Skip to main content

Chapter 11

Chapter 11, Special Programs and Services, provides guidance on C-12 aircraft management, drawdowns, Excess Defense Articles (EDA), sales to other U.S. Government agencies, provision of U.S. Government defense articles or services in support of commercial exports, leases and loans, Security Cooperation Education and Training (SCET) Teams, the Special Defense Acquisition Fund (SDAF), and the Warsaw Initiative Fund (WIF).

Section Title
C11.1. C-12 Aircraft Management
C11.2. Drawdowns
C11.3. Excess Defense Articles (EDA)
C11.4. Foreign Assistance Act (FAA), Section 607 Furnishing of Services and Commodities
C11.5. Government Furnished Equipment and Materiel (GFE/GFM) Sales
C11.6. Leases of Defense Articles under the Arms Export Control Act (AECA)
C11.7. Loans of Defense Articles
C11.8. Security Cooperation Education and Training (SCET) Teams
C11.9. Special Defense Acquisition Fund (SDAF)
C11.10. Warsaw Initiative Fund (WIF)

The Defense Security Cooperation Agency (DSCA), Defense Intelligence Agency (DIA), and U.S. Air Force (USAF) Memorandum of Understanding (MOU), dated August 6, 1996, [new 2011 version of MOU pending final approval/signature] provides four C-12 aircraft to DSCA for use in implementing Security Assistance programs. In consultation with the appropriate Geographical Combatant Command (CCMD), DSCA assigns the C-12s to overseas Security Cooperation Organizations (SCOs) on a priority basis. The CCMDs provide additional supplemental guidance to SCOs on C-12 program management with regard to the approval and funding of Security Cooperation (SC)/Department of Defense (DoD) missions.

C11.1.1. C-12 Aircraft Missions.

C11.1.1.1. Security Assistance (SA) C-12 Aircraft Missions. The primary mission of the DSCA dedicated C-12 aircraft is to support SCO SA program management as outlined in Foreign Assistance Act (FAA), section 515. Section C2.1., provides a representative list of SA program management functions. Included in this category are local in-country training, evaluation, and maintenance flights. When scheduling missions, the SCO lead pilot will ensure that the flight directly supports an SA program management function. These missions are financed by SA Administrative (T-22) funds.

C11.1.1.2. Non-Security Assistance C-12 Aircraft Missions. SC, DoD, and other missions, as directed by the CCMD, may be flown only when they do not impair SA missions, when they are reimbursed, and only when in compliance with the laws and regulations governing the use of DoD transportation assets. Examples include: disaster relief, CCMD exercises, visitors who are on non-SA management business, flights flown in support of the U.S. Embassy, Senior Defense Official/Defense Attaché (SDO/DATT) responsibilities, or flights flown in support of an FMS case which specifically includes a transportation line. C-12 flights that support Congressional or Congressional Staff Delegations (CODELs) are also included in this category. DSCA Form 78-001 (See Figure C11.F1.) should be completed and submitted with a certified statement of actual flying time to DSCA (Business Operations Directorate/Comptroller) within five workdays after the airlift has been completed.

Figure C11.F1. DSCA Form 78-001, Request for Revenue Traffic Airlift

C11.1.2. C-12 Aircraft Policies. The policies in Table C11.T1. govern the use of the DSCA C-12 aircraft.

Table C11.T1. DSCA C-12 Aircraft Policies

# Description

1

When SCOs share or jointly use C-12 aircraft, Security Assistance missions take precedence over any other SCO requirements.

2

All C-12 missions flown out of the SCO area of responsibility (AOR) require prior justification to/approval by the CCMD and DSCA (Business Operations Directorate/Comptroller).

3

The C-12 aircraft will be used only when such use is more economical than commercial aircraft or airline services are not available, readily obtainable, or for reasons which must be specified, incapable of satisfying the transportation requirements. The C-12 should not be used if travel requirements can be met with other safe, more cost effective modes of transportation, (e.g., rail or automobile). The SDO/DATT has the authority to make these decisions.

4

Passenger travel and reimbursement will be in accordance with DoD Directive 4515.13-P and DoD Directive 4500.9E, or by specific CCMD approval before flight, except in case of emergency.

C11.1.3. Flight Approval Authority for DSCA C-12 Aircraft. If the SDO/DATT will be a traveler on the proposed C-12 mission, or for all non-SA missions (SC, DoD, CCMD, CODEL, etc.), the SDO/DATT will coordinate with the CCMD and follow established CCMD approval procedures (to include ensuring that the required fund cite is obtained) prior to approving the flight. If the SDO/DATT will not be a traveler on the proposed C-12 aircraft mission, the SDO/DATT is the approval authority for flights within his or her country or AOR in support of SA program management functions. The SDO/DATT retains responsibility for the proper use of the C-12 aircraft regardless of the agency using or funding its use. For DIA dedicated C-12 aircraft used jointly by the SCO, the SDO/DATT retains responsibility for proper C-12 aircraft uses for SCO missions.

C11.1.4. Passenger Approval and Eligibility for DSCA C-12 Aircraft. Passenger eligibility for all DoD aircraft is set out in DoD 4515.13-P and DoD Directive 4500.56. Normal categories of military travel are permitted to include temporary duty and space-available travel of military members and dependents, provided that such travel does not interfere with the primary SA mission. Special categories of passengers, such as CODELs, may be eligible for C-12 travel if approved by the appropriate authority as set out in DoD 4515.13-P. The SDO/DATT authorizes SA program management travel and makes the determination that non-SA travel does not interfere with the SA mission; he/she is the final authority for passenger movement, to include approval of space-available travel. In addition, the SDO/DATT has special authority as outlined in DoD 4515.13-P, Sections C9.4. and C10.9., for specified American Embassy personnel, distinguished foreign nationals, key foreign military, and spouses of certain officials, under certain conditions as indicated in Table C11.T2. DSCA dedicated C-12 missions may not be scheduled solely for rest and recuperation purposes.

Table C11.T2. Passenger Eligibility for DSCA C-12 Aircraft

Passenger Type Eligibility for DSCA C-12 Aircraft

Spouses of DoD personnel, other than authorized by DoD 4515.13-P must have Invitational Travel Orders (ITOs)

Due to unique funding of DSCA C-12 operations, these procedures may differ from other DoD aircraft transportation requirements. The spouse travel must clearly be in the national interest and there must be an unquestionable official requirement in which the spouse is to participate.

Congressional Delegations (CODELs)

CODELs warrant special consideration. The Assistant Secretary of Defense for Legislative Affairs (ASD(LA)) has approval authority for non-sponsored, non-reimbursable flights in support of CODELs. In addition, sponsored, non-reimbursable CODEL flights outside of the United States must be submitted to the Secretary of Defense (DoD Directive 4515.12).

In the process of determining the availability of DSCA dedicated C-12 aircraft to support a CODEL mission, DSCA verifies to ASD(LA) that the aircraft does not have a higher priority Security Assistance requirement. DSCA requests the appropriate CCMD obtain C-12 availability from the SDO/DATT. Once a decision has been made to use the DSCA dedicated C-12, the Military Department (MILDEP) that has been assigned by ASD(LA) to support the CODEL should immediately provide the SDO/DATT, the CCMD, and DSCA (Business Operations Directorate/Comptroller) with a fund cite to support the mission, as well as a list of names of official members of the CODEL, identified by the Chairman of the Committee which is sponsoring the CODEL, to ensure that all concerned clearly understand who are the authorized passengers.

Pursuant to 10 U.S.C. 2341-2350, and the rules promulgated thereunder, such as DoD Directive 4515.12, official members of CODELs may be authorized passengers on DSCA dedicated C-12 aircraft. On short notice requests, the SDO/DATT should contact DSCA (Business Operations Directorate/Comptroller) to resolve questions on CODEL travel. The SDO/DATT will keep the CCMD and DSCA (Business Operations Directorate/Comptroller) informed on all matters related to CODEL C-12 travel.

C11.1.5. Reimbursement for C-12 Aircraft Flights. The reimbursement requirement for passenger travel is addressed in DoD 4515.13-P. If the passenger is on official duty in support of SA program management functions, he or she is authorized travel and no reimbursement is required. Approval authority for space-available, non-reimbursable travel for designated individuals is granted to SDO/DATTs by DoD 4515.13-P. Embassy requests for permission to transport non-DoD individuals (outside the authority of DoD 4515.13-P shall be in accordance with DoS Foreign Affairs Manual, Volume 14, Section 551.5, to ensure proper inter-agency coordination. All other passengers must fall under the purview of DoD 4515.13-P as non-reimbursable, or they must reimburse DSCA for their travel. While some CODEL travel may be determined by DSCA and the respective CCMD to be in support of SA missions, there is no authority for the use of SA Administrative funds to support non-SA CODEL missions on DSCA dedicated C-12 aircraft. CODEL mission funding is the responsibility of the MILDEP tasked by ASD(LA) to support the CODEL. The cost for the CODEL mission is reported by the SCO via DSCA Form 78-001 (See Figure C11.F1.) to DSCA (Business Operations Directorate/Comptroller) for reimbursement action. For reimbursable travel, there is no seat mile rate for DSCA dedicated C-12 aircraft; flying hour rates will be used. Questions should be directed to DSCA (Business Operations Directorate/Comptroller).

C11.1.6. DSCA C-12 Aircraft Program Management Responsibilities. Table C11.T3. shows the C-12 Aircraft program management responsibilities for the SCOs, the CCMDs, and DSCA (Business Operations Directorate/Comptroller).

Table C11.T3. DSCA C-12 Aircraft Program Management Responsibilities

Group/Org Responsibilities

SCOs

  • Provide to DSCA (Business Operations Directorate/Comptroller) and the respective CCMD the flying hour requirements for the yearly budget in accordance with criteria established by this manual and the DSCA (Business Operations Directorate/Comptroller) annual budget call.
  • Provide to DSCA (Business Operations Directorate/Comptroller) and the respective CCMD copies of all Memoranda of Understanding (MOU) between the SCO and other organizations where a shared or joint use agreement is in effect.
  • Submit monthly activity reports to the DSCA C-12 Program Manager DSCA (Business Operations Directorate/Comptroller), the respective CCMD, and the Oklahoma Air Logistics Center (OC-ALC), Oklahoma City, OK. Include all receipts for Fuels and Ground Handling Services provided through use of the MultService AIRCards and Identaplates for each given month.
  • Complete DSCA Form 78-001, "Request for Revenue Traffic Airlift", and a memorandum certifying actual flying time, for each reimbursable flight and send these forms to DSCA (Business Operations Directorate/Comptroller), 201 12th Street South, Suite 402, West Tower, Arlington VA 22202, within 5 working days after the completion of the flight.
  • Keep DSCA (Business Operations Directorate/Comptroller) and the respective CCMD informed of all CODEL mission requirement/activities.
  • Provide to DSCA (Business Operations Directorate/Comptroller) and the respective CCMD information pertaining to changes in overall flying hour program requirements as soon as possible. Changes to flying hour programs, or movement of aircraft, can require a lead-time of six months to become effective.
  • Validate/approve SA missions and approve non-SA missions upon receipt of fund cite authorizations.
  • Comply with this section of the SAMM, as well as guidance that may be provided by the respective CCMD. Questions should be directed to DSCA (Business Operations Directorate/Comptroller).

CCMDs

  • Review and forward recommended flying hour requirements to DSCA (Business Operations Directorate/Comptroller).
  • Provide administrative oversight of DSCA dedicated C-12 aircraft in the respective AOR consistent with applicable guidelines and directives to ensure safe and efficient use of these resources.
  • Keep DSCA (Business Operations Directorate/Comptroller) informed of problems or issues resulting from reviews of SCO monthly reports, or other sources, to include corrective action(s) underway.
  • Assist SCOs in obtaining fund cites for non-SA missions, as necessary, prior to the mission.
  • Maintain copies of all MOUs between SCOs and other organizations for joint or shared use of DSCA dedicated C-12 aircraft.

DSCA (Business Operations Directorate/Comptroller)

  • Coordinate/maintain the DIA/DSCA/USAF C-12 MOU. Provide policy and program guidance on management of DSCA dedicated C-12 aircraft.
  • Provide financial management of the DSCA C-12 program. Obtain funding and establish approved flying hour budgets for SCOs; process DSCA Forms 78-001 submitted by SCOs; administer reimbursement to the USAF for the Contract Logistics Support case costs of the DSCA C-12 program, to include maintenance contract costs, engine overhauls, and flying hours; administer reimbursement to MultiService Corporation for costs of Fuels and Ground Handling services.
  • Establish annual flying hour program reporting requirements; provide annual flying hour requirements to the C-12 Program Management Office, OC-ALC, Oklahoma City, and Internal Management Control (ICM) reporting on the C-12 aircraft to higher authority.
  • Coordinate C-12 pilot training requirements and scheduling with SCOs, CCMDs, DIA Air Operations, MILDEPs, and AFMC/Rucker/A3V.

C11.2.1. Definition and Purpose. The Foreign Assistance Act (FAA) authorizes the President to direct transfers of on-hand Department of Defense (DoD)-stock defense articles and services (as well as articles and services from the inventory and resources of any agency of the USG) and military education and training to foreign countries and international organizations in response to unforeseen military emergencies, humanitarian catastrophes, peacekeeping needs, or counternarcotics requirements. Except for transportation and related services where new contracts would cost less than providing such services with DoD assets, new procurement is not authorized and no new funds may be placed on existing contracts. Table C11.T4. summarizes the legal authorities for different types of drawdowns.

Table C11.T4. Drawdown Legislation Summary

Legislation Subject

FAA, Section 506(a)(1) [22 U.S.C. 2318(a)(1)]

DoD Drawdown for unforeseen emergencies:

  • Authorizes the President to direct DoD drawdowns for unforeseen emergencies requiring immediate military assistance that cannot be addressed under the Arms Export Control Act (AECA) or any other law.

  • Only defense articles already on hand in DoD stocks, DoD services, and military education and training may be provided.

  • Congress must be notified before the President signs the Presidential Determination (PD).

  • The aggregate value of all drawdowns directed in any fiscal year under this authority may not exceed $100M.

FAA, Section 506(a)(2) [22 U.S.C. 2318(a)(2)]

DoD Drawdown for international narcotics control, international disaster assistance, antiterrorism assistance, nonproliferation assistance, migration and refugee assistance, Prisoner of War/Missing in Action (POW/MIA) efforts in Cambodia, Laos and Vietnam:

  • Inventory and resources of any USG agency may be provided.

  • Congress must be notified before the President signs the PD for international disaster relief and POW/MIA efforts in Vietnam, Cambodia, and Laos.

  • Congress must be notified 15 days before the President signs the PD for international narcotics control and antiterrorism assistance

  • The aggregate value of all drawdowns directed in any fiscal year under this authority may not exceed $200M of which:

    • No more than $75M may come from the Department of Defense.

    • No more than $75M may be used for international narcotics control.

    • No more than $15M may be used for POW/MIA drawdowns.

FAA, Section 552(c)(2) [22 U.S.C. 2348a(c)(2)]

DoD Drawdown for Peacekeeping Operations:

  • Authorizes drawdown if the President determines that an unforeseen emergency requires the immediate provision of commodities and services of any USG agency to countries and international organizations to support peacekeeping operations.

  • Congress must be notified before the President signs the PD.

  • The aggregate value of drawdowns directed under this authority may not exceed $25M per fiscal year.

FAA, Section 503 [22 U.S.C. 2311]

General authority to furnish Military Assistance under the FAA.

FAA, Section 505 [22 U.S.C. 2314]

Conditions of eligibility for Military Assistance under the FAA.

FAA, Section 652 [22 U.S.C. 2411]

Congressional Notification required before the President can direct drawdowns or exercise other specified special authorities under the FAA.

Public Law No. 106-113 [22 U.S.C. 287B] [22 U.S.C. 287e2e]

Support to the United Nations.

Special Legislative Authorities

Congress may create special legislation for specific programs or purposes. There is no annual limit on the amount of special authorities that Congress may authorize. Special authorities give the President the legislative authority to provide assistance, but it is a Presidential decision whether to use that authority. Legislation for special authorities may provide for broader drawdown assistance, including authorization to contract for articles, services, and education and training that are NOT on hand.

Cargo Preference Act of 1954

All drawdowns items transferred by ocean carriers must follow U.S. cargo preference requirements See Section C7.12.1. Recipient countries must use U.S. flag vessels unless the Maritime Administration (MARAD) has issued a non-availability waiver. MARAD assists in monitoring these statutes. The Military Departments (MILDEPs) must consider cargo preference requirements when considering transportation options for drawdowns. The responsible office at MARAD is

USDOT/Maritime Administration
Office of Cargo Preference and Domestic Trade
1200 New Jersey Avenue S.E.
MAR 730, W23-444
Washington DC 20590

C11.2.2. Who Is Eligible to Receive a Drawdown? Defense articles and/or services may be drawn down and transferred to a friendly foreign country or international organization only if the President issues a PD in accordance with the FAA. An FAA, section 503 eligibility determination must be completed by the Department of State (DoS) and the FAA, section 505 assurances must be signed by the proposed foreign country recipient before the drawdown can be executed.

C11.2.3. Types of Drawdowns.

C11.2.3.1. Emergency Drawdowns. Drawdowns are usually precipitated by an emergency in a foreign country or region. In emergency drawdowns, DoD, DoS, and the National Security Council (NSC) staff coordinate the USG response. This interagency process determines which existing statutory authority applies and identifies which articles and services should be provided. Potential contributing agencies (e.g., Department of Defense, Department of Treasury, Department of Justice) and the military services furnish valuation and availability (V&A) data to the DoS indicating the estimated value of the articles and services proposed for the drawdown. The V&A data and the scope of support form the basis for the PD that authorizes a specific maximum dollar value authority for the drawdown. Requirements may be determined 24-48 hours before an Execute Order (EXORD) is issued, but more commonly within 1-2 weeks. The EXORD is the operational requirement document that identifies the articles and services to be provided under the drawdown, as well those organizations responsible for providing the articles and services. Emergency drawdowns end when the PD authority has been exhausted or the response to the emergency has officially ended.

C11.2.3.2. Non-Emergency Drawdowns. Drawdowns may be authorized in non-emergency situations to support mid- to long-term foreign policy initiatives. Non-emergency drawdown procedures are similar to emergency drawdown procedures. In non-emergency situations, the PD provides the value of the drawdown that cannot exceed the existing or special legislative authority. The time-line to determine requirements is often one to six months before an EXORD is issued. Delivery of articles and services may take an extended period of time. Non-emergency drawdowns end when the PD authority has been exhausted.

C11.2.4. Types of Articles, Services, and Training Provided Under Drawdowns.

C11.2.4.1. Articles and Services. Equipment must already be in DoD stocks. DoD employees normally perform services under drawdowns, but contractors may also provide services on a case-by-case basis as approved by DSCA. Supplies or services under existing DoD contracts may be used for drawdown purposes if the use is within the scope of the PD and funds have been previously obligated. Where possible, complete support packages are provided for major end items to include training for operation and maintenance of the major end item. Spare parts requisitions are processed on a "Fill or Kill" basis. Unless otherwise authorized, materiel must be provided in condition code "B," or Full Mission Capable (FMC) condition, or -10/-20 standards or better. MILDEPs cannot place a hold, reserve, or fence equipment or spares prior to the release of DSCA's EXORD.

C11.2.4.2. Transportation. New commercial contracts for transportation and related services may be used if the cost is less than the cost to use USG assets. Normally, the MILDEP providing the equipment must fund the transportation of that equipment to its final destination. The MILDEP reimburses the U.S. Transportation Command (TRANSCOM) for air and/or sealift of the equipment. Existing contracts or resources may be used for airlift and sealift if their scope covers the proposed use (such as time-charter or multiple air mission agreements).

C11.2.4.3. Defense Working Capital Fund (DWCF) Items. DWCF items may be used to fulfill drawdown requirements. In accordance with Under Secretary of Defense (Comptroller) (USD(C)) policy, the MILDEPs must reimburse the DWCF for all materiel and services provided. These costs must be charged and accounted for under the current year Operations and Maintenance (O&M) funds.

