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C5.4.1. Definition. The LOA is the legal instrument used by the USG to sell defense articles, defense services including training, and design and construction services to a foreign country or international organization under authorities provided in the Arms Export Control Act (AECA). The LOA itemizes the defense articles and services offered and when implemented becomes an official tender by the USG. The LOA is not used to provide Price and Availability (P&A) data. Signed LOAs and their subsequent Amendments and Modifications are also referred to as “FMS cases.” See Chapter 15 on use of LOAs to implement Building Partner Capacity (BPC) cases.

C5.4.2. LOA Preparation Timeframe. The time required to prepare LOAs varies with the complexity of the sale and the clarity of the purchaser’s LOR. Processing time for LOAs and Amendments is measured from the time the LOR is considered complete (i.e., sufficiently detailed to begin LOA Data (LOAD) development) until the time it is offered to the purchaser (Document Sent, (DOCMNTSENT in DSAMS)). Table C5.T9. lists DSAMS Milestones. After DSCA has countersigned the LOA, the Implementing Agency (IA) sends a copy of it to the SCO to offer to the purchaser. Processing time for Modifications will be measured from the time the LOR is considered complete until the Modification is implemented.

C5.4.2.1. Assignment of an Anticipated Offer Date (AOD). Upon creation of a case document, the IA must enter a Case Category Code and assign an AOD Group Code in DSAMS regardless of whether the LOR has been marked complete or associated to a case document. DSAMS will not allow the case document to be saved until both codes have been entered. Once entered in DSAMS, the Case Category Code and AOD Group Code cannot be deleted but can be revised by the IA. DSAMS will automatically assign an AOD derived from the AOD Group Code to every case document when the IA enters an LOR complete date and associates the LOR to a case document. The DSAMS-generated default AOD is designated according to the following case groupings shown in Table C5.T6.

Table C5.T6. AOD Group Codes

Group	Description
A	75 days for Blanket Order LOAs, training LOAs, Cooperative Logistics Supply Support Arrangements (CLSSAs), and associated Amendments and Modifications. The IA can change the date to less than 75 calendar days if appropriate, but cannot exceed 75 days without justification, which must be documented in DSAMS milestone comments.
B	120 days for Defined Order LOAs, and associated Amendments, and Modifications. The IA can change the date to less than 120 calendar days if appropriate; but cannot exceed 120 days without justification, which must be documented in DSAMS milestone comments.
C	121 days for Defined Order LOAs and associated Amendments that are considered “purchaser-unique” in nature. The IA may revise the AOD to more than 121 days based on factors (1) through (8) below. Associated Modifications will be placed in either Group B as Modifications generally do not require more than 120 days for preparation First-time purchase of a defense article or service by an FMS purchaser First-time FMS purchase by a specific country or international organization with limited experience or knowledge of FMS processes/procedures Case requires engineering, system integration, or special acquisition Requested use of the system is different from its use by U.S. military forces (e.g., Navy ship missile to be fired from an Army or foreign country’s helicopter) Detailed release/disclosure coordination required Complex pricing effort required Extraordinary coordination required inside or outside the IAs Other (must be explained by detailed milestone comments in DSAMS)
D	75 days for all Pseudo LOAs and associated Amendments and Modifications. The IA may shorten or lengthen the DSAMS-generated AOD as soon as information or conditions make AOD determination possible; e.g., receipt of contracting, funding, or other guidance and information needed to determine when the document will be approved.

C5.4.2.2. AOD Changes. Changes to the AOD will be permitted on a case-by-case basis and not as a matter of routine. The IA will determine who has the authority to change an AOD. Detailed milestone comments will be entered when an AOD is changed. The IA should transmit or implement at least 85 percent of its total number of LOA documents on or before the assigned AOD. The IA will inform the purchaser of the AOD and of any subsequent changes.

