation Organization (SCO), DSCA, and other key USG stakeholders as early in the process as possible. The geographic CCMD should include the Military Departments (MILDEPs) and regional experts within the Office of the Secretary of Defense (OSD) and State to participate in SC planning.

C15.2.5.1. Title 10 Significant Security Cooperation Initiative Centric Planning. The Significant Security Cooperation Initiative (SSCI) planning process serves as the basis of generating requirements for a Title 10 BPC program. An SSCI comprises multiple SC activities planned over multiple years in support of a specific SC objective and consists of Initiative Design Documents (IDDs), with Performance Monitoring Plans (PMPs) as a requirement. A PMP outlines objective statements, monitoring indicators, and baseline data for SSCI objectives, long-term and short-term outcomes, outputs, and activities. The PMP includes an Objective Tree, a logic model that ties activities to specific objectives at the SSCI, National Defense Strategy (NDS) and Theater Campaign Plan (TCP) levels. Each SSCI objective requires the RA to generate an IDD that identifies the programs, projects, and activities over a three-to-five-year period in sufficient detail to ensure that IAs have the information needed to source appropriate defense articles and services to enable the achievement of the SSCI objective. This phase of a BPC requirement concludes with the RA’s submittal of a detailed, coordinated MOR, TEL, etc. that is executable by the IA within funding and timeline limitations. The RA should complete the request package with support from the SCO, geographic CCMD, DSCA, the Office of the Under Secretary of Defense for Policy (OUSD(P)) and other stakeholders, and with technical advice from the IA if required.

C15.2.5.2. Benefitting Partner Involvement. SCOs should engage with the Benefitting Partner representatives, as appropriate, to support U.S. objectives. The SCO must clearly communicate during any engagement with the Benefitting Partner that planning discussions do not in any way imply or guarantee USG assistance. Proposed U.S. assistance for a partner is not guaranteed. Prior to title transfer, the USG may opt to divert proposed assistance to a different Benefitting Partner. See Section C15.5.9.9.

C15.2.5.2.1. The SCO may engage with the Benefitting Partner to gain insights on the current conditions within the Benefitting Partner to develop an individual BPC program’s objectives and requirements. The Benefitting Partner’s representatives can provide the SCO with their perspective on the threat, details of existing capabilities, current capacity, inventory, logistics and lifecycle management chain, concept of operations, and any additional security requirements that would support identification and prioritization of the BPC program requirements. The Benefitting Partner’s representatives must confirm budget availability and the ability to support and sustain any BPC provided articles and services under consideration.

C15.2.5.2.2. The SCO works with the Benefitting Partner to navigate the Benefitting Partner Customs processing and security, and to arrange for final delivery and title transfer once defense articles, training, and services are procured or available to be provided.

C15.2.5.3. Protected Information. SCOs must not share internal USG correspondence or information about internal USG discussions regarding BPC requirements and pre-decisional information with Benefitting Partner representatives.

C15.2.5.4. Approved Sample Language to the Benefitting Partner for Security Cooperation Organization use for Proposed United States Government Assistance. Below is the approved language that SCOs can use to discuss potential grant assistance directly with the Benefitting Partner:

C15.2.6. Identification of Desired Capabilities. The RA defines the Benefitting Partner’s military roles required to meet security objectives under existing and emerging security environments. This assessment should include a gap analysis of doctrine, organization, training, materiel, leadership, personnel, facilities, and policy (DOTMLPF-P) within the Benefitting Partner for each capability considered to prevent an overly narrow focus on equipment or training solutions. The assessment, captured in the geographic CCMD’s Country Campaign Plan, should also consider the Benefitting Partner’s political will to apply the capabilities, the national legal framework that permits or circumscribes the application of the capabilities in support of the desired partner role, and the capacity of the partner’s Ministry of Defense (MoD) and other supporting institutions to sustain the capabilities. The Country Campaign Plan articulates how desired roles and capabilities relate to specific geographic CCMD and national-level strategic objectives. The U.S. Embassy includes desired partner objectives in the Integrated Country Strategy (ICS) and Mission Resource Request (MRR).

C15.2.6.1. Prioritize Requirements. The RA identifies a prioritized list of partner capacity and capability shortfalls that the Benefitting Partner is willing to address once initial planning is completed, and the Country Team within the U.S. Embassy or the American Institute in Taiwan (AIT) indicates the will to support. This prioritization helps direct resources toward the most urgent requirements, assures proper sequencing of the delivery of new capabilities, facilitates the creation of capability packages, and provides scale-ability to the overall program should only a portion of requested funds be available. The RA should coordinate the prioritization with IAs and geographic CCMD’s staff, while considering any known restrictions on the use of funds.

C15.2.6.2. Capability Package Planning. The RA translates prioritized requirements into packages of specific, actionable, and sustainable BPC program requests. USG subject matter experts may conduct site visits for complex efforts or if more definitive assessments are required. The subject matter experts consult with Benefitting Partner representatives, inspect equipment, evaluate institutional capacity, and assist the RA in capability package planning.

C15.2.6.3. Total Package Approach. The RA should apply the Total Package Approach (TPA) to the provision of defense articles and defense services for capacity building in BPC MORs, TELs, etc. The RA should consider and address follow-on support and effective sustainability during planning and also recognize that BPC programs are limited by the amount of time available to obligate appropriated funds. Adequate sustainment support may require additional spares, training, consumables, and possible contractor logistics support that exceed the BPC authority and appropriation timelines and may require a follow-on program.

C15.2.6.4. Feasibility Assessment. DSCA and the IA will conduct a feasibility assessment for MORs, TELs, etc. to verify that requirements are actionable, and the desired materiel and training can be provided in accordance with the restrictions of the authorizing legislation. The IA should use the Feasibility Checklist, when a TEL is used, early in the process. The formal feasibility assessment period is 7-14 days, during which the IAs and other implementers review the MORs, TELs, etc. to ensure they can purchase the assigned equipment, training, and services. The DSCA Country Portfolio Director (CPD) in coordination with the Regional Portfolio Director (RPD) or BPC Program Manager (PM) may by exception extend the feasibility assessment period for more complex programs. The IA proposes alternatives to the RA for articles, services, and training that cannot be provided due to availability or releasability issues. The alternatives being considered provide a similar capability that is permitted in accordance with the authorizing legislation and the POA of the funds. The RA must confirm that any proposed substitutes for equipment and services are acceptable and must revise the MOR, TEL, etc. to reflect the change. DSCA may also reassign programs or lines to another IA if the original IA identifies issues with executing a particular program. Feasibility assessments should identify any documentation needed to complete the MOR, TEL, etc. package, such as a Country Team Assessment (CTA) and the geographic CCMD’s endorsement; definition of requirements; technology security and foreign disclosure releases; accurate equipment, training, and support cost estimates; transportation plans; third-party transfer approval and waiver of non-recurring cost charges for cooperatively produced defense articles; and special contracting requirements.

C15.2.6.5. Sole Source Justification. All sole source requests require a Justification and Approval (J&A) in accordance with Federal Acquisition Regulation (FAR) and Defense FAR Supplement (DFARS) requirements for DoD and must be approved by the IA’s contracting authority per 10 U.S.C. 3204. See Figure C15.F1.

C15.2.6.5.1. The RA will provide a Statement of Urgency if an exception is requested based on unusual and compelling urgency. See 10 U.S.C. 3204(a)(2). Neither the preference of the Benefitting Partner nor the expiring nature of funds will be sufficient justification for urgency.

C15.2.6.5.2. The RA will complete a J&A if an exception is requested because there is either only one responsible source or there is a specific brand-name requirement to support an existing logistics chain already found in the Benefitting Partner per 10 U.S.C. 3204(a)(1). See FAR Subpart 6.3, DFARS 206.3, DFARS Procedures, Guidance, and Information (DFARSPGI) 206.3.

C15.2.6.5.3. With the exception of BPC programs under 10 U.S.C. 333, the 10 U.S.C. 3204(a)(4) "International Agreement" exception cannot be used to support BPC requirements, because there is no international agreement with the partner. In the context of FMS, the LOA is a binding agreement under U.S. domestic law and can be relied upon as the basis to sole source a requirement based on the "international agreement" exception.

C15.2.6.5.3.1. Sole Source Exception for International Agreements under 10 U.S.C. 333(i). With concurrence from State, the DoD may allow a Benefitting Partner to provide source direction and enter into an agreement for provision of such direction for 10 U.S.C. 333 programs.

C15.2.6.5.4. Other justifications for sole source procurements can be found in the FAR and DFARS.

C15.2.7. Targeting Capabilities. Any BPC transfers of air-to-surface (A/S) munitions greater than or equal to 105mm in diameter, ship-to-shore munitions, indirect fire surface-to-surface (S/S) munitions, and/or the associated A/S and S/S delivery systems and/or components, must account for the appropriate advanced target development (ATD) capabilities that enable the effective employment of such munitions while enabling the partner to minimize the risk of civilian harm. ATD capabilities are covered in more detail in Section C4.4.18., and more specific guidance for unguided indirect fire S/S munitions is provided in Section C4.4.18.7.

C15.2.8. Price and Availability. IAs provide Price and Availability (P&A) data to DSCA immediately following the feasibility review period. BPC P&A responses differ from FMS P&A responses outlined in Section C5.3. BPC P&As are developed by the IA, independent of Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC) and provided directly to DSCA. BPC P&A data must be of sufficient fidelity to accurately set the program price ceiling and create the Congressional Notification (CN). IAs must also complete the program execution timeline tab, as this information is included in the CN tables. The IA must communicate to DSCA any requirements for additional information or clarification in order to provide pricing information within 45 days of the P&A request. When submitting P&A data to DSCA, IAs must identify and communicate to the DSCA PM any equipment that requires a CTA, CCMD endorsement, and/or technology security and foreign disclosure review and release. The RA, in conjunction with the SCO, ensures CTAs and CCMD endorsements are provided before BPC case or training grant development begins. IA submittal of P&A confirms IA sufficiency to develop BPC cases in accordance with Case Development Category D as explained in Table C5.T6. (BPC training grants do not have a development period), and to begin execution once the BPC case or training grant is implemented.

C15.2.9. Economy Act. The Economy Act (31 U.S.C. 1535) and Section 1536, is a general authority for the interagency or the intradepartmental furnishing of goods and services on a reimbursable basis. The purchasing department or agency must pay the performing agency’s actual costs of the goods or services provided under this act, to include direct and indirect costs. The entire amount of an Economy Act order to fill a BPC program requirement is obligated by the purchasing agency when the performing agency accepts the order (DoD Financial Management Regulation (DoD FMR) Volume 11a, Chapter 3). Economy Act orders, however, are subject to the same fiscal limitations that are contained in the appropriation from which they are funded. The performing agency must enter into any supply or service contract pursuant to the Economy Act order before the appropriation’s POA for obligation expires. For services to be provided not by contract but by the performing agency, the performing agency will de-obligate all obligated funds for services not to be provided before fund expiration and return the funds to DSCA. The purchasing agency will return the funds prior to their expiration.

C15.2.10. Funds Execution Planning. The IA verifies that all appropriated funds for the BPC case or training grant can be obligated before the expiration of the POA for new obligations. The IA notifies the RA and the DSCA CPD or RPD if there is a possibility that funds may not be obligated during this timeframe. The IA also considers materiel shipment requirements and ensures that sufficient transportation funds are identified in the MOR, TEL, etc. and on a BPC transportation case (unless above the line transportation is being used, see Section C15.3.11.1.).