C11.2.4.4. Fuel. Fuel drawdowns are handled in the same way as DWCF materiel. Defense Logistics Agency (DLA)'s Defense Energy Support Center (DESC) manages fuel contracts for all MILDEPs. As with any other commodity, MILDEPs can use O&M or Working Capital Funds (WCF) obligational authority to fund, via Military Interdepartmental Purchase Request (MIPR), fuel drawdowns supplied from DESC existing contracts. Use of this funding can impact both cash and obligational authority for normal MILDEP operations; therefore such issues should be carefully coordinated with the MILDEPs and reported to USD(C) for inclusion in subsequent MILDEP budget requests. As with any other type of drawdown commodity, new contracts are not permitted without special legislative authority. Therefore, the types of fuel available for drawdowns is limited to those available through DESC's existing bulk fuels contracts at the time of drawdown. Special coordination is required for the transportation, delivery, storage and distribution of fuel.

C11.2.5. Value of Drawdowns. Due to the often-abbreviated timelines available to develop V&A data for drawdowns, it is critical to ensure that projected values are as accurate as possible. Close coordination between DSCA and the MILDEPs during drawdown execution is critical to reconcile values as early as possible. Actual value of drawdowns is normally available 30-90 days after delivery of the equipment. The value of the drawdown does not include FMS surcharges. Value of articles, services, and training is determined using the following guidance:

C11.2.5.1. Value of Articles. The value of drawdown articles is calculated in accordance with DoD 7000.14-R, Volume 15, Chapter 7.

C11.2.5.2. Value of Training. The value of drawdown military education and training is based on the additional costs that are incurred by the USG to provide the training (i.e., Foreign Military Financing (FMF) Grant or incremental rate as specified in DoD 7000.14-R, Volume 15, Chapter 7).

C11.2.5.3. Value of Services. The value of services provided under drawdowns is based on actual costs to the USG to provide the service. Funded civilian pay and travel and per diem costs of military and civilian personnel performing an approved "tasked" support role that is devoted exclusively to the drawdown effort may be included when computing the value of drawdown services. Value does not include salaries of the members of the U.S. Armed Forces and unfunded civilian retirement and other benefits.

C11.2.6. Drawdown Process. Table C11.T6. summarizes the drawdown planning and development process. Additional information may be found in the DSCA Action Officer (AO) Handbook for Foreign Assistance Act (FAA) Drawdown of Defense Articles and Services.

Table C11.T5. Drawdown Process

Steps Actions
1

Crisis occurs or policy situation develops

2

Interagency process determines "Drawdown" is required.

3
  • Drawdown package is developed (DSCA has the DoD lead).
  • Interagency Staffing (DoD, the DoS, the NSC, etc.).
  • Package includes requirements, costs, and execution plan.
  • The DoS obtains FAA, section 505 end-use agreement from proposed recipient country if one is not already available.
  • The DoS considers human rights issues.
  • The DoS develops a Congressional Notification package.
  • Internal DoD Processing.
  • The MILDEPs prepare V&A data based on interagency-proposed requirements.
  • The MILDEPs review impact of the drawdown on operational readiness and O&M budgets.
  • DSCA coordinates readiness impacts with the Chairman of the Joint Chiefs of Staff.
  • DSCA refers questions regarding readiness impact to Secretary of Defense or the Deputy Secretary of Defense (if required).
  • Costs are balanced among MILDEPs as much as possible.
4

DoS staffs and coordinates the Congressional Notification package.

5

Congress is formally notified - 15 day notification.

6

After Congressional Notification is complete, the Presidents signs the PD and memorandum of justification prepared by the DoS. During the interagency process to finalize a PD, the drawdown package is continually reviewed and updated. The interagency determines which articles/services should be provided depending on availability. The final PD should reflect what the DoD can provide and becomes the base reference for execution of the drawdown.

7

DSCA prepares and issues an EXORD identifying the articles, services, and training to be provided under the drawdown. Before issuing the EXORD, DSCA must have:

  • A signed PD,
  • DoS vetting (e.g., Trafficking in Persons (TIP), Child Status Protection Act (CSPA), Leahy Vetting) that human rights issues do not preclude delivery.
8

The MILDEPs (or others as appropriate) receive the EXORD and provide funding to the agency/organization responsible for executing the drawdown. The executing agency/organization provides the articles, services, and training to the recipient(s).

9

DSCA/OSD/Chairman of the Joint Chiefs of Staff/Combatant Command monitor the execution and make adjustments through revised EXORDs as required.

10

The DSCA and the MILDEPs reconcile the drawdown to ensure all cost elements are reported. The DoD cannot exceed the drawdown authority provided in the legislation and the PD.

11

The MILDEPs submit delivery data on drawdowns to DSCA for entry into DSCA's 1000 System drawdown tracking database. Tracking data includes: Item/Service, Quantity, Unit Cost (drawdown value), Equipment (Total Quantity Cost), Services/Repair, Training (if applicable), Spare Parts, Support Equipment, Packing, Crating and Handling (PC&H), Transport, and Total Item/Service Cost (sum of all other categories for each items). Salaries for civilian services should be separately identified.

12

DSCA provides formal reports to Congress on the articles, services, and training provided.

C11.2.7. Congressional Reporting for Drawdowns. DSCA (Business Operations Directorate) prepares reports to Congress on Drawdowns as required by law.

C11.2.7.1. Reports to Congress on drawdowns are required by law.

C11.2.7.2. FAA, Section 506 Report. FAA, section 506 requires the DoD (DSCA (Business Operations Directorate)) reports to Congress details on all the defense articles, defense services, and military education and training delivered to the recipient country or international organization upon delivery of such articles, or completion of services, or education and training. The report must also indicate whether any savings were realized by using commercial transportation services rather than acquiring those services from USG transport assets.

C11.2.7.3. Reporting for Drawdowns Under Special Authorities. For special drawdown authorities, there may be additional reporting requirements authorized by legislation in any fiscal year.

C11.3.1. Definition and Purpose. EDA is Department of Defense (DoD) and United States Coast Guard (USCG)-owned defense articles no longer needed and declared excess by the U.S. Armed Forces. This excess equipment is offered at reduced or no cost to eligible foreign recipients on an "as is, where is" basis. The EDA program works best in assisting friends and allies to augment current inventories of like items with a support structure already in place. Table C11.T6. is a summary of the EDA program legal references.

Table C11.T6. EDA Legislation Summary

Legislation Subject

Arms Export Control Act (AECA), Section 21 (22 U.S.C. 2761)

Authorizes sales from stock, including the sale of defense articles that are excess to DoD stocks.

AECA, Section 25(a) (22 U.S.C. 2765(a))

Requires an annual report to Congress listing weapons systems that are Significant Military Equipment (SME) and numbers thereof, forecasted to be available for transfer as EDA during the next calendar year.

Security Assistance Act of 2000, Section 706 of Public Law 106-280

Sense of the Congress resolution that there should be more use of the authority to sell excess defense articles under AECA section 21(a) (22 U.S.C. 2761) by using the flexibility afforded by AECA section 47(2) (22 U.S.C. 2794(2) to ascertain their market value.

FAA, Section 505 (22 U.S.C. 2314)

Establishes conditions of eligibility, transfers, use and security of grant EDA transfers.

FAA, Section 516 (22 U.S.C. 2321j)

Authority, limitations, terms of grant EDA transfers.

FAA, Section 516(b)(1)(E) (22 U.S.C. 2321j)
AECA, Section 21(k) (22 U.S.C. 2761)

EDA transfers will not adversely impact the U.S. national technology and industrial base nor reduce the opportunities of U.S. industry to sell new or used equipment to the proposed country. The Director, DSCA, determines the impact to industry with input from the Department of Commerce (DoC).

FAA, Section 516(c)(2) (22 U.S.C. 2321j)

Requires priority delivery of grant EDA to NATO members, major non-NATO allies on the south and southeastern flank of NATO (currently Egypt, Greece, Israel, Jordan, Portugal, and Turkey) and to the Philippines to the maximum extent feasible.

FAA, Section 516(e) (22 U.S.C. 2321j)

EDA recipients are responsible for Packaging, Crating, Handling and Transportation (PCH&T) costs, as well as refurbishment work and follow-on support. These services may be purchased from DoD through the FMS program. DoD funds may be expended for the transportation of grant EDA by exception if it is in the U.S. national interest, the transportation is on a Space Available basis, the total weight of the transfer does not exceed 50,000 lbs., and the recipient is a developing country receives less than $10M in International Military Education and Training (IMET) or FMF in the fiscal year the transportation is provided. Implementing Agencies must request Space Available authorization with the EDA request. Requests must include the total weight, proposed method and route of Space Available, and time frames or constraints. DSCA (Programs Directorate) seeks the required national interest determination (delegated to the Director, DSCA) and, when approved, notes Space Available transportation may be used in the EDA transfer authorization message.

FAA, Section 516(f) (22 U.S.C. 2321j)

A 30-day Congressional Notification is required prior to any EDA grant or transfer under the AECA of EDA that is SME or had an original acquisition value of $7M or more.

FAA, Section 516(g) (22 U.S.C. 2321j)

The aggregate current market value of grant EDA may not exceed $500,000,000 in any fiscal year. Congress may exclude the value of naval vessel transfers from this limit when it enacts legislation authorizing the transfer of such vessels. DSCA assures the ceiling limit is not exceeded.

FAA, Section 516(i) (22 U.S.C. 2321j)

EDA includes excess property of the USCG, and the term ‘Department of Defense’ includes the USCG with respect to such excess property.

FAA, Section 620(q) (22 U.S.C. 2370)

Limitation on assistance under FAA to countries in default on U.S. loans in excess of six months. When this sanction is enacted, all grant EDA transactions for the affected country are held until the sanction is lifted.

FAA, Section 644(g) (22 U.S.C. 2403)

The statutory definition of EDA excludes construction equipment (including tractors, scrapers, loaders, graders, bulldozers, dump trucks, generators and compressors). These items CANNOT be transferred under the EDA program.

10 U.S.C. 2562

Construction and fire equipment (tractors, scrapers, loaders, graders, bulldozers, dump trucks, generators, pumpers, fuel and water tankers, crash trucks, utility vans, rescue trucks, ambulances, hook and ladder units, compressors, and miscellaneous firefighting equipment) can be transferred only if the President declares an emergency for which the equipment is especially suited or if no other Federal Agency, State Government, person or entity eligible to receive the items submits a request for these items to the Defense Logistics Agency (DLA) Disposition Services and DLA Disposition Services performs the appropriate screening. Section 2562 is not an exception to FAA 516 and EDA as defined in FAA 644(g). Transfer of construction or firefighting equipment to a foreign country or international organization should be under authority other than FAA 516, such as humanitarian assistance authority.

Foreign Operations, Export Financing and Related Program Appropriations Act (enacted annually)

May require a 30-day Congressional Notification prior to any EDA grant of Significant Military Equipment (SME) or any transfer with an original acquisition value of $7M or more. May contain Brooke Amendment, which limits assistance to countries in default on U.S. Loans in excess of one year.

Foreign Relations Authorizations Acts (enacted periodically)

May authorize the use of funds appropriated to the DoD to pay PCH&T for EDA transfers for certain countries

NATO Enlargement Facilitation Act of 1996 [Public Law No. 104-208], Section 606 and Section 609

Requires priority delivery of grant EDA for Poland, Hungary, the Czech Republic, and Slovenia.

10 U.S.C. 2581

Requires all reasonable efforts to be made to refurbish excess UH-1 Huey and AH-1 Cobra helicopters prior to export to foreign countries unless transferred solely as a source for spare parts

10 U.S.C. 7307

Requires enactment of authorizing legislation to transfer naval vessels less than 20 years old or more than 3,000 tons. The value of these transfers is not normally included in the EDA ceiling limit (dependent upon current authorization language).

Cargo Preference Act of 1954 (46 U.S.C. 55305)

All grant EDA items transferred by ocean carriers must follow U.S. cargo preference requirements. IAs must consider cargo preference requirements when drafting Letter of Offer and Acceptance (LOAs). Recipient countries must use U.S. flag vessels unless a non-availability waiver has been issued by Maritime Administration (MARAD) (Administrator, Maritime Administration, Attn: Office of Cargo Preference (MAR591), Washington, DC 20590-0001).

Annual Special Legislation for PCH&T

Annual legislation may specify certain countries for which DoD funds for EDA PCH&T may be expended. SCOs and/or IAs must request funding of such transfers. Requests should identify the proposed source of DoD funds and the estimated PCH&T cost. DSCA is required to notify Congress of the use of this authority and of the estimated funds to be spent for each transfer that meets congressional notification requirements under FAA, section 516(f) (22 U.S.C. 2321j). Requests for such funding should accompany the EDA approval request. DSCA determines which transfers are funded based on budget constraints and priorities associated with the source of DoD funds. As these exceptions are authorized for a limited time period, they must be renewed.

C11.3.2. Who Can Obtain EDA?

C11.3.2.1. Eligibility for EDA Sales. All FMS eligible countries can purchase EDA. See Table C4.T2.

C11.3.2.2. Eligibility for EDA Grants. To receive grant EDA, a country must be justified to Congress for the fiscal year in which the transfer is proposed via the annual notification letters to Congress with DoS concurrence. Eligibility does not guarantee that any EDA offers will be made on a grant basis. Each EDA transfer is considered case-by-case. Questions about a country’s eligibility to receive grant EDA should be addressed to DSCA (Programs Directorate, Building Partner Capacity Division (BPC)).

C11.3.2.2.1. FAA, Section 505 Assurances for Grant EDA. In order to be eligible to receive grant EDA, foreign countries must have agreed to blanket end-use, security, and retransfer assurances. The text of these assurances is established by law. The DoS obtains these FAA, section 505 (22 U.S.C. 2314), assurances via exchange of diplomatic notes. EDA offers will not be authorized until the exchange of notes has been completed and copies received by the Department of State’s Office of the Legal Advisor.

C11.3.2.3. Country Priority for Grant EDA. Priority delivery of grant EDA is given to NATO countries and to major non-NATO allies on the southern and southeastern flank of NATO, and to the Philippines to the maximum extent feasible over the delivery of such excess defense articles to other countries (FAA, section 516(c)(2) (22 U.S.C. 2321j)). Countries currently eligible for priority delivery are Egypt, Greece, Israel, Jordan, Portugal, and Turkey. Next priority is to countries eligible for assistance authorized by the NATO Enlargement Facilitation Act of 1996 (Section 609 of Public Law No. 104-208). These countries include Poland, Hungary, the Czech Republic, and Slovenia (Section 606 of Public Law 104-208).

C11.3.3. Congressional Notification Requirements. Proposed EDA grants or sales that contain SME or with an original acquisition cost of $7M or more require a 30-calendar day Congressional Notification (FAA, section 516(f) (22 U.S.C. 2321j), Foreign Operations, Export Financing and Related Programs Appropriations Act). Notifications, prepared by DSCA (Programs Directorate), include:

C11.3.3.1. The purposes for which the article(s) is provided to the country, including whether the article(s) was previously provided to the country;

C11.3.3.2. The impact on the military readiness of the United States;

C11.3.3.3. The impact on the national technology and industrial base and the impact on opportunities of this base to sell new or used equipment to the country;

C11.3.3.4. The current value and original acquisition value of the article(s); and

C11.3.3.5. As required, an estimate of PCH&T funds needed for transfers.

C11.3.4. EDA Pricing. EDA items are priced in accordance with DoD Financial Management Regulations (FMR) 7000.14-R, Volume 15, Chapter 7. Section 706 of Public Law 106-280 (the Security Assistance Act of 2000) states that it is the sense of Congress that the President should make expanded use of the authority to sell EDA by using the flexibility to ascertain the market value of the EDA. USD(C) is responsible for approving pricing exceptions. Storage charges are not automatically applied to EDA transfers; however, reasonable charges can be assessed against items stored beyond 60 days past LOA acceptance. These charges must be stated in an LOA note. See Appendix 6 for the exact note wording.

C11.3.5. EDA Survey Messages. IAs use survey messages to advise the SCOs of potential recipients of present or future availability of EDA and to gather information to evaluate country requirements. Survey messages may be initiated only by the owning IAs and the USCG. Survey messages normally include item(s) description and condition. They may also include rough order of magnitude cost/value of end items, costs and lead-times for support items, supportability dates, and other information as appropriate. Survey messages should allow a 45-day response time to the extent feasible.

C11.3.5.1. Survey messages for non-SME are drafted by the IA and addressed to SCOs for action, with DSCA, DoS, DoC, the Joint Chiefs of Staff (J-5) and the Combatant Commanders (CCDRs) as information addressees.

C11.3.5.2. Survey messages for SME are drafted by the IA and forwarded to DSCA for coordination and approval with the Joint Chiefs of Staff (J-5), DoC, and DoS before release to SCOs for action. The issued survey message is sent only to SCOs approved in the coordination process to receive copies with information copies to DSCA, DoS, DoC, the Joint Chiefs of Staff (J-5), and the CCDRs. Copies of survey messages SHOULD NOT be forwarded to SCOs that are not included as an action or information addressee. Unapproved release could provide a false impression of DoD intent to offer materiel to a country not approved by DoD, DoS, and DoC.

C11.3.6. Joint Visual Inspection (JVI) of EDA. Transfer approval for EDA items is granted by DSCA upon a determination by the Director, DSCA, to transfer the EDA materiel or upon completion of the Congressional Notification, if required. Recipient countries are then encouraged to perform a JVI, wherever the materiel is located and at their expense, to examine the condition of the EDA materiel before accepting it. JVIs of materiel are not authorized prior to transfer approval from DSCA unless the Principal Director, Programs, has granted an exception. DSCA grants an exception to allow a JVI of EDA materiel to take place prior to transfer approval only if it is advantageous to U.S. interests and every effort is made on the part of the IA to prevent false impressions. A blanket exception is granted when the EDA is owned by DLA Disposition Services. To request a waiver to existing policy on the JVI of EDA materiel, IAs should use the sample letter and worksheet in Figure C11.F2. Title has not transferred at the time a JVI is performed.

Figure C11.F2. Letter and Worksheet for Exception to Joint Visual Inspection Policy

C11.3.7. Blanket Order EDA Transfers. Blanket order EDA cases and/or lines may be established only for non-SME consisting of spare parts and/or components, clothing, basic field equipment, and office equipment, supplies, furniture, or other non-SME items as approved by DSCA (Programs Directorate). Blanket order cases and/or lines for PCH&T may also be written in conjunction with EDA transfers of similar, non-SME items when the purchaser requests them. When spare or component parts are being transferred, the LOA must identify the end-item being supported.

C11.3.8. Title Transfer of EDA Items. Title to EDA items transfers at the point of origin except for items located in Germany. EDA items in Germany transfer title at the nearest point of debarkation outside of Germany. When using "space available" transportation or paying for transportation with DoD funds, title transfer at the destination should be considered on a case-by-case basis.

C11.3.9. Offer Termination. An unforeseen urgent U.S. Forces' requirement for an excess item may arise after it is offered to a country. When items previously offered are no longer available, the IA must notify DSCA (Programs Directorate), which will advise the DSCA Country Program Director and OUSD(P). Withdrawal of the offer should occur only after OUSD(P) has had the opportunity to weigh U.S. requirements against the potential damage to national security and foreign policy goals. If OUSD(P) agrees that U.S. requirements outweigh the potential damage to national security and foreign policy goals, then DSCA (Programs and Operations Directorates) advise the Department of State that the offer is being withdrawn. If OUSD(P) determines that U.S. requirements do not outweigh the potential damage to foreign policy goals, then the issue will be elevated to SecDef for decision under the procedures outlined in Section C6.4.7.

C11.3.10. Limitation on Assistance to Countries in Default. FAA section 620(q) (22 U.S.C. 2370) provides that no assistance under the FAA shall be furnished to any country in default of payment in excess of six months on any loan made under the FAA, while the annual legislation in the Foreign Operations, Export Financing and Related Program Appropriations Act generally provides that no funds appropriated in that act shall be used to provide assistance to any country in default of payment in excess of one calendar year on any loan under a program funded by that act. For countries that are in default of payment in excess of six calendar months, all grant EDA transactions for the affected country are put on hold until the sanction is lifted. Sales of EDA continue to be permitted under these sanctions.

C11.3.11. EDA Process. Table C11.T7. summarizes the EDA process.

