Charge

Description

How Priced

Applied by - for Billing

References

Acceleration Rates

To recover full cost of providing USG services.

Included in the line item value on the Letter of Offer and Acceptance (LOA).

Specific to Building Partnership Capacity (BPC) cases: Do not charge unfunded civilian retirement.

Implementing Agency (IA)

DoD Financial Management Regulation (DoD FMR), Volume 15, Chapter 7 (Jan 2021), paragraph 072001.A

Army Program Support Charge

To recover the cost of services to support the Army’s Simplified Non-Standard Acquisition Program (SNAP) and Commercial Repair and Return (CR&R) Program.

Included in the value of line items on the LOA.

Included as a percentage of applicable Army line items when these programs are used.

Implemented on or after 1 October 2016, apply a charge of:

  • 5 percent for Army SNAP

Implemented on or after 1 October 2022, apply a charge of:

  • 4 percent for Army CR&R Program (NOTE: Does not apply to BPC cases).

IA

DoD FMR, Volume 15, Chapter 7 (Jan 2021)

Attrition / Liability Statement

To recover the cost of training/operational equipment used as training aids lost as the result of student negligence.

Include as a percentage as part of tuition Rate A:

  • 1 percent for flying and non-flying training courses (effective fiscal year (FY) 96 - FY16)
  • 0 percent effective beginning with FY17 tuition rates

Include the liability statement for:

  • Tuition Rates B, C, and D
  • Dedicated training programs unless a negotiated percentage is specifically stated in program documentation
  • Non-tuition based training that includes training/operational equipment used as training aids

IA

DoD FMR, Volume 15, Chapter 3 (Jul 2020), 030408.D, and DoD FMR, Chapter 7 (Jan 2021), 072203.A, 072303.C.1, and 072304.C.1.

Foreign Military Sales (FMS) Administrative Surcharge

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 percent for both standard and nonstandard articles/services (for LOA lines implemented on or after June 1, 2018)
  • 3.5 percent for both standard and nonstandard articles/services (for LOA lines accepted on or after November 1, 2012 and before June 1, 2018).
  • 3.8 percent for both standard and nonstandard articles/services (for LOA lines accepted on or after August 1, 2006 and before November 1, 2012).
  • 2.5 percent for standard articles/services (for LOA lines implemented on or after June 1, 1999 and before August 1, 2006).
  • 5 percent for non-standard articles/ services (for LOA lines for non-standard items implemented before August 1, 2006).
  • 3 percent 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 percent.
  • 5 percent 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.T15. and C10.T16.). However, if excluded, the military department (MILDEP) is responsible for the cost."
  • Small Case Management Lines (SCMLs).
  • Excess Defense Articles (EDA) Grant Lines

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

Defense Finance Accounting Service – Indianapolis (DFAS-IN)

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 (Jan 2021), paragraph 0705

BPC: The cost of administering these cases is no different than FMS cases. However, effective 14 Aug 2020, BPC Title 10-funded cases will not be assessed the FMS Surcharge

Contract Administration Services (CAS) Surcharge

CAS is comprised of three basic elements:

  1. quality assurance and inspection;
  2. contract administration management; and
  3. contract audit.

For cases implemented on or after October 1, 2002, that have contracts administered overseas, an additional element (Outside Continental United States (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.

For Parts and Repair Ordering System (PROS) Program, full administration of PROS is provided through a contracted program office and no additional services for contract administration, quality assurance or contract audit are provided, so CAS(1), CAS(2), and CAS(3) do not apply for PROS Program.

For U.S. Air Force Security Assistance and Cooperation (AFSAC)-managed case lines with design and construction contracts that are assigned to the Air Force Installation Contracting Center (AFICC), quality assurance and inspection and contract administration management costs are included in the contract and charged to the case line, so CAS(1) and CAS(2) do not apply to AFSAC-managed case lines with design and construction contracts that are assigned to AFICC. AFSAC will manually override CAS(1) and CAS (2) elements in DSAMS to reflect NA.

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 Design and Construction Lines:

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

  • 0.10 percent for contract audit

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

  • 0.20 percent for contract audit

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

  • 0.50 percent for contract audit

If additional CAS services are required from DCMA or DCAA, the IA must work with the USACE program office to fund the costs of the services on a case-by-case basis.

 

For PROS Program Lines:

Implemented on or after April 18, 2005, do not apply any CAS components

Implemented on or after October 1, 2002, but before April 18, 2005, the following surcharge(s) apply:

  • 0.50 percent quality assurance and inspection
  • 0.50 percent contract administration management
  • 0.50 percent contract audits

If additional CAS services are required from DCMA or DCAA, the IA must work with the PROS program office to fund the costs of the services on a case-by-case basis.

 

For AFSAC-managed case lines with design and construction contracts assigned to AFICC:

Implemented on or after April 28, 2023:

  • 0.10 percent for contract audit
  • For contracts administered overseas, an additional 0.20 percent (OCONUS CAS) applies to the entire case. (For contracts administered overseas (by permanent-party Defense Contract Management Agency (DCMA) employees), an additional 0.20 percent (OCONUS CAS) applies to the entire case.)

Implemented on or after February 1, 2020, but before April 28, 2023 the following surcharge(s) apply:

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

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

  • 0.50 percent quality assurance and inspection
  • 0.50 percent contract administration management
  • 0.50 percent contract audit

 

For non-USACE cases, non-AFSAC-AFICC lines, and non-PROS II lines:

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

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

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

  • 0.50 percent quality assurance and inspection
  • 0.50 percent contract administration management
  • 0.50 percent contract audits

DFAS-IN

AECA, section 21(h) (22 U.S.C. 2761(h)) and DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 071603

BPC: Applicable CAS charges are no different than FMS cases. However, effective 14 Aug 2020, BPC Title 10-funded cases will not be assessed the CAS Surcharge.