C15.2.10.1. Congressional Notification. BPC program execution may be subject to a CN requirement before funds are made available for case implementation based upon the requirements in the specific authorizing legislation. See the program-specific guidance in Appendix 8 for additional details on roles, format, and time requirements for notifications to Congress.

C15.2.10.1.1. The CN must be submitted to Congress in advance of initiating activities under a BPC program. Each BPC authority requiring notice to Congress may have differing requirements for how far in advance the notice must take place and what information about the BPC program must be included in the notice. To prevent premature approval for BPC cases, the "BPC WAIT" milestone is automatically posted within DSAMS-BPC once the case moves to "Review" status (RSTATUS) until the DSCA Country Finance Director (CFD) confirms the CN and funds release. The IA and DSCA must ensure each BPC case is ready to implement as early in the FY as possible, to maximize the remaining POA for funds obligation, funds expenditure, and case execution.

C15.2.10.1.2. Congressional Notifications for Department of Defense Funded Programs. The DoD RA initiates the CN process by submitting proposals and requirements to OSD. Depending on the specific authority, Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) or Office of the OUSD(P) coordinates the CN packages with DSCA, State, and the Office of the Under Secretary of Defense for Legislative Affairs (OUSD(LA)) (though DSCA can coordinate CN packages with OUSD(P) and OUSD(C), i.e. 10 U.S.C. 333) before they are submitted to the Secretary of Defense (SECDEF), as required, and then to Congress for the required notification period. BPC program funds may be notified annually or may be notified in groups, referred to as tranches, during the FY. Annual or tranche notifications are determined based on the applicable statutory authority. The level of detail required for each CN varies by authority. OUSD(C) will authorize release of funds to the appropriate DoD Comptroller office once the notification period expires and no congressional holds remain.

C15.2.11. Memorandum of Request. The RA, in accordance with its internal procedures, finalizes and submits an MOR, TEL, etc. to DSCA. RAs should submit completed MORs, TELs, etc. as expeditiously as possible and in accordance with the authority’s programmatic schedule to allow adequate time for BPC case or training grant development and funds obligation within the established authority’s specified planning timeline (See Section 4 of each program in Appendix 8 for planning information). MORs, TELs, etc. must be unclassified and submitted in unclassified communication channels so they are accessible to all stakeholders. DSCA reviews the MOR, TEL, etc., verifies the appropriate IA as identified during MOR, TEL, etc. development, and tasks the IA with the MOR, TEL, etc. for BPC case or training grant development (see Section C15.3.). The IA verifies that the MOR, TEL, etc. still meets the basic requirements of Table C15.T2., or no further action will be taken until all required information is received. The IA must develop 85 percent of BPC cases within 60 days of receiving a completed MOR, TEL, etc. The development period is complete when the RSTATUS milestone is placed in DSAMS-BPC along with the "BPC Wait" milestone automatically populating. See Table C5.T6., for Case Development Category D cases. Training grants do not have a development period.

C15.2.11.1. Prohibition on Animal Requirements. Due to the limited number of months allowed for execution of BPC funded programs, BPC cases cannot adequately plan and account for the associated long-term care and sustainment concerns associated with the transfer of animals (e.g. ceremonial, working animals such as working dogs, other animals used for detection or counter maneuvers etc.). If proposals for desired capabilities include any requirements for animals the RA must work with the CCMD, DSCA and IAs to identify alternative capabilities.

C15.2.12. Creating the Customer Request. The DSCA CPD for partner specific BPC authorities or the DSCA RPD for regional and global authorities, as appropriate creates the CR in DSAMS-BPC and tasks the IA to review. The IA must approve the customer request (CR) prior to BPC case or training grant initialization. For the USAI and Counter-Islamic State of Iraq and Syria Train and Equip Fund (CTEF) programs, DSCA forwards the MOR, TEL, etc. and provides the allowed Total Case Value (TCV) to the IA who then builds the CR in DSAMS-BPC.

C15.2.13. Security Cooperation Customer Codes. The Benefitting Partner’s SCCC is used for the State Description and Benefitting Partner field in DSAMS-BPC. The Benefitting Partner code must be the SCCC that is used for the CN. The Semi-Permanent SCCC is used in the Benefitting Partner field when a BPC case is exclusively for transportation.

C15.3.1. General. Building Partner Capacity (BPC) Letter of Offer and Acceptance (LOA) (also known as BPC case) and training grant development generally follows the guidance for Foreign Military Sales (FMS) and Foreign Military Financing (FMF) LOA development, implementation, and execution found in the Chapter 5 and Chapter 6. The process set forth below highlights BPC-unique caveats that Implementing Agencies (IAs) must follow when developing BPC cases and training grants. The Requesting Authority (RA) and Security Cooperation Organization (SCO) will monitor program and BPC case and training grant development in Security Cooperation Information Portal (SCIP)/Security Cooperation Management Suite (SCMS) and will remain actively engaged throughout development to clarify requirements, ensure development is on-track, and maintain communication with the Benefitting Partner (see Section C15.3.9.1.2. for BPC training grant development).

C15.3.2. Choice of Building Partner Capacity Case or Training Grant and Development of Requirements. When providing materiel, use a BPC case, which contains line(s) for each of the defense articles, services, and small-scale construction (when authorized) being provided and may also contain training specifically related to the use of U.S. defense articles or services. A BPC training grant program will only include training managed and executed by the appropriate training field activities. BPC cases and training grants may only be funded with a single appropriation. BPC case and training grant development occurs during the current period of availability of the appropriation funding the case or grant. With the case in "Development" status (DSTATUS) in the Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC), IAs and RAs coordinate to document the requirements, costs, and schedule on a BPC case and training grant. The RA, with support from Component Commands and IAs, determines BPC case and training grant scope through assessment of partner capacity and capability to perform strategic, operational, support, and governance roles.

C15.3.3. Building Partner Capacity Case Development Timelines. BPC cases must be developed in DSAMS-BPC in accordance with Case Development Category D standards as described in Table C5.T6., 85 percent of the time. The Group D 60-day timeline for BPC cases begins when the customer request (CR) is complete (CR complete is when the IA approves the CR in DSAMS-BPC) and ends when the "BPC Wait" milestone is automatically applied with "Review" status (RSTATUS) placed in DSAMS-BPC, stopping the 60-day timeline. DSCA (Office of Administration, Performance, Improvement, and Effectiveness Directorate (ADM/PIE)) will monitor BPC case implementation status as a SCIP Pending Case Status report and will annotate any reasons for late implementation. BPC cases returned to DSTATUS for correction should be addressed as soon as possible to support notional timelines. DSCA reviewers may determine that case corrections can be fixed later and will indicate this via comments in the Case Tracking System (CTS) and case remarks in DSAMS-BPC. DSCA (Office of International Operations, Global Execution Directorate, Case Writing and Development Division (IOPS/GEX/CWD)) will then post a Future Correction milestone to be incorporated in conjunction with the first Case Amendment. Note that even though a BPC case may have met the case development metric standards, if it is returned from RSTATUS back to DSTATUS for corrections that must be made immediately, there still may be program failure; therefore, BPC cases should be submitted with enough time for corrections before the appropriation authority period of availability lapses. This section does not apply to training grants.

C15.3.4. Initiating a Building Partner Capacity Case or Training Grant. The IA initializes the BPC case or training grant in DSAMS-BPC using a unique case identifier (ID) and provides the case ID to the DSCA Country Portfolio Director (CPD) or Regional Portfolio Director (RPD). The case ID is a 6-position alpha-numeric or alpha-alpha string which includes the BPC Security Cooperation Customer Code (SCCC)/program code, the single-position IA code of the DoD component providing the support, and a three-position case designator (e.g. E7-B-UAC). The three-position case designator will be assigned according to the letters used by the IAs to assign case designators found in Figure C5.F6. (Instructions for Preparing an LOA). Each SCCC/program code in DSAMS-BPC is associated with Benefitting Partners authorized to receive assistance. If a BPC case or training grant benefits more than one Benefitting Partner, there may only be one Benefitting Partner on each line of the BPC case with the exception of a line to fund training, in which the BPC case will have low dollar lines to track each Benefitting Partner. The Benefitting Partner’s SCCC/Country Code, found in Table C4.T2A. and distinct from the BPC SCCC/program code, will be selected by the IA at the line level in DSAMS-BPC. Table C15.T3A. and Table C15.T3B. provides instructions for preparing a BPC case or training grant document, to be used with BPC Program data provided in each program in Appendix 8 and the definitions of terms provided in the BPC LOA Information document.

C15.3.5. Line Construction. Each line on a planning document for a BPC program (e.g. MOR, TEL, etc.) must be clearly accounted for on the BPC case (either with a Military Articles and Services List (MASL), case line description, or line [insert line number] description note, unless the DSCA Office of Primary Responsibility (OPR) (DSCA (Office of International Operations, Regional Execution (IOPS/REX)), and/or Global Capability Development Directorate (IOPS/GCD)) determine it is not appropriate to do so.

C15.3.5.1. Line Construction for Significant Military Equipment, Major Defense Equipment, United States Munitions Lists, and Other Major end Items. The IA will identify MDE or SME items from the MOR, TEL, etc. and create individual case lines, with no embedded non-SME items being included. Other major end items (which require tracking) must also be individual lines on a BPC case with a corresponding MASL (end items are defined in the Defense Finance Acquisition Regulation Supplement (DFARS) Part 207 as a production product assembled, completed, and ready for issue or deployment). Examples of major end items may include aircraft; ships; boats; motorized wheeled, tracked, and towed vehicles for use on highway or rough terrain; weapon, missile, and sensor end items; ammunition; and sets, assemblies, or end items having a major end item as a component. In addition, any article identified on the United States Munitions List (USML) (22 CFR part 121) must be an individual line on a BPC case.

C15.3.5.2. Line Construction for Non-Significant Military Equipment that are not Major end Items. Non-SME lines (that are not major end items) are created using appropriate categories with case line descriptions such as "radar spares," "communication equipment," "training support items," etc. These non-SME lines will be created to ensure that shipments are executed properly and will ensure accountability for unshipped items. Small items typically included as part of a spares package may be rolled up into a spares line with a corresponding spares MASL on a BPC case. Parts, components, accessories, or attachments to an end item may be included as part of an ancillary items package with a corresponding MASL on a BPC case. The IA will be responsible for determining the appropriately coded MASLs. The unit of issue as "XX" is only allowed for services, training, and support item lines. Appropriate units of issue for non-spare article lines are "each," "kit," "package," etc.

C15.3.5.3. Line [Insert Line Number] Description Notes. The line description notes will identify the corresponding line on the planning document (e.g. MOR, TEL, etc.) and will include the list of items being provided on the line for tracking purposes. This requirement will increase accuracy in program execution, to include materiel delivery tracking purposes, reporting, and accountability. Line description notes for spares will indicate the end item being supported and the scope of the support (for example: "initial support package," or "two years of spares as required").