Table C11.T7. EDA Process Flow

Step Action

1
Determine Materiel Availability

Prior to the end of a fiscal year, the IAs forward a list of available EDA assets (type and quantity, not to include secondary items) to DSCA and a list of assets that are forecasted to become EDA during the next calendar year in accordance with AECA, section 25(a) (22 U.S.C. 2765(a)). DSCA provides this information to the DoS. The Executive Branch informs Congress in the annual Javits Report.

2
IA Issues Survey Message

IAs use survey messages to advise potential recipients of present or future availability of EDA and to gather information to evaluate country requirements. Survey messages normally include item(s) description, condition, rough order of magnitude cost/value of end items, costs and lead-times for support items, supportability dates and other information as appropriate. To the extent feasible, survey messages should allow a 45-day response time.

  • Survey messages for non-SME are drafted by the IAs and addressed to the SCOs for action, with DSCA, DoS, DoC, the Joint Chiefs of Staff (J-5) and the CCDRs as information addressees.

  • Survey messages for SME are drafted by the IAs and forwarded to DSCA for coordination and approval with the Joint Chiefs of Staff (J-5), the DoC, and the DoS before release to the SCOs for action.

The issued survey message is sent only to the SCOs in countries approved to receive copies by the coordination process with information copies to DSCA, DoS, DoC, the Joint Chiefs of Staff (J-5), and the CCDRs.

3
Purchaser Requests for EDA

A foreign country or international organization identifies a requirement for EDA by:

  • Responding to a survey message. SCO responses to these surveys should include a transfer justification as well as an assessment of the proposed recipient's capabilities to fund follow-on operational, maintenance, and training requirements. SCO responses are provided to the IA with a copy to the CCDR, the Joint Chiefs of Staff (J-5), and DSCA; or

  • Submitting a Letter of Request (LOR); or

  • Visiting DLA Disposition Services location or locating items via the DLA Disposition Services website.

Purchaser requests for grant EDA should identify the intended/anticipated recipient unit for any defense articles and/or services to be granted, recognizing such unit designations may change as the case is implemented and equipment is delivered to the host nation. The SCO will update the recipient unit designation at the time of LOA signature, if applicable, by alerting the IA who will input updated information into DSAMS.

4
Responses to EDA Requests

IAs must respond to an EDA request within 20 days. Responses should state which items are available as EDA and which items are currently not available. They should also indicate, if known, the fiscal year when such items may become available. An information copy of this response is sent to DSCA (Operations Directorate). No offer may be made at this time unless the appropriate approvals/notifications have been completed. The IAs must screen all EDA for items subject to the Missile Technology Control Regime (MTCR). See Chapter 3.

  • If the item is not currently available, the IA shall keep the request on-hand until the items become available or the request is withdrawn.

  • If enough assets are currently available, the IA submits the required information to DSCA (Programs Directorate) within 30 days of LOR receipt for coordination, approval and notification (if required) prior to offer. Figure C11.F3. illustrates the standard memorandum and attachment that must be completed for each proposed EDA transfer. A detailed justification, based on country requirements, must be included in each memorandum. Additionally, the national stock number and the Military Articles and Services List (MASL) of the item(s) proposed as EDA must be included in the information provided to DSCA to facilitate acceptance and delivery reporting by the IAs at the end of each fiscal year. Go to Step #9.

  • If not enough assets are available, go to Step #5.

5
IA Requests EDA Allocation

If requests exceed available assets, the IA submits a proposed allocation plan to DSCA (Programs Directorate) within 30 days of LOR receipt. The IA should consider the CCDR’s regional EDA allocation priorities when developing its recommendations. Figure C11.F4. illustrates the standard format for requests for allocation plans.

6
DSCA Develops DoD Position

DSCA (Programs Directorate) works with Office of the Secretary of Defense (OSD) regional offices and the Joint Chiefs of Staff to develop a DoD position on which country(ies) should receive the asset(s). Concurrently, the DoS works with its offices to determine a DoS position on allocation of the assets. When possible, interested parties are notified 30 days in advance to prepare papers and justify their proposed allocation plans.

7
EDA Coordinating Committee (CORCOM) Convened

When requirements exceed assets DSCA (Programs Directorate) and the DoS co-chair an EDA Coordinating Committee (CORCOM) meeting to develop a coordinated plan to allocate EDA assets to potential recipients. The EDA CORCOM also consists of members from the Joint Chiefs of Staff (J-5) and the DoC. DSCA consolidates and represents the input of each of the regional offices within OSD. The EDA CORCOM considers the following criteria:

  • Arms transfer criteria specified by the President’s Conventional Arms Transfer Policy

  • Combatant Command (CCMD) priorities

  • Regional balancing as dictated in legislation or to achieve maximum benefit for the United States

  • Potential impact on the ability of U.S. Industry to sell new or used equipment

  • Matches of country requirements with items available

  • Ability of the country to effectively use and support the items

  • Item location and transportation requirements

  • Ability of the country to afford refurbishment of the items

8
Staffing Recommended Allocation Plan

If the EDA CORCOM finalizes an allocation plan, the Director, DSCA, signs and sends the allocation plan to the relevant IA for action.

If the EDA CORCOM cannot finalize an allocation plan, a recommended allocation plan is staffed for approval within OSD Policy before submission to the DoS for final approval. This coordination process takes approximately 30 to 45 days. After DoS approval, the Director, DSCA, signs and sends the allocation plan to the relevant IA so that it can begin preparing the individual cases.

9
Congressional Notification

If the proposed transfer does not meet Congressional Notification requirements, go to Step #10.

If the proposed transfer requires Congressional Notification, DSCA assembles a Congressional Notification package. DSCA (Programs Directorate) coordinates the package with the Under Secretary of Defense for Policy (USD(P)) regional office, DSCA (Operations and Strategy Directorates, Office of the General Counsel (OGC), and Legislative and Public Affairs(LPA)), DoC and DoS Bureau of Political-Military Affairs, Office of Regional Security and Arms Transfers (DoS (PM/RSAT)). The Congressional Notification period is 30 days. Go to Step #11.

10
EDA Determination

For transfers that do not require Congressional Notification, a DSCA Determination is required before items can be authorized for transfer. DSCA prepares this Determination and coordinates it with the USD(P) regional office, DSCA (Operations Directorate and the Office of the General Counsel), DoC and DoS (PM/RSAT).

11
Authorization to Offer EDA

For EDA sales or grant transfers, DSCA (Programs Directorate) sends a message to the IA authorizing the offer and transfer of items to the proposed country. An information copy is sent to the SCO, DoS, the CCDR, the Joint Chiefs of Staff (J-5), and MARAD. Each message contains a Record Control Number (RCN) associated with the grant transfer that is used for requisitions. IAs should not submit LOAs for EDA grants, sales, or associated services to DSCA prior to their receipt of DSCA’s authorization message.

12
LOA Preparation and Processing

The IA prepares an LOA for the grant EDA items, any EDA items being sold, and/or any supporting services or non-EDA articles associated with the transfer. For cases in which EDA is not the primary item being transferred, normal case writing rules apply. For cases in which EDA is the primary item being transferred, the following three steps apply:

  1. Case nickname: "EDA Grant" or "EDA Sale."

  2. Term of Sale: If the EDA transfer is a grant item, the term of sale should reflect "EDA Grant." If there are non-EDA grant items on the LOA, the LOA must include a dollar breakout for each term of sale used.

  3. Case Description:

    1. For an EDA grant transfer the case description should include the statement "is for the EDA grant transfer of [quantity] of [material nomenclature] under Section 516 of the Foreign Assistance Act of 1961 as amended…"

    2. For an EDA sale, the case description should include the statement, "is for the EDA sale of [quantity] of [material nomenclature] under Section 21 of the Arms Export Control Act as amended…"

The following additional rules apply for any line of any case in which EDA is being transferred by grant or sale:

  1. Line Item Description: For both EDA grants and sales, including amendments or modifications when an EDA grant or sales line item is added or changed, the line item description must include the EDA original acquisition value.

  2. Source Code: "E" for "Excess."

  3. Type of Assistance Code

    1. For an EDA grant transfer: "A – FAA Excess Defense Articles - non-reimbursable"

    2. For an EDA sale: "3 – Cash Sale from Stock-payment in advance" or appropriate code for corresponding Term of Sale.

  4. If the EDA transfer is a grant, offer release code and delivery term code may remain blank if special shipping instructions apply.

  5. If the EDA transfer is a grant, unit and total price should reflect $0 value. EDA sales follow normal LOA writing rules for inclusion of unit and total price.

  6. Line item description note: Each line for an EDA grant or sale item must include a line item description note that includes the equipment being transferred, item nomenclature, quantity, original acquisition value, and current estimated value at the time of transfer, location, condition code and RCN. If the EDA transfer is a grant, include the phrase "Grant Value is $0" to correspond with the $0 value in the line.

  7. Special EDA notes must be included as standalone notes on the LOA. See Appendix 6 for exact wording.

13
Delivery Documentation

The Implementing Agency is required to complete a DD Form 1348-1a, "Issue Release/Receipt Document;" DD Form 1149, "Requisition and Invoice/Shipping Document;" or other equivalent form, such as a DD Form 250 "Material Inspection and Receiving Report," as official documentation of delivery.

14
Tracking EDA Offers and Deliveries

IAs notify DSCA (Programs Directorate) when offers have been accepted/rejected and items have been delivered. Not later than 45 days following the end of the fiscal year, the IAs provide DSCA a year-end report of accepted/delivered offers from each IA. IAs provide this data in the format required by DSCA (Programs Directorate).

Figure C11.F3. Sample EDA Transfer Memorandum and Enclosure

Figure C11.F4. Sample EDA Allocation Plan Request

C11.3.12. EDA for Naval Vessels. The Navy International Programs Office (Navy IPO) is responsible for transfers of U.S. naval vessels and for the administration of transfers of USCG vessels and other excess USCG equipment. Ship Transfer Allocation Plans and any accompanying legislation must be approved by the Chief of Naval Operations and coordinated with the Secretary of the Navy before forwarding to DSCA for USD(P) action. DSCA coordinates all EDA ship transfers with USD(P), the Joint Chiefs of Staff (J-5), DoC, and DoS to ensure compliance with statutory notification and authorizing legislation requirements.

C11.3.13. Defense Logistics Agency (DLA) Disposition Services Transfers. Major end items are usually available from IAs. Other EDA, including most parts and components, are transferred to DLA Disposition Services when they become excess. DRMO-held EDA are listed on the DLA Disposition Services Web Page, a computerized inventory searching service designed to provide information on all stock-numbered items in the DLA Disposition Services inventory. Interested countries can identify these items and request that they be transferred by EDA grant or sale.

C11.3.13.1. For minor items, the country requests an LOA from DLA Disposition Services for a sum agreed upon by the country to fund sale and/or PCH&T, and DLA Disposition Services staffs a blanket EDA request to an agreed upon value. The country requisitions property via the web, and DLA Disposition Services fills and ships the order as the items become available.

C11.3.13.2. For major end items and SME, the country finds items on the website and selects them via a web request. DLA Disposition Services staffs the EDA request and prepares an LOA. When the LOA is signed and funds have been obligated, DLA Disposition Services fills and ships the order.

C11.4.1. Definition and Purpose. Whenever the President determines it to be consistent with, and in furtherance of, the purposes of Part I of the FAA and within the limitations of the Foreign Assistance Act of 1961, section 607 of the FAA authorizes any agency of the USG to furnish services and commodities on an advance-of-funds or reimbursement basis to friendly countries, international organizations, the American National Red Cross, and voluntary nonprofit relief agencies/private voluntary organizations (PVOs) registered with and approved by the U.S. Agency for International Development (USAID). For the purposes of the FAA, "services" include any service, repair, training of personnel, or technical or other assistance or information used for the purposes of furnishing nonmilitary assistance. "Commodities" includes any material, article, supply, goods, or equipment used for the purposes of furnishing nonmilitary assistance. The President's authority to make determinations under section 607 was delegated to the Secretary of State and to the Administrator of USAID for matters within their respective areas of responsibility in a memorandum dated February 16, 1995. A list of registered PVOs can be found at the following USAID website: https://pvo.usaid.gov/usaid/.

C11.4.2. Requests for Sales. A Letter of Request (LOR) that details the services and/or commodities needed is submitted by a foreign government or international organization, as referenced in C11.4.1, to the USG through the U.S. Embassy Security Cooperation Organization (SCO). The LOR should indicate the proposed method of financing and whether Price and Availability (P&A) data, a Letter of Offer and Acceptance (LOA), an LOA Amendment or LOA Modification is desired. Once endorsed by the Embassy SCO, a copy of the LOR should be forwarded to the appropriate Implementing Agency (IA) and DSCA alerting each organization of the request. The LOR is subsequently forwarded by the IA to USAID with a request for a determination from USAID, which is coordinated with the Department of State (DoS), on whether it approves or disapproves of the request. Once USAID has approved or disapproved the request, the determination is sent back to the IA for onward coordination and processing with DSCA. Prior to the development of an LOA, the IA furnishes P&A data to DSCA (Operations Directorate) for appropriate coordination with the Office of the Secretary of Defense (OSD).

C11.4.3. Letter of Offer and Acceptance (LOA). The USG uses an LOA to track the sale of services and/or commodities (to include training, and design and construction services) under the authority of FAA, section 607. The LOA itemizes the services and/or commodities included in the LOR. Like other FMS LOAs, section 607 LOAs authority are signed by the country and/or organization receiving the services and/or commodities.

C11.4.3.1. LOA Preparation Timeframe. Section 607 LOAs are categorized as "Group D" and will be processed according to the guidelines provided in Section C5.3.2.

C11.4.3.2. LOA Preparation. The IA develops a section 607 LOA in the Defense Security Assistance Management System (DSAMS) to allow execution of these programs through existing Security Assistance automation systems. Section 607 LOAs follow the same LOA preparation guidelines as FMS LOAs. See Section C5.4.5.

C11.4.3.3. LOA Format. LOA format guidance provided for FMS LOAs in Figure C5.F6. applies to section 607 LOAs except as identified in Table C11.T8.

Table C11.T8. Unique Instructions for Preparing Section 607 LOAs

# Unique Instructions for Preparing a Letter of Offer and Acceptance for Section 607 Cases

1

Case Identifier. For section 607 LOAs, the case identifier is composed of country code "S6" (FAA, section 607 Transactions - Payment in Advance), the Implementing Agency code of the DoD Component providing support, and a case designator assigned by DSCA (Strategy Directorate).

2

Purchaser's Reference. The USAID Determination that covers the region or country being supported is entered in the "Based on" field.

3

Nickname Field. The country/organization receiving the support and the type of support (e.g., section 607 - [insert country/international organization]) is identified in the "nickname" field on the LOA.

4

Terms of Sale. The Term of Sale for all section 607 LOAs is "Cash with Acceptance."

5

Transportation. Transportation costs for section 607 LOAs are required to be included as actual costs above-the-line and must contain Delivery Term Code (DTC) "4".

C11.4.3.4. Pricing of LOAs.

C11.4.3.4.1. Commodities. The price of commodities sold under this authority is the acquisition cost adjusted, as appropriate, for condition and age; or the Defense Working Capital Fund (DWCF) standard price.

C11.4.3.4.2. Services and/or Training. The price of services and/or training sold under this authority is the amount of additional costs incurred by the DoD to provide such services. For DoD airlift services, the rate is that specified for Joint Chiefs of Staff exercises in the Catalog of USG and Non-USG Airlift Rates published annually by the US Transportation Command (TRANSCOM).

C11.4.3.4.3. Surcharges and Accessorials. FMS surcharges (i.e. FMS Administration Fee and Contract Administrative Surcharge (CAS)) and accessorial rates apply (i.e. Transportation and Packing, Crating and Handling - PC&H). DoD FMS resources support this effort and are reimbursed through the normal FMS surcharges and accessorial accounts. Any request to deviate from the application of these surcharges and accessorials must be sent to DSCA (Business Operations Directorate) for approval.

C11.4.3.4.4. Nonrecurring Cost (NC). NC does not apply to section 607 LOAs.

C11.4.3.5. Additional LOA Information. Each section 607 LOA must include, as an attachment, a copy of a State Department or USAID determination authorizing the sale. The LOA Standard Terms and Conditions apply to section 607 LOAs as do all other mandatory notes. Notes regarding inclusion of charges on the document (e.g., Administrative Surcharge and CAS notes) apply to these LOAs as well. See Appendix 6 for exact wording of these notes.

C11.4.3.6. DSCA Coordination and Countersignature of LOAs. All section 607 LOA documents require DSCA countersignature. See Section C5.4.13. The Implementing Agency posts the country acceptance milestone in DSAMS after purchaser signature.

C11.4.3.7. Support to the United Nations (UN). Rather than signing the LOA, when the UN accepts a section 607 LOA it incorporates the documents into a UN Letter of Assist (UNLOA). UNLOAs are considered by the UN to be firm fixed-price contracting documents. They are submitted, with a copy to DSCA, to the IA for review of prices, delivery dates, and other data. After coordination with the IA and appropriate OSD and DoS activities, DSCA grants approval to IA to provide the commodities or services. Multiple UNLOAs should not be executed on a single LOA. However, multiple LOAs may be prepared to support a single UNLOA.

C11.4.4. Management of Funds. Section 607 sales are cash in advance. Defense Finance and Accounting Service (DFAS) Indianapolis establishes a sub-account within the FMS Trust Fund for these transactions. If advance payments are deposited into this account, standard procedures, including direct citing of the FMS Trust Fund on the DoD contract, apply.

C11.4.5. LOA Reporting. The DSCA 1200 system is used to record section 607 LOAs and is distinguished by the type of sales code of "S-FAA" from other FMS agreements. The Implementing Agency submits delivery reporting for these cases. Transportation costs for section 607 LOAs are reported as actual costs on above-the-line delivery reports. All delivery reports must contain Transportation Bill Code (TBC) "D." Government Bills of Lading cite the transportation line of the section 607 case and do not cite the FMS Trust Fund Transportation Clearing Account.

C11.4.6. LOA Billing. For non-UN support, standard billing procedures are used for section 607 LOAs. For UN support, the following guidelines apply:

C11.4.6.1. "S6" LOAs (Payment in Advance). The IA provides DFAS Indianapolis a monthly forecast using a payment schedule. DFAS Indianapolis prepares a special monthly bill on or about the 15th of each month. The bill shows the LOA and the UNLOA designators and forecasted payment amount for the current month. It is based on delivery reports received from the IA. Monthly delivery listings are also provided to the UN. DFAS Indianapolis coordinates the bill with DSCA and forwards it to the UN through the U.S. Mission to the United Nations (USUN).

C11.4.6.2. "S5" LOAs (Reimbursable). As a matter of policy, "S5" or reimbursable section 607 cases are no longer executed by DSCA.

Arms Export Control Act (AECA), Section 30 (22 U.S.C. 2770) authorizes the USG to sell defense articles and defense services to U.S. companies in support of direct commercial exports pursuant to an approved export license. Authority to approve such sales has been delegated to the Director, DSCA. When the sale has been approved, the Implementing Agency concludes and executes the sale contract with the purchasing company.

C11.5.1. AECA, Section 30 Sales Eligibility Requirements. If an Implementing Agency receives such a request, it must determine whether the proposed sale meets all of the criteria in Table C11.T9.

Table C11.T9. AECA Section 30 Sales Eligibility Requirements

# Statutory Eligibility Requirements

1

Sale is to a company incorporated in the United States that has an approved export license for final assembly, manufacture, or concurrent or follow-on support of an end item being procured for the armed forces of a friendly country or for an international organization.

2

The articles would be supplied to the prime contractor as GFE/GFM if the end item were being procured for the use of the U.S. Armed Forces;

3

Any services being provided must be performed in the United States and may include transportation, installation, testing, or certification that are directly associated with the sale.

4

And the articles and services are available only from USG sources or are not available to the prime contractor directly from the U.S. sources at such times as may be required to meet the prime contractor’s delivery schedule.

C11.5.1.1. AECA, Section 30 Sales from Stock. Unless approved by USD(P) in coordination with the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)), sales are not authorized if they result in stocks dropping below the reorder point.

