Attachment: Security Assistance Management Manual E-Change 759

1. Add Section S333.5.3. per below:

   S333.5.3. Congressional Notification Before Treating Defense Articles as Department of War Stock When Delivery to Benefitting Partner is Cancelled. To obtain an Under Secretary of War for Policy (USW(P)) determination to treat Section 333 materiel as DoW stock after delivery to a Benefitting Partner is cancelled (see Section S333.6.15.), DSCA (Office of International Operations (IOPS)) reviews and coordinates with DSCA offices and the applicable Implementing Agencies (IAs) to submit required information to the Office of the Under Secretary of War for Policy (OUSW(P)), which includes a draft CN and a DSCA recommendation for which DoW organization should gain the defense articles to be treated as DoW stock. If USW(P) determines Section 333 materiel will be treated as DoW stock, the CN will be transmitted to Congress and after the 15-day waiting period, the DoW may treat the Section 333 material as DoW stock. After the CN is transmitted and the 15-day waiting period has passed, the defense articles can be treated as DoW stock and the DoW organization gaining the defense articles will be responsible for costs related to the use, storage, or disposition of the gained defense articles.

2. Add Section S333.6.10.9. per below:

   S333.6.10.9. If defense articles will be treated as DoW stock, the BPC case originally providing the defense articles is amended to identify the treatment as DoW stock via the line description note with future DSAMS/DSAMS Building Partner Capacity Module (DSAMS-BPC) functionality to be added to track quantities with more granularity and to facilitate reporting. The IA will identify the quantity being treated as DoW stock in the applicable line description note. See Section S333.6.15. for treatment as DoW stock and see Section C15.6.3. and Section C15-Legacy.6.5. for redirection and disposal.

3. Add S333.6.15. and subsections per below:

   S333.6.15. Redirection, Treatment as Department of War Stock, or Disposal of Defense Articles not yet Title Transferred Originally Intended for a Benefitting Partner. Programs will be reduced in scope or cancelled for various reasons, and defense articles that were originally intended for a Benefitting Partner will no longer be delivered. In situations such as these, DSCA (Office of International Operations (IOPS)) and the IA will coordinate to determine the most cost-effective course of action for storage and inspection requirements pending disposition decision. If defense articles will be redirected or disposed of, see Section C15.6.3. and Section C15-Legacy.6.5. The process for determining disposition is outlined in Figure.S333.F5. below.

   Figure S333.F5. S333 Defense Articles Disposition Decision Flow Chart

    

   • Web Version of Figure 
   • PDF Version of Figure 

   S333.6.15.1. Resolution for a Frustrated Section 333 Delivery. On behalf of the Secretary of War (SECWAR), the Under Secretary of War for Policy (USW(P)) may direct that an undelivered Section 333 defense article will not be provided to the Benefitting Partner. Such a circumstance constitutes a frustrated Section 333 delivery (see Section S333.6.15.1.1.). In the event USW(P) fully or partially cancels a Section 333 program, USW(P) and the Under Secretary of War for Acquisition and Sustainment (USW(A&S)) will provide direction for the DoW to accomplish necessary actions to either redirect the defense articles to another Benefitting Partner(s), dispose of the defense articles, or to treat the defense articles as DoW stock.

   S333.6.15.1.1. Defense Security Cooperation Agency Responsibilities for Seeking Resolution for a Frustrated Section 333 Delivery. For a frustrated (unable to be delivered to the notified Benefitting Partner) Section 333 delivery, in coordination with the applicable IA, the CCMD, the Office of the Under Secretary of War for Sustainment (OUSW(A&S)), the Office of the Undersecretary of War for Policy, Strategy, Plans, and Forces (OUSW(P/SPF)), and State, DSCA (IOPS) will seek a USW(P) determination to either redirect the undelivered defense articles to a different Benefitting Partner(s), to dispose of the defense articles, or to notify Congress of the Department's intent to treat Section 333 procured defense articles as DoW stock. Before seeking USW(P)'s determination, DSCA will coordinate with IAs (IAs will coordinate with Military Department (MILDEP) Material Managers (see DoD Manual (DoDM) 4160.21, Volume 1, Volume 2, Volume 3, and Volume 4 and DoD Instruction (DoDI) 5160.68)), Defense Agencies with IA responsibilities, and Defense Logistics Agency (DLA) Disposition Services to assess whether DoW organizations have a need for any of the defense articles no longer required to support the Section 333 program. If no DoW organization has a need for the defense articles, DSCA will recommend that USW(P) and USW(A&S) direct that either the IA that acquired the defense articles to support the Section 333 program treat this material as DoW stock or transfer property to DLA Disposition Services for disposal of the defense articles. DSCA (IOPS) recommendation will include whether the IA and/or DLA agrees or opposes the DSCA recommendation and any concerns that DoW organizations or State may have. When DSCA recommends that Section 333 procured defense articles be treated as DoW stock, DSCA will provide the following information to inform the USW(P) action:

   1. The Benefitting Partner and specific unit whose capacity was intended to be built under the program;
   2. Section 333 Program Name, Tranche Number, and BPC Case IDs;
   3. Equipment Details: The acquisition cost, the current depreciated value, quantity, type, purpose, and condition and/or condition code of the defense article;
   4. The location of the defense article;
   5. Explanation of whether the defense article is pending title transfer to the Benefitting Partner or whether the Benefitting Partner is seeking to return delivered defense article (See Section C15.5.6.3. and Section C15-Legacy.5.6.5.);
   6. An explanation as to why the defense article is no longer needed by the original Benefiting Partner and is unable to be re-directed to support another Section 333 program.
   7. A DSCA recommendation for which DoW organization USW(P) should designate to gain and dispose of the defense article. DSCA (IOPS) will summarize whether the recommended DoW organization agrees or opposes DSCA's recommendation and forward any concerns that DoW organization has with gaining the defense article as their stock.

   S333.6.15.1.1.1. If more than one DoW organization has a need for the defense articles, USW(P) and USW(A&S) determine which specific DoW organization will gain the defense articles no longer required to support the Section 333 program.

   S333.6.15.1.1.2. Benefitting Partner's Request to Return Delivered Section 333 Defense Articles to the Department of War. For proposed return of Section 333 defense articles for which title has already transferred to the Benefitting Partner, DSCA will seek a USW(P) and USW(A&S) determination whether to accept the return of defense articles if one or more DoW organizations have indicated a need for the defense articles to be returned. Return to DoW stock does not require a Third Party Transfer request, but Routine EUM or EEUM requirements and procedures must be followed, as outlined in Table C8.T2. For transfers other than return to DoW stock, the Benefitting Partner must utilize the Third Party Transfer Process as outlined in Section S333.2.10.2.

   S333.6.15.1.1.3. Depreciation and Cost-Benefit Calculation of Serviceable Articles. When IAs determine depreciated value data for defense articles in support of a disposition decision, IAs will adhere to in-line depreciation standards as outlined in Department of War Financial Management Regulation (DoW FMR), DoD 7000.14-R, Volume 4, Chapter 4. For a serviceable defense article in need of repair, if the cost of repair exceeds the current depreciated value of the article as outlined in DoDM 4140.01, Volume 4 Section 3.2., the defense article will be disposed as noted in Section C15.6.3. or Section C15-Legacy.6.5. A defense article that does not pass inspections prior to shipping due to safety concerns where there is no other DoW use for the defense article will also be disposed of as noted in Section C15.5.6.3. or Section C15-Legacy.6.5.

   S333.6.15.1.2. Required Actions After an Under Secretary of War for Policy and Office of the Undersecretary of War for Acquisition and Sustainment Determination that Articles will be Treated as Department of War Stock.

   S333.6.15.1.2.1. Consistent with the USW(P) and USW(A&S) decision, and after completion of required CN, DSCA (IOPS) informs the DoW organization of their responsibility to treat the defense articles as their stock and their responsibility to use or dispose of the gained materiel if it is unneeded excess stock.

   S333.6.15.1.2.2. Reclaiming Articles After Title Transfer. In cases where title has already transferred to the Benefitting Partner, after completion of the required Section 333(h) (10 U.S.C. 332(h)) CN, the United States Military Group (MILGP) is responsible for re-gaining possession of the articles on behalf of the DoW organization who is gaining the returned materiel by re-issuing a new Transfer and Receipt document (see Figure C15.F4. and Figure C15-Legacy.F4.). The completion of the custody transfer documentation relieves the Benefitting Partner of legal ownership of the materiel and Routine EUM or EEUM requirements following the procedures outlined in Table C8.T2. A TPT request is not required for articles being returned to DoW stock.

   S333.6.15.1.3. Periodic Review of Section 333 Defense Articles Pending Title Transfer. DSCA (IOPS) will review inventories of all Section 333 articles pending title transfer on a quarterly basis to identify any articles that warrant redirect to an alternate Benefitting Partner or are no longer needed for any Section 333 program. Any Section 333 defense articles whose planned title transfer is intentionally paused due to circumstances that frustrate planned title transfer should be evaluated for potential redirect to support an alternate notified Section 333 program. Evaluation of frustrated defense articles will be prioritized by remaining shelf life. If an alternate Benefiting Partner would benefit from the transfer of the defense articles but the defense articles fall outside the scope of any existing Section 333 program for the alternate Benefitting Partner, in coordination with OUSW(P) (SPF), DSCA (IOPS) will seek a USW(P) and USW(A&S) decision and Secretary of State concurrence to notify a new Section 333 program to facilitate the redirect of the Section 333 materiel to the alternate Benefitting Partner.