C15.3.5.3.1. Representative Lists. Equipment and parts lists are intended to specify what items will be provided and may be representative in nature. If any additional item(s) is required to meet the originally intended scope of the line, the IA, the IOPS RPD or CPD, and the DSCA (Office of Business Operations, Financial Policy & Regional Execution Directorate (OBO/FPRE)) Country Finance Director (CFD) coordinate to determine if a BPC case amendment or follow-on effort BPC case is needed. If the required additional items are identified after the relevant funding expires and the items are within the scope of the original obligation of funds, the IA will submit a request for a Prior Year Adjustment (PYA) (see Section C15.6.1.1.). See Section C15.5.9.2.1. for representative lists and delivery requirements.

C15.3.5.4. Benefitting Partners. Multiple Benefitting Partners can be included on the same BPC case but may not be included on the same line. A single Benefitting Partner must be listed on a defense article or service line to enable tracking, monitoring, and evaluation of the provided assistance.

C15.3.6. Months. For BPC cases, the MOS field in DSAMS-BPC is the estimated calendar range of months when services will be performed or the calendar range of months for anticipated delivery of defense articles to the USG (not the Benefitting Partner), calculated from the anticipated or actual BPC case implementation date. See Figure C5.F5. for the MOS definition. The MOS calculation is not to be confused with when items are considered to be delivered to the Benefitting Partner as described in Section C15.5.6.5. All BPC case lines are defined and will use a month/year range (e.g. MAR 2025 – SEP 2026) to define the calendar range of months for services and training or calendar range of months for anticipated delivery of defense articles to the USG. The initial month cannot occur before the month MILAP is posted, and consideration should be given for normal processing timelines when choosing the beginning months for services and delivery efforts. Normal processing month start date is usually 30 days after MILAP.

C15.3.6.1. Delivery to the Benefitting Partner. To the maximum extent practical, defense articles should be delivered to the Benefitting Partner within 120 days of receipt by the USG.

C15.3.7. Pricing. The IA will use DoD Financial Management Regulation (DoD FMR), 7000.14-R, Volume 11A, "Reimbursable Operations," the authorizing legislation for the program, and relevant financial management policy for the appropriation when pricing articles, services and training. The IA must exercise care whenever items and quantities on the BPC case change to ensure they do not change or exceed the nature and scope of the congressionally notified program. The quantities and/or value of defense articles and services provided under a BPC program that has been notified to Congress in accordance with its authorizing statute may not increase without the submittal of a re-notification of the relevant BPC program to Congress.

C15.3.7.1. Title 10 Building Partner Capacity Case-Related Manpower Functions and Funding Source Matrix. For Title 10 BPC, the BPC Activity Matrix (BAM) table describes Title 10 BPC case-related activities/functions and their proper source of funding. The activities/functions listed in Table C9.T2B. under the "Title 10 BPC Program Support Costs" and "Performing Activity Title 10 Costs" columns represent indirect costs funded by the Title 10 appropriated funds and should not be included and/or priced as direct costs on the BPC case. The activities/functions listed in Table C9.T2B. under the "Title 10 BPC Case Costs" column represents direct costs funded by the Title 10 appropriated funds made available to support Benefitting Partners and should be included as lines on the BPC case. Manpower information for BPC cases will be reviewed/validated as part of the planning process; no separate Manpower Travel Data Sheet (MTDS) sheet is required. Requests for funding clarification regarding this table and possible funding alternatives or exemptions must be coordinated with the DSCA (OBO/FPRE/FP).

C15.3.7.1.1. FMS Administrative funds are not provided to support the program management of Title 10 BPC programs. DSCA will issue a Funding Authorization Document (FAD) of Title 10 funding for administrative program support costs associated with the execution of DSCA's Title 10 BPC programs. IAs will work with the Army Budget Office (ABO) to determine the funds distribution mechanism (e.g. Military Interdepartmental Purchase Requests (MIPRs)) for the CTEF programs. DSCA's Operations and Maintenance (O&M) will not be used to support CTEF programs (see AP8.CTEF.). DSCA will issue FADs to the respective IA procuring organizations to commence executing implemented BPC cases and training grants.

C15.3.7.1.2. IAs will be required to report all administrative program support costs monthly and periodically respond to Requests for Information (RFIs) to DSCA and Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) in support of annual programming and budgeting processes. Administrative program support costs for DSCA programs will include all previously funded below-the-line and above-the-line administrative program support costs. IAs’ submissions will be reviewed and approved by the DSCA PMs and DSCA (Office of Business Operations (OBO)). IAs must adhere to the OUSD(C) July 13, 2018, budget policy guidance to determine allowable costs for CTEF requirements. CTEF manpower requirements and execution will be reported to the ABO.

C15.3.7.2. Defense Articles.

C15.3.7.2.1. Defense Working Capital Funded Materiel. The selling price is the Defense Working Capital Fund (DWCF) current standard price. Payments or reimbursements are credited to the DWCF providing the items.

C15.3.7.2.2. Non-Defense Working Capital Funded Materiel not to be Replaced. The IA will set the price for these assets at the sum of the most recent actual procurement cost and modifications, or improvements incorporated after production, adjusted for age or condition, plus prorated overhaul cost. For defense articles not to be replaced, the price of defense articles utilized to provide reimbursable support to a BPC program is depreciated value of the provided defense article. See DoD FMR, Volume 15, Chapter 7.

C15.3.7.2.3. Non-Defense Working Capital Funded Materiel to be Replaced. The DoD Budget and Future Years Defense Program (FYDP) must reflect intent to acquire replacements for such assets before they are included on a BPC case. The Funding Authority will make reimbursements equal to the estimated replacement cost, including the contract or production costs of the article, less an adjustment for age and condition of the item being sold. The items can be replaced with "Like Items" or replaced with "Dissimilar or Modified Items." For USG-sourced defense articles that need to be replaced, the price of defense articles utilized to provide reimbursable support to a BPC program authority is the acquisition cost to replace the same item minus the amount of depreciation for the provided defense article adjusted as appropriate for condition and age. See DoD FMR, Volume 15, Chapter 7.

C15.3.7.2.4. Nonrecurring Costs. USG appropriated funds may not be used to pay Nonrecurring Costs (NC) associated with U.S.-origin defense articles; therefore, IAs will not apply NC to BPC cases and will reflect costs as waived in DSAMS-BPC.

C15.3.7.2.4.1. Cooperatively Developed Articles. The payment and/or waiver of special NC charges associated with cooperatively produced defense articles is governed by the cooperative agreement between the United States and other participants to such agreement. The transfer of such articles to Benefitting Partners under BPC programs requires third party transfer approval from the cooperative participants as well as a written waiver of special NC charges in accordance with the terms of the cooperative agreement. If the cooperative participant(s) does not agree to waive its portion of special NC recoupment, the Benefitting Partner must agree to pay un-waived NC charges within 90 days of notification by the USG, otherwise the article must be deleted from the MOR, TEL, etc. and BPC case (any unused appropriated funds must be returned to DSCA immediately for reallocation to other BPC cases). Any Benefitting Partner’s payment of a special NC must be paid directly from the Benefitting Partner’s national funds accounts to the cooperative participant for which the special NC was established.

C15.3.7.2.5. USG-sourced Defense Articles and the Special Defense Acquisition Fund. Funds collected from the transfer of equipment from DoD stock pursuant to Title 10 BPC authorities are not legally authorized to be deposited into the Special Defense Acquisition Fund (SDAF). Proceeds from BPC transfers of equipment not intended, or unable to be replaced, must be deposited into the Department of Treasury’s Miscellaneous Receipts.

C15.3.8. Procurement.

C15.3.8.1. Capital Investment Operations and Maintenance Threshold. The annual appropriations legislation for DoD typically prohibits the use of O&M funds to procure an item whose unit cost exceeds a specified threshold. DoD procures such capital investment items for its own inventory using funds appropriated for procurement. However, an O&M expense for procurement of defense articles in support of a BPC program is not subject to the O&M threshold for capital investment items.

C15.3.8.1.1. Buy American Act. The Buy American Act (41 U.S.C. 8301) does not apply to BPC procurements.

C15.3.9. Building Partner Capacity Training. All training requirements must be captured in the MOR, TEL, etc. See Section C15.3.6. to ensure that projected training schedules comply with the number of months allowed and funds availability restrictions applicable to the BPC program.

C15.3.9.1. Methods to Provide Building Partner Capacity Training.

C15.3.9.1.1. Building Partner Capacity Case Training Lines. When appropriate training field activities are not managing training efforts, use a BPC case, such as BPC cases containing materiel that also include training lines (i.e. for new equipment training). When training is included on a BPC case, it should be specifically in support of the purchase of U.S. defense articles and services. Each Military Department (MILDEP) should coordinate and execute those training lines, to include both USG and contractor-provided training, with the appropriate training field activities according to MILDEP procedures. Training shall be a standalone training line on the BPC case using the FMS training MASL and may not be included in other service or materiel lines. A medical line will be included on BPC cases with training lines. The IAs will have separate training pipelines using the appropriate MASL to distinguish between continental United States (CONUS) and outside the contiguous United States (OCONUS) training. The IA must establish training tracks in DSAMS-BPC prior to the BPC case being sent to the DSCA (IOPS/GEX/CWD) for countersignature and State approval. Training should be in a programmed or scheduled status when the case is sent forward.

C15.3.9.1.1.1. Training Support Equipment/Services. Training provided to the Benefitting Partner will not have a DTC annotated on the BPC case. If equipment is needed by the U.S. trainers, a separate line on the BPC case will be developed to provide the proper funding to move the training support equipment. See Chapter 10 for other training information, to include requesting Security Cooperation Education Training (SCET)/Mobile Training Teams (MTTs).

C15.3.9.1.2. Building Partner Capacity Training Grant. Training managed and executed by the appropriate training field activities is administered through a training grant (applies to all Title 10 programs including 10 U.S.C. 333, USAI, and Indo-Pacific Maritime Security Initiative (MSI)). There shall be only one Benefitting Partner on each Title 10 training grant. Training grants are developed in DSAMS-BPC. The IA will develop training tracks for each line in DSAMS-BPC. Training grants that are completed and in receipt of funds into the IA’s financial system will be considered financially implemented. BPC training grants get routed to DSCA (IOPS/GEX/CWD) to process for approval by State (PM) via the State Daily List.

C15.3.9.2. The IA will enter all BPC training in the DSAMS Training Module (DSAMS-TM), including training provided by MTTs. See Section C10.22.5. for specific guidance on BPC MTTs. The SCO will record all Benefitting Partner student information in the Security Assistance Network Web/Security Cooperation – Training Management System (SANweb/SC-TMS) prior to the training start date. See Section C10.4.2. The SCO shall update the SANweb/SC-TMS with information for every student that participated upon conclusion of an MTT. The IA will apply Rate D for tuition-based training funded with DoD BPC program funds (see DoD FMR Volume 15, Chapter 7). For training requiring dedicated resources, the full cost of the training will be applied (excluding military pay and civilian unfunded retirement).

C15.3.9.3. Financial Information for Building Partner Capacity Training.

C15.3.9.3.1. The IA will apply Rate D for tuition-based training funded with DoD BPC program funds (see DoD FMR Volume 15, Chapter 7). For training requiring dedicated resources, the full cost of the training will be applied (excluding military pay and civilian unfunded retirement).

C15.3.9.3.2. Travel and Living Allowances for Training. See Section C10.13.3. The IA may include appropriate Travel and Living Allowance (TLA) charges on the MOR, TEL, etc. and the final BPC case or training grant in accordance with the authorized living allowance rates in Table C10.T12. and does not need to seek approval from DSCA (IOPS/REX).