C11.5.1.2. AECA, Section 30 Sales from Procurement. When procurement or manufacture in Government-owned facilities is required, the Implementing Agency determines if a sale shall be concluded. In determining production priorities, the Implementing Agency considers existing requirements and schedules manufacture, allocation, and delivery on a first-in first-out basis guided by DoD Manual 4140.1 and related assignments of Force Activity Designators (FADs) by the Chairman of the Joint Chiefs of Staff. For questions of priority among competing U.S. or foreign requirements, refer to Section C6.4.6.

C11.5.2. If the proposed sale is consistent with these requirements, the Implementing Agency provides the following information listed in Table C11.T10. to DSCA (STR/POL).

Table C11.T10. AECA Section 30 Sale Approval Request Details

Required Information

Purchasing Company

Items/Quantity or Service

End Item Application (if applicable)

End Item Purchaser (country or international organization)

Number and Date of the Munitions Export License or other Export Approval

DSCA (STR/POL) will staff the request with the Director, DSCA, and inform the Implementing Agency of the decision. Once informed in writing that the Director, DSCA, has approved a proposed sale, the Implementing Agency’s contracting activity will execute the sale agreement.

C11.5.3. AECA, Section 30 Sales Format. A unique sales agreement is used by the USG for the sale of defense articles and/or services to U.S. companies under the authority of AECA, section 30 (22 U.S.C. 2770) The sales agreement includes the information outlined in Table C11.T11.

Table C11.T11. AECA, Section 30 Sales Agreement Requirements

# General Provisions and/or Notes Required
1

The USG retains the right to cancel in whole or in part or to suspend performance at any time under unusual or compelling circumstances if the national interest so requires.

2

The USG provides no warranty or guarantee, either expressed or implied, regarding the item being sold.

3

The USG shall provide best efforts to comply with the delivery lead time cited, but incurs no liability for failure to meet an indicated delivery schedule.

4

The USG shall use its best efforts to deliver at the estimated price, but that the purchaser is obligated to reimburse the USG for the total cost if it is greater than that price.

5

The item sold may be used only for incorporation into end items (or as concurrent or follow-on support in conjunction with a sale of the end item) for export under an approved export license and may not be used for other purposes.

6

The purchaser renounces all claims against the USG, its officers, agents, and employees arising out of or incident to this agreement, whether concerning injury to or death of personnel, damage to or destruction of property, or other matters, and shall indemnify and hold harmless the USG, its officers, agents, and employees against any such claims of third parties and any loss or damage to USG property.

7

The U.S. company agrees to provide protection of classified information and requires that the agreement with the foreign Government provides protection of U.S. classified information.

8

The purchaser is responsible for any insurance desired and, when applicable, export customs clearance.

9

The purchaser is required to reimburse the USG for all costs incurred by the USG if the purchaser cancels the purchase agreement before item delivery.

10

Delivery is Free On Board (FOB) point of origin. The purchaser must arrange for continental U.S. (CONUS) transportation (except for sensitive or hazardous cargo that is normally shipped via the Defense Transportation System (DTS)).

11

Payment terms.

  1. Sales of Articles from Stock. Total payment is required in advance for the full cost of any USG shipment.

  2. Sales of Articles or Services from Procurement, or Sales of Services from Resources on Hand. Payment is normally cash payable in full at the time the agreement is signed. Based on purchaser request, a payment schedule may be considered when full funding is not immediately required. When requested by the purchaser, the Implementing Agency, in coordination with the contracting officer, may negotiate a payment schedule that complies with the Security Assistance Management Manual (SAMM). Funds must be available prior to USG entering into a contract, submitting a MIPR, or making other obligations. Payment is equal to the full cost of the obligations plus reasonable uncertainties, such as costs which could be incurred should it become necessary to prematurely terminate the Sales Agreement.

C11.5.3.1. Pricing of AECA, Section 30 Sales. Prices, accountability, and disposition of collections shall be in accordance with DoD 7000.14-R Volume 11a, Chapter 1. The Implementing Agency executing the Section 30 sale shall ensure it recovers its full cost of executing the sale, to include pricing elements as outlined in Volume 11a, Chapter 1, Addendum 1, "To Private Parties." FMS Administrative surcharge and accessorial rates are not applicable to Section 30 sales. Sales shall be in cash, with payment upon signature of the sales agreement by the USG and U.S. company representatives. Payment in U.S. dollars shall precede procurement, production action, delivery (in cases of stock sales), and/or performance of service. Funds obligated for a reimbursable procurement, internal production of articles, or provision of services may not exceed the cash received from an authorized purchaser. If there is an increase in the cost, the purchaser is required to make additional cash payments to fund the costs.

C11.5.3.2. Planning Data. To allow planning and marketing, Implementing Agencies are authorized to provide cost and delivery data to authorized potential purchasers in advance of approval of a sales agreement. Such data must be identified as estimates that are not binding on the USG.

C11.5.4. Records and Reporting. The Implementing Agency maintains a central record showing the purchaser, item being sold, source (stock, DoD production, or procurement), cost estimate or (if delivered) billed price, end item (if applicable), ultimate recipient (country or international organization), and export license number and date or other DoS approval. Information from this record is provided to DSCA upon request.

C11.6.1. Definition and Purpose. Under AECA, section 61 (22 U.S.C. 2796), the President may lease DoD defense articles to eligible foreign countries or international organizations for a period not to exceed 5 years and a specified period of time required to complete major refurbishment work prior to delivery. The President has delegated this authority to the Secretary of Defense who has redelegated authority to the Director of DSCA. There must be compelling foreign policy and national security reasons for providing such articles on a lease basis, and the articles must not be needed for public use at the time. Leases may provide defense articles for testing, to allow the USG to respond to an urgent foreign requirement, or for other purposes as approved by the DSCA Director. Table C11.T12. summarizes legal references pertinent to the leases.

Table C11.T12. Lease Legislation Summary

Legislation Subject

AECA, Subchapter VI

Lease authority, limitations, and terms

AECA, Section 62 (22 U.S.C. 2796a)

Congressional Notification

AECA, Section 63(a) (22U.S.C. 2796b)

Legislative Review

FAA, Section 484 (22 U.S.C. 2291c)

Aircraft made available to a foreign country primarily for narcotics-related purposes shall be provided on a lease or loan basis, rather by sale or grant, unless to do so is determined contrary to the national interest and Congress is so notified.

10 U.S.C. 7307

Unique requirements regarding ship leases

C11.6.2. Who Can Lease Defense Articles? Defense articles may be leased to a country or international organization if that country and/or organization is eligible for Foreign Military Sales (FMS) purchases. See Table C4.T2. for a list of eligible countries and/or organizations.

C11.6.3. What Can Be Leased? The President may lease defense articles from DoD stock to eligible foreign countries or international organizations if there are compelling foreign policy and national security reasons for providing such articles on a lease basis rather than as a sale; the articles are not needed for the time for public use; and the effects of the lease on the national technology and industrial base are considered, particularly the extent, if any, to which the lease reduces the opportunity of U.S. manufacturers to sell new equipment to the lessee.

C11.6.3.1. Naval Vessel Leases. Naval vessel leases are subject to additional requirements contained in 10 U.S.C. 7307, which requires specific statutory authorization for the lease of naval vessels in excess of 3000 tons or less than 20 years of age, and Congressional notification for other naval vessels. AECA, Subchapter VI requirements also apply to naval vessel leases unless the separate legislation expressly provides otherwise.

C11.6.4. Counternarcotics Aircraft. The Foreign Assistance Act (FAA), section 484 (22 U.S.C.2291c), requires aircraft made available to a foreign country primarily for narcotics-related purposes shall be provided on a lease or loan basis, rather than by sale or grant, unless to do so is determined contrary to the national interest and Congress is so notified. It further requires that if Foreign Military Financing (FMF) is used to finance the leasing of aircraft the entire cost of any such lease (including any renewals) shall be an initial, onetime payment of the amount which would be the sales price for the aircraft if they were sold via FMS.

C11.6.5. Lease Preparation and Format. Leases are prepared using the Defense Security Assistance Management System (DSAMS). Implementing Agencies (IAs) are responsible for preparing leases in accordance with this manual.

C11.6.6. Lease Duration. The lease shall provide that the USG may terminate the lease at any time during the lease period and require the immediate return of the defense article(s). Leases may be written for a maximum of five years and a specified period of time required to complete major refurbishment work prior to delivery. Leases may include multiple items with different lease duration periods. The shortest lease period is one month; the longest 60 months and a specified period of time required to complete major refurbishment of the leased articles to be performed prior to their delivery of the leased articles. Leases of less than five years may be extended via an Amendment, but the total period under a specific lease may not exceed five years plus the time needed for major refurbishment work. The lease period begins on the date shown at the beginning of the lease, provided that any initial deposit has been paid, unless the period is otherwise specified within the terms and conditions. If the purchaser signs the lease after the proposed starting date, the lease must be amended to show the actual lease start date and any payment adjustments necessary to the payment schedule (Schedule A).

C11.6.6.1. Lease Format. The lease format, including sample data and preparation instructions, is provided in Figures C11.F5. through C11.F9. This format may not be altered unless special circumstances require an exception authorized by DSCA (Programs and Strategy Directorates). Additional provisions may be added to a lease when appropriate and with concurrence of DSCA (Programs, Strategy Directorates, and Office of General Counsel (OGC)).

C11.6.6.2. Lease Identification. The IA assigns a unique designator to each lease in DSAMS. The lease designator is composed of the FMS Customer Code, the IA code, and a 3-position code assigned by the IA. The lease designator is included on each lease page, including schedules, appendices, and accompanying documents. FMS cases associated with leases must reference the lease designator(s).

C11.6.7. Lease Pricing.

C11.6.7.1. Rental Payment. The lessee must agree to pay in U.S. dollars all costs incurred by the USG in leasing articles, including reimbursement for depreciation of articles while leased. The rental payment is calculated in accordance with DoD Financial Management Regulations (FMR) 7000.14-R, Volume 15, Chapter 7. Rental payments do not include an administrative charge.

C11.6.7.2. Exceptions. Certain leases do not require reimbursement of depreciation or may be eligible for waiver of reimbursement. DSCA must authorize the exception prior to the IA’s notifying a potential lessee that a no-rent lease is available.

C11.6.7.2.1. The requirement for reimbursement of depreciation and other costs incurred by the USG in leasing the articles does not apply to leases for the purposes of cooperative research or development, military exercises, or communications or electronics interface projects.

C11.6.7.2.2. The President may waive reimbursement of depreciation for any defense article(s) that has passed three-quarters of its normal service life if he or she determines that to do so is important to the national security interests of the United States. This waiver authority has been delegated to the Director, DSCA, in accordance with the provisions of DoD Directive 5105.65. When requesting this waiver, the IA must provide DSCA (Programs Directorate) the following information:

  • A letter certifying that the items are beyond three-quarters (75 percent) of their service life,

  • A spreadsheet showing how replacement costs were calculated, a spreadsheet showing what the depreciation charges would normally be;

  • And, if applicable, a spreadsheet showing how partial depreciation charges were calculated and a copy of any prior or related waivers.

C11.6.7.2.3. The President may also waive reimbursement of depreciation in exchange for the lessee’s lease of defense articles to DoD on substantially reciprocal terms. In these cases, the President submits a detailed notification for each lease to the Committees on Foreign Affairs and on Appropriations of the House of Representatives, and to the Committees on Foreign Relations and Appropriations of the Senate. Unless Congress provides otherwise, this waiver authority may be exercised only once during the current fiscal year, and only with respect to one country.

C11.6.7.3. Replacement of Lost and/or Damaged Items. The lessee must agree to pay the costs of restoration or replacement if the articles are lost, damaged, or destroyed while leased. For lost or destroyed items, the customer is charged the replacement cost, adjusted for the depreciated value of the destroyed item, if the United States intends to replace the articles, or the actual article value (depreciated value of the most recent procurement cost of the article) if the United States does not intend to replace the articles. These charges may be recouped through amendment or modification of the annotated support case listed in the lease or establishment of a separate LOA.

C11.6.7.4. Payment Schedules. Schedule A of each lease identifies the replacement cost(s) of the item(s) being leased and the schedule for rental payment due to the USG. The payment schedule is established on a quarterly billing cycle compatible with the FMS billing cycle. If the quarterly cycle does not provide for payment prior to the effective date of the lease, an initial deposit is required to assure that payment is received in advance of the month in which a rental charge is incurred. Billings to the foreign lessee are based on this schedule of payments and are included on a separate DD Form 645A with the country’s quarterly FMS billing statement. The IA assures that payment schedules are updated for any extensions, delivery schedule changes, or other Amendments that may result in a change to the lease value or schedule of payments. DFAS deposits receipts from lease rental payments into the Miscellaneous Receipts Account 3041 (FMS Recoveries, DoD Lease Costs) in accordance with the Treasury Financial Manual, Supplement to Volume 1.

C11.6.7.5. Use of FMF or Military Assistance Program (MAP) Merger Funds. When authorized by DSCA (Business Operations and Operations Directorates), FMF or MAP Merger funds may be used to fund LOAs for services associated with a lease, but the AECA does not allow their use for rental payments for leases made pursuant to AECA, section 61 (22 U.S.C. 2796), except for leases of aircraft for counternarcotics purposes pursuant to FAA, section 484 (22 U.S.C.2291c). In such instances, the total lease cost (including any renewals) is an initial, one-time payment of an amount equivalent to the aircraft price as if it were sold on an LOA. Questions regarding proper sources of funding for leases should be directed to DSCA (Business Operations Directorate).

C11.6.8. Congressional Notification Requirements. AECA, section 62(a) (22 U.S.C. 2796a) requires written certification from the President to the Speaker of the House of Representatives, the Chairman of the Committee on Foreign Relations of the Senate, and the Chairman of the Committee on Armed Services of the Senate before entering into or renewing a lease agreement for a period of one year or longer. AECA Section 62(c) (22 U.S.C. 2796a) requires that the certification must be transmitted not less than 15 calendar days before agreements with NATO, NATO member countries, Australia, Japan, the Republic of Korea, Israel, or New Zealand and not less than 30-calendar days before agreements with all other countries or organizations. The certification includes the country or international organization to which the defense article is to be leased; the type, quantity, and value (in terms of replacement cost) of the defense article to be leased; the terms and duration of the lease; and the justification for the lease, including an explanation of why the defense article is being leased rather than sold. AECA, section 62(b) (22 U.S.C. 2796a) authorizes waiver of the Congressional Notification for leases if the President states in his or her certification that an emergency exists that requires the lease be entered into immediately in the interest of U.S. national security. The certification must include a detailed justification with a description of the emergency circumstances and a discussion of the national security interests involved. This authority is reserved by the President and has not been delegated to the Secretary of Defense. In the event of such an emergency, DSCA (Programs Directorate) provides instructions to the IA.

C11.6.9. Lease Process. Table C11.T13. summarizes the lease process.

Table C11.T13. Lease Process

Step Action

1
Purchaser Request for Lease

An eligible foreign country or international organization identifies a requirement and submits an LOR to the respective IA with a courtesy copy to DSCA (Programs Directorate).

2
Responses to Lease Requests

The IA determines whether a lease is a viable option and whether the items are needed for public use during the proposed lease period. DSCA (Programs Directorate) should be consulted at this time.

With DSCA (Programs Directorate) approval, the IA responds to the country/organization stating whether the equipment is available and whether a lease is an available option. No actual offer may be made until the appropriate approvals/notifications are complete.

If the IA recommends application of an exception to a customer’s reimbursing depreciation costs, the IA must provide justification and receive authorization from DSCA (Programs Directorate) before advising the customer of the exception.

3
IA Prepares Lease

The IA prepares lease documents in DSAMS in accordance with Figures C11.F5. through C11.F9. The lease package consists of: the lease agreement with all terms/conditions and payment schedule (Schedule A), the determination of compelling foreign policy and national security interests and that the articles are not for the time needed for public use, a statement as to why a lease is preferable to a sale, a forwarding memorandum, and a draft Congressional Notification if the duration of the proposed lease exceeds one year.

4
IA Coordinates the Lease

The IA coordinates the lease package internally. The IA must screen all lease items for articles controlled under the Missile Technology Control Regime (MCTR). See Chapter 3. After the IA has reviewed/coordinated on the lease package, it enters the "MILSGN" milestone into DSAMS. This milestone changes the lease status to "Proposed."

5
IA Submits Lease Package to DSCA

For leases that are less than one year in duration, the IA submits the lease determination and forwarding cover memorandum to DSCA (Programs Directorate) electronically for countersignature. For leases that are one year or longer in duration, the IA submits the lease, determination, Congressional Notification certification, and forwarding cover memorandum to DSCA (Programs Directorate) electronically for countersignature.

If not submitted electronically, lease packages for countersignature may be submitted to:

Lease Program Manager (PGM/BPC)
Defense Security Cooperation Agency
201 12th Street South, Suite 203
Arlington, VA 22202-5408

6
DSCA Coordinates Lease Package

DSCA (Programs Directorate) coordinates the lease package within DSCA and with OSD (Regional Offices) and the DoS.

If the lease is for less than one year in duration, go to Step #8.

7
DSCA Prepares Congressional Notification

DSCA (Programs Directorate) prepares the notification to Congress required by AECA, section 62(a) (22 U.S.C. 2796a). All documents are coordinated with OSD (Regional Offices), DoS, and DSCA before the Director, DSCA, signs the notifications. If a lease requires Congressional Notification, an advance draft copy of the unsigned lease may be provided to the customer when the Congressional Notification has been delivered to Congress.

8
DSCA Signs the Lease Determination and Countersigns the Lease

Upon completion of coordination, and the Congressional Notification period if required, DSCA (Programs Directorate) submits the lease determination to the Director, DSCA, for signature. After signature, DSCA enters the "DCSGN" milestone in DSAMS. This milestone automatically sets the lease status to "Offered" and posts "DSCA Approved" and the date of the DCSGN milestone in the countersignature block. DSCA provides a copy of the signed Determination to the IA.

9
IA Sends Lease to Customer

Upon receipt of the "DCSGN" milestone, the IA signs the lease document and sends it to the customer for review/signature.

10
Customer Acceptance

The customer signs the lease and sends any required initial deposit to DFAS Indianapolis. If the purchaser signs the lease after the proposed starting date, the lease must be amended to show the actual lease start date and any payment adjustments necessary on the Schedule A.

11
Lease Implementation

The IA assures that DFAS has received the initial deposit (if required). After receipt of the deposit the lease is implemented. DFAS receives DSAMS Management Flags when a lease moves to "Offered" status and "Implemented" status.

12
Lease Execution

The IA or DSCA (Programs Directorate) may require a certificate of delivery (See Figure C11.F10.) when a leased item(s) is provided to the lessee. The IA is responsible for tracking and monitoring the lease to ensure conditions of the lease agreement are followed. These responsibilities include (but are not limited to):

  • Maintaining a record of all items including associated tools, ground support equipment, and other materiel to be recovered at the end of the lease

  • Ensuring monitoring of the defense articles during the period of the lease

  • Advising DSCA (Programs Directorate) of non-compliance by the lessee

  • Ensuring that the appropriate rental payment schedule is maintained

  • Ensuring that all related costs are recovered

  • Reporting the status of each lease on a quarterly basis

  • Ensuring that prior to lease expiration the lease is either being prepared properly for closure, extended via Amendment, or if it has reached the 60-month limit, renewed in the form of a new lease

  • Ensuring that the leased materiel is returned by the lessee

  • Ensuring proper disposition of the defense article(s) upon expiration or termination of the lease and restoration to its original condition in accordance with the terms of the lease

DFAS Indianapolis is responsible for collecting rental payments and delivery reporting.

13
Lease Closure

The IA will enter the delivery and equipment return dates in DSAMS. When all required data has been entered, DSAMS automatically notifies DFAS Indianapolis that the lease is ready for closure. DFAS Indianapolis will reconcile the financial information and close the lease in Defense Integrated Financial System (DIFS), which will then automatically close the lease in DSAMS.

C11.6.10. Lease Renewal. Leases may be renewed. The same procedures as those outlined in Section C11.6.8. for new leases apply.

C11.6.11. Lease Terminations. Any proposal by the USG to terminate a lease before its expiration date must be coordinated with DSCA.

