Cost of administering FMS and FMS-like programs

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

• 3.2% for both standard and nonstandard articles/services (for LOA lines implemented on or after June 1, 2018)
• 3.5% for both standard and nonstandard articles/services (for LOA lines accepted on or after November 1, 2012 and before June 1, 2018).
• 3.8% for both standard and nonstandard articles/services (for LOA lines accepted on or after August 1, 2006 and before November 1, 2012).
• 2.5% for standard articles/services (for LOA lines implemented on or after June 1, 1999 and before August 1, 2006).
• 5% for non-standard articles/ services (for LOA lines for non-standard items implemented before August 1, 2006).
• 3% for standard articles/services (for LOA lines implemented on or after October 1, 1977 and before June 1, 1999.)
• For cases signed prior to October 1, 1977, the FMS Administrative Surcharge was 2%.
• 5% for Foreign Military Sales Order (FMSO) I cases

The FMS Administrative Surcharge does not apply to:

• Program Management Lines (PMLs). Per the AECA Section 21(g),the FMS Administrative Surcharge may be excluded from non-dedicated training lines applicable to reciprocal pricing agreement countries (refer to Tables C10.T13. and C10.T14.). However, if excluded, the MILDEP is responsible for the cost."
• Small Case Management Lines (SCMLs).
• EDA Grant Lines

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

AECA, sections 21(e)(1)(A) (22 U.S.C. 2761(e)(1)(A)) and 43(b) (22 U.S.C. 2792(b))
DoD FMR, Volume 15, Chapter 7, paragraph 0706

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

CAS is comprised of three basic elements:

• quality assurance and inspection;
• contract management; and
• contract audit.

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

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

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

May be waived if reciprocal agreements exist.

For USACE cases:

Implemented on or after February 1, 2020, apply a surcharge of:

• 0.10% for contract audit

Implemented on or after October 1, 2002, but before February 1, 2020, apply a surcharge of:

• 0.20% for contract audit

Implemented before October 1, 2002, apply a surcharge of:

• 0.50% for contract audit

For non-USACE cases:

Implemented on or after February 1, 2020, the following surcharge(s) apply:

• 0.45% contract administration/management
• 0.45% quality assurance and inspection
• 0.10% contract audits
• For contracts administered overseas, an additional 0.20% (OCONUS CAS) applies to the entire case. (For contracts administered overseas (by permanent-party DCMA employees), an additional 0.20% (OCONUS CAS) applies to the entire case.)

Implemented on or after December 1, 2014, but before February 1, 2020, the following surcharge(s) apply:

• 0.50% contract administration/management
• 0.50% quality assurance and inspection
• 0.20% contract audits
• For contracts administered overseas, an additional 0.20% (OCONUS CAS) applies to the entire case. (For contracts administered overseas (by permanent-party DCMA employees), an additional 0.20% (OCONUS CAS) applies to the entire case.)

Implemented on or after October 1, 2002, but before December 1, 2014, the following surcharge(s) apply:

• 0.65% contract administration/management
• 0.65% quality assurance and inspection
• 0.20% contract audits
• For contracts administered overseas, an additional 0.20% (OCONUS CAS) applies to the entire case. (For contracts administered overseas (by permanent-party DCMA employees), an additional 0.20% (OCONUS CAS) applies to the entire case.)

Implemented before October 1, 2002, the following surcharge(s) apply:

• 0.50% contract administration/management
• 0.50% quality assurance and inspection
• 0.50% contract audits

AECA, section 21(h) (22 U.S.C. 2761(h)) and DoD FMR, Volume 15, Chapter 7, paragraph 0706

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