C5.4.2.3. AOD for Restatements. There may be times when major changes need to be made to a document after it has been countersigned and offered to the purchaser. If the purchaser wants to retain the existing designator (instead of canceling the offer and issuing a new case), the offered case may be restated. Restatements can be made as long as the document is in “offered” status, the purchaser has not yet signed the case, the Offer Expiration Date (OED) has not yet expired, and all changes are consistent with FMS policies and procedures. See Section C6.7.1.4. for more information on restatement. DSAMS will automatically revise the original customer request status of an LOA document from LOR Complete to LOR Restate once an IA selects the restatement tool in DSAMS. Once it is determined there is sufficient information to begin restatement of the LOA, the IA will revise the customer request status in DSAMS from LOR Restate to LOR Complete. DSAMS will not allow the MILDEP Approval (MILAP) on the restated LOA document without the customer request status being marked LOR complete. Once the customer request is marked complete, DSAMS will automatically assign a new AOD to the restatement based upon the case grouping selected. The IA may revise the DSAMS generated AOD for the restated LOA as described in Section C5.4.2.1.

C5.4.3. Types of FMS Cases. The standard types of FMS cases are Defined Order, Blanket Order, and Cooperative Logistics Supply Support Arrangement (CLSSA). These cases generally allow DoD to provide FMS purchasers the same kinds of defense articles and services used by U.S. Forces. Defined Order and Blanket Order cases are also routinely used to provide hardware or services to support commercial end items, obsolete end items, (including end items that have undergone system support buy outs), and selected non-U.S. origin military equipment.

C5.4.3.1. Defined Order Cases or Lines. Defined Order cases or lines are commonly used for the sale of items that require item-by-item security control throughout the sales process or that require separate reporting. Items to be provided are stated explicitly on the LOA and include specific quantities (articles) or periods of performance (services). Scope is limited to the quantity of items or described services including specific performance periods listed on the LOA. The IA places the orders with companies that manufacture the equipment or provide the requested service.

C5.4.3.1.1. Items Provided on Defined Order Cases or Lines. Significant Military Equipment (SME), and the related initial support package; explosives, including munitions; specific services; classified materiel (e.g., software) and Technical Data Packages (TDPs) are types of items normally provided under Defined Order cases. Defined Order cases or lines may also be used to provide specific services that are designated for a specific period of time. Major Defense Equipment (MDE) items must be identified clearly on the LOA with specific quantities and cannot be embedded in a line coded as non-MDE. Defined Order cases can also include Blanket Order non-MDE lines when no specific period of performance or quantity is identified for the support on those lines, and the intent is to use the lines until funds are exhausted.

C5.4.3.1.2. Items Not Provided on Defined Order Cases or Lines. Relatively minor, non-SME items that do not require intensive item-by-item control are not normally provided on Defined Order cases or lines except as part of an initial support package for a system or major end item. An assembled article ready for its intended use. Only ammunition, fuel or another energy source is required to place it in an operating state.

C5.4.3.2. Blanket Order Cases or Lines. Blanket Order cases or lines are used to provide categories of items or services (normally to support one or more end items) with no definitive listing of items or quantities. Scope is limited to the specified item or service categories, and the purchaser specifies the case or line dollar value. The foreign purchaser normally submits its own requisitions. The preferred method is for purchasers to submit requisitions through the Security Cooperation Information Portal (SCIP).

C5.4.3.2.1. Items Provided on Blanket Order Cases. Types of unclassified, non-SME items or services that can be provided on Blanket Order cases or lines include spares and repair parts (consumables and repairables), support equipment (tools, test equipment), supplies (fuel, personnel items, commercial consumable items), maintenance (repair, rebuild, minor modifications or alterations), technical assistance (specialist advice or actions, site survey teams, system integration, item checkout, systems evaluation, study groups to develop engineering requirement plans, technical assistance teams), training, publications (forms, catalog data, technical order manuals, stock lists, reports, books, maps), unclassified software, and training aids. Classified publications, including technical manuals and reports, may be included on Blanket Order lines if the following conditions are met as shown in Table C5.T7.

Table C5.T7. Blanket Order Case Conditions for Classified Publications

#	Condition
1	Classified publications must be offered as a standalone line item and cannot be combined with unclassified publications
2	MASL for classified publications must be used
3	Quantities of the classified publications must be identified in the corresponding line item description note
4	Statement must be included in the line item description note that only the USG is authorized to acquire the classified publications

C5.4.3.2.2. Items Not Provided on Blanket Order Cases or Lines. Classified material, SME, commercial items more readily provided from