C11.6.12. Lease Amendments. Lease Amendments (See Figure C11.F10.) may be used to extend or change existing leases. Such changes may include variations or updates to payment schedules, Schedule A items, or periods of performance; however, a Lease Amendment may not be used to add new or additional items to the Schedule A with an effective date different from the effective date of the lease. An increase in scope in this way requires a new lease. Each Amendment includes the original lease designator and undergoes the same staffing process as the original lease. If a lease for less than one year is amended so that the total period of the original lease and the Amendment(s) equals or exceeds one year, the Amendment must be notified to the Congress before it can be offered. As with original leases, the IA submits the draft lease Amendment, Congressional Notification certification if required, and a forwarding cover memorandum to DSCA (Programs Directorate) electronically for coordination and countersignature.

C11.6.13. Lease Reporting Requirements. Each IA is responsible for updating the status of each lease under its cognizance via DSAMS. The update is made by posting the "Action Taken on Lease" (comment code "ACT") in the "Lease Text/Comments" field of the "Lease" tab of the "Lease Detail." Additionally, the IA must verify the accuracy of payments and notify DFAS of any financial issues when updating its leases in DSAMS. Not later than 30 days after the end of each quarter, the IA electronically notifies DSCA (Programs Directorate) that its leases have been updated. DSCA then generates a report for each IA in DSAMS.

C11.6.14. LOAs for Services Associated with a Lease. LOAs are not used for the lease of defense articles. However, an LOA can be used for costs incurred by the USG incident to the lease including, but not limited to: restoration and/or replacement as a result of damage, loss or destruction; packing, crating, handling, and transportation (PCH&T); and the sale of associated articles and services, including refurbishment of the defense article(s) required prior to, during, or after the lease period. These costs are not to be included in the lease and the lease shall not remain open (valid) past the expiration date of the associated LOA. The associated LOA designator is included in General Provision 12 and Schedule A of the lease. Also, a note on the LOA (See Appendix 6) identifies the associated lease designator.

Figure C11.F5. Lease Forwarding Memorandum

Figure C11.F6. Sample Lease

Figure C11.F7. Lease Determination

Figure C11.F8. Congressional Notification Information Memorandum

Figure C11.F9. AECA, Section 62(a) Report to Congress

Figure C11.F10. Certificate of Delivery

Figure C11.F11. Sample Lease Amendment

Under Arms Export Control Act (AECA), section 65 (22 U.S.C. 2796d), the Department of Defense (DoD) may lend materiel, supplies, and equipment to NATO and major non-NATO allies for research and development purposes. Loans that support cooperative research, development, test, and evaluation (RDT&E) programs, strengthen the security of the United States and its allies by promoting standardization, interchangeability, and interoperability of allied defense equipment. Table C11.T14. summarizes the loan program legal references.

Table C11.T14. Loan Legislation Summary

Legislation Subject

AECA, section 65 (22 U.S.C. 2796d)

Authority, limitations, and terms of loans

FAA, , Part II, Chapter 2, section 503 (22 U.S.C. 2311)

General authority for the President to furnish military assistance.

Authority to make loans under FAA, section 503 (22 U.S.C. 2311) does not exist at this time. See FAA, section 503 (22 U.S.C. 2311) for information on the general authority, terms and conditions for making loans under this section.

C11.7.1. Who May Receive Loans? Under AECA, section 65 (22 U.S.C. 2796d), the Secretary of Defense may loan materiel, supplies, or equipment to NATO or major non-NATO allies only to carry out cooperative RDT&E programs.

C11.7.2. What May Be Loaned? The materiel, supplies, or equipment loaned may be expended or consumed without reimbursement if the Secretary of Defense determines that the success of the effort depends on expenditure or consumption and approves of it. The Secretary of Defense may not loan strategic and critical materiel if, at the time the loan is to be made, the quantity of the materiel in the National Defense Stockpile is less than the quantity of such materiel to be stockpiled, as determined by the President under 50 U.S.C. 98b (section 3 of the Strategic and Critical Materials Stock Piling Act).

C11.7.3. Loan Agreements Conditions. AECA, section 65 (22 U.S.C. 2796d) loans must comply with the Deputy Secretary of Defense memo of November 27, 1990, which delegates the authority to make, accept, and administer such loans (or gifts) to the DoD Components (Military Departments (MILDEPs) and/or Defense Agencies) in coordination with the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)). Each loan or gift transaction under this section shall be recorded in a written agreement between the Secretary of Defense and the country. Table C11.T15. summarizes conditions governing these agreements.

Table C11.T15. Loan Agreement Conditions

# Loan Agreement Conditions
1

The Assistant Secretary/Deputy Agency Director level or higher must sign the written agreement.

2

Mutual benefits of the loan (or gift) must be shown in supporting documentation.

3

Each Implementing Agency (IA) shall maintain a single repository for agreements and documents and provide a signed copy of each agreement to USD(AT&L).

4

IAs are responsible for any funding required for loans.

5

IAs must provide appropriate legal, fiscal, and industrial base factors analysis and security plans for each agreement, as specified in DoD Directive 5530.3.

6

IAs must provide 15 days advance notification to the Office of the Secretary of Defense (OSD), through USD(AT&L), before the loan agreement is executed. Advance notification must include the appropriate legal, fiscal, and industrial base factors analysis and security plans.

7

IAs must obtain appropriate security and technology transfer clearances for each loan (if offices responsible for those clearance so require).

8

Transfers of materiel, supplies, and equipment under this authority are based on the principle of reciprocity, although item-for-item exchanges are not expected or required.

9

The existence of this authority in no way affects the ability to use AECA, section 61 (22 U.S.C. 2796) leases for cooperative research and development purposes.

10

AECA, section 65 (22 U.S.C. 2796d) does not provide authority for the exchange of information beyond basic operational and simple maintenance for test purposes. Accordingly, any exchange of additional information related to an AECA, section 65 (22 U.S.C. 2796d) loan or gift may only take place pursuant to an approved test and evaluation or Data Exchange Agreement, Information Exchange Project, a cooperative research and development agreement, or coproduction agreement approved in accordance with DoD Directive 5530.3.

11

If required, USD(AT&L) (after coordination with Under Secretary of Defense for Policy (USD(P)) and DoD General Counsel) consults with the Department of Commerce (DoC) for an assessment of U.S. industrial base impact and U.S. industry's international trade position.

12

The loan agreement shall not require either party to provide materiel, supplies, or equipment that would impair its own priorities, requirements, or commitments, or would otherwise be inconsistent with its national laws or regulations or other international agreements.

13

The loan agreement describes how the type and quantity of materiel, supplies, or equipment meets the objectives of the cooperative RDT&E program.

14

The loan agreement sets out the intellectual property rights applicable to the transfer and use of materiel, supplies, and equipment and the results of the research, development, test, and evaluation conducted with the materiel, supplies, and equipment.

15

Loan agreements shall include the following terms/conditions:

  • The materiel, supplies, and equipment shall remain the property of the providing party.
  • Classified information or materiel shall be protected in accordance with applicable security agreements in force.
  • The receiving party shall use the items only to meet the RDT&E objectives specified in the agreement.
  • The receiving party shall maintain materiel, supplies, and equipment in good order, repair, and operable condition and return the items in operable condition and in as good condition as when received, normal wear and tear excepted, unless the providing party agrees that the loaned materiel, supplies, or equipment may be expended or otherwise consumed in connection with the RDT&E programs without reimbursement to the providing party.
  • The receiving party shall not transfer materiel, supplies, equipment, or information to a third party without the prior consent of the providing party.
  • Subject to the limitations of national disclosure policies, the receiving party shall submit (without charge) a report of its use of the materiel, supplies, and equipment to the providing party.
  • Each party agrees not to assert a claim against the other for injury, loss, or damage resulting from the use of the materiel, supplies, or equipment loaned by the other party.

C11.7.4. Loan Agreement Process.

Table C11.T16. Loan Agreement Process

# Step Action

1

Request for Loan

NATO or a major non-NATO ally requests or makes a loan (or gift) of materiel, supplies, or equipment for RDT&E purposes from/to a DoD Component.

2

Implementing Agency Prepares Agreement

The DoD Component develops the agreement and supporting documentation in accordance with the legal and policy provisions.

3

Advance Notification

The DoD Component provides 15 days advance notification to OSD, through USD(AT&L) before loan execution.

4

Loan Agreement Coordination

USD(AT&L) coordinates each loan with USD(P) and DoD General Counsel. If required, USD(AT&L) consults with the DoC for the U.S. industrial base impact assessment and the international trade position of U.S. industry. Such consultation is conducted by USD(AT&L) after coordination with USD(P), USD(C), DoD General Counsel, DSCA and the other MILDEPs/Defense Agencies (as required).

5

Signature of the Loan Agreement

Upon OSD notification completion and barring non-concurrence, the Assistant Secretary/Deputy Agency Director level (or higher) signs the loan agreement.

The receiving party signs the loan agreement and the Implementing Agency distributes copies to USD(AT&L) and the loan repository.

6

Loan Agreement Execution

The loan is executed and monitored by the Implementing Agency.

C11.8.1. Definition and Purpose. SCET teams consist of U.S. Military, Department of Defense (DoD) civilian, and/or contractor personnel deployed to a foreign country on Temporary Duty (TDY – 179 days or less), or Permanent Change of Station (PCS – more than 179 days) status. These teams provide advice, training, technical assistance, or support to personnel of the host nation. This assistance is provided to meet specific objectives in connection with the development of a country’s capabilities. Prior to programming these teams, planners should take into consideration all of the advantages and disadvantages inherent in the use of this type of assistance in a particular country. Deployment of SCET teams should also be consistent with DoD, Combatant Command (CCMD), and the U.S. Embassy Country Team Mission Strategic Plan (MSP). Table C10.T1., in the previous chapter, provides a listing of the various authorities for deploying teams.

C11.8.1.1. Constraints. Teams deploy and function under authority of the relevant section of either Title 10 USC, Title 22 USC or other relevant legislation are subject to procedures and constraints included in the authorizing legislation and/or established policy. Procedures and constraints vary greatly from one legislative authority to another and all concerned with a particular team’s deployment must fully understand those differences.

C11.8.1.2. Before a team deploys under Title 10 USC authorities, the Security Cooperation Organization (SCO) will ensure the team understands any rules of engagement or other constraints applicable to the particular section of the law that authorizes the deployment. The SCO will refer any questions to the Combatant Commander’s (CCDR) Staff Judge Advocate for resolution prior to the team’s deployment.

C11.8.1.3. Teams deploying under security assistance (SA) authorities, Title 22 USC, will not engage in, or provide assistance or advice, to foreign forces in a combat situation. Additionally, such teams must not perform operational duties of any kind except as may be required in the conduct of On-the-Job Training in the operation and maintenance of equipment, weapons, or supporting systems. Teams deploying under SA authorities must not perform SCO functions or augment the SCO or U.S. forces in country. Teams will not serve as an integral part of the Armed Forces of the hosting nation.

C11.8.1.4. All members of SCET teams must understand their responsibilities concerning acts of misconduct by foreign country personnel. The Military Department (MILDEP) responsible for SCET organization and management will brief team members prior to deployment on what to do if they encounter or observe such acts.

C11.8.1.5. The provisions listed in the above paragraph represent a level of conduct the United States expects each foreign country to observe. If team members encounter prohibited acts, they will disengage from the activity, leave the area if possible, and report the incidents immediately to the SCO, who will notify the Chief of the U.S. Mission. The Chief of the U.S. Diplomatic Mission through the SCO will identify proper U.S. authorities during the team’s initial briefing. Team members will not discuss such matters with non-U.S. Government (USG) authorities such as journalists or civilian contractors.

C11.8.2. Types of Security Cooperation Education and Training Teams.

C11.8.2.1. Extended Training Service Specialist (ETSS). ETSS are DoD military and/or civilian personnel normally deployed in a PCS status and who are technically qualified to provide defense related advice and instruction, or training in the installation, operation, and maintenance of weapons, equipment, and systems. ETSS are attached to the SCO for operational oversight and administrative and logistical support, but do not perform SCO staff duties. ETSS are not used for follow-on retraining or advisory duties, except in rare instances when the recipient country cannot provide qualified personnel from its own resources or hire qualified personnel from non-indigenous sources.

C11.8.2.1.1. ETSS deploy under SA authorities contained in Title 22 USC and are programmed under budget generic code N30 on the basis of person-month requirements. ETSS are most often programmed under a FMS case. Because of funding severability issues, ETSS are note normally programmed for either the IMET or the CTFP program. DSCA (Operations, Programs, and Strategy Directorates) must approve ETSS deployment under either of these programs. The Case Manager and SCO should ensure the FMS case contains appropriate language to support ETSS deployment. All costs involved in deploying and sustaining the ETSS must be included in the LOA. Depending on the country, this can include such items as dependent travel, movement of household goods, and dependent schooling.

C11.8.2.1.2. ETSS that provide English language instructors, supervisors, or advisors on detached duty status from Defense Language Institute English Language Center (DLIELC) are referred to as a Language Training Detachment (LTD).

C11.8.2.1.3. ETSS may be provided for periods up to one year under International Military Education and Training (IMET). Only DSCA (Operations, Programs, and Strategy Directorates) can approve longer periods.

C11.8.3. Contract Field Services (CFS). CFS are civilian personnel under contract from private industry who perform the same functions as ETSS. CFS personnel are used only when the Implementing Agency (IA) determines that services by DoD personnel are not practical. Only DSCA (Programs Directorate) can approve use of CFS personnel under IMET. CFS requirements are programmed on the basis of person-month requirements. Estimated contract cost covers the total training service cost, including salary, transportation, baggage, etc. Budget generic code N30 funds CFS personnel.

C11.8.3.1. CFS costs depend on the value of a negotiated contract with the civilian firm involved and include such costs as salary, in-country maintenance, CONUS travel, and overhead.

C11.8.3.2. The SCO is responsible for ensuring the contractor understands regulations and procedures for receipt, dispatch, storing, and safeguarding of military information, including classified information.

C11.8.3.3. CFS contracts are non-personal services contract. U.S. officers and employees should have no supervisory control over contractor personnel. Non-personal services contract means a contract under which the personnel rendering the services are not subject, either by the contract’s terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the Government and its employees.

C11.8.3.4. Contractors and their employees will not be placed in policy-making positions or in positions of command, supervision, administration, or control over DoD personnel or personnel of other contractors; nor will they become part of a foreign government organization.

C11.8.3.5. Security clearance for employees of contractors performing field services will conform to the requirements of applicable DoD instructions or regulations. Other administrative requirements such as those involving certificates of performance, logistical support, travel, identification, privileges, and reports will conform to the appropriate provisions of the MILDEP regulation, as incorporated within the contract for the services.

C11.8.3.6. According to the terms of the contract, the contracting officer may require the contractor to remove from the job site any CFS employee who endangers persons or property or whose continued employment under the contract is inconsistent with the interests of the USG.

C11.8.3.7. CFS personnel are authorized leave for U.S. federal holidays as specified in MILDEP procurement procedures. All other leave and absence are authorized at the discretion of the contractor.

C11.8.4. Technical Assistance Field Teams (TAFT). TAFT are DoD and/or contractor personnel deployed in a permanent change of station (PCS) status for the purpose of providing in-country technical, advisory, or maintenance support to foreign personnel on specific equipment, technology, weapons, and supporting systems when mobile training teams (MTT) and ETSS are not appropriate for the purpose (e.g., Technical Assistance Team (TAT) deployed in a TDY status). Any training a TAFT provides is collateral to their technical and maintenance support function. TAFT cannot be provided under IMET.

C11.8.5. Mobile Training Team (MTT) and/or Mobile Education Teams (METs). MTTs are DoD and/or contract personnel on temporary duty (up to 179 days) for the purpose of training foreign personnel in the operation, maintenance, or support of weapon systems and support equipment, or for specific training requirements that are beyond in-country U.S. resources. Requirements for assistance in excess of 179 days should be met by CONUS training or be provided as an ETSS.

C11.8.5.1. MTT deploy under Title 10 USC, Title 22 USC, or other statutory authorities. METs provide training developed primarily in response to the expanded-IMET program in a seminar and/or educational format.

C11.8.5.2. MTTs may be authorized for either CONUS or OCONUS deployment. This includes in-country training surveys to determine specific country training needs; to identify quantity requirements that are beyond the country’s capability to assess and that are associated with equipment deliveries; and to provide assistance for self-defense. MTTs should be considered when training must be accomplished quickly in response to a threat or adverse condition affecting the security of the foreign country; training is of relatively short duration; training must reach a large number of trainees; or when training can be conducted only on equipment or in facilities located in the foreign country.

C11.8.5.3. General MTT/MET Programming and Funding Information.

C11.8.5.3.1. MTT and METs are funded under budget generic code N20. Programming must include duration in weeks; number of team members; costs for overseas travel (round trip); in-country travel; travel and living allowances; CONUS travel; baggage; and DoD civilian salaries. Only the MILDEP can approve excess baggage.

C11.8.5.3.2. Per diem allowance costs during temporary duty travel outside CONUS is computed according to Joint Federal Travel Regulations (JFTR) rates for U.S. military personnel, and rates shown in the "Standard Regulations, Government Civilians, Foreign Areas" (published by the DoS) for USG civilians. MTTs’ CONUS travel costs are programmed at an estimated rate to include commercial air transportation, baggage, and per diem.

C11.8.5.3.3. Costs of team members traveling from overseas locations are computed using commercial air (tourist rate) transportation, per diem, and excess baggage. Additional travel costs should be based on the Joint Travel Regulations (JTR) and other applicable directives and regulations.

C11.8.5.3.4. When more than one MILDEP is involved, a joint MTT is programmed using the MASL line of the MILDEP providing the most team members. If each MILDEP provides an equal number of team members, the MTT is programmed using the Military Articles and Services List (MASL) line of the MILDEP counterpart to the requesting foreign country MILDEP.

C11.8.5.3.5. All team member costs, including pre-deployment orientation or training costs are programmed as "unit costs" of the country program.

C11.8.5.3.6. Training aids (including packing, crating, handling, and transportation (PCH&T)) are programmed separately under budget generic code N20, description: MTT-TRNG AIDS (MASL Item-ID 309000-CONUS, 319000-O and/or S). This program line shows the next sequential suffix of the Work Control Number (WCN). Only training aids that cannot be requisitioned under FMS are included under this procedure and must be approved by DSCA (Operations and Programs Directorates).

C11.8.5.3.7. Light refreshments during breaks in MTT/MET-provided training may be funded if the provision of such refreshments prevents disruption of the training agenda. The MTT/MET must be a formal DoD conference with a published and substantive agenda, which includes scheduled speakers, and involves matters of topical interest to participants from multiple agencies and/or foreign governmental participants, where refreshments are incidental to the overall conference. The SCO must provide the DSCA (Business Operations Directorate) adequate documentation explaining that no other convenient source of refreshments for attendees exists. This documentation must be provided to the DSCA (Business Operations Directorate) at least 30 days prior to the start of training.

C11.8.5.4. MTT Funded with FMS.

C11.8.5.4.1. An MTT may be furnished under an LOA, either as a separate case or as part of an existing training case. MTTs provided through an FMS LOA may cross fiscal years. The MILDEPs develop cost data for these MTTs. The same cost elements as stated for IMET MTTs are used, with the addition of military pay and allowances with current acceleration factors for all military members of FMS-funded MTTs.

C11.8.5.4.2. When planning for MTTs, the SCO should allow adequate time for:

  • determination of price and availability;

  • LOA preparation and processing;

  • submission to and acceptance by the country;

  • receipt of the initial deposit and issuance of obligation or expenditure authority;

  • and MTT team orientation and preparation of training aids after funding is received.

C11.8.5.5. MTT funded with IMET.

C11.8.5.5.1. A fundamental objective of IMET is to influence current and future senior leaders among foreign military personnel by exposing them, during CONUS training, to the American people, way of life, institutions, beliefs, and aspirations. This must be considered when proposing an MTT OCONUS deployment in lieu of CONUS training. A decision to use MTTs should not be solely based on cost considerations. Every attempt should be made to provide MTTs through FMS rather than IMET. MTT requests under IMET must demonstrate that an MTT is the best approach and that IMET is the only available funding option. A DSCA waiver by DSCA (Programs Directorate) is required to program an MTT under IMET.

