USAI.2.1. Through the Ukraine Security Assistance Initiative (USAI), the Secretary of War (SECWAR), with the concurrence of the Secretary of State (SECSTATE), will provide appropriate security assistance (SA) and security cooperation (SC), intelligence, and support including training, equipment, logistics support, supplies, and services, to military and other security forces of the Government of Ukraine and Partnership for Peace (PfP) partners when needed to support said countries’ sovereignty and territorial integrity.

USAI.2.1.1. Assistance includes activities noted in Section USAI.1.2.

USAI.2.1.2. Allowed materiel includes, but not limited to: lethal weapons such as mortars, crew-served weapons, grenade launchers, small arms, anti-armor systems, and supporting ammunition, counter-artillery radars, unmanned aerial surveillance systems, counter-electronic capabilities, and cyber. Funds can be used for the replacement of items previously provided to the government of Ukraine from the U.S. inventory. Additional material can be provided based on situational need.

USAI.2.2. The SECWAR is authorized, with the concurrence of the SECSTATE, to make available to the Government of Ukraine weapons and other defense articles, and services, from the U.S. inventory and other sources, and defense services, in such quantity as the SECWAR determines to be appropriate to achieve the purposes specified above.

USAI.2.3. Interim Accounting Solution for Fiscal Year 2024 Appropriations and Before. USAI is subject to the interim Building Partner Capacity (BPC) Accounting Solution for fiscal year (FY) 2024 appropriations and before (see Section C15-Legacy.3.2. for general guidance). For FY 2025 appropriations and later, see Chapter 15)).

USAI.2.4. Transportation and Packing, Crating, and Handling. Starting October 1, 2020, DSCA tasks the U.S. Army to develop and implement a single current year BPC transportation Letter of Offer and Acceptance (LOA) (also known as a BPC case), including packing, crating, and handling (PC&H), for all defense articles on BPC cases implemented after August 14, 2020 with Delivery Term Code (DTC) 2, 7, or 9. Estimated costs should be identified during the USAI proposal request phase and included in the Congressional Notification (CN) tranche worksheets. All Implementing Agencies (IAs) must work closely with Army and DSCA to ensure estimated deliveries and costs are captured accurately. DSCA may authorize other IAs to develop BPC transportation cases in exceptional circumstances. Contact the DSCA Ukraine Country Portfolio Director (CPD) and/or Country Finance Director (CFD) for additional guidance on transportation, including obtaining Transportation Account Codes (TACs) and requirements for Shipment Control Numbers (SCNs), and/or to request authorization for an additional BPC transportation case.

USAI.2.5. Administrative Program Support Costs. DSCA will validate the annual administrative program support costs requested by the IAs and provide the approved levels to DSCA (Office of Business Operations (OBO)) for funds transfer. Estimated costs should be identified by the United States European Command (USEUCOM) during the USAI proposal request phase and included in the CN tranche worksheets.

USAI.2.6. Exceptions to the Bona Fide Need Rule. The Bona Fide Need (BFN) (31 U.S.C. 1502) rule is a general fiscal law principle that requires appropriations to be obligated only for payment of bona fide need of the requiring agency during the period of availability of funds. In addition to the use of the production/lead time BFN exception that applies to all USG acquisitions, there is one other BFN exception that applies to USAI programs: Cross Fiscal Year (CFY) authority. The CFY BFN exception allows for the execution of funds in future years as long as the funds are obligated during their original period of availability.

USAI.2.6.1. Production/Long Lead Time Exception. Limited contractor-provided non-severable services (e.g., initial operator training or construction) are permissible to support the delivery of articles and equipment with a long-lead production time when the desired non-severable services or training would fall outside of the allowable months (MOS) under another authority. Non-severable service contracts may be awarded to support the fielding of a long-lead production article but must be funded entirely with appropriations available for new obligations at the time the contract is awarded, and the MOS may extend across fiscal years (FYs) to support the equipment whenever it is delivered prior to the funds’ cancellation date. CFY authority is available to execute USAI programs when such programs are also being executed with production/long lead time.

USAI.2.6.2. Cross Fiscal Year.

USAI.2.6.2.1. USAI Program Start. CFY authority is legally available for DoW to execute USAI programs through a multi-year deliberate planning process to deliver enduring capabilities to Benefitting Partners. The CN establishes the scope for each USAI program. A USAI program begins at the earlier of the following (1) the program’s first obligation of program funds for a procurement contract; or (2) the first date of delivery to the Benefitting Partner of a USG-sourced defense article, USG-sourced defense service, or USG-sourced training provided by the program. The planned execution timeline provided to Congress will be based on when the first field activity officially starts the program. To achieve a unified start among all offices supporting a single USAI program there must be continual communication and coordination to ensure all supporting offices know the fiscal year a program starts and conform their execution to the permissible MOS authorized by USAI.