C15.3.9.3.3. Medical Expenses. BPC programs are authorized by various authorities. If the scope of the applicable BPC authority allows DoD to provide a defense service, the BPC program may provide funding for emergency and non-elective health care necessary to either return the International Military Students (IMSs) to training or return the IMS from the training location to their destination. The provision of medical support is addressed by including a medical line on the BPC case or training grant, regardless of whether the training is at a contractor-owned facility or at a military installation. The details of medical coverage are delineated on the IMS’s Invitational Travel Order (ITO). The BPC case or training grant may require an amendment to increase funds on the line if incurred medical expenses exceed the original estimate. The IA will contact the DSCA CFD to discuss funds availability or possible PYA. See Section C10.9. for additional healthcare coverage policy guidance.

C15.3.9.4. Dependent Travel. Dependents are not authorized to accompany the IMS to BPC training unless they meet the requirements outlined in Section C10.6.10.5. Travel with Dependents and Section C10.12. Dependents.

C15.3.10. Services. Non-training services will be priced using the DoD FMR Volume 11A. See Section C15.3.7.

C15.3.10.1. Surcharges and Accessorial Charges. The IA must not apply the FMS Administrative surcharge, Contract Administration Services (CAS) surcharge, and accessorial charges to Title 10 BPC cases.

C15.3.10.2. Services Under a Continuing Resolution Appropriation. When developing a BPC case or training grant that will be funded under a Continuing Resolution (CR) appropriation that does not span the full FY, the IA will specify the number of months allowed for services in accordance with the general fiscal law limitations associated with the appropriation. The applicable CR will specify the availability period of the funds appropriated pursuant to a CR. The IA must also ensure that the BPC case or training grant is for activity that is allowed by the CR. For example, CR generally prohibit the initiation of projects for which appropriations, funds, or authority were not available during the preceding fiscal year (FY) (i.e. "new starts"). The IA will provide written notification via e-mail or memo to the service provider to clarify that obligations are subject to the availability of funds. See Section C15.5.2.1. for a discussion of funds obligation under a CR appropriation. Training grants must follow the same principles.

C15.3.10.3. Project Orders. IAs may use project orders as a mechanism to fund services in support of a program. Funding for Project Orders must be obligated during the funds’ period of availability and then may be executed like a contract in accordance with 41 U.S.C. 6307. See DoD FMR Volume 11A, Chapter 2. Project orders must not extend beyond the appropriation’s funds cancellation date.

C15.3.10.3.1. Commencement of Work. A bona fide need must exist in the FY in which the project order is issued. Work to be performed must be expected to begin within a reasonable timeframe after acceptance. A project order should not be issued if work is contingent upon a future event.

C15.3.10.3.2. Cancellation. The project order must be cancelled if work does not begin before January 1 of the FY after the appropriation expiration date.

C15.3.10.4. Months Allowed for Services. The allowable MOS for services under a BPC case or training grant is based on the POA of the appropriation that funds the effort as well as the time limitations specified in the authorizing legislation and the DoD FMR. All BPC funds must be obligated during the POA for obligation regardless of the MOS for services. The IA will make its best effort to perform services by the RA's required delivery date (RDD) or MOS. The MOS must be defined in accordance with the timeframe necessary to execute the requirements and must not automatically extend to the maximum legally permissible MOS.

C15.3.10.5. Engineering Services and Construction. BPC programs cannot be used for engineering or construction services to accomplish infrastructure projects within a Benefitting Partner that are in support of U.S. forces unless there is specific statutory authorization. Such projects are governed by the laws regarding military construction, 10 U.S.C. 2801, and implementing regulations and guidance are provided by the geographic Combatant Command (CCMD).

C15.3.10.6. Contractor Services. Contractor services are categorized as either severable or non-severable, according to the definition provided in DoD FMR, Volume 3, Chapter 8, section 080304.B. Each category of service is subject to separate MOS restrictions with which the IA must comply to avoid Anti-Deficiency Act (31 U.S.C. 1341) violations.

C15.3.10.6.1. Severable Services. Severable contractor services are generally performed within the year of funds availability. However, under 10 U.S.C. 3133, the MOS for severable contract services entered into by a DoD component that begins during the period of funds availability may extend into the subsequent year provided the contract period does not exceed a total of 12 months (absent other legal authority). Option years on a contract are treated as new contracts. Training on tactics, techniques, and procedures, or maintenance is generally considered severable training.

C15.3.10.6.1.1. 10 U.S.C. 3133 does not limit the ability to use Cross-Fiscal Year (CFY) authority under Section 333. 10 U.S.C. 3133 and the Section 333. CFY authority both provide exceptions to the bona fide needs rule. There is no limitation on the use of Section 333. CFY authority simply because 10 U.S.C. 3133 would also apply. Therefore, DoD may use CFY authority for contractor-provided training under Section 333. to perform severable services for up to 36 months, irrespective of the 12-month limit on severable service contracts under 10 U.S.C. 3133, as long as funds are appropriately obligated during their POA.

C15.3.10.6.2. Non-severable Services. Non-severable services are those performed via contractors that produce a single or unified outcome. Non-Severable services, to include training, are a single undertaking that cannot be feasibly subdivided, and include actions such as software programming required, new equipment training required for basic operation and operator maintenance, initial fielding, and upgrade/refurbishment labor costs. Non-severable contractor services will be funded entirely at the time the contract is awarded, though the MOS may extend across FYs until July 31 of funds’ cancellation year.

C15.3.10.6.2.1. New Equipment Training. Contractor-provided new equipment familiarization training (the level of learning required to adequately perform the responsibilities designated to the function and accomplish the mission assigned to the system, such as how to perform functions and how to conduct basic operator maintenance) and installation at a basic level may be provided outside the CFY authority period when necessary for the installation or operation of the equipment being delivered to the Benefitting Partner (as long as funds have not yet cancelled). This includes basic quality assurance testing to ensure the items are in operating order. Such training must be included on the procurement contract for the equipment being delivered outside the CFY period.

C15.3.10.6.2.2. Example of New Equipment Training and Other Services that May Be Performed Outside the Cross Fiscal Year Period. An example of a service or training that is associated with the delivery of long-lead equipment follows: a Benefitting Partner under a FY 20XX appropriation is to receive radios and antennas with a lead-time allowing deliveries after CFY timelines have ended. FY 20XX funds can be used to place basic initial training and antenna installation on contract (if awarded during the appropriation’s original period of availability for obligation) so that the basic training and installation can be conducted when the equipment is delivered (as long as the funds have not yet cancelled).

C15.3.10.7. Government-sourced Services. For reimbursable support provided pursuant to the Economy Act, USG personnel (civilian and/or military) must cease program-related activities when the POA for obligation of the appropriation ends. Project Order—and-DWCF-funded USG personnel may continue program-related activities beyond the POA for obligation of the appropriation in accordance with timelines allowed in DoD FMR Vol 11A. Neither of these exceptions prolong the POA for obligation of the funds. The funds must still be obligated within the POA.

C15.3.11. Transportation. The IA will plan for transportation of materiel from the earliest stages of BPC case development in order to ensure delivery of materiel and services meets the RA’s RDD. Estimated costs for transportation will be calculated and tracked to allow for adequate resources if transportation costs will be paid by a separate BPC transportation case, because multiple organizations will be requesting use of these transportation funds.

C15.3.11.1. Above-the-line Transportation. Funds for shipping defense articles that are placed as above-the-line transportation costs, such as Arms, Ammunition, & Explosives (AA&E), are obligated when transportation is contracted or when a manifest is received from the United States Transportation Command (USTRANSCOM). A manifest is issued after the materiel has been loaded on the Defense Transportation System (DTS) conveyance. The IA will confirm with the SCO that shipment delivery information provided in the MOR, TEL, etc. (e.g. Military Assistance Program Address Code (MAPAC), Port of Debarkation (POD), and RDD) is complete and valid. The IA will then submit the shipping data to the Procuring Agency, along with any other specific transportation guidance. When the materiel is ready for shipment, the DoD entity responsible for ensuring DTS transportation will enter the shipment requirements into the DTS booking system.

C15.3.11.1.1. Premium Transportation. An above-the line direct charge that must be used during the POA is added to the BPC case if a line will be transported via a Special Assignment Airlift Mission (SAAM) or other premium transportation.

C15.3.11.1.1.1. Prime Vendor Transportation. For system sales and more complex acquisition and sustainment efforts, the IA may request approval from DSCA (Office of Strategy, Plans, and Policy, Execution Policy and Analysis (SPP/EPA)) for the prime vendor to transport and make delivery of materiel to the Benefitting Partner’s designated location; this request must be submitted prior to BPC case development. DSCA approval is required when the prime vendor is transporting USG titled materiel. DSCA (SPP/EPA) will review the request and coordinate with the United States Maritime Administration (MARAD) and USTRANSCOM to determine if the mandatory use of DTS for BPC shipments will be waived. The prime vendor’s contract price will include a cost for transportation and ORC A and DTC 4 will be cited against the line. The IA will include a note in the BPC case to describe the transportation and delivery arrangements.

C15.3.11.2. Transportation Charges. For all Title 10 transportation that is not part of the applicable procurement contract to meet the case requirement, a separate program-wide BPC transportation case will fund transportation of materiel to the Benefitting Partner. The IA will include a case note that indicates transportation will be billed via a separate case and provide, if possible, the case ID. This information will also be entered when the Transportation Bill Code (TBC) is selected.

C15.3.11.2.1. Transportation and PC&H program-wide support case(s) must have a correlating line note describing the costs included for each line. BPC cases for defense articles and defense services providing the primary BPC assistance that will have a transportation related charge must include the "Transportation Charges Not Included - Building Partner Capacity (BPC)" case note. Transportation planning must occur during BPC case development.

C15.3.11.2.2. PC&H charges on Title 10 BPC cases will be funded with an annual Title 10 BPC transportation account if the PC&H is not already included in the transportation costs. PC&H costs incurred through stock items will be paid with the IA’s annual transportation account.

C15.3.11.2.3. IAs must submit Title 10 PC&H estimates for the next FY to the DSCA (Office of International Operations (IOPS)) PM through the Title 10 BPC cost collection process due annually in September.

C15.3.11.2.4. IAs that do not have an established transportation account will receive funding via a direct cite MIPR for Title 10 PC&H services performed during the FY.

C15.3.11.2.5. IAs must provide Title 10 PC&H estimates to the Army Case Manager (CM) via the U.S. Army Security Assistance Command - Washington Field Office (USASAC-WFO) in coordination with their submission to the DSCA (IOPS/GCD) PM.

C15.3.11.2.6. IAs will return all residual funds from the MIPR back to the Army CM by June 1 of the FY in which the funds’ POA expires.

C15.3.11.3. Consolidation Point Transportation. The IA may consolidate materiel at a CONUS consolidation point in order to manage multiple shipments of materiel to a Benefitting Partner. The IA will include a note on the BPC case to describe the intended consolidation and cite the separate case (if known) that will provide funds for materiel handling services at the consolidation point and onward shipment into the Benefitting Partner. Equipment or materiel that does not ship through a consolidation point may include, but is not limited to, oversized rolling stock/equipment, oversized/heavy engineering equipment, and AA&E.

C15.3.11.3.1. Transportation to a Consolidation Point. The BPC case must show the delivery address of the final destination, even if the equipment goes to a consolidation point first. The IA will use DTC 2/7 on the BPC case to indicate a consolidation point is being used.

