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Refer to the DoD FMR, Volume 11a, Chapter 1, General Reimbursement Policy for additional guidance on materiality.Ĭ9.3.2. DoD Components should ensure the materiality determination is justified and documented using data analysis, i.e., cost-benefit analysis, which is routinely reassessed to stand up to audit scrutiny. A materiality assessment must be used to determine whether indirect and overhead costs should be included in reimbursable billings.

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Refer to the DoD FMR, Volume 11a, Chapter 1, General Reimbursement Policy for guidance on determining the amounts to be reimbursed and DoD FMR, Volume 15, Chapter 7, Pricing, on how to price defense articles and services.Ĭ9.3.1.2. For indirect cost, only those additional costs that are incurred by the USG in furnishing the assistance should be recovered. DoD Components must recover their costs for executing security assistance (SA) programs in accordance with the AECA and DoD Financial Management Regulation (FMR). for more information on when these documents should be used.Ĭ9.3.1.1.

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Modifications and Amendments are used to update case values as necessary when changes to the program occur. The Letter of Offer and Acceptance (LOA) mandates that the purchaser pay the full cost regardless of the estimated LOA cost for the individual case or the estimated values that were provided on the case. The FMS program must be managed to recover the full costs of defense articles and defense services from the stocks of the Department of Defense and Coast Guard in accordance with the Arms Export Control Act (AECA). Some broad financial policies that should be noted early in the Foreign Military Sales (FMS) process include the following:Ĭ9.3.1. Restrictions/controls on the ability to execute FMS sales Congressional Notification International Military Education and Training (IMET)Īllocation and Reimbursement Among AgenciesĪnnual Foreign Operations and Related Appropriations ActsĪuthority and appropriated amounts for FMF and other FMS-related accounts 2791)Ĭoproduction/Licensed Production Offshore Procurementįoreign Assistance Act of 1961, as amended, Section 503 (22 U.S.C. Guaranties (used with old Federal Financing Bank (FFB) credits)ĪECA, Section 42(b) and (c) (22 U.S.C. Payment terms for FMS sales from procurement Payment terms for Foreign Military Sales (FMS) sales from stock Financial Management Legal ReferencesĪrms Export Control Act, as amended (AECA), Section 3(c)(1)(A) (22 U.S.C.