DEFENSE SECURITY COOPERATION AGENCY 2800 DEFENSE PENTAGON WASHINGTON, D.C. 20301-2800

7/25/2011

MEMORANDUM FOR :

DEPUTY UNDER SECRETARY OF THE AIR FORCE FOR INTERNATIONAL AFFAIRS
DEPUTY ASSISTANT SECRETARY OF THE ARMY FOR DEFENSE EXPORTS AND COOPERATION
DEPUTY ASSISTANT SECRETARY OF THE NAVY FOR INTERNATIONAL PROGRAMS
DIRECTOR, DEFENSE CONTRACT MANAGEMENT AGENCY
DIRECTOR FOR SECURITY ASSISTANCE, DEFENSE FINANCE AND ACCOUNTING SERVICE - INDIANAPOLIS OPERATIONS
DIRECTOR, DEFENSE INFORMATION SYSTEMS AGENCY
DIRECTOR, DEFENSE LOGISTICS AGENCY
DIRECTOR, DEFENSE LOGISTICS INFORMATION SERVICE
DIRECTOR, DEFENSE REUTILIZATION AND MARKETING SERVICE
DIRECTOR, DEFENSE THREAT REDUCTION AGENCY
DIRECTOR, NATIONAL GEOSPATIAL INTELLIGENCE AGENCY
DEPUTY DIRECTOR FOR INFORMATION ASSURANCE, NATIONAL SECURITY AGENCY
DIRECTOR, MISSILE DEFENSE AGENCY

SUBJECT :

Closure of Foreign Military Sales (FMS) Cases with Reduced or Zero FMS Administrative Surcharge Collections (DSCA Policy Memo 11-41)

This memorandum clarifies requirements for requesting permission to close Foreign Military Sales (FMS) and FMS-like cases with reduced FMS Administrative Surcharge collections (e.g., less than would be calculated against the revised value of the case or with zero ($0) FMS Administrative Surcharge collections). Specifically, it clarifies the amount of FMS Administrative Surcharge to assess/collect in certain circumstances. Please refer to the following references for existing guidance:

1. DSCA Security Assistance Management Manual (SAMM) (DoD 5105.38-M)
   • C6.8.4.2. Case Closures at Reduced or $0 Value
   • C6.9.1. Purchaser-Requested Case Cancelations
   • C6.9.2. USG-Requested Case Cancelations
2. DSCA Reconciliation and Closure Manual (RCM) (DoD 5105.65-M)
   • C3.11. Zero Dollar Value Closure Requests

When requesting that a case be closed with a reduced or zero FMS Administrative Surcharge value, or requesting that a case be canceled (purchaser or USG request), the Implementing Agency should submit a request to DSCA/DBO-FPIO for review/approval of the surcharge collection amount. The information to be provided is at ATCH 1.

Please note that the minimum, non-refundable amount of FMS Administrative Surcharge to be applied will generally be as follows: a) The value when combining the Small Case Management Line (SCML) plus the FMS Administrative Surcharge value, OR b) One-half of the FMS Administrative Surcharge estimated on the case, OR c) The standard FMS Administrative Surcharge percentage of the expended value, whichever is greater. Also note that if an SCML was not included on the basic case and the case was accepted on or after August 1, 2006, an SCML must be added if the case value is reduced such that an SCML is needed to reach $15,000 in surcharge collections. If an Implementing Agency requests that a case be closed at zero dollar value and determines that the appropriate FMS Administrative Surcharge to be applied is the amount already collected (generally, the front-loaded amount of fifty percent), there is no DSCA/DBO-FPIO approval required. The case may be sent directly to DFAS for closure. In all other instances, the requests should be provided to DSCA/DBO-FPIO for action. Upon decision, DSCA/DBO-FPIO will enter a case remark in DSAMS and provided a response to the Implementing Agency with a copy to DFAS.

Should you require further information, please contact, Michele Kennedy, DSCA/DBO-FPIO, michele.kennedy@dsca.mil, 703-604-6578.

Ann Cataldo
Principal Director
Business Operations

ATTACHMENT : 
As stated

CC :

STATE/PM-RSAT
DISAM
USASAC
SATFA
TRADOC
USACE
NAVICP
NETSAFA
AFSAC
AFSAT
AFCEE
JFCOM
SOCOM
EUCOM
CENTCOM
NORTHCOM
PACOM
AFRICOM
SOUTHCOM
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