C15.3.11.3.2. Transportation from a Consolidation Point. For the final leg of transportation from the consolidation point to the Benefitting Partner, the IA will use DTC 7 or 9. Please refer to Appendix 8 and for BPC Authority and Program specific guidance.

C15.3.12. Notes. Notes on BPC cases do not constitute the terms and conditions of an international agreement, but rather do communicate information necessary for proper execution of the BPC case and handling of the materiel by USG entities. Appendix 6 lists standard notes applicable to BPC cases. The IA is responsible for adding non-standard notes, as required. See Section C15.3.5.3. for line description notes. Training grants will not contain case notes.

C15.3.13. Defense Security Cooperation Agency Processing of the Building Partner Capacity Case or Training Grant.

C15.3.13.1. Submittal to the Defense Security Cooperation Agency Case Writing and Development Division. The IA will submit the BPC case electronic package (ePKG) to DSCA (IOPS/GEX/CWD) as early as possible to allow adequate time for final stage processing and review before obligation of funds and return of excess funds for other uses. A BPC case ePKG must include the checklist, planning document (e.g. MOR, TEL, etc.), the draft Congressional Notification (CN) document, the direction to begin BPC case development, and any significant changes to the planning document, as applicable (e.g. MOR, TEL, etc.). For BPC cases, when the IA completes development of the BPC case, the IA posts MILAP. The IA should provide MILAP in DSAMS-BPC at least 60 days before the BPC program funds expire for new obligation. The BPC case moves to DSCA (IOPS/GEX/CWD) for review and preparation of the final version of the BPC case WSTATUS. For training grants, when the IA completes development, the IA posts BPCCMP.

C15.3.13.2. "Review" Status and Building Partner Capacity Wait Milestone. The BPC case then moves to DSCA Headquarters "HQ" for RSTATUS. The "BPC Wait" milestone stops the BPC case processing clock, and it is automatically added when the BPC case has the RSTATUS placed in DSAMS-BPC. This milestone does not apply to BPC training grants. The training grant moves to DSCA Comptroller for "Grant Review Status" (GRSTATUS) and State approval per Table C15.T3B.

C15.3.13.3. United States Government Signature. An authorized representative of the IA will post the Military Signature (MILSGN) milestone on BPC cases in DSAMS-BPC representing the U.S. signature. This is the only signature required, and it allows the DSCA countersignature data to be updated by DSAMS-BPC after all approvals are received.

C15.3.13.4. Approval of a Building Partner Capacity Case. DSCA (IOPS/GEX/CWD) will post CWD Approval (CWDAPPRV) and place "Proposed" status (PSTATUS) in DSAMS-BPC after DSCA, and the IA approve the BPC case as written. State approval is required to begin implementation. The BPC case is added to the daily State List (STLST) and CWD posts State approval once received (STAP).

C15.4.1. General. Implementation of a Building Partner Capacity (BPC) Letter of Offer and Acceptance (LOA) (also known as a BPC case) or training grant begins when Financial Approval (FINAPPRV) is posted, and the Funding Authorization Document (FAD) request is sent to the Defense Agencies Initiative (DAI) system (FADRQST) for approval (FADAPPRV). Before proceeding to implementation, DSCA confirms funds are available and initiates the funds distribution process. The Implementing Agency (IA) acknowledges receipt of funding by posting the Funding Received (FUNDRCVD) milestone, which implements the BPC case (ISTATUS). For training grants, after the IA posts FUNDRCVD, Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC) automatically posts the grant funded milestone (GRNTFND), which implements the training grant (ISTATUS). If DSCA (Office of Business Operations, Comptroller Directorate (OBO/CMP)) rejects the BPC case or training grant, the BPC case or training grant cannot be implemented, and will be returned to "Development" status (DSTATUS) in DSAMS-BPC for determination of a way forward. These actions must occur during the period of availability (POA) of the appropriation.

C15.4.2. Department of Defense Appropriations. After a BPC case or training grant is implemented, DSCA disburses funds to the DoD Component via the FAD. The DoD Component receives funds into their financial system and distributes funds through their internal funds distribution processes. There will be one FAD per BPC case or training grant. Line level funding requirements will be documented in the FAD notes. The DoD Component is expected to load funds into its financial system in accordance with the FAD.

C15.5.1. General. Once DSCA (Office of Business Operations (OBO)) provides Title 10 Building Partner Capacity (BPC) funds via Funding Authorization Document (FAD) to the Implementing Agencies (IAs) to implement the BPC Letter of Offer and Acceptance (LOA) (also known as a BPC case) or training grant, the IA is then responsible for obligating the funds and executing the BPC case or training grant to meet Requesting Authority (RA) timelines. BPC program funds are subject to applicable USG procurement law and policy. Obligation and expenditure of the BPC case funds are subject to the terms, conditions, and expiration date specified in the appropriation. BPC case funds must be obligated prior to the end of their period of availability (POA) for new obligations or must be removed from the BPC case and returned to DSCA for appropriate action. The USG is responsible for transporting materiel to the Benefitting Partner according to delivery requirements provided by the Security Cooperation Organization (SCO). The SCO (or appointed U.S.-designated officials, see Section C15.5.1.4.) will transfer custody to the Benefitting Partner after materiel has been inventoried.

C15.5.1.1. Procurement. IAs procure defense articles and services in accordance with the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS).

C15.5.1.2. Transportation. Materiel is transported using the Defense Transportation System (DTS) or vendor-provided transportation when pre-approved by policy exception. The IA retains oversight of the transportation process and assists with resolution of transportation issues that may arise.

C15.5.1.3. Receipt and Transfer. The SCO, or appointed U.S.-designated officials, receives and inventories the materiel, transfers custody and responsibility of the materiel and services to the Benefitting Partner, documents the transfer of equipment to the Benefitting Partner, provides copies to DSCA per Table C15.T1., and begins End Use Monitoring (EUM), as applicable. The U.S.-designated officials shall be appointed or endorsed, in writing, by the Combatant Command (CCMD) with the concurrence of the Ambassador and DSCA. The U.S.-designated officials can be contractors or U.S. personnel serving in locally employed embassy staff positions.

C15.5.1.4. Residual Funds. The IA must identify any residual funds for return as soon as possible and inform the DSCA (Office of International Operations (IOPS)) Program Manager (PM). DSCA determines if an amendment should be tasked to return these funds, or if the funds should be returned during BPC case or training grant closure. When closure activities are complete, the IA will post the closure milestone in the Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC).

C15.5.2. Funds Obligation. Immediately upon implementation, the IA begins the process of BPC case or training grant execution, which includes funds obligation and funds reconciliation. The IA will obligate both DoD and non-DoD appropriations in accordance with the rules described in the DoD Financial Management Regulation (DoD FMR), Volume 3, Chapter 8, prior to the date upon which the funds availability ends, as provided in Table AP8.T3. Security Assistance and Security Cooperation Programs. The IA and the procuring organization must recognize the fund’s expiring and canceling timeline. See Section C15.5.2.1. for specific guidance on handling BPC case or training grant funds offered under a Continuing Resolution (CR) Appropriation. IA-managed funds transfers for training via Military Interdepartmental Purchase Requests (MIPRs), should include the following information: BPC case or training grant information, funds availability, and number of months allowed in accordance with the BPC case or training grant. The IA will also request to obligate the funds within three (3) months from MIPR acceptance, but no later than the end of the POA for obligation of the appropriation.

C15.5.2.1. Continuing Resolution Appropriations and Funds Obligation. Congress may pass a CR appropriation that partially funds BPC programs for a specific time period, which will be less than the full fiscal year (FY). If a BPC case or training grant is implemented during a CR, funds can be obligated during the Continuing Resolution as the period of availability is the end date of the CR. If the CR is not extended or replaced by a subsequent appropriation, the period of availability lapses, and the BPC case or training grant cannot incur any new obligations. Subsequently, a new appropriation will remove this restriction on obligations (unless the BPC authority is cancelled). USG services (not funded by Project Order or Defense Working Capital Fund (DWCF)) must cease if the period of availability lapses, unless using Cross Fiscal Year (CFY). Procurement actions can be executed until the funds cancel.

C15.5.2.2. Obligation Against Materiel and Services. RAs will submit information and documentation to the IA Procuring Agency as early as possible to ensure funds are obligated prior to expiration, allowing sufficient time for that agency to submit requisitions or award contracts. IAs will enter requisitions in the appropriate logistics management system within 30 days of BPC case or training grant implementation, with funding for items that require basic contracting action being obligated within six months of implementation. Items requiring long lead contracting action are flagged and reviewed during quarterly program reviews with the IAs. The processing time required to obligate funds on contract will depend on the complexity of the requirement. The IA will ensure that participants in the sourcing, procurement, and acquisition processes are informed of the BPC case or training grant financial timeline. Instructions will be included in funding documents to ensure that all relevant offices are aware of the expiring or cancelling nature of the BPC case and training grant funds. An example of such language follows:

C15.5.2.2.1. Funding Civilian Pay. BPC case or training grant funds may be used to reimburse civilian pay expenses consistent with months allowed (See Section C15.3.10.4.) and in accordance with the DoD FMR. DSCA does not direct the use of a particular funds’ obligation vehicle. Each IA should verify with its financial management organization(s) which document is most appropriate to use as a valid obligating document.

C15.5.3. Notification to the Security Cooperation Organization. The IA will notify the SCO and provide a copy of the implemented BPC case or provide training grant information once appropriated funds are obligated. The SCO or appointed U.S.-designated officials may begin preparations for receipt of the materiel and services, as needed.

C15.5.3.1. Sharing Building Partner Capacity Case Information with Benefitting Partners. The SCO may share the BPC case or training grant information and supporting documents, with the exception of protected information (such as proprietary vendor information), with Benefitting Partner Ministry of Defense (MoD) representatives, as appropriate (BPC cases and training grant information with multiple Benefitting Partners will not normally be shared among the Benefitting Partners). SCOs should clearly communicate to Benefitting Partner representatives that information regarding the schedule of shipments or training events does not constitute a commitment by the United States. An implemented BPC case or training grant and valid obligations are not guarantees that the USG will provide military assistance. Changes to the program during execution, such as changes to contracts, or diversions or redirections to other Benefitting Partners may occur. Assistance to a Benefitting Partner is not guaranteed.

C15.5.4. Funds Expenditure. BPC case or training grant funds should be fully expended in accordance with Military Department (MILDEP) procedures once obligated to allow sufficient time to process and pay final invoices and enable timely closure. Funds that cancel are no longer available for any purpose. The "Fund Source and Availability" BPC case note will specify the date by which funds must be expended. See individual BPC program guidance in the Table AP8.T3. Security Assistance and Security Cooperation Programs for funds expiration and cancellation dates. The IA will maintain oversight of deliverables and coordinate with the Defense Contract Management Agency (DCMA) to ensure inspection, acceptance, and timely processing of contractor invoices. See the FAR Section 32.905.

C15.5.4.1. Reporting. The DoD Components execution systems will directly feed into the applicable security cooperation (SC) Advana dashboards to centralize BPC execution tracking and reporting.