C11.8.5.5.2. MTTs are programmed by the SCO for the fiscal year in which the team will be used. Teams are programmed on a man-week basis. An IMET funded MTT cannot be funded across fiscal years; therefore, personnel on MTT duty must terminate their TDY and return to home station before September 30 unless action has been taken to reprogram the team in the new fiscal year. Such reprogramming is subject to the 179-day restriction on MTTs, receipt of Continuing Resolution Authority (CRA) or other budget authority in the new fiscal year, and DSCA approval. Consider also that there are some authorities that allow funding across fiscal years. See Chapter 15.

C11.8.5.5.3. Transportation costs for round trip team travel are chargeable to the fiscal year of the start of the TDY. Once a formal MTT request is submitted according to MILDEP instructions and the details of mission, concept, composition, duration, and source agency finalized, the IMET will be adjusted to reflect the MTT cost estimate developed by the appropriate MILDEP. The following factors will be included: CONUS travel and team orientation programmed per-member to include CONUS airfare, per diem, and baggage; transoceanic travel (round trip) using current commercial airfare rates; travel and per diem allowances according to the JFTR; in-country travel costs; and cost of team members. For civilians, this cost is calculated from the base salary rate plus acceleration factor as prescribed by current DoD pricing instructions. No salary costs are included for military members. All team member costs, including pre-deployment orientation or training cost, are programmed as "unit costs" of the country program.

C11.8.5.5.4. An MTT cannot be deployed under IMET until funds are available; therefore, a SCO must consider lead times when requesting and programming a MTT.

C11.8.5.5.5. For costing purposes, MTT are subject to IMET incremental pricing policy.

C11.8.5.6. Other MTT following the IMET procedures.

C11.8.5.6.1. An MTT may be funded by the Counter Terrorism Fellowship Program (CTFP) only after receipt of Office of the Secretary of Defense Special Operations/Low Intensity Conflict (OSD(SO/LIC)) and CCMD approval. CTFP-funded MTTs use the same cost programming and cost elements as IMET-funded MTTs.

C11.8.5.6.2. An MTT provided under the Counter-Drug Training Support program, use the same cost programming and cost elements as an IMET-funded MTT.

C11.8.5.7. Technical Assistance Team (TAT). Similar to TAFTs, TATs provide SA services not SA training. TATs are DoD and/or contractor personnel deployed to place into operation, maintain, or repair equipment that was provided under SA programs. Any training a TAT provides is collateral to its primary mission of placing into operation, maintaining, or repairing equipment sold or provided to the host nation. TAT services cannot be provided under IMET, except in the case of the installation of English language laboratories. TAT personnel deploy in TDY status unlike TAFT personnel who deploy in PCS status.

C11.8.5.8. Requirement Survey Team (RST). RSTs deploy to help the SCO develop and define equipment, training and technical assistance requirements for the host nation. The Funding source depends upon the nature of the mission and could include, but is not limited to, FMS cases and IMET. An Expeditionary Requirements Generation Teams (ERGT)is a type of RST organized and deployed by DSCA. See Section C2.4. for more information on ERGT.

C11.8.5.9. Pre-Deployment Site Survey (PDSS). An RST team chief may deploy alone or with other personnel as an advance party to ensure preparations for the main body are in place. As with RSTs, funding sources for a PDSS will depend upon the nature of the mission and could include, but are not limited to, FMS and IMET cases.

C11.8.6. Other SCET Teams and OCONUS activities under Title 10 USC. Teams or personnel deployed under various authorities, such as Combatant Commander Initiatives Fund (CCIF) (10 USC 166a), military-to-military contacts (10 USC 168), or Joint Combined Exchange Training (10 USC 2011) are programmed as a part of the development of a Combatant Command Theater Security Cooperation Plan. Unlike those teams programmed under SA procedures, IMET and FMS, Title 10 SCET deployments are typically tasked by the CCDR directly to a MILDEP component command. Funding is provided by the tasking CCDR to the Service component providing the team. Teams composed of Special Operations Forces personnel require Special Operations Command (SOCOM) approval. The Service component command follows its proscribed internal procedures for filling CCMD tasking.

C11.8.6.1. Combatant Commander Initiatives Fund (CCIF). Under authority of 10 USC 166a, CJCS may provide funds to CCDRs to deploy personnel in a TDY status to foreign countries to provide military education and training to military and related civilian personnel of that country. Beyond provision of SCET teams, these funds may also be utilized for force training, contingencies, selected operations, command and control, joint exercises (including activities of participating foreign countries), humanitarian and civil assistance, personnel expenses of foreign country defense personnel participation in bilateral or regional cooperation programs, and force protection.

C11.8.6.2. Military-to-Military Contacts and Comparable Activities. Under authority of 10 USC 168 the Secretary of Defense (SECDEF) may direct military-to-military contacts and comparable activities designed to encourage a democratic orientation of defense establishments and military forces of other countries. SECDEF may provide funds to the CCDRs, which may be used for the activities of traveling contract teams, military liaison teams, exchanges of civilian or military personnel between DoD and defense ministries of foreign governments, exchanges of military personnel between units of the armed forces and units of foreign armed forces, seminars and conferences held primarily in a theater of operations, and distribution of publications primarily in a theater of operations. Except for the activities specifically authorized by this section, funds provided may not be used for the provision of any other defense articles or services, including training, to any foreign country.

C11.8.7. Coordination and Programming of SCET Teams.

C11.8.7.1. Whenever possible, the SCO should forecast requirements for SCET multiple years in advance of the expected deployment date. SCO’s plans for SCET should be included in the CCMD out-year theater SC planning where they are ultimately integrated and synchronized with other SC activities in support of a larger strategic objective.

C11.8.7.2. SCO should also capture SCET requirements in the SCO Combined Education and Training Program Plan (CETPP). The CETPP includes all SCO training requirements for a three-year period (current year, budgeting year (current+1), and planning year (current+2)).

C11.8.7.3. Finally, the SCO submits SCET requests, at annual Security Cooperation Education and Training Working Groups (SCETWGs). Requests not identified as part of the CETPP and submitted at a SCETWG are considered "out-of-cycle". Although an out-of-cycle request does not necessarily prevent a SCET from being sourced, the various DoD organizations that resource SCET may have fewer resourcing options to support late-developing requirements.

C11.8.7.4. To obtain SCET team support, SCO should initiate coordination with the appropriate MILDEP or Service training organization as soon as an OCONUS training requirement is identified. Formal requests for SCET teams funded by FMS, IMET, CTFP and Counter-Drug Training Support are submitted in accordance with MILDEP procedures described in AR 12-15/SECNAVINST 4950.4B/AFI 16-105, Joint Security Cooperation Education and Training (JSCET).

C11.8.7.5. SCET sourced by U.S. Special Operations Forces must be endorsed by the theater Special Operations Component Command (SOCPAC, SOCCENT, SOCEUR, SOCSOUTH, or SOCAF), and approved by the U.S. Special Operations Command (SOCOM).

C11.8.7.6. Coordination with the host nation. In many cases, the relative cost and level of difficulty in preparing for a SCET is significantly higher for the host nation than for the United States. Limited budgets, manning, number of personnel with English language capability, logistics; finite ground and/or air transportation assets to transport students; complex approval procedures; and ongoing combat operations are examples of difficulties that many partner nations face. Early and continuous coordination with the host nation can help ensure SCET team mission success. The SCO must work with representatives from the host nation to establish the SCET team mission and ensure the host nation military understands, in detail, the requirements for training equipment by type and number; number of students expected and their military grade and skills; English Comprehension Level (ECL); types of training facilities; transportation and communications requirements; safety equipment, medical care/evacuation requirements; and SCET team support arrangements.

C11.8.8. Selection of personnel. MILDEPs, commands, and agencies providing personnel for assignment to a SCET team should ensure that those personnel have the experience, technical ability, maturity, and personality to accomplish their duties in a manner that is in the best interest of the United States.

C11.8.8.1. The SCO requesting a SCET team will identify the expertise and qualifications that the team members should possess. Any special requirements, considerations, or restrictions should also be identified.

C11.8.8.2. Team members must be medically fit to perform duty with a SCET team in the designated country. Physical disorders that may require medical attention or hospitalization may disqualify a candidate. Medical expenses incurred for non-military team members will be charged to the program supporting the team.

C11.8.8.3. Personnel selected for SCET must have enough time remaining in the MILDEP before separation or retirement to complete the required period of deployment.

C11.8.9. Quality of Life (QOL) and Mission Sustainment (MS) Items for SCET Teams. QOL items are any articles or services that, in the judgment of the SCO Chief and CCDR, have a positive effect on the living and and/or or working environment of the deployed SCET Team. MS items are those articles and services that are essential for the successful accomplishment of the team's mission. Factors to be considered in determining specific QOL and/or MS item requirements should include availability of suitable entertainment, climate and/or geography, security, local language, and recreational facilities.

C11.8.9.1. Examples of QOL Items. Examples of QOL items include, but are not limited to magazines, athletic equipment, fishing equipment, camping equipment, scuba gear, equipment repair, etc. Not included are charges for consumables, memberships, lessons, etc. Additionally, personal entertainment equipment, such as TVs, DVD players, or stereos, should only be provided for use in dayroom-type situations when justified by unusual circumstances or when individual team members cannot reasonably be expected to bring or acquire their own (e.g., extreme isolation or harsh environmental conditions, and limitations on baggage and/or personal belongings that members may bring). High cost QOL items over $500 must be approved by the CCDR and justified in the budget submission. Due to storage and repair problems, it may be more economical to rent and/or lease authorized high-cost equipment on an occasional basis to reduce the costs involved.

C11.8.9.2. Examples of MS Items. Examples of MS items include, but are not limited to housing, dependent education, medical support, security guards, drivers, physical conditioning equipment (e.g., aerobic equipment, weight lifting equipment), transformers, and environmental and morale leave. Not included are charges for consumables, memberships, lessons, etc.

C11.8.9.3. The SCO Chief is the ultimate authority in-country for approving expenditures for these items within published guidance and LOA limitations.

C11.8.9.4. Funding for QOL and/or MS Items. QOL items for SA-funded teams are provided to the team by the parent MILDEP and not from SA funds provided to the SCO (T-20) or (T-10). If MILDEP funds are inadequate to meet QOL requirements for FMF-funded FMS SCET teams, then the FMF-funded FMS case funds may be used if specifically authorized in the LOA. QOL items cannot be funded under IMET but may be provided to IMET-funded teams from in-country SCET team stocks or parent MILDEP. MS items identified by the SCO can be purchased in-country using case funds if specifically authorized in the LOA.

C11.8.9.5. Disposition of QOL and/or MS Items. Prior to departure from country, the SCO and SCET team chief conduct a physical inventory of QOL and MS property. The MILDEP determines disposition of QOL items furnished by the MILDEP. The SCO determines disposition of QOL items purchased with case funds. The SCO chief is the ultimate authority in-country for disposition of MS items within published guidance and LOA limitations. For continuing SCET team missions, the team chief assigns the property to the follow-on team chief or temporarily to the SCO. When the SCET team mission is complete, the property is transferred to an authorized representative of the host nation or returned to the MILDEP as appropriate. Items purchased with case funds ultimately become the property of the host nation and the SCO assigns the property to an authorized representative of the host nation.

C11.8.10. Security Assistance Team Command Relationships. The Chief of the U.S. Diplomatic Mission exercises general supervision over the in-country operations and activities of SCETs through the SCO Chief. The CCDR provides necessary technical assistance and administrative support to SCOs to facilitate the efficient and effective oversight of SCETs activities, including QOL for personnel. The level of support provided to team members under an FMS case must not exceed the level authorized for in-country DoD personnel of equivalent grade who are funded by U.S. appropriations or FMS. Oversight of SCETs by CCDR through SCOs must not usurp MILDEP authority in issues of case management, contract administration, or the technical execution of the SAT mission as described in the individual terms of reference (i.e., Letter of Offer and Acceptance).

C11.8.11. SCO Chief. The SCO Chief exercises operational and administrative control over in-country SCET teams and is responsible for coordinating the team's activities to ensure compatibility with other DoD elements in or directly related to the U.S. diplomatic mission. The SCO Chief ensures compliance with CCMD directives and keeps the CCDR informed of SCET team activities and progress.

C11.8.12. SCO. SCO support responsibilities include, but are not limited to, those shown in Table C11.T17.

Table C11.T17. SCO Functions in Support of Cooperation Education and Training Teams

# SCO Functions in Support of Security Assistance Teams
(not inclusive)
1

Forecast SCET requirements and include these requirements in CCMD out-year Theater Security Cooperation (TSC) planning and SCO CETPP.

2

Submit formal SCET team requests, using format provided in Table C11.T16., at annual SCETWG. Submit out-of-cycle SCET team requests to the appropriate MILDEP w/ copies to other stakeholders.

3

Conduct coordination with the host nation and the appropriate MILDEP or training organization to identify, validate, and refine training and training support requirements.

4

Assist the MILDEP in identifying country and/or case unique management and administrative duties in the implementing program directive.

5

Ensure necessary equipment, instruction, facilities, and technical publications are available before or upon SCET team arrival in country.

6

Ensure foreign personnel to be trained meet the prerequisites necessary to comprehend the technical level of the training to be provided.

7

Exercise operational and administrative oversight over the in-country SCET team and ensure the team’s activities are consistent with the CCMD TSC and Embassy Mission Strategic Plan (MSP).

8

Review residential leases to ensure quarters are appropriate for rank and dependent status of team members and comply with DoD and DoS standards. The SCO ensures each lease request is submitted to the Embassy Interagency Housing Board, if required, for approval prior to signature by the appropriate contracting officer. If higher headquarters approval is required, ensure Embassy Interagency Housing Board reviews request before forwarding lease to the Implementing Agency (IA) case manager.

9

Establish procedures to review all team TDYs and approve requests for out-of-country travel.

10

Review SCET team chief's request for annual funding prior to submission to the IA team manager.

11

Review SCET team request for purchase of Quality of Life (QOL) and/or Mission Sustainment (MS) items and items required to execute the team training and/or technical assistance mission. The SCO provides the MILDEP and the CCDR and/or designated Regional Component Command with an itemized listing of recommended QOL and MS articles to be included in the LOA. SCOs ensure the requested items are authorized in the LOA under which the team operates and that vendor discussions and actual purchases are made through a USG contracting office.

12

Ensure team chief establishes supply and/or equipment accountability records that provide a complete audit trail from item acquisition to disposal. All non-expendable, durable property costing $50.00 or more is recorded on a property record.

13

Review team property and inventory records for accuracy. Ensure continuous in-country accountability is maintained by conducting a physical inventory prior to team and/or team chief departure from country. As a minimum, physical inventories for PCS teams are conducted annually.

14

Perform periodic reviews of team petty cash funds to ensure funds are adequately protected and cash management is in accordance with Embassy budget and fiscal office procedures.

15

Assist SCET team chief with establishing procedures with the Embassy for payroll support of any foreign service employees hired to support the SCET team.

16

Prior to SCET team/team chief departure from country, conduct an after action review (AAR) and, with the team chief, provide inputs into the CCMD Theater Security Cooperation Information Management System (TSCMIS).

17

Ensure the SCET team chief provides formal after-action report within 30 days of completion of the team’s mission using format provided in AR 12–15/SECNAVINST 4950.4B/AFI 16–105.

Table C11.T18. Training Team Request Format

# Information to be Included Description
1

Team Identification

Create a training team identification code. Codes include the five components:

  1. Team Function (UH-1 Maint, M112A1 Opns, etc)
  2. The type of team (MTT, TAT, ETSS, TAFT, pre-deployment site survey, or RST)
  3. Two letter country code
  4. For IMET, the four digit WCN. For FMS, the alphabetical FMS case designator
  5. Four digits designating the FY in which the SAT is to deploy

Below are examples of MTT identification codes:

  • For IMET : UH1 Maint MTT-TH0014-2000
  • For FMS : M113A1 Opns MTT-SR-OBQ-2000
2

Mission

Provide a detailed scope of instruction the team is to conduct.

3

Training Goal

In a concise statement, describe the results the team is expected to achieve. Provide justification for the team in terms of the effect on the security cooperation objective(s). Do not restate the team mission.

4

Objective

Describe the actions or steps the team will take to accomplish the mission.

5

End State

List the expected results from the training. Make sure they can be quantified and measured. These will provide an indicator of mission success.

6

Team Composition

List expected results from the training that can be quantified. The measure of these results following training will provide an indicator of mission success.

7

Duration

Indicate proposed duration of PCS mission in months and TDY mission in weeks.

8

Personnel to be trained

Indicate number of students. Categorize by officer, enlisted, and civilian. Characterize the technical qualifications of students, to include relevant training and education levels.

9

Security Clearance

Indicate type of security clearance required.

10

Team restrictions

List any required limitations or exclusions on the type of personnel, uniforms, equipment, or methods of instruction.

11

Summary of host nation capabilities

List host nation’s capabilities and limitation as related to the requested training, and training support to help prepare appropriate type and level of training.

12

Equipment

List tools/equipment required and describe their availability in the country.

13

Availability of training aids and technical support

List required training aids and indicate their availability.

14

Interpreter support

Describe English language proficiency and if an interpreter is required.

15

Training location(s)

If more than one, indicate distance between locations, time requirements for travel, and modes of transportation anticipated.

16

Desired team arrival date

Identifies arrival date.

17

Facilities available for training and quarters

List facilities and quarters available to support instruction, and training team personnel.

18

Uniform/clothing

Describe requirements for on and off-duty uniforms and civilian clothing.

19

In-country transportation

Indicate the means of in-country transportation to be provided to or from quarters, duty location, and dining facilities or specify rental car requirements and availability.

20

In-country cost estimate for authorized expenses

List estimate costs for expenses such as lodging, per diem, and travel costs.

21

Facilities

Indicate the availability of medical, dental, shopping, and laundry facilities.

22

Confirmation of CCMD and Embassy country team approval

Validate the training team mission; verify COCOM and country team support for the mission and that the mission supports the CCMD security cooperation strategy and country team Mission Strategic Plan.

23

Pre-Deployment Site Survey requirement

State whether there is a requirement for the team chief to conduct a PDSS to the training site and/or to meet with SCO and host nation representatives to determine or validate requirements prior to team deployment.

24

Additional information:

Include any important data requiring emphasis or which may otherwise be useful to the MILDEP training organization and/or team chief.

  • Sensitive areas/topics - Information on sensitive areas, subjects to avoid, taboos and personalities involved.
  • Force Protection - Address any force protection provided to the SAT by the host country or U.S. Embassy. State whether the training team is required to bring weapons and describe security/facilities available for weapons and ammunition if required.
  • Lessons learned - Refer to effectiveness/evaluations of any previous training teams.
  • Financial support - Information on use of credit cards or availability of monetary facilities for converting personal funds and cashing checks.
  • PCS team support - For PCS training teams, provide information on in-country particulars such as housing, transportation, security, medical/dental care, maintenance, telephones, schools, TDY, emergency leave, quality of life, ICASS, etc.
  • Civilian contractors - Indicate whether the host country will accept civilian contractors if DoD personnel are not available.
25

Funding and supporting case data

List funding source for the training, case identifier, and amount.

26

SCO point of contact

Include name, grade, DSN and commercial phone numbers, e-mail address, and message and mailing addresses for the SCO.

C11.8.13. SCET Team Chief. The SCET team chief is the senior team member and assigns duties and responsibilities to team personnel. The SCET team chief is under the administrative and operational control of the SCO while in-country and is an integral part of the SCO in support of the overall SC mission. The team chief is responsible to the MILDEP, CCMD, or Regional Component Command, as appropriate, for the accomplishment of the SCET team technical and/or training mission. SCET team chief responsibilities include, but are not limited to, the duties shown in Table C11.T19.

Table C11.T19. SCET Team Chief Functions

# Security Cooperation Education and Training Team Chief Functions
(not inclusive)
1

Assign duties to team members to ensure the team mission is accomplished within the prescribed time frame.

2

Submit request and justification of all TDYs required in support of team mission to SCO for review. Requests for out-of country TDYs must be approved by the SCO.

3

Coordinate annual request for Security Assistance team funding with SCO prior to submission to MILDEP case manager.

4

Submit requests and/or justification for Quality of Life (QOL) and/or Mission Sustainment (MS) items, and items required to execute the team mission, to the SCO prior to purchase.