Logistics Support Charge (LSC)

Cost of logistics support.

Included in the value of logistics line items on the LOA (excludes Working Capital Fund items). 3.1 percent

The specific Military Articles and Services List (MASLs)/generic codes where LSC applies is maintained by the DSCA (Office of Business Operations (OBO)) in the Case Performance Reporting System (CPRS).

For any items delivery reported on or after April 1, 1987 and prior to October 1, 2007 that qualify.

Any deliveries reported on or after October 1, 2007 will not be assessed the LSC.

DFAS

DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 0706

BPC: Same as FMS.

Nonrecurring Cost (NC)

Pro rata recovery of Research, Development, Test, and Evaluation (RDT&E) and Production startup costs.

Included in value of applicable Major Defense Equipment (MDE) line items on the LOA. (The requirement to recover NC on non-MDE was eliminated on June 26, 1992).

Estimated value included in value of MDE line items when the NC charge applies but is not yet established or approved.

May be waived by DSCA under specific circumstances.

Per the AECA and Foreign Assistance Act (FAA), LOAs fully financed with Military Assistance Program (MAP) Merger or non-repayable FMF are not assessed an NC charge.

NC charges apply only to Government-to-Government sales (to include Government-to-International Organization). (The requirement to recover NC on direct commercial sales was eliminated on October 7, 1992).

May include special recoupment - costs incurred under FMS, paid by a foreign customer to develop a special feature or unique or joint requirement.

IA

AECA, section 21(e)(1)(B) (22 U.S.C. 2761(e)(1)(B))

DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 071505

DoD Directive 2140.02

BPC: NC does not apply.

Packing, Crating and Handling (PC&H)

Costs incurred for labor, materiel, or services in preparing non-Defense Working Capital Fund (DWCF) materiel for shipment from the storage or distribution point.

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

For blanket order lines - 3.5 percent.

For defined order lines - 3.5 percent for the first $50,000 in unit cost and 1 percent for the portion of the unit cost that exceeds $50,000.

When provided as a unique service, these charges may be included as a separate line on the LOA.

DFAS-IN

DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 070401

BPC: DoD FMR, Volume 11A, Chapter 1 (Jul 2020), paragraph 010204.J

Note: effective 14 Aug 2020, BPC Title 10-funded cases will not be assessed the PC&H Accessorial Charge.

Prepositioning

Supply distribution costs incurred by locations outside the United States in anticipation of support to other authorized purchasers.

Included as a separate line item on the LOA.

These costs are applicable when shipments are made from overseas storage and distribution points.

No positioning costs shall be assessed on “long supply” stocks.

IA

 

Royalty

Incremental payments for the use of intellectual property.

If required to be collected for intellectual property that is subject to contractor proprietary rights restrictions, include in the pricing of the item.

Prior to January 1, 1998, charges for Technical Data Package (TDP) usage were included as a separate line item on the LOA.

Discontinued for cases implemented on or after January 1, 1998 for U.S.-owned TDPs that are not subject to contractor proprietary rights restrictions.

BPC: Apply only to the extent that the cost is included in the contract.

IA

DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 071902

BPC: DoD FMR, Volume 11A, Chapter 1 (Jul 2020), paragraph 010204.J

Staging

Costs for consolidating or prepositioning materiel in U.S. facilities within the continental United States (CONUS).

Included as an estimated actual cost above or below-the-line on the LOA. It is below-the-line if the appropriate Delivery Term Code (DTC) is used. It is above the line if a staging MASL is used.

DFAS-IN

 

Storage (FMSO)

Cost of storing on-hand inventory.

Included in the line item value on the LOA.

1.5 percent annually on value of stored assets, unless a separate fee is negotiated with the storage facility.

.125 percent monthly on value of stored assets, unless a separate fee is negotiated with the storage facility.

IA

DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 070804

BPC: Does not apply

Storage (Other)

Cost of storing items.

Included above the line on the LOA.

1.5 percent annually on value of stored assets, unless a separate fee is negotiated with the storage facility.

.125 percent monthly on value of stored assets, unless a separate fee is negotiated with the storage facility.

IA

DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 0709

BPC: DoD FMR, Volume 11A, Chapter 1 Addendum 1

Transportation

Cost to the United States of transporting purchaser materiel using the Defense Transportation System (DTS) or a Bill of Lading. (Includes costs for labor, materiel, or services at ports of embarkation or debarkation).

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

See Table C9.T4a. for a complete list of Delivery Term Codes (DTCs).

For blanket order lines – the DTC percent.

For defined order lines – the DTC percent for the first $10,000 in unit cost and 25 percent of the DTC percent for the portion of the unit cost that exceeds $10,000.

See Table C9.T4a. for DTC percentages.

DFAS-IN

DoD FMR, Volume 15, Chapter 7 (Jan 2021), paragraph 070402

BPC: DoD FMR, Volume 11A, Chapter 1 Addendum 1

Note: effective 14 Aug 2020, BPC Title 10-funded cases will not be assessed the Transportation Surcharge.

A Transportation Bill Code (TBC), if used, overrides the DTC for both blanket and defined order line entries.

Estimated/actual pricing for transportation may be used if known

IA

 

Unanticipated services related to detention and demurrage.

When provided as a unique service, this charge may be included as a separate line on the LOA.

IA

 

Actual charges are applied to the applicable line. The case must be modified to reflect the additional costs to the line.

 

See Section C7.12.