C15.5.4.2. Review and Reconciliation. The DoD FMR, Volume 3, Chapter 8, requires a Dormant Account Review-Quarterly (DAR-Q) of commitments, obligations, accounts payable, and accounts receivable. The IA will review and reconcile financial documentation regularly to identify and correct errors. Performing these reviews ensures the full use of appropriated funds before they expire and ensures that open obligations are valid and liquidated before the cancellation of the appropriation. This should be a collaborative effort among multiple IA offices, to include resource management, accounting, program management, contracting, acquisition, and logistics functions. Both BPC case and financial data should be reconciled throughout the execution phase to facilitate timely closure. Price increases and other activities may occur on the BPC case after the funds’ period of availability for obligation expires. Fiscal law allows upward obligation adjustments for the recording, adjusting, and liquidating of obligations properly chargeable to that account. Current year funds will only be used if there are no original year funds available or the use of funds in the current FY would not constitute a bona fide need of the FY in which the funds were originally obligated. The DSCA Country Finance Director (CFD) will review any price and quantity increase or extension of the number of months or range of delivery dates at the line or sub-line level. See DoD FMR Volume 3, Chapter 10.

C15.5.5. Tax Exoneration. U.S. grant assistance efforts must be free from any foreign sales tax, Value Added Tax (VAT), customs fees, or other similar fees imposed by the Benefitting Partner. Absent an Under Secretary of Defense for Policy (USD(P)) approved exception, DoD may not use U.S. funds to pay a foreign tax directly charged to the USG, or indirectly charged to the USG through a USG contractor assisting the Benefitting Partner, in accordance with DoD Instruction (DoDI) 5100.64, "DoD Foreign Tax Relief Program" and the Deputy Secretary of Defense memorandum, "Update to the DoD Foreign Tax Relief Policy," dated September 29, 2017. Absent an approved USD(P) exception, IAs or geographic CCMDs may also not use U.S. funds to indirectly pay a foreign tax imposed on a DoD contractor by the assisted Benefitting Partner if such payment is not allowed by DoDI 5100.64 or the referenced supplemental memo. There may be existing bi-lateral agreements between the United States and some Benefitting Partners that provide tax relief for U.S. assistance to the Benefitting Partner. Some Benefitting Partners may have their own domestic law that may also unilaterally exempt foreign assistance from taxation. Either of these methods are preferred over a Benefitting Partner offering to reimburse any collected tax on the U.S. grant assistance. A tax reimbursement process is disadvantageous to the USG because by the time funds are returned, the POA for the funds is typically expired which precludes DoD’s use of the returned funds for another SC effort. To seek a DoD exception to use funds for taxes imposed by the Benefitting Partner, the geographic CCMD must seek clearance to proceed through DSCA (IOPS) and provide a compelling justification as to why payment of the foreign tax is in U.S. national security interests.

C15.5.6. Transportation and Delivery of Materiel and Provision of Services. The IA has overall responsibility for transportation and delivery of materiel and provision of services. The IA will make its best effort to deliver equipment and provide training/services within the number of months allowed for BPC case or training grant implementation or prior to the Required Delivery Date (RDD). The IA will ensure that transportation requirements and schedules are communicated appropriately to the procuring activity and the SCO. The SCO will provide shipping documents (e.g. bills of lading or manifests) to the Benefitting Partner representative to allow for arrangement of materiel off-load, customs clearance, security, staging, storage, onward movement, and integration. The IA will confirm that the SCO or appointed U.S.-designated officials and the Benefitting Partner are able to receive the materiel and that proper arrangements have been made to move the cargo to a secure location before delivery.

C15.5.6.1. Materiel Accountability Prior to Shipment. The IA will provide a monthly delivery record with serial numbers of Enhanced End Use Monitoring (EEUM) items to DSCA (Office of International Operations, Global Execution Directorate, End Use Monitoring Division (IOPS/GEX/EUM)) (dsca.eumhelpdesk@mail.mil) in advance of shipment of EEUM-designated items for input into the Security Cooperation Information Portal (SCIP)-EUM (SCIP-EUM) database (see Table C8.T2.).

C15.5.6.2. Shipment and Tracking of Materiel Before and During Delivery. Considerations for shipment and tracking of materiel include initial location, visibility, and advance notice.

C15.5.6.2.1. Initial Location of Shipment (Continental United States or Outside Continental United States).

C15.5.6.2.1.1. Continental United States Shipments.

C15.5.6.2.1.1.1. Small Parcel Package Direct from Vendor. Use of Delivery Term Code (DTC) 4 (shipping by the vendor) is rare and requires DSCA (Office of Business Operations, Financial Policy & Regional Execution Directorate (OBO/FPRE)) to approve an exception to policy prior to developing the BPC case. The IA should consult DSCA (Office of International Operations, Global Capability Development Directorate (IOPS/GCD)) or the Country Portfolio Director (CPD) prior to case development.

C15.5.6.2.1.1.2. Arms, Ammunition, and Explosives. Arms, Ammunition, and Explosives (AA&E) cannot be sent via the Joint Consolidation Point (JCP) (see Section C15.5.6.2.1.1.3.) and must be shipped directly to the Benefitting Partner. All AA&E items should use an executable DTC for the MILDEP. DTC options may include but are not limited to DTC 7 (delivery to an inland point in the recipient Benefitting Partner) or DTC 9 (delivery to an overseas Point of Debarkation (POD)).

C15.5.6.2.1.1.3. Joint Consolidation Point. Equipment and materiel from a continental United States (CONUS) vendor can be consolidated at a JCP. Typically, the JCP is used for small items that need to be collected from various vendors to enhance the efficiency of transportation and delivery coordination. The JCP is not typically used for large items that may be more appropriately sent direct from the vendors. The JCP does not handle weapons, ammunition, or certain types of hazardous materiel. IAs that are unsure whether use of the JCP is appropriate for an item should coordinate with DSCA PMs prior to shipments. DTC 2 and 7 will be indicated on the equipment lines on the BPC case with associated notes when a consolidation point is used. DSCA IOPS works with the consolidation point team to provide current timelines for contacting the SCO to coordinate shipment no less than 30 days prior to arrange transportation and confirm the delivery address or Military Assistance Program Address Code (MAPAC), POD, RDD and any special delivery requirements. Exceptions must be coordinated by DSCA, the MILDEP, the SCO, and the JCP. The coordination will provide the SCO or appointed U.S.-designated officials proper time to prepare the transfer of equipment to the appropriate Benefitting Partner unit and/or representative prior to delivery or make arrangements for another USG representative to perform these functions. The current year BPC transportation case will support the consolidation of equipment and materiel, as well as onward movement of equipment to the Benefitting Partner. IAs will calculate and track estimated costs for transportation to allow for adequate request of resources.

C15.5.6.2.1.2. Outside of the Continental United States Shipments. The vendor is responsible for outside the continental United States (OCONUS)-sourced materiel movement. All packing, crating, export license, marking, certification, and/or documentation pertaining to hazardous materiel must be included in the contract. OCONUS-sourced procurements do not ship through a consolidation point. The vendor is also responsible for providing the IA with detailed documentation, including but not limited to export license, packing lists, detailed invoices, and photos (if deemed necessary). MILDEPs will use the applicable and executable DTC with associated case notes.

C15.5.6.2.2. Transportation Visibility. The IA and SCO should use SCIP to track transportation of all materiel. Deliveries by vendors may not appear in SCIP. The IA will ensure that specific requirements for materiel packing and shipping are properly addressed, and that necessary plans have been made for EEUM, and classified or sensitive materiel. This duty cannot be delegated by the SCO to appointed U.S.-designated officials.

C15.5.6.2.3. Advance Notice of Delivery by Shipping Activities. The shipping activity must provide advance notice to the SCO, geographic CCMD, and DSCA Office of Primary Responsibility (OPR) for that program no less than 30 days prior to materiel delivery. Exceptions must be coordinated by DSCA, MILDEP, SCO, and JCP. The SCO will provide the Benefitting Partner MoD (or other government ministry, as appropriate) with a written notice of the pending delivery. The notice should state what materiel or service is arriving for the Benefitting Partner, when (if known) and where the materiel will be delivered, and which unit is to receive the materiel or service. The materiel shipment information should be attached to the notice, which may be used by the Benefitting Partner to facilitate Customs processing. See Figure C15.F2.

C15.5.6.2.3.1. The program office will upload the final list of equipment procured under a BPC case line (See Section C15.3.5.3.1.) in SCIP/SCMS Non-Standard Requisition (NSR) Tool no later than 30 days prior to the line’s final shipment.

C15.5.6.3. Arrival of Shipment.

C15.5.6.3.1. Arrival Procedures for Mark for Address and Customs. Materiel will be delivered to the Mark For address on the contract (or text address) available at the time of booking. The SCO will provide the IA with any corrections to this information, if a change is possible. Materiel will normally be processed through Customs by Benefitting Partner officials upon arrival and before being released into the SCO’s custody. The Benefitting Partner Customs Office approves release of materiel to the SCO's custody in advance of Customs procedures if that will facilitate processing. The SCO will enter the receipt date of materiel in SCIP even if appointed U.S.-designated officials transferred the materiel and report the receipt date to the DSCA OPR. The DSCA OPR will verify the receipt date in SCIP. Charges related to detention and demurrage will be funded with current year BPC program funds, either as a separate line on the BPC case or under a BPC transportation case. Contact DSCA OPR for resolution options if there are concerns or issues over storage costs and/or customs fees.

C15.5.6.3.2. Receipt Reporting Upon Arrival. Upon arrival, the SCO or appointed U.S.-designated officials will check skid count and verify each skid has no obvious signs of tampering. SCOs must report the delivery and receipt of materiel within 30 days. The SCO or appointed U.S.-designated officials will document this initial verification using DD Form 1907 "Signature and Tally Record" and subsequently report the delivery using an option in Table C15.T4.

C15.5.6.4. Retention of Title Before Transfer and Receipt of Materiel. The SCO will retain title and custody of the equipment until the Benefitting Partner is ready to receive the equipment. BPC defense articles and defense services are transported to the Benefitting Partner as USG-owned materiel and delivered to the SCO or appointed U.S.-designated officials in the Benefitting Partner’s territory. The defense articles will remain USG-owned materiel until they pass through the Benefitting Partner Customs and are physically transferred to the Benefitting Partner. The International Traffic in Arms Regulations (ITAR), 22 Code of Federal Regulations (CFR) 126.4(a)(4), requires the USG to obtain appropriate end-use and retransfer assurances from the Benefitting Partner before transferring a defense article or defense service to the Benefitting Partner in execution of a DoD SC activity. See Section C15.1.6.3. Contractors that execute BPC cases are required to comply with the ITAR in their dealings with the USG and Benefitting Partner.

C15.5.6.5. Title Transfer. Items are considered delivered when the materiel and title is transferred to a representative of the Benefitting Partner. The SCO is encouraged to hold a handover ceremony to publicly reinforce the deepening bilateral relationship between the United States and the Benefitting Partner. The SCO will conduct a joint inventory, prepare the Transfer and Receipt document, have the document signed by the Benefitting Partner representative, and provide a copy to the IA along with the signed document and attachments.

C15.5.6.5.1. Joint Inventory for Transfer and Receipt of Materiel. When the Benefitting Partner is ready to receive the delivery, the SCO or appointed U.S.-designated officials and the Benefitting Partner representative will conduct a joint materiel inventory using the shipper’s manifest while the materiel remains in the custody of the SCO. The SCO will inform the IA of any materiel suspected to be missing to verify that it has not been included in a subsequent delivery. The initial operator training is responsible for providing initial equipment testing. The SCO will advise the Benefitting Partner that the Benefitting Partner has a limited-time window to notify the SCO if equipment is not functioning as intended.

