Incorporated
Policy changes from this SAMM E-Change memo have been incorporated into the SAMM.
This memo supersedes DSCA 04-41.
DEFENSE SECURITY COOPERATION AGENCY
2800 DEFENSE PENTAGON
WASHINGTON, D.C. 20301-2800
9/18/2026
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, DEFENSE INFORMATION SYSTEMS AGENCY
DIRECTOR, DEFENSE LOGISTICS AGENCY
DIRECTOR, DEFENSE THREAT REDUCTION AGENCY
DIRECTOR, MISSILE DEFENSE AGENCY
DIRECTOR, NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY
DIRECTOR, SECURITY COOPERATION ACCOUNTING DIRECTORATE, DEFENSE FINANCE AND ACCOUNTING SERVICE, INDIANAPOLIS OPERATIONS
DIRECTOR OF CYBERSECURITY DIRECTORATE AND DEPUTY NATIONAL MANAGER FOR NATIONAL SECURITY SYSTEMS, NATIONAL SECURITY AGENCY
SUBJECT :
Defense Security Cooperation Agency Policy Memorandum 26-77, Reimbursing Military Pay and Allowances for Defense Services [SAMM E-Change 847]
REFERENCE :
- Security Assistance Management Manual Policy Memo 04-41, "Pricing Military Personnel Reimbursement in Support of Foreign Military Sales (FMS)", 13 Sep 2004
- The Office of the Secretary of War - Comptroller (OSW-C), "Military Personnel Composite Standard Pay and Reimbursement Rates (Tab K)," published annually.
This memorandum supersedes reference (a) and provides reimbursement guidance for military personnel providing defense services priced in Foreign Military Sales (FMS) cases. Military Pay and Allowances (MPA) are priced using a composite rate in accordance with reference (b). Components must compare MPA reimbursement requests against their manning document to ensure reimbursement requests are authorized. The policy in the attachment is incorporated into the DSCA SAMM at https://samm.dsca.mil.
If you have questions on this memorandum, please contact the Office of Business Operations, Financial Policy & Regional Execution Directorate, Financial Policy Division (OBO/FPRE/FP) at dsca.ncr.obo.list.fpre-fp@mail.mil. Please reference the DSCA policy number and memorandum subject.
For general questions about the SAMM, please contact the Office of Strategy, Plans, and Policy, Execution Policy and Analysis Directorate (SPP/EPA)) at dsca.ncr.spp.mbx.epa@mail.mil.
Brian T. Watford
Acting Chief Operating Officer and Chief Financial Officer
Defense Security Cooperation Agency
ATTACHMENT :
SAMM E-Change 847 - Defense Security Cooperation Agency Policy Memorandum 26-77, Reimbursing Military Pay and Allowances for Defense Services
Attachment: Security Assistance Management Manual E-Change 847
Defense Security Cooperation Agency Policy Memorandum 26-77, Reimbursing Military Pay and Allowances for Defense Services
Revise C9.4.3.3.:
From:
C9.4.3.3. Military Fringe Benefits. Military personnel services are priced using the applicable DoD Military Personnel Composite Rate plus an acceleration factor that covers medical health care costs of active duty personnel and their dependents. In addition, rates include a per capita normal cost for Medicare-Eligible Retiree Health Care (MERHC) accruals. These factors are published annually by OUSD(C) at Department of Defense Fiscal Year (FY) Reimbursable Rates webpage. Military fringe benefits consist of quarters (family housing), subsistence, medical (hospital), and other personnel support (e.g., commissary and exchanges). The costs are applicable to both direct and indirect military salaries and are computed by applying the acceleration factors for officer and enlisted personnel. These costs are included for all military personnel allocated to the training course. Tuition rates D and E exclude both direct and indirect military salaries; therefore, military fringe benefits are excluded as well. Military fringe benefits costs, used as part of base operating support (BOS) costs and allocated to training courses, are used as indirect costs in the tuition rates. The costs must not be duplicated in the tuition rates by also being included as direct and indirect costs under Pay and Fringe Benefits.
To:
C9.4.3.3. Military Fringe Benefits Military Composite Rates and Fringe Benefits. Military personnel services are priced using the applicable DoD Military Personnel Composite Rate plus an acceleration factor that covers medical health care costs of active duty personnel and their dependents. In addition, rates include a per capita normal cost for Medicare-Eligible Retiree Health Care (MERHC) accruals. These factors are published annually by OUSD(C) at Department of Defense Fiscal Year (FY) Reimbursable Rates webpage. Military fringe benefits consist of quarters (family housing), subsistence, medical (hospital), and other personnel support (e.g., commissary and exchanges). The costs are applicable to both direct and indirect military salaries and are computed by applying the acceleration factors for officer and enlisted personnel. These costs are included for all military personnel allocated to the training course. Tuition rates D and E exclude both direct and indirect military salaries; therefore, military fringe benefits are excluded as well. Military fringe benefits costs, used as part of base operating support (BOS) costs and allocated to training courses, are used as indirect costs in the tuition rates. The costs must not be duplicated in the tuition rates by also being included as direct and indirect costs under Pay and Fringe Benefits.
Add C9.4.3.3.1.:
C9.4.3.3.1. Military Pay and Allowance Reimbursement. Implementing Agencies (IA) will calculate the actual dollar amount of manpower expended on the FMS case line(s) based on the rates listed in Section C9.4.3.3. IAs will utilize the G-Invoicing solution (see Section C14.9.), or comparable process, to reimburse the MILPERS account for pay and allowances. For health benefits/accrual, IAs will use the Standard Form (SF) 1080, Voucher for Transfers Between Appropriations and/or Funds, to transfer funds from the FMS case to the required accounts. Any office receiving FMS Administrative Surcharge funds or FMS Case funds shall maintain a current manpower report for its military, civilian, and contracted FMS personnel. The report should be in accordance with the AECA, Section 25(a)(6) (22 USC 2765(a)(6)) and should include the estimate of expected reimbursement for Military Pay and Allowances and closely align with the IA's authorized military reimbursable positions.