5

Establish and maintain supply and/or equipment accountability records for all QOL, MS and mission essential property in accordance with MILDEP directives and procedures. Provide SCO with a copy of property records listing all non-expendable, durable equipment valued at $50.00 or more.

6

Provide SCO with access to team property for the purpose of conducting a physical inventory (at least annually and/or prior to team chief departure from country).

7

Identify problems that may impact team personnel and/or mission to the SCO and the MILDEP.

8

Send copies of receipts and vouchers to the MILDEP, CCMD, and/or designated Regional Component Command, as appropriate, and hold copies on open action files until cleared through accounting and finance channels.

9

Provide annual (for PCS teams) or end of tour (for TDY teams) progress report to the MILDEP, CCMD, and/or designated Regional Component Command, as appropriate, to include a complete listing of personnel/units trained.

10

Prior to departure from country, conduct an after action review (AAR) with the SCO and assist the SCO in providing inputs into the CCMD Theater Security Cooperation Information Management System (TSCMIS).

11

Provide an after-action report within 30 days of completion of the team’s mission. See format provided in AR 12–15/SECNAVINST 4950.4B/AFI 16–105.

C11.9.1. Purpose. The Special Defense Acquisition Fund (SDAF) is a revolving fund that is used by the Secretary of Defense, in consultation with the Secretary of State, to finance the procurement of defense articles and defense services in anticipation of their future transfer under the Arms Export Control Act (AECA), the Foreign Assistance Act of 1961, as amended, or as otherwise authorized by law to foreign governments and international organizations. The Fund allows the U.S. Government to deliver selected articles and services to partners in less than normal procurement lead-time, and it enhances U.S. force readiness by reducing the need to divert assets from U.S. forces when partners have urgent requirements that cannot otherwise be satisfied.

C11.9.2. Authority. The SDAF is authorized in Section 51 of the Arms Export Control Act, 22 U.S.C. 2795. The fund was established with the enactment of the International Security and Development Cooperation Act of 1981, Public Law 97-113, which added Chapter 5 to the Arms Export Control Act, 22 U.S.C. 2751, et seq. The Principal Deputy Assistant Secretary of Defense (Comptroller Directorate) approved the SDAF Charter and Operating Instructions on December 30, 1982. In 1989, Section 51(a) of the Arms Export Control Act, 22 U.S.C. 2795(a), was amended to provide that the SDAF can be used for narcotics control purposes. From 1981 to 1993, the Fund was used to purchase more than $2.7 billion worth of defense articles and services, $2.68 billion of which was sold and transferred to FMS partners. Although the fund was widely regarded as a success, reductions in defense spending at the end of the Cold War led to the decision to decapitalize the account in 1993 with no new procurements authorized after September 30, 1995. Unobligated cash balances within the SDAF were rescinded and the proceeds from future sales were returned to the Department of Treasury as offsetting receipts. However, the SDAF authority, as provided in 22 U.S.C. 2795, was never rescinded. In 2012, the Congress approved the Administration’s request to recapitalize the Fund with the enactment of the Department of State, Foreign Operations, and Related Programs Appropriation Act, 2012 (Division I, Public Law 112-74), which authorized the Department to:

  1. conduct a one-time transfer of up to $100 million from the FMS Administrative Surcharge Account to the SDAF, and
  2. obligate up to $100 million from the account through September 30, 2015.

C11.9.3. Account Funding and Capitalization. The SDAF operates as a financially-independent, revolving fund. When SDAF-purchased assets are transferred to a foreign government or international organization, the proceeds from the transaction are reimbursed to the SDAF and used to finance subsequent purchases. The account is capitalized using selected proceeds from FMS sales, as authorized in Section 51(b) of the Arms Export Control Act, 22 U.S.C. 2795(b).

C11.9.3.1. Fund Classification. In accordance with the Financial Management Regulation (FMR), Volume 12, Chapter 1, Section 010602, the SDAF is a Department of Defense Public Enterprise Fund.

C11.9.3.2. Fund Symbol. The SDAF account symbol assigned by the Department of Treasury is 11-4116.

C11.9.3.3. Obligation Authority. The SDAF operates within the limits established by the Congress (see 22 U.S.C. 2795). None of the funds in the account may be obligated without prior Congressional approval of an obligation limitation determined in appropriation acts during the annual budgeting process. Since the SDAF was reconstituted in 2012, the obligation authority for the Fund has been annually provided in the Department of State, Foreign Operations and Related Programs Appropriation Act.

C11.9.3.4. Capitalization Limit. The capitalization limit for the Fund is provided in 10 U.S.C. 114(c). This amount is calculated as the sum of the unobligated cash balance in the account plus the total monetary value of the assets that have been purchased by the Fund but not yet sold.

C11.9.3.5. Funding Sources. The primary source of funding for the SDAF is the monetary collections received from the sale and transfer of SDAF-procured defense articles and services to foreign governments and international organizations. In addition to these monies, the Fund is capitalized with collections received for the following charges on export sales by the U.S. Government and its contractors:

  1. non-recurring research, development, and production costs;
  2. asset-use and facility rental charges for the use of U.S. Government-owned facilities and equipment; and
  3. collections from the sale of defense articles not intended to be replaced ((see Section 51(b) of the Arms Export Control Act (AECA), 22 U.S.C. 2795(b)).

In accordance with Section 51(b)(3) of the AECA, the Fund may also be capitalized with monies authorized and appropriated or otherwise made available for the purposes of the Fund.

C11.9.3.6. Administrative Costs. SDAF administrative operating costs are included in the FMS administrative budget. However, the SDAF does have the authority to pay for additional administrative operating costs, if necessary.

C11.9.3.7. Cost Recovery. The SDAF cannot gain or lose monies as a result of procurement and/or sales transactions. As such, a special surcharge is applied, as necessary, to recover the cost of SDAF inventory losses, pilferage, obsolescence, and loss of proceeds resulting from sales at reduced prices. The surcharge amount is established by the DSCA Business Operations Directorate and added to the unit prices for articles and services in the SDAF inventory.

C11.9.4. Procurement of Defense Articles and Defense Services. DSCA, in consultation with the Department of State, Bureau of Political-Military Affairs, selects the defense articles and defense services to be purchased by the SDAF. The Implementing Agencies execute the purchases, and in coordination with DSCA, maintain accountability of the purchased articles and services until they are sold and transferred to a foreign customer or building partner capacity program in accordance with the laws, regulations, and rules that govern such transactions.

C11.9.4.1. Procurement Proposals. To request SDAF funds, DoD Components must download and complete the SDAF Procurement Proposal Form.

C11.9.4.1.1. Secondary and Stock Items. Secondary or stock items that are critical or essential to the operation of a major end item will be considered for procurement. Complete spare parts packages, however, are usually not appropriate; although, exceptions can be made on a case-by-case basis. Items managed by the Defense Logistics Agency (DLA) and the General Services Administration (GSA) are not normally considered for SDAF buys.

C11.9.4.1.2. Costs that are expected to be incurred to transport items to an assembly or holding point that are not included in the unit price should be included as a separate line in the procurement request.

C11.9.4.1.3. Storage and Maintenance Costs. Defense articles purchased by the SDAF can be stored at a U.S. Government facility or by the manufacturer. The costs that are expected to be incurred for the storage and maintenance of the item must be included in the procurement request.

C11.9.4.2. Procurement Proposal Submission. Proposals may be submitted to DSCA at any time during the year. DSCA will not accept a proposal, however, until it has been reviewed by

  1. the Office of the Deputy Under Secretary of the Air Force, International Affairs,
  2. the Office of the Deputy Assistant Secretary of the Army for Defense Exports and Cooperation, or
  3. the Office of the Deputy Assistant Secretary of the Navy for International Programs.

Proposals that are generated by Security Cooperation Offices or Geographic Combatant Commands should be coordinated with the relevant Integrated Regional Team at DSCA. Completed proposals should be submitted to dsca.ncr.bpc.mbx.sdaf-program@mail.mil.

C11.9.4.3. Proposal Review and Approval Process. When a procurement proposal is received, it is added to the Unfunded Proposal List (UPL). DSCA, in consultation with the Department of State, Bureau of Political-Military Affairs, reviews the UPL and selects the proposals to fund at scheduled times during the year. When deciding whether to approve a proposal, DSCA coordinates with the Office of the Deputy Assistant Secretary of Defense for Security Cooperation, the Joint Chiefs of Staff, Directorate for Strategic Plans and Policy (J-5), and others, as needed. Proposals that are not approved during a review period remain on the UPL until the proposal is rescinded by the requesting organization or is deemed to be no longer executable.

C11.9.4.4. Urgent Procurement Requests. Procurement requests that must be acted upon immediately should be sent directly to DSCA at dsca.ncr.bpc.mbx.sdaf-program@mail.mil. In such instances, DSCA coordinates the request with the Department of State, Bureau of Political-Military Affairs, as well as the relevant Military Department(s), Geographic Combatant Command(s), and others, as needed. Such requests must be urgent in nature, directly support the achievement of a U.S. strategic priority, and be approved by the Director, DSCA. Urgent requests will only be considered if there is sufficient funding available in the SDAF account at the time DSCA receives the request.

C11.9.4.5. Funds Distribution and Execution. SDAF funds are distributed by the DSCA Comptroller to the Military Departments on a Funding Authorization Document (FAD) in the Program Budget and Accounting System (PBAS). Table C11.T20. lists the organizations that receive the funds. These organizations subsequently allocate budget authority to the appropriate acquisition activity(s) through the Military Department’s accounting system (General Fund Enterprise Business System, Navy Enterprise Resource Planning, or General Accounting and Financial System). Once the funds have been allocated, the acquisition activity establishes obligation authority and assumes responsibility for managing the funds.

Table C11.T20. - SDAF Funds Distribution

Military Department: Funds Issued To:

U.S. Air Force

Deputy Assistant Secretary for Budget (SAF/FMB), Directorate of Budget Management and Execution (FMBM)

U.S. Army

Assistant Secretary of the Army for Financial Management and Comptroller (ASA/FM&C), Army Budget (BU), Business Resource Directorate (BUR)

U.S. Navy

Office of the Deputy Assistant Secretary of the Navy for International Programs (NIPO) and Financial Management and Budget (FMB-33)

C11.9.4.5.1. Military Interdepartmental Purchase Request. When necessary, SDAF funds may be issued on a Military Interdepartmental Purchase Request (MIPR), DD Form 448. The MIPR may be accepted as direct cite or reimbursable. Acceptances (DD Form 448-2) must be provided to the DSCA Comptroller no later than ten (10) days after acceptance. DSCA will not issue a MIPR when the requested funds can be distributed in PBAS.

C11.9.4.5.2. Compliance with Acquisition Regulations and Procedures. SDAF procurements must be made in accordance with Department of Defense regulations and procedures, as outlined in the Federal Acquisition Regulation (FAR) and the Defense FAR Supplement (DFARS). The international agreements exception to full and open contracting competition, as outlined in the Competition in Contracting Act (CICA) (10 U.S.C. Section 2304(c)(4)), the FAR Subpart 6.302-4, and the DFARS Subpart 206.302-4, cannot be used on SDAF procurements.

C11.9.4.5.3. Reporting Obligations. Obligating documents, to include procurement contracts, must be provided to DSCA no more than ten (10) days from the date when the funds were obligated. Obligating documents shall be submitted to dsca.ncr.bpc.mbx.sdaf-financials@mail.mil.

C11.9.4.5.4. Excess Funds. Funds distributed for the procurement of defense articles and defense services that are not needed must be returned to DSCA.

C11.9.5. Inventory Control and Reporting of SDAF Assets.

C11.9.5.1. Custodial Responsibility. The Implementing Agencies, in coordination with DSCA, are responsible for storing and maintaining accountability of defense articles purchased by the SDAF until the items are transferred to a foreign government, international organization, or building partner capacity program. In addition, the Implementing Agencies must establish controls to ensure SDAF assets are not transferred to a foreign customer or used by the Military Department unless explicitly approved by DSCA.

C11.9.5.2. Inventory Storage and Payment. SDAF-procured items should be stored at a U.S. Government facility. If such storage is not available, the items may be stored by the manufacturer. SDAF-procured items should be segregated from other items in the inventory. The SDAF-procured items do not have to be physically segregated from other inventory, but the inventory manager must be able to maintain accurate accountability of the SDAF-procured items. Implementing Agencies should forward bills and obligating documents for storage to dsca.ncr.bpc.mbx.sdaf-financials@mail.mil. When SDAF-procured items are stored at a U.S. Government facility, only those bills for direct out-of-pocket costs will be paid. An itemized list of storage expenses must be approved by DSCA before any costs are incurred.

C11.9.5.3. Inventory Reporting. Defense articles purchased by the SDAF and taken into property accountability by the Military Departments require quarterly reporting to DSCA. Inventory items may either be on loan to the Military Department in accordance with the SDAF Loan Agreement or they may be in inventory awaiting finalization of a foreign military transfer. In either circumstance, the Military Departments are responsible for property accountability of all items financed by the SDAF for which custody is required. For items provided from Department of Defense inventories, SF 1080 billings, with accompanying back-up detail, will serve as the source documents. For items provided from new procurement, delivery reporting shall be conducted through the Wide Area Workflow (WAWF) online application. In the event WAWF is not available, DD 250s ("Material Inspection and Receiving Report"), with accompanying back-up detail, shall be used.

C11.9.5.4. Inventory Reports. Inventory reports must be submitted to DSCA no more than ten (10) days after the end of a fiscal quarter. There is no required format that must be used when submitting the report, but at a minimum, the report must contain the information listed in Table C11.T21. Inventory reports shall be submitted to dsca.ncr.bpc.mbx.sdaf-program@mail.mil.

Table C11.T21. - SDAF Inventory Report

Number Requirement

1

Item description

2

National Stock Number (NSN) or Part Number (PN), if applicable

3

Contract award date(s)

4

Quantity in stock

5

Quantity on order, to include estimated delivery dates

6

Quantity sold by country and LOA (case line)

7

Quantity on loan to Military Departments

C11.9.5.5. Inventory Losses. If SDAF-procured items are lost while held in inventory, the responsible Implementing Agency will conduct an investigation in accordance with the DoD Financial Management Regulation, Volume 12. Results of the investigation will be forwarded to the Director, DSCA for disposition, to include the possible billing of the Implementing Agency for the loss.

C11.9.6. Allocation of Defense Articles and Services Purchased by the SDAF. SDAF-procured assets are allocated in accordance with the laws, regulations, and policies that apply to all foreign military sales and transfers. The allocation of an asset to support an eligible foreign country, international organization, or building partner capacity program must be approved by DSCA before it can be added to an LOA.

C11.9.6.1. Types of Sales. Generally, sales are made from assets in the SDAF inventory. In instances where the article or service requested has been purchased by the SDAF but not yet delivered to the U.S. Government, the customer may purchase the equity that the SDAF owns in the acquisition contract.

C11.9.6.2. Allocation Process. The allocation process begins when an eligible foreign country, international organization, or building partner capacity program requests information on defense articles and/or services, and the articles and/or services are available in the SDAF inventory. When such a request is received, the Implementing Agency should verify the availability of the requested asset and then submit an SDAF Allocation Request to dsca.ncr.bpc.mbx.sdaf-sales@mail.mil. If the request is approved, DSCA will sign and return the SDAF Allocation Request to the Implementing Agency, along with a Financial Analysis Worksheet. These documents must be included with the FMS or pseudo-FMS case when it is sent to the DSCA Case Writing Division. Once a case is offered, the SDAF assets on the case will be held in reserve until the Offer Expiration Date (OED) expires.

C11.9.6.2.1. SDAF Allocation Request. An approved allocation request authorizes the Implementing Agency to offer the requested item or service to a foreign government, international organization, or building partner capacity program. Allocation Messages are reviewed periodically by DSCA and the Military Departments to ensure actions are complete or to initiate proper follow-up actions.

C11.9.6.2.2. Financial Analysis Worksheet. The Financial Analysis Worksheet (FAW) provides the SDAF sales price. A separate FAW must be completed for each SDAF line on a case. The FAW must reference the Funding Allocation Document (FAD) or MIPR that was issued by DSCA Comptroller to procure the items and services.

C11.9.6.3. Price and Availability Data. Implementing Agencies must coordinate with DSCA before responding to a request for price and availability data for items and services on contract for SDAF or in the SDAF inventory. To submit such a request, Implementing Agencies must complete an SDAF Allocation Request and submit it to dsca.ncr.bpc.mbx.sdaf-sales@mail.mil. If DSCA approves the proposed allocation, the Implementing Agency will provide the customer with pricing and availability data through standard FMS procedures. The price and availability data will contain an expiration date (usually 90 days), which the Implementing Agency may extend in coordination with DSCA.

C11.9.6.4. LOA Development Data.

C11.9.6.4.1. Source of Supply Code. The SDAF source code is "F."

C11.9.6.4.2. Separate Case Lines. SDAF assets may be offered on a separate LOA or as one or more separate lines on an LOA that includes articles and services that will not be sourced from the SDAF inventory. Sub-lines will not mix SDAF and non-SDAF material and services.

C11.9.6.4.3. Type of Assistance (TA) Code. The TA code for SDAF assets is 5 (Cash Sale from Procurement with Payment in Advance, AECA Section 22(a)). This does not require a cash term of sale on the LOA.

C11.9.6.4.4. Support Items. In instances where an SDAF-procured item is a component of an end item not purchased by the SDAF, the SDAF item will be identified with a source of supply code "F" on a separate line(s) on the case. In such instances, the SDAF item(s) must be on a separate line from the non-SDAF item(s).

C11.9.6.4.5. Delivery Codes. SDAF uses three delivery codes, as shown in Table C11.T22.

Table C11.T22. - SDAF Delivery Codes

Code Description

SA

Sale of items originally purchased from DoD inventories.

SD

Sale of items procured from contractors by the SDAF. This delivery source code computes packing, crating, and handling (PC&H) cost.

SE

Sale of items procured from contractors and shipped directly from the contractor to the customer, providing there is no requirement for any special PC&H. This delivery source code does not calculate PC&H cost.

C11.9.6.4.6. Case Notes. A case note(s) is required for SDAF items and services. This note must convey that the line provides articles or services from the SDAF inventory. Implementing Agencies have the discretion to include additional information in the note, if needed.

C11.9.6.4.7. Case Amendments and Modifications. The preferred method is to allocate SDAF assets during the development of a basic case. The addition of SDAF assets to an implemented case, whether through a case amendment or modification, is done on an exception basis only. The Implementing Agency must coordinate with DSCA before making any adjustments to an implemented case. If a pricing adjustment is needed, a new Financial Analysis Worksheet (FAW) must be prepared and included with the case when it is submitted to the DSCA Case Writing Division. Payments for SDAF lines are due with acceptance of the case amendment or modification.

C11.9.6.5. Pricing Rules. SDAF items are priced in accordance with the pricing guidance contained in DoD 7000.14.-R, DoD Financial Management Regulation.

C11.9.6.5.1. Sales Pricing. The price for SDAF assets and contract equities sold through the FMS process will be computed by establishing a base acquisition price. The base price is the higher of the SDAF procurement price or the current contract price. Once the base price has been established, additional charges, such as CAS, transportation, and proportionate storage fees, will be added to arrive at the SDAF selling price.

C11.9.6.5.1.1. Application of Select Pricing Elements. The SDAF unit price is all inclusive. Implementing Agencies should not include any additional pricing elements when preparing an LOA other than the FMS administrative surcharge. The FMS administrative surcharge is in addition to (and not a component of) the unit price and therefore should not be included in the SDAF sales price.

C11.9.6.5.1.2. Added Costs. The SDAF sales price must include charges for storage of the item; manpower funded by the SDAF to procure the item; costs for transporting the material; and packaging, crating, and handling costs. This information is provided by DSCA when the Implementing Agency prices the SDAF line(s) on the LOA.

C11.9.6.5.1.3. Non-Recurring Costs. Applicable non-recurring costs (NC) paid by SDAF will be added to the base price to arrive at the SDAF selling price. If the item being sold is classified as Significant Military Equipment and the USG has developed an NC for the item (paid for by other than SDAF funds), that NC may be waived under normal procedures. If the NC is not waived, a new MASL must be created for the SDAF sale so that the item will be reported as coming from the SDAF inventory and the NC is included in the pricing.

