Foreign Military Sales (FMS)
Foreign military sales (FMS) and International Military Education and Training (IMET) are two key programs included within Security Cooperation. IMET is conducted solely on a grant basis. FMS can be conducted through direct payments of foreign states or United States Foreign Military Financing (FMF).
Foreign Military Sales division is the core activity of DSCA, and yearly sales are between US$30 and US$40 billion. FMS is a U.S. government to foreign government agreement, and DSCA acts as agent for procurement mostly for American defence company and aerospace companies or for DoD stocks. FMS is managed and operated by DoD on a no-profit and no-loss basis. Countries participating in the program pay for defense articles and services at prices which recoup costs incurred by the United States. This includes a fee ($15,000, or 3.8% of item and service cost, whichever is greater) to cover the cost of administering the program.
When defense articles or services are required, the requesting country's representative in the defense establishment of the country or stationed at the embassy in the U.S. provides a letter of request (LOR) to the representative's U.S. counterpart. The U.S. counterpart forwards an information copy of the request to the Department of State (DoS) Bureau of Politico-Military Affairs and the Defense Security Cooperation Agency (DSCA). The original is furnished to the DoD Military Department (MILDEP – Army, Navy, or Air Force) or Defense Agency which will prepare the response.
The response may be in the form of Price and Availability (P&A) information or a letter of Offer and Acceptance (LOA). Due to a shorter preparation and staffing cycle, P&A is normally used only for preliminary planning purposes. The LOA is a formal offer which, when accepted, forms the basis for the U.S. to provide the materiel and services offered.
Read more about this topic: Defense Security Cooperation Agency
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