USAI.2.6.2.2. Cross Fiscal Year Authority. CFY authority allows amounts available in a fiscal year to be used to execute activities under that authority that begin in that fiscal year and end not later than the end of the second fiscal year thereafter. Per standard fiscal law guidelines, non-severable services may be performed, and long-lead procurement items may be delivered to the USG outside the CFY period until funds are canceled as long as funding is fully obligated before funds expire. The IAs must provide sufficient time for case reconciliation to be completed after final delivery to the USG to facilitate case closure not later than July 31 of the cancellation year.

USAI.2.6.2.2.1. Provision of Services Related to Equipment Delivery. Certain activities that do not constitute non-severable services but are intrinsic to the provision of equipment being delivered under a USAI program may be executed upon delivery of long-lead equipment that is outside the MOS authorized by CFY authority. Such activities may include engineering and technical services, quality assurance, installation, transportation, and initial operator training (not tactical or deployment training, see Section C15.3.10.6.2.) when a BFN exists at the time the funds are initially obligated to procure the long-lead equipment. In addition, such services and/or training must be included in the procurement contract awarded for equipment during the appropriations’ original period of availability (POA) for obligation. This section does not apply to USG services, with the exception of project orders (Section C15.3.10.3. and Section C15-Legacy.3.10.3.).

USAI.2.7. Reimbursable Economy Act Support. If a supporting USG organization provides reimbursable support to a USAI program under the authority of the Economy Act (31 U.S.C. 1535), the supporting organization must de-obligate and return to the ordering agency any funds for services (to include training services) not provided prior to fund expiration. Funds obligated on a commercial contract, project order, or a working capital fund (e.g. Defense Working Capital Fund (DWCF)) before the appropriation expires are not required to be de-obligated and returned to the ordering agency. IA Recipients must return de-obligated and unused funds to DSCA no later than the end of the first quarter following the expiration of the funds' POA. The timelines authorized by CFY authority do not negate the Economy Act de-obligation requirement.

USAI.2.7.1. Support services provided by USG personnel (except when operating under a project order or a working capital funds like the DWCF (see DoD Financial Management Regulation (DoD FMR) Volume 11a, Chapter 2)), are considered obligated only when the support service is actually provided, not when funds are provided.

USAI.2.7.2. For BPC case lines supported by USG personnel (with a Source of Supply (SOS) of “S” or “X”) where MOS dates extend beyond funds’ expiration, the line note must include language stating USG services are funded with working capital funds or by project order. For SOS “X” BPC case lines, if USG personnel are not funded with either working capital funds (WCFs) or by project order, the line note must include language stating USG services will end when funds expire.

USAI.2.7.3. For any service lines, the BPC case note must indicate if severable or non-severable services will be provided.

USAI.2.8. 10 U.S.C. 2571 - Authority for Certain Reimbursable Interchange of Supplies and Services. Section 1202 of the NDAA for FY 2022 (P.L. 117-81) amended 10 U.S.C. 2571 to grant authority to DoW to transfer funds to other DoW organizations in order to execute Security Cooperation (SC) activities on a reimbursable basis without utilizing the Economy Act authority in 31 U.S.C. 1535 and 31 U.S.C. 1536. The FY26 NDAA also allows use for USAI.

USAI.2.8.1. The use of the authority granted in 10 U.S.C. 2571 is limited to seeking support from a supporting DoW organization. Funds transferred to other departments, such as the Department of State (State) or Department of Justice (DOJ), must continue to use the Economy Act to seek reimbursable support.

USAI.2.8.2. DSCA will rely upon 10 U.S.C. 2571 whenever DSCA seeks reimbursable support from another DoW organization and cite 10 U.S.C. 2571 on commitment documents for USAI funding. IAs must rely upon 10 U.S.C. 2571 and also cite 10 U.S.C. 2571 on any funding documents when seeking reimbursable support from another DoW organization. This guidance does not apply when a DoW organization is seeking support from a WCF or via a project order.

USAI.2.9. Refurbishment and Repair of Defense Articles. When USEUCOM supports the provision of refurbishment or repair services for Ukrainian titled defense articles using USAI funding (to include USAI-Prioritized Ukraine Requirements List (USAI-PURL), Ukraine may submit a request per the conditions set forth in Figure USAI.F1. The effort may require the USG to gain custody.

USAI.2.9.1. Ukraine’s Request and Requesting Authority Endorsement. Ukraine’s request must be consistent with Figure USAI.F1. Since USAI requirements are established by USEUCOM, a representative from USEUCOM must endorse Ukraine’s request as a valid BPC requirement and confirm that USEUCOM will accomplish all required actions for BPC planning and requirements definition.