C11.9.6.5.1.4. Contract Administration Services (CAS) Surcharge. CAS is included in the unit price for SDAF items and services. Implementing Agencies (and the Case Writing Division) should not include CAS as a separate pricing element when developing SDAF case lines in DSAMS.

C11.9.6.5.2. Price Reduction. In accordance with DoD 7000.14-R, if DSCA determines an SDAF-procured item is of reduced utility, an appropriate reduction to the price may be made. Such a reduction could conceivably lower the selling price to below the SDAF cost.

C11.9.6.6. Payment Schedules. The payment for defense articles and services sourced from the SDAF must be included in the initial deposit. This policy can be waived by DSCA if there is a strong justification to do so.

C11.9.6.7. Supply Discrepancy Reports (SDRs). It is Department of Defense policy that the appropriation credited with the proceeds of a sale pay SDR costs or replace the material when the U.S. Government is deemed to be at fault (see DoD 7000.14-R). Hence, SDAF will finance SDRs on SDAF cases, if applicable. When the SDAF is considered the appropriate source of funding for a SDR, the SDR must be submitted to DSCA in accordance with Section C6.4.10.

C11.9.6.8. Reimbursement to the SDAF. LOA closure responsibilities for the sale of SDAF assets transferred to a foreign purchaser resides with the Implementing Agency responsible for the LOA. The DSCA Business Operations Directorate, in coordination with the Implementing Agency, assures reimbursement of the appropriate amount to the SDAF.

C11.9.6.8.1. Obligating Documents. Once a case is implemented, the Implementing Agency must establish an obligation for the SDAF asset(s) in their official logistics system at the case/line level. The Implementing Agency can use a Miscellaneous Obligating Requirements Document, if available. For obligation purposes, the implemented LOA and the existing SDAF contract shall serve as the documentation to support a financial obligation in the accounting and finance system of record. Obligating documents must be provided to DSCA at dsca.ncr.bpc.mbx.sdaf-financials@mail.mil.

C11.9.6.8.2. Expenditure Transfer. Once the funds on a case have been expended against the LOA, DFAS-IN will facilitate an expenditure transfer from the customer trust fund account to the SDAF account. Should the procurement or the delivery of the assets to the customer be cancelled, DFAS-IN will transfer the funds from the SDAF account back to the customer.

C11.9.6.8.3. Complete Reimbursement. As with any other FMS procurement contract, the LOA obligates the purchaser to pay the total cost to the U.S. Government, even if the actual costs exceed the estimates provided in the LOA.

C11.9.6.8.4. Delivery Reporting. After the case/line obligation has been established by Implementing Agency in its official logistics system, and upon the delivery or the articles and/or services to the customer, the Implementing Agency is responsible for reporting the delivery of the articles and/or services (within the 30 day time period) via the appropriate logistics system. Delivery reporting of the articles and/or services purchased from the SDAF will also serve to liquidate the obligation created at the case/line level and allow for closure of the SDAF line.

C11.9.6.9. Loans to Military Departments. SDAF-procured items may be loaned to U.S. forces upon the approval of DSCA and the consummation of an SDAF Loan Agreement between DSCA and the borrowing activity. The borrowing activity is responsible for all repair and replacement costs. In the event the loaned equipment is destroyed or permanently transferred to U.S. forces, the borrowing activity will be required to reimburse the SDAF in the amount specified in the loan agreement.

C11.9.6.10. Sales to Military Departments. At times, the Military Departments divert material from U.S. service inventories to meet urgent foreign requirements. In such instances, the Military Departments may request that SDAF assets be used to replenish inventories. If the request is approved by DSCA, the Military Department is required to use its own funds to purchase the requested item(s) from the SDAF.

C11.9.6.10.1. Pricing. The sale of an item from the SDAF to a Military Department will be priced to recover the cost(s) incurred by the SDAF.

C11.9.6.10.2. Secondary and Stock Items. Secondary and inventory items may not be used to fill U.S. requirements without written concurrence of the Director, DSCA, and appropriate reimbursement to the SDAF.

C11.9.6.10.3. Required Information. The information listed in Table C11.T23. must be provided to DSCA when requesting the purchase of assets in the SDAF inventory.

Table C11.T23. - Request to Sell SDAF Assets to a Military Department

Step Requirement

1

Item description and quantity;

2

Latest contract price for the item;

3

Required delivery date for the item or service; and

4

Brief statement explaining why the SDAF assets are needed.

C11.9.6.11. Presidential Drawdown. The SDAF-procured stock can be used to support Presidential Drawdowns. Since the SDAF is a revolving fund, the Military Departments must use their own funds to purchase the item(s) or service(s) from the SDAF.

C11.9.6.12. Reimbursing Funds Invested in Modifications of Assets Not Owned by the SDAF. The SDAF can be used to finance equipment modification programs. The use of the SDAF for such purposes must be approved by DSCA. SDAF funds invested for such purposes must be listed as a separate line(s) on the case.

C11.9.6.12.1. Charge Required. A charge to recoup the SDAF investment must be included on a separate case line(s). The charge must be coordinated with the DSCA Business Operations Directorate.

C11.9.6.12.2. Amortization. The amount of recoupment per unit is established by the DSCA Business Operations Directorate, in consultation the Military Departments and the Office of the Undersecretary of Defense (Comptroller), and must be explicitly identified in the Financial Analysis Worksheet accompanying the case.

C11.9.6.12.3. Process and Reporting Compliance. The same policies and procedures concerning the allocation and delivery reporting of SDAF assets, as well as the financial reimbursement to the SDAF, apply to the sale and transfer of modified assets.

C11.10.1. Overview. In January 1994, the North Atlantic Treaty Organization (NATO) launched the Partnership for Peace (PfP) program to increase stability, diminish threats to peace, and build strengthened security relationships among individual partner nations and with NATO. The U.S. established the Warsaw Initiative Fund (WIF) shortly thereafter to provide support to developing nations that are members of the Partnership for Peace (hereinafter "PfP Partners"). The WIF program’s primary objectives are to improve NATO/PfP Partner interoperability, advance PfP Partner defense institution building/defense reform, and support PfP Partner integration with NATO. WIF program policy is directed by the Office of the Under Secretary of Defense for Policy (OUSD(P)); the Defense Security Cooperation Agency (DSCA) is responsible for program management. This section of the SAMM provides an overview of the business practices and policies that govern the execution of the WIF program.

C11.10.2. WIF Authorities. The Department of Defense (DoD) implements the WIF program under the statutory authority of sections 168, 1051, and 2010 of Title 10, United States Code and authorities governing use of Operation and Maintenance funds summarized in Table C11.T24.

Table C11.T24. WIF Legislation Summary

Legislation Subject

10 U.S.C. 168

WIF is used to pay the expenses of military-to-military contacts and similar activities designed to encourage democratic orientation of defense establishments and the military forces of PfP Partners. WIF may pay the U.S. costs associated with traveling contact teams, military liaisons, reciprocal and non-reciprocal personnel exchanges, seminars, conferences, exercise planning conferences, workshops, working groups, and similar activities. WIF may pay costs of U.S. military and civilian defense employees or contractors, where necessary, to support the types of activities noted above.

10 U.S.C. 1051

WIF may pay for the travel, subsistence, and similar personal expenses for developing nation PfP Partner defense personnel in connection with attendance at multilateral, bilateral, or regional conferences, seminars, or similar meetings. Expenses may be paid in connection with travel of PfP Partner personnel to the territory of any of the countries participating in PfP or the territory of any NATO member country. Expenses paid for PfP Partner personnel may not exceed the amount a U.S. military member of comparable grade would receive for travel of a similar nature. As appropriate, 10 USC Sections 168 and 1051 may be used collaboratively to develop an activity and pay for U.S. costs (consistent with Section 168) and to allow PfP Partners to participate (Section 1051).

10 U.S.C. 2010

WIF is authorized to pay incremental expenses of developing PfP Partners incurred as the direct result of participation in a bilateral or multilateral exercise with the U.S. military that enhances U.S. national security interests. To qualify for funding, the respective Combatant Command (CCMD) must determine that PfP Partner participation is necessary to achieve the fundamental objectives of the exercise and that those objectives cannot be achieved unless the United States provides such funding. Incremental expenses include the reasonable and proper costs of goods and services consumed by a PfP Partner as a direct result of its participation in an exercise. Includes rations, bulk supplies, training ammunition, transportation, and lodging. Excludes pay, allowances, and other normal costs of a PfP Partner's personnel. Annual Congressional reporting is required on which developing countries have been supported and the amount of expenses paid.

C11.10.3. Eligibility. OUSD(P) determines partner eligibility for WIF funds and approves activities/events designed for WIF-eligible countries.

C11.10.4. WIF-Supported Programs. WIF can support an array of programs, conferences, exchanges, seminars, military exercises and studies and support to execute these activities. WIF-supported programs include, but are not limited to, seminars and workshops that support defense reform initiatives, functional conferences and activities to assist in building capacity, and improving interoperability with NATO and U.S. forces. WIF may be used in conjunction with other types of funding, to include Combatant Command Initiative Funds (CCIF), Traditional Combatant Command (CCMD) Activities (TCA), Official Representation Funds (ORF), Emergency Extraordinary Expenses (EEE), FMF, IMET, NATO funds, and others. The following outlines specific uses of WIF funds:

C11.10.4.1. In-Country Coordinators. WIF funding supports in-country coordinators who facilitate planning and implementation of WIF programs within the assigned partner nation in coordination with the CCMD.

C11.10.4.2. Travel By Non-Partner Participants. Non-Partner representatives whose expertise is critical to the execution of the event may be funded on a case-by-case basis when approved by DSCA.

C11.10.4.3. Military Exercise Support. WIF can be used to pay incremental expenses for eligible PfP Partners' participation in PfP and "in the spirit of PfP" (ISO-PfP) exercises. WIF is not intended to subsidize Combatant Command exercise programs. WIF can support Partner participation in an exercise only if U.S. Forces are also participating. WIF-supported PfP exercises should address NATO-identified Military Tasks for Interoperability (MTIs) or niche capabilities that PfP Partners have chosen as Partnership Goals that could benefit an entire region. WIF is intended to support the cost of basic PfP-Partner participation in PfP and ISO-PfP exercises, and it can be used to support the participation of individuals from developing country PfP Partners by providing for travel, lodging, meals, and per diem (The Joint Travel Regulation Chapter 4 will be used for determining the amount of per diem payment for all DoD-sponsored events). WIF cannot be used to purchase pre-positioned bulk supplies such as fuel, or for excessive PfP Partner-participation costs. All organizations planning to use WIF funding must ensure that funds are used only for direct costs incurred by a PfP Partner.

C11.10.4.4. Costs Not Supported by WIF. WIF may not be used to support U.S. participation or deployment for exercises (except planning conferences), or to pay for: courses or classroom study, defense articles or other military assistance, excessive PfP Partner-participation costs, PfP Partner transfer of military officers to NATO for temporary duty, or PfP Partner costs to hold events not approved by OUSD(P).

C11.10.5. WIF Organization Responsibilities. Table C11.T25. identifies the DoD organizations and their responsibilities in support of the PfP Program using WIF.

Table C11.T25. WIF Organization Responsibilities

Organization Responsibility

Assistant Secretary of Defense for Special Operations/Low-Intensity Conflict and Interdependent Capabilities (ASD/SOLIC&IC); DASD (Partnership Strategy and Stability Operations)

  • DoD lead for WIF program Management and PfP policy

  • Reviews/approves annual program submissions.

  • Determines WIF planning, prioritization, and funds distribution.

  • Primary interface between country desk officers at OSD, Joint Staff, DSCA, and CCMDs.

  • Provides oversight of DSCA execution of the WIF program.

  • Assesses and provides guidance on annual CCMD planning.

  • Coordinates and seeks DoD Office of the General Counsel review, as necessary.

DSCA

  • Manages WIF program execution.

  • Manages cost, schedule, and performance related to WIF program execution.

  • Develops programs and activities in response to policy guidance.

  • Identifies and tasks responsible agencies to develop and execute WIF programs.

  • Prepares budget materials.

  • Defends budget requests to USD (Comptroller); supports Office of Management and Budget (OMB) and Congressional inquiries.

  • Provide oversight of Program Execution and exercise overall resourcing management responsibility of the DoD and international portions of the Warsaw Initiative Program, in coordination with ASD(SO/LIC)

  • Determines whether costs requested by activities are allocable to WIF.

  • Provides funds certification.

  • Allocates approved funds to WIF receiving activities.

  • Issues funds to field activities.

  • Provides WIF financial management and program accountability (obligations, expenditures, reconciliations) quarterly to SO/LIC Partnership Strategy (PSO), WIF Policy Managers.

  • Provides legal analysis in support of DoD Office of the General Counsel, as necessary.

CCMD

  • Provides oversight of CCMD PfP programs.

  • Plans prioritizes, and implements WIF in support of individual CCMD PfP activities.

  • Coordinates Secretary of Defense guidance and regional CCMD plans with DSCA and SOLIC&IC Partnership Strategy (PSO) WIF policy managers.

  • Coordinates with National Guard Bureau (NGB) as necessary to ensure the best use of National Guard and State partner assets.

  • Maintains direct link to NATO via the U.S. Military Delegation to NATO and U.S. National Military Representative at Supreme Headquarters Allied Powers Europe (SHAPE).

Program/Activity Managers

  • Coordinate to ensure priorities are aligned with strategic plans and ASD (SOLIC&IC) priorities.

  • Conform to DoD Financial Management Regulations, guidelines, and standard operating procedures (SOP) addressing fund acceptance, disbursement, reporting, expenditures, and fiscal year closeout available from DSCA (Business Operations Directorate).

  • Provide annual and quarterly WIF fiscal summaries to DSCA and SOLIC&IC (PSO).

  • Ensure monthly obligation and expenditure reporting is accomplished.

  • Ensure WIF is implemented in accordance with published DoD and CCMD guidance.

  • Influence strategic planning as necessary to achieve regional objectives.

  • Identify performance metrics representing program successes and challenges.

In-Country PfP Coordinators

  • Facilitate planning and implementation of WIF within the assigned country, in coordination with CCMDs and lead WIF management activity.

  • Implement programs in accordance with guidance provided by the requiring activity.

  • Coordinate annual requirements with CCMD and participate in short and long term planning.

  • Maintain fiscal transaction capability via a qualified financial tracking system.

Defense Finance and Accounting Service

  • Provide accounting support to all WIF activities.

  • Maintain official accounting records.

  • Distribute monthly accounting reports.

C11.10.6. Budgeting and Financial Execution. DSCA (Business Operations Directorate) maintains financial execution SOPs for use by the WIF program. Between May and June of each fiscal year, CCMDs submit WIF budget proposals via a collaborative online database called the Concept and Funding Request system https://tsc.eucom.mil. Each proposed activity is coordinated with the OSD country desk officer, CCMD, and in-country teams before submission and signature. The final approved annual program plan is returned to DSCA for execution and funding on a quarterly basis. Within ten days of receiving the approved WIF budget, typically in August, funded providers must submit to the DSCA WIF Program Manager a Monthly Obligation Plan (MOP) for the year using approved budget figures. The MOP will form the basis by which DSCA (Business Operations Directorate) monitors execution throughout the fiscal year. Activities that are approved but fall outside of the budget are considered "Unfunded Requirements" and are eligible to compete for funding during the DSCA Mid-Year Review, or to be funded as activities are cancelled, delayed, reduced in scope, or funded from other sources. Throughout the fiscal year, WIF-funded organizations are authorized to shift costs to approved but unfunded WIF activities in coordination with the DSCA WIF Fiscal Manager. The DSCA WIF Fiscal Manager will provide DSCA (Business Operations Directorate) detailed quarterly financial requirements for all WIF activities. Quarterly funding requests to execute the fiscal plan are provided to the DSCA WIF Fiscal Manager one month prior to the beginning of each quarter. The annual WIF plan is adjusted throughout the year to respond to emerging requirements. Extensive DoD Planning, Programming, Budget and Execution (PPBE) information is available via the Financial Management Regulation website.

C11.10.7. WIF Funding Guidelines. Recipients of WIF are responsible for the administrative control of funds and record keeping. This requirement is based in law, instructions issued by OMB, and the DoD Financial Management Regulations, which contain guidelines on budget execution. DoD WIF are one-year DoD-wide O&M funds that must be obligated in the year for which they are appropriated. Funds may be used for activities across fiscal years under Subsection (a) of section 1206 of the National Defense Authorization Act for Fiscal Year 2006 Public Law 109-163; 119 Stat. 3456, when the funded activity begins in the current fiscal year and ends in the next fiscal year. Each WIF activity must plan for effective execution of funding on an annual basis.

C11.10.8. WIF Program Planning and Execution. After DASD PSO has approved the fiscal plan, the Program/Activity Manager manages program implementation, maximizing in-country assets as necessary. Managers are responsible for determining cost, schedule, and performance associated with their programs. DASD PSO provides policy guidance and DSCA assumes implementation and execution responsibilities. WIF Program Managers should contact DASD PSO for questions of policy, and DSCA for questions regarding fund use. DSCA (Business Operations Directorate) provides direction concerning budgetary, financial, and contract questions.

C11.10.9. Procurement Requirements Documentation (PRD). Each WIF receiving activity generates and manages its own contracts to ensure timely execution of budgeted and approved plans. DSCA (Business Operations Directorate) manages those actions where DSCA pays directly for contracted services and support. Each activity submits the documentation required to initiate a procurement request for services or supplies. At a minimum, 60 days prior to award date, the contracting office requires: a Performance Work Statement (PWS); an Independent Government Cost Estimate (IGCE); an Administrative Service Request (DD Form 1262); a written request regarding the requirement; and, a Justification and Approval (J&A) in accordance with FAR Part 6.302 if circumstances permit other than full and open competition.

C11.10.10. WIF Program Planning and Implementation Process. Table C11.T26. summarizes the annual WIF planning and implementation process.

Table C11.T26. WIF Program Planning Timeframe and Implementation Process

Steps (Date) Actions

1 (November)

DASD PSO issues Policy guidance for WIF program development to DSCA with a copy to the Regional Combatant Commands

2 (December-June)

CCMDs work with activity providers and appropriate desk officers/country teams to develop proposals for WIF activities that support OSD Policy goals and intent.

3 (May - June)

CCMDs submit WIF budget proposals through the Concept and Funding Request system to DSCA.

4 (July)

DSCA reviews submissions and consolidates initiatives into an annual WIF program plan, which is delivered to the DASD PSO WIF policy managers by July for prioritization and signature.

5 (August)

DASD PSO approves the annual WIF program plan and forwards it to DSCA for execution. Within 10 days of receiving the approved program plan, WIF executing organizations forward their annual Monthly Obligation Plans to the DSCA WIF Program Manager.

6 (October)

OUSD(C) allocates WIF funding in quarterly amounts to DSCA (Business Operations Directorate), which in turn allocates approved amounts to WIF activities in coordination with the WIF Program Manager.

7 (Jan)

Normally there is at least one major Program Review to conduct strategic planning, assess performance of WIF, and communicate initiatives within the DOD and the interagency. Additional Program Reviews are held as required.

8 (March/April)

Mid-Year Financial Reviews are convened to assess funds obligations, expenditures, and yearly performance.

9 (Continuous)

DSCA/CCMDs monitor execution and make adjustments as required. New or significant revisions to annual requirements are considered "Out of Cycle" requests. Out of Cycle requests are submitted in the format outlined in the Concept Funding Request (CFR) and entered in the CFR. Upon coordination with GCCs, it is submitted by e-mail to the DSCA fiscal manager for funding review and the forwarded to DASD(PSO) for approval.

10 (Continuous)

These requests may require a budget offset when DSCA lacks sufficient Operations and Maintenance Funds.

11 (Bi-Annually)

DSCA develops and coordinates input for the DoD Planning, Programming, Budgeting, and Execution process, including development of Program Objective Memorandum (POM) inputs.

12 (Monthly)

DSCA (Business Operations Directorate) provides monthly reports to OUSD(C) on financial performance.

13 (Quarterly)

WIF funded organizations forward their quarterly allocation requests to the WIF Program Manager 10 days before the start of a new quarter. Quarterly requests should detail individual activities and associated funding requirements highlighting any major shifts in the program plan.