4. Insert Figure S333.F5. S333 Defense Articles Disposition Decision Flow Chart

5. Rename C15.6. per below:

   From:

   C15.6. - Building Partner Capacity Letter of Offer and Acceptance and Training Grant Amendments and Other Changes to Programs.

   To:

   C15.6. - Building Partner Capacity Letter of Offer and Acceptance Amendments and Changes to Programs.

6. Update C15.6.2. per below:

   Current:

   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.

   Revised:

   C15.6.3. Program Changes: Defense Article Redirection, Treatment as Department of War Stock, and Disposal. If a Benefitting Partner will not be receiving a defense article and the defense article has either been released from stock or from a vendor and is in the delivery process, if the defense articles are determined to be unserviceable or they do not pass inspection, they can be redirected to the Defense Logistics Agency (DLA) for disposal, or to the Joint Munitions Command (JMC) for all ammunition items that require disposal; alternatively, the defense article can be redirected to another Benefitting Partner eligible to receive the defense article under the same authority. For Section 333, after CN, defense articles can also be treated as DoW stock (see Section S333.6.15.).

   C15.6.3.1. Redirection of Defense Articles to Different Benefitting Partners. For BPC Programs with multiple eligible Benefitting Partners, articles that are procured but not yet transferred to a Benefitting Partner may require redirection via renotification to a different Benefitting Partner. This may occur because of political instability, program cancellation, changes in requirements, or shifting priorities. The Office of the Under Secretary of War for Policy (OUSW(P)), the Office of the Undersecretary of War for Acquisition and Sustainment (OUSW(A&S)), State, and the geographic Combatant Command (CCMD) may all identify when a Benefitting Partner will no longer receive the defense articles. The Under Secretary of War for Policy (USW(P)) will coordinate with State prior to OUSW(P) notifying Congress with the intent to redirect the defense article and determine the new Benefitting Partner with input from the geographic CCMD, DSCA (Office of International Operations (IOPS)), and the IA that sourced the defense article (see Table C15.T6.). OUSW(P) provides DSCA with direction and will support the CN.

   Table C15.T6. Key Factors for Determining Redirection

   Key Factors	Action Required
   Identification	DSCA (IOPS) and the geographic CCMD coordinate to identify specific defense articles that may warrant redirection to an alternate Benefitting Partner(s).
   Condition Assessment	The DoW organization in physical possession of the articles coordinates with the IA that sourced the defense article to assess the condition to determine suitability for transfer to a new Benefitting Partner since the articles will likely be shipped "as is."
   Location Assessment	The location of articles at the time a proposed redirection is considered is a critical factor because of the need to determine the feasibility and cost of shipment to the new Benefitting Partner(s). For defense articles physically located in a specific geographic CCMD's area of operations, redirecting those articles to a different area of operations may be cost ineffective and administratively cumbersome.
   Significant Security Cooperation Initiative Alignment (SSCI)	Any redirection decision must be consistent with and further an established SSCI for the potential new Benefitting Partners. The geographic CCMD is responsible for explaining how the proposed redirection furthers U.S. security interests.
   Benefitting Partner Absorption Capacity	Each potential Benefitting Partner for gaining redirected defense articles must be assessed for absorption capacity by the applicable geographic CCMD for the new Benefitting Partner.
   Geographic CCMD Preference	The preference of the applicable geographic CCMD for the cancelled BPC program for redirecting articles to new Benefitting Partner(s) will always be considered but does not prevent USW(P) direction to redirect defense article to other Partner(s).

   C15.6.3.1.1. Selection of the new Benefitting Partner(s). USW(P) selects the new Benefitting Partner(s), in coordination with DSCA (IOPS), the geographic CCMD that was the original Requesting Authority (RA), and any geographic CCMDs that may be the new RA.

   C15.6.3.1.1.1. After the new Benefitting Partner(s) is selected by USW(P), DSCA (IOPS) will provide the IA instructions regarding the amendment to the original case and the development of a new case (see Section C15.3.) or an amendment to an existing case (using the program code with which the articles were originally provided as funds obligation is not required), and any additional required information. On the original case, redirection will be tracked in DSAMS-BPC via Case Remarks and Line Description Note (with future DSAMS-BPC functionality to be added to track redirection quantities with more granularity and to facilitate reporting). The IA will enter a case remark indicating the BPC case line, quantity, and the item description not being delivered to the original Benefitting Partner, and the new BPC case ID the transfer will be conducted on. The IA will only identify the quantity being redirected in the applicable line description note. Prior Year Adjustment Review is not required. On the new case or an amendment to an existing case, redirection will be tracked in DSAMS-BPC via Case Remarks and Line Description Note (with future DSAMS-BPC functionality to be added to track redirection and to facilitate reporting). The IA will enter a case remark indicating the quantity redirected, the item description, the original case identifier (ID), and any relevant Congressional Notification reference. The IA will only identify the quantity being redirected in the applicable line description note.

   C15.6.3.1.1.2. Memorandum of Request. The applicable geographic CCMD for a new Benefitting Partner under consideration to receive redirected defense articles provides a Memorandum of Request (MOR) from Director of Strategy, Engagement, and Programs (or equivalent - J5 Director) addressed to the DSCA (IOPS) Assistant Director to confirm that the Partner's capacity to utilize the redirected articles and how the proposed redirect furthers U.S. security objectives. The MOR will include:

   • Identification of Specific Articles.
   • Absorption Capacity. Confirmation that the Benefitting Partner has the capacity to effectively utilize the articles.
   • Strategic Rationale. Explanation of the strategic reasons that may be advantageous to the USG for the Benefitting Partner.
   • Benefitting Partner acknowledgment that the equipment will be shipped in "as is" condition.

   C15.6.3.1.1.3. Congressional Notification of Re-Directed Defense Articles. Articles requiring redirection from the original Benefitting Partner must comply with applicable CN requirements.

   C15.6.3.2. Disposal of Defense Articles. For defense articles that are determined to be unserviceable or that do not pass inspection prior to shipping due to safety concerns (e.g., ammunition) DSCA (IOPS) will accomplish the disposal action in coordination with the DLA, JMC, OUSW(P) (SPF), and OUSW(A&S). The disposal will be identified on the case via the line description note, with future DSAMS-BPC functionality to be added to track disposal quantities with more granularity and to facilitate reporting. The IA will identify the quantity being disposed of in the applicable line description note.

7. Renumber C15.6.3. "Coordinated Amendments" to C15.6.2.

8. Rename C15-Legacy.6. per below:

   From:

   CC15-Legacy.6. - Building Partner Capacity Amendments and Modifications.

   To:

   C15-Legacy.6. - Building Partner Capacity Letter of Offer and Acceptance Amendments, Modifications, and Changes to Programs.

9.  

   Current:

   C15-Legacy.6.3. 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 case referencing the new LOA, identifying the new case ID, the new Benefitting Partner, and the line numbers of all redirected items.

   Revised:

   C15-Legacy.6.5. Program Changes: Defense Article Redirection, Treatment as Department of War Stock, and Disposal. If a Benefitting Partner will not be receiving a defense article and the defense article has either been released from stock or from a vendor and is in the delivery process, if the defense articles are determined to be unserviceable or they do not pass inspection they can be redirected to the Defense Logistics Agency (DLA) for disposal, or to the Joint Munitions Command (JMC) for all ammunition items that require disposal; alternatively, the defense article can be redirected to another Benefitting Partner eligible to receive the defense article under the same authority. For Section 333, after CN, defense articles can also be treated as DoW stocks (see Section S333.6.15.).

   C15-Legacy.6.5.1. Redirection of Defense Articles to Different Benefitting Partners. For BPC Programs with multiple eligible Benefitting Partners, articles that are procured but not yet transferred to a Benefitting Partner may require redirection via renotification to a different Benefitting Partner. This may occur because of political instability, program cancellation, changes in requirements, or shifting priorities. The Office of the Under Secretary of War for Policy (OUSW(P)), the Office of the Undersecretary of War for Acquisition and Sustainment (OUSW(A&S)), the Department of State (State), and the geographic Combatant Command (CCMD) may all identify when a Benefitting Partner will no longer receive the defense articles. The Under Secretary of War for Policy (USW(P)) will coordinate with State prior to OUSW(P) notifying Congress with the intent to redirect the defense article and determine the new Benefitting Partner with input from the geographic CCMD, DSCA (Office of International Operations (IOPS)), and the IA that sourced the defense article (see Table C15-Legacy.T7.). OUSW(P) provides DSCA with direction and will support the CN.

   Table C15-Legacy.T7. Key Factors for Determining Redirection

   Identification	DSCA (IOPS) and the geographic CCMD coordinate to identify specific defense articles that may warrant redirection to an alternate Benefitting Partner(s).
   Condition Assessment	The DoW organization in physical possession of the articles coordinates with the IA that sourced the defense article to assess the condition to determine suitability for transfer to a new Benefitting Partner since the articles will likely be shipped "as is."
   Location Assessment	The location of articles at the time a proposed redirection is considered is a critical factor because of the need to determine the feasibility and cost of shipment to the new Benefitting Partner(s). For defense articles physically located in a specific geographic CCMD's area of operations, redirecting those articles to a different area of operations may be cost ineffective and administratively cumbersome.
   Significant Security Cooperation Initiative Alignment	Any redirection decision must be consistent with and further an established SSCI for the potential new Benefitting Partners. The geographic CCMD is responsible for explaining how the proposed redirection furthers U.S. security interests.
   Benefitting Partner Absorption Capacity	Each potential Benefitting Partner for gaining redirected defense articles must be assessed for absorption capacity by the applicable geographic CCMD for the new Benefitting Partner.
   Geographic CCMD Preference	The preference of the applicable geographic CCMD for the cancelled BPC program for redirecting articles to new Benefitting Partner(s) will always be considered but does not prevent USW(P) direction to redirect defense article to other Partner(s).

   C15-Legacy.6.5.1.1. Selection of the new Benefitting Partner(s). USW(P) selects the new Benefitting Partner(s), in coordination with DSCA (IOPS), the geographic CCMD that was the original Requesting Authority (RA), and any geographic CCMDs that may be the new RA.

   C15-Legacy.6.5.1.1.1. After the new Benefitting Partner(s) is selected by USW(P), DSCA (IOPS) will provide the IA instructions regarding the amendment to the original case and the development of a new case (see Section C15.3. for cases developed using the DSAMS BPC Module (DSAMS-BPC) and Section C15-Legacy.3. for cases developed using the DSAMS Case Module) or an amendment to an existing case (using the program code with which the articles were originally provided as funds obligation is not required), and any additional required information. On the original case, redirection will be tracked in DSAMS via Case Remarks and Line Description Note (with future DSAMS functionality to be added to track redirection quantities with more granularity and to facilitate reporting). The IA will enter a case remark indicating the BPC case line, quantity, and the item description not being delivered to the original Benefitting Partner, and the new BPC case ID the transfer will be conducted on. The IA will only identify the quantity being redirected in the applicable line description note. Prior Year Adjustment Review is not required. On the new case or an amendment to an existing case, redirection will be tracked in DSAMS or DSAMS-BPC via Case Remarks and Line Description Note (with future DSAMS functionality to be added to track redirection and to facilitate reporting). The IA will enter a case remark indicating the quantity redirected, the item description, the original case identifier (ID), and any relevant Congressional Notification reference. The IA will only identify the quantity being redirected in the applicable line description note.

   Memorandum of Request. The applicable geographic CCMD for a new Benefitting Partner under consideration to receive redirected defense articles provides a Memorandum of Request (MOR) from Director of Strategy, Engagement, and Programs (or equivalent - J5 Director) addressed to the DSCA (Office of International Operations (IOPS)) Assistant Director to confirm that Partner's capacity to utilize the redirected articles and how the proposed redirect furthers U.S. security objectives. The MOR will include:

   • Identification of Specific Articles.
   • Absorption Capacity. Confirmation that the Benefitting Partner has the capacity to effectively utilize the articles.
   • Strategic Rationale. Explanation of the strategic reasons that may be advantageous to the USG for the Benefitting Partner.
   • Benefitting Partner acknowledgment that the equipment will be shipped in "as is" condition.

   C15-Legacy.6.5.1.1.3. Congressional Notification of Redirected Defense Articles. Articles requiring redirection from the original Benefitting Partner must comply with applicable CN requirements.

   C15-Legacy.6.5.2. Disposal of Defense Articles. For defense articles that are determined to be unserviceable or that do not pass inspection prior to shipping due to safety concerns (e.g., ammunition) DSCA (IOPS) will accomplish the disposal action in coordination with the DLA, JMC, OUSW(P) (SPF), and OUSW(A&S). The disposal will be identified on the case via the line description note, with future DSAMS functionality to be added to track disposal quantities with more granularity and to facilitate reporting. The IA will identify the quantity being disposed of in the applicable line description note.

10. Renumber the following sections:

    Current	Revised
    C15-Legacy.6.4. "Use of a Modification"	C15-Legacy.6.3. ...
    C15-Legacy.6.5. "Coordinated Modifications and Subsequent Amendments."	C15-Legacy.6.4. ...