C15.5.6.5.2. Transfer Document Preparation. After joint inventory, the SCO or appointed U.S.-designated officials will prepare the Transfer and Receipt document. A Transfer and Receipt document, or a comparable form established for this purpose, is used to record the title transfer, must be signed before physical transfer occurs (unless DSCA (IOPS) provides written direction to transfer defense articles due to urgency of need), and serves as a reminder to the Benefitting Partner of their obligations regarding the use, disposition, and security of the defense articles and services in accordance with the Foreign Assistance Act (FAA) Section 505 Agreement. See Figure C15.F3.

C15.5.6.5.2.1. The format for Transfer and Receipt document in Figure C15.F3. will not be used for Coalition Readiness Support Program (CRSP) equipment because CRSP equipment is loaned to the Benefitting Partner and title is not transferred. See Section CRSP.2. The documentation to record the transfer of physical custody of the loaned equipment will be accomplished but the content of this transfer document would be different than Figure C15.F3.

C15.5.6.5.2.2. Transfer and Receipt Document Attachments. The SCO or appointed U.S.-designated officials will attach a materiel inventory list to the Transfer and Receipt document, similar in content and format to the template provided in Figure C15.F4.

C15.5.6.5.3. Transfer Document Presentation. The SCO or appointed U.S.-designated officials and the Benefitting Partner representative will sign the Transfer and Receipt document, acknowledging that the Benefitting Partner is assuming title, custody, and responsibility for the items or services being transferred when appropriate or when defense services are ready to begin. Appointed U.S.-designated officials that presented the articles and services to the Benefitting Partner must provide the SCO with the Transfer and Receipt document.

C15.5.6.5.3.1. Discrepancy Reporting. The SCO will report on a Transportation Discrepancy Report (TDR) materiel that is confirmed to be missing or damaged during transportation.

C15.5.6.5.3.2. If the Benefitting Partner representative does not sign the Transfer and Receipt document, the SCO will provide an explanatory memo to the IA along with the unsigned document and attachments.

C15.5.6.5.4. Title Transfer to the Congressionally Notified Unit. Equipment, services, and training may only be transferred to the Benefitting Partner unit that was included in the Congressional Notification (CN). No equipment, services, or training may be received by a unit that was not specifically listed on the CN.

C15.5.6.5.5. Title Transfer Document Reporting. The SCO will provide a copy of the signed Transfer and Receipt document within 30 days of receipt of materiel to IA and DSCA Regional Portfolio Director (RPD) or Country Portfolio Director (CPD) and will input the document into SCIP. The SCO will provide an explanatory memo to the IA, along with the unsigned document and attachments when the Benefitting Partner representative does not sign the Transfer and Receipt document. The IA then posts the shipment in its systems. The SCO and the Benefitting Partner will track and conduct EUM inspections as required by the DoD Golden Sentry program and guidance in Chapter 8, maintaining appropriate records of EEUM items within the SCIP EUM community.

C15.5.6.6. Additional Responsibilities for Joint Consolidation Point Commercial Air Deliveries.

C15.5.6.6.1. Security Cooperation Organization Responsibilities.

C15.5.6.6.1.1. Advanced Notification. The SCO is responsible for confirming the USG point of contact (POC) for the shipment to the shipping activity (see advance notice of delivery section); the MAPAC; the physical address for delivery; the materiel handling requirements at airport and destination; and of any blackout dates including holidays, weekends, and hours of arrival once the 45-day notification is provided. The SCO will provide a copy to DSCA and upload the Transfer and Receipt Documentation and Annex A to SCIP to create a central point of reference.

C15.5.6.6.1.2. Local Coordination. The SCO will coordinate with Airport/Police Security, Benefitting Partner customs agents, contracted shipping agents, and Benefitting Partner military leadership for sufficient ground handling, transportation, and security from airport to the final destination, and storage, as applicable 18-20 days prior to delivery. In addition, the SCO will coordinate with Persistent Engagement Teams for Support as applicable/available, confirm proper storage for defense articles, and coordinate for any delivery assist team.

C15.5.6.6.1.3. Security Cooperation Organization Delivery Day Requirements. The SCO or appointed U.S.-designated officials will sign Form 1907 "Signature and Tally Record" upon skid count verification on the day of arrival. The SCO or appointed U.S.-designated officials will verify each skid has no obvious signs of tampering. The SCO or appointed U.S.-designated officials will confirm EUM skid's tamper seal is intact and serial number cross checks with advanced documentation. The SCO or appointed U.S.-designated officials will provide for continuous monitoring of materiel from airport to the final destination. The SCO or appointed U.S.-designated officials will ensure that defense articles are delivered and secured per EUM requirements, see Table C8.T2.

C15.5.6.6.1.3.1. Receipt Inventory. The SCO or appointed U.S.-designated officials will conduct an inventory of all articles received in the shipment on the day of arrival or the next day. The SCO or appointed U.S.-designated officials will reconfirm skid count and that each skid has no obvious signs of tampering. The SCO or appointed U.S.-designated officials will reconfirm EUM skid's tamper seal is intact and serial number is correct. The SCO or appointed U.S.-designated officials will conduct a joint serial number inventory of EUM designated defense articles against advanced shipping documentation with a Benefitting Partner recipient unit representative, as applicable. The SCO or appointed U.S.-designated officials will conduct a joint inventory with a Benefitting Partner recipient unit representative of remaining articles. Verification of skid contents by external documentation is sufficient unless there is evidence of tampering or damage. For damaged or tamper evident skids, the SCO or appointed U.S.-designated officials will conduct a 100 percent inventory of articles, then photograph and document any damage, discrepancies, or evidence of tampering.

C15.5.6.6.1.4. Post Delivery Requirements.

C15.5.6.6.1.4.1. Record of Inventory. The SCO or appointed U.S.-designated officials will provide a record of inventory and discrepancies to the IA no later than seven days after delivery. This will include any photographic documentation.

C15.5.6.6.1.4.2. Delivery Surveys. The SCO will provide any requested delivery surveys no later than seven days after delivery.

C15.5.6.6.1.4.3. Handover of Delivered Articles. The SCO or appointed U.S.-designated officials will transfer articles to the Benefitting Partner and provide Transfer and Receipt Documentation with Annex A within 30 days after delivery. At a minimum, one copy is provided to the Benefitting Partner, one copy is provided to the SCO Office (who uploads the document to SCIP). The SCO is still responsible for ensuring the Transfer and Receipt Documentation is provided, even if appointed U.S.-designated officials transferred the articles to the Benefitting Partner.

C15.5.6.6.2. Global Train and Equip Delivery Team Responsibilities.

C15.5.6.6.2.1. 1149 Packet. The Global Train and Equip Delivery Team (GTE DT) will provide the SCO or appointed U.S.-designated officials an 1149 Packet, which will include a list of EEUM articles' serial numbers, a Handover Receipt Annex A (Delivery Report), and a tentative delivery date 25 days prior to delivery.

C15.5.6.6.2.2. Carrier and Shipping Agent. The GTE DT will provide the SCO or appointed U.S.-designated officials carrier and shipping agent contact information, to include name, phone number, and email address 18-20 days prior to delivery.

C15.5.6.6.2.3. Final Documentation. The GTE DT will provide an airway bill, invoice, and packing list to the SCO or USG representative 14-18 days prior to delivery. The GTE DT will provide a delivery marking brief to the SCO, including EUM skid's tamper proof seal serial number(s) seven days prior to delivery.

Delivery Movement Notification. GTE DT will confirm shipment pickup at the JCP (Shipment en route) two to seven days prior to delivery. The Carrier/Shipping Agent will confirm aircraft departure one to two days prior to delivery. The Carrier/Shipping Agent will confirm aircraft arrival to the SCO and GTE DT.

C15.6.1. General. Changes to a Building Partner Capacity (BPC) Letter of Offer and Acceptance (LOA) (also known as a BPC case) or training grant require an amendment and must be accomplished in Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC). Amendments to BPC cases and training grants do not require Benefitting Partner acceptance or signature. All actions identified in Section C6.7.2. and Section C6.7.3.1. apply to BPC amendments. Once placed in "Proposed" status (PSTATUS) in DSAMS-BPC, State approval is required to begin implementation. The BPC case is added to the daily State List (STLST) and CWD posts State approval (STAP) once received. Amendment implementation follows the BPC Case implementation process (see Section C15.4.). For Emergency Implementation, See Section C6.1.2. Implementing Agencies (IAs) may amend the BPC case or training grant during the current or expired period of the relevant appropriation funding for the BPC case or training grant. Once PSTATUS is placed in DSAMS-BPC and funding transferred as applicable, the amendment will be implemented. Amendments after the period of availability (POA) are limited to returning funds, reducing scope if funds were not obligated, and prior year adjustment (PYA) actions (using funds from the same appropriation). IAs must request PYA from DSCA (Office of Business Operations (OBO)) and document approval in DSAMS-BPC case remarks.

C15.6.1.1. Prior Year Adjustments. PYA requests are utilized to make monetary or Months (MOS) adjustments to BPC cases and training grants funded with prior year appropriations. The funds are no longer available for incurring new obligations when an appropriation expires but remain available for recording, adjusting, and liquidating obligations properly chargeable to that account. Expired funds are available for upward adjustments only in specific situations, as outlined below (see Section C15.6.1.1.1.). Five years after expiration, the funds are cancelled and no longer available for any purpose. The IA will submit a PYA Request Package to the DSCA Country Finance Director (CFD), identifying the amount and/or MOS changes required, the reason for the additional funds or time, and supporting documentation. A determination by the IA Contracting Officer (KO) and an opinion by the IA’s legal counsel are required if additional funds for a procurement action are required.

C15.6.1.1.1. Funds Selection for Prior Year Adjustments. The original appropriation will be used, if available, to fund the PYA request. Current year funds that are available for the same purpose as the expired funds must be used to fund the requirement if funds from the original appropriation are not available (either the funds are cancelled, fully expended, or committed to other efforts). The DSCA CFD will determine an appropriate fund source and coordinate approval with DSCA (Office of Business Operations, Comptroller Directorate (OBO/CMP)) and the DSCA (Front Office, Office of the General Counsel (FO/OGC)). A Congressional Notification (CN) may be required in certain instances, (i.e., when assistance exceeds the previous total program value) prior to authorizing and releasing the funds.

C15.6.1.1.2. Prior Year Adjustment Submission for Use of Expired Year Funds. IAs are required to submit PYA Requests to use expired funds for: within scope increases to BPC case or training grant Total Case Value (TCV); adjustments within TCV (e.g. increasing one line and decreasing another); Defense Working Capital Fund (DWCF) fact-of-life price increases; and extensions to MOS, where applicable (see Section C15.6.1.1.2.1. for when PYA Requests are not required). The IA will submit a PYA Request package (see Figure C15.F5.) to the DSCA CFD, identifying the amount and/or MOS changes required, the reason for the additional funds or time, and supporting documentation. The IA Contracting Officer determination and the opinion of the IA’s legal counsel will be included in the request package. IAs will submit the PYA Request package to the DSCA CFD PYA Request mailbox (dsca.ncr.dbo.mbx.prior-year-requests@mail.mil).

C15.6.1.1.2.1. PYA requests for MOS extensions are not required when:

C15.6.1.1.2.1.1. The increase in MOS for a procurement articles line is due to delays in delivery and does not impact any training or services lines;

C15.6.1.1.2.1.2. The increase in MOS for the provision of defense articles, defense services, or training by contractor or USG personnel is being extended to a date that is within the period of availability (POA) for obligation of the appropriation that is financing the article, service, or training; or

C15.6.1.1.2.1.3. The increase in MOS for the provision of defense articles, defense services, or training by contractor or USG personnel is being extended to a date that is within the allowable number of MOS under Cross Fiscal Year (CFY) authority, as applicable.

C15.6.1.1.3. Prior Year Adjustment Submission for Use of Current Year Funds. IAs are required to submit PYA requests to use current year funds to make payments against a cancelled-year appropriation or against an expired-year appropriation where insufficient funds are available in that appropriation to support the requested payment, among other scenarios. IAs will complete the PYA Request Form with all supporting documentation and submit to the DSCA CFD PYA Request mailbox (dsca.ncr.dbo.mbx.prior-year-requests@mail.mil).

C15.6.1.1.3.1. The use of a current year BPC case or training grant to fund a PYA request requires the following:

C15.6.1.1.3.1.1. The line(s) loaded in the DSAMS-BPC. Lines should reflect the Military Articles and Services List (MASL) for articles and services procured in the cancelled-year funded case.

C15.6.1.1.3.1.2. Quantities must default to 'XX', and MOS should end no later than the fund’s expiration date.

C15.6.1.1.3.2. Each line added to the current-year funded BPC case should link to the old case using the Appendix 6 "Current Year Funds Usage – Building Partner Capacity (BPC)" note provided by the CFD PYA Team. The case writer should insert a place holder for said case note until the approved Appendix 6 "Current Year Funds Usage – Building Partner Capacity (BPC)" note is provided. Training grants will be annotated with a remark confirming CFD PYA Team approval.

C15.6.1.1.3.3. IAs must coordinate the use of an Amendment with the BPC PM and the DSCA CFD to assess the feasibility of the request, taking into consideration assessorial surcharges and the current year program's budget allocation.

C15.6.1.1.4. Prior Year Adjustment Approval. Approval from DSCA is required for all PYA requests.

C15.6.1.1.4.1. Within 30 days of receiving the complete PYA request from the IA, the CFD will inform the IA of DSCA's decision. DSCA (OBO/CMP) approves all funding requests that increase the TCV of the BPC case or training grant, and DSCA (Office of Business Operations, Financial Policy & Regional Execution Directorate (OBO/FPRE)) Deputy Assistant Director approves all adjustment requests within the TCV of the BPC case or training grant and Months extensions. DSCA (FO/OGC) and DSCA (OBO/FPRE) also review PYA submissions and provide concurrence.

C15.6.1.1.4.2. If approved, the CFD will provide the verbiage for either the Appendix 6 "Current Year Funds Usage - Building Partner Capacity (BPC)" or Appendix 6 "Prior Year Funds Usage - Building Partner Capacity (BPC)" BPC case note and approval memo to the IA and document the approval in a DSAMS-BPC case remark.

C15.6.1.1.4.3. If disapproved, the CFD will inform the IA of DSCA's decision and provide guidance on the way forward.

C15.6.1.1.4.4. If expired year funds are not available to fund a PYA, then current year funds must be used to fund the requirement (see Section C15.6.1.1.3.). The IA must amend the prior year BPC case to add a unique BPC case note stating funds are not available and reference the amount and current year BPC case funding the expired year bill.

C15.6.1.1.5. Prior Year Adjustment in the Defense Security Assistance Management System Building Partner Capacity Module. When the IA receives the PYA approval memo, the IA will use the memo's date as the Request Date in DSAMS-BPC (the IA will mark the Request Date as complete, which starts the processing clock (Anticipated Offer Date Group D – 60 days) for BPC case document development). The IA will add the required notes and other information required to complete the BPC case document. The IA will then post the Military Approval (MILAP) milestone in DSAMS-BPC in order to submit the BPC case document to DSCA (Office of International Operations, Global Execution Directorate, Case Writing and Development Division (IOPS/GEX/CWD)) for further processing. The IA must include the LOA Checklist, any relevant documentation outside of the approved PYA package, and the DSCA approval memo when uploading the electronic package (ePKG) into the Case Tracking System (CTS). The IA will retain all supporting documentation in accordance with document retention requirements.

C15.6.2. Redirection or Diversion. Articles that are procured but not yet transferred to the Benefitting Partner and require redirection or diversion to a different Benefitting Partner than originally notified to Congress require DSCA notification to the Office of the Under Secretary of Defense for Policy (OUSD(P)) with DSCA also providing recommended options to hold and redirect the equipment and services. The Under Secretary of Defense for Policy (USD(P)) will coordinate with the Department of State (State) prior to USD(P) notifying Congress with the intent to redirect the equipment. USD(P) provides DSCA with direction and will obtain the necessary Congressional approval. DSCA will provide the IA instructions with the development of a new BPC case and new Benefitting Partner, and any additional required information, referencing the original case identifier (ID) in the notes, with the Congressional redirect reference. A note must be added to the original implemented BPC case referencing the new BPC case, identifying the new case ID, the new Benefitting Partner, and the line numbers of all redirected items.

C15.6.3. Coordinated Amendments. There may be occasions when two or more BPC cases need to be amended in order to move funds between the BPC cases to reallocate funding to best meet requirements. Coordinated amendments can be processed for select Title 10 BPC authorities (please see each specific program in Appendix 8 for security cooperation (SC) authority specific guidance to confirm applicability) so long as the amendment reducing value is implemented first followed by an amendment to receive the funds. IAs will coordinate with DSCA (OBO/CMP), (OBO/FPRE) and the cognizant BPC Program Manager (PM) to verify the BPC cases do not exceed CN thresholds.

C15.7.1. General. The Implementing Agency (IA) will expend funds or reduce Building Partner Capacity (BPC) Letter of Offer and Acceptance (LOA) (also known as BPC cases) or training grant value before the funds cancel. DSCA requires that BPC case and training grants funded with expiring/cancelling funds be closed by the IA no later than July 31st of the cancelling year, which allows time for residual funds to be redirected or returned before the deadline. IAs must ensure that vendors have delivered all items to the USG, submitted all invoices, and that all outstanding obligations have been paid in full prior to July 31st. The IA will update the Estimated Closure Date milestone in the Defense Security Assistance Management System (DSAMS) BPC Module (DSAMS-BPC), if appropriate, and begin closure of a BPC case or training grant as soon as it is supply/services complete. Chapter 16 and Appendix 7, Case Reconciliation and Closure Guide (RCG) provide additional information on case reconciliation and closure.

C15.7.2. Closure Facilitation. Each IA will submit contact information for their Closure Facilitator to DSCA (Office of Business Operations, Financial Policy & Regional Execution Directorate (OBO/FPRE)) no later than 15 months prior to funds cancellation, and the Closure Facilitator will submit a list of contracts with BPC case or training grant funds that will cancel the following fiscal year (FY) to DSCA (OBO/FPRE). The Closure Facilitator is expected to lead the stakeholders within the respective IA and ensure timely closure of BPC cases and training grants. The closure facilitator will direct stakeholders to review cancelling BPC cases and training grants as listed in the Security Cooperation Management Suite (SCMS) and identify any BPC case or training grant at risk of not closing by July 31st of the cancelling FY. The Closure Facilitator will also identify to DSCA (Office of Business Operations (OBO)) valid, unliquidated obligations subject to closure/cancellation to determine whether funds are available for future adjustments or payments against such obligations. See DoD Financial Management Regulation (DoD FMR), Volume 3, Chapter 10, 100201.D.

C15.7.3. Reporting Building Partner Capacity Case and Training Grant Financial Status. The IA will input closure status/issues for all BPC cases and training grants funded with cancelling funds on the form at Figure C15.F6., available in SCMS (Input Case Option). DSCA (OBO) will download this information monthly beginning in November, bi-weekly beginning in July, and weekly beginning in September during the FY of cancellation.

C15.7.3.1. Reconciling Balances. The IA and Defense Finance and Accounting Service - Indianapolis (DFAS-IN) will ensure accounting balances have been reconciled, and all performance and disbursements have been properly reported. BPC cases and training grants that have associated open contracts can be closed if no unliquidated obligations exist on those contracts. IAs will prepare the closure certificate and any other necessary supporting documentation in accordance with established procedures. Closure certificates must be submitted electronically to DFAS-IN.

C15.7.3.2. Closing a Building Partner Capacity Case or Training Grant with Open Contracts. A BPC case or training grant may be closed even when an underlying contract remains open as long as the contract lines pertaining to the BPC case or training grant are closed and there are no unliquidated obligations.

C15.7.4. Closure in the Defense Information Finance System. DFAS-IN will review the closure certificate and perform actions to close the BPC case or training grant in Defense Integrated Financial System (DIFS). DFAS-IN should close BPC cases and training grants containing no inhibitors within 30 days of receipt of the closure certificate and process the "C1" closure transaction. When DFAS-IN closes the BPC case or training grant in DIFS, DIFS sends a transaction to the Military Department (MILDEP) execution systems, Centralized Integrated System for International Logistics (CISIL), Management Information System for International Logistics (MISIL), Security Assistance Management Information System (SAMIS) or Case Management Control System (CMCS) to close the BPC case or training grant in those systems. The systems send a transaction to update the BPC case or training grant in DSAMS-BPC to place "Closed" status when the closure transaction is processed. IAs can review closure information by referring to MILDEP systems or to the Security Cooperation Information Portal (SCIP).

C15.7.5. Financial Activity After Funds Cancel.

C15.7.5.1. Adding Funds to an Open Building Partner Capacity Case or Training Grant. The IA must contact the Country Finance Director (CFD) in DSCA (OBO/FPRE) if additional funds are required on a BPC case or training grant that was funded with a canceled appropriation. DSCA (OBO) may approve the use of a currently available appropriation to pay this requirement in accordance with Section C15.6.1.1. (guidance on submitting Prior Year Adjustment requests). Further, the total of all payments from the current appropriation must not exceed the amount specified in DoD FMR, Volume 3, Chapter 10, 100201.F. Refer to Section C15.6.1.1. for submitting Prior Year Adjustment (PYA) requests.

C15.7.5.2. Reopening a Closed Building Partner Capacity Case or Training Grant. It will be necessary for an IA to reopen a BPC case or training grant once closed if there is financial activity that impacts the closed BPC case or training grant. The IA will send a request to DSCA (OBO/FPRE) to reopen the BPC case or training grant, with sufficient justification, for review and approval to either apply a credit or use current year funds if a BPC case or training grant needs to be reopened.

C15.7.6. Delivery to the Benefitting Partner After Case and Training Grant Closure. Items that have been delivered to the USG pursuant to a BPC case or training grant but have not yet been final delivered to the Benefitting Partner will be identified during the BPC or training grant closure process. A program-wide transportation BPC case will be utilized to effectuate final shipment and will include a unique case note identifying the Benefitting Partner to receive the items, the BPC case identifier, the description and quantities to be provided, and the estimated receipt date of the items. The IA will provide the Security Cooperation Organization (SCO) a copy of the BPC case or training grant information and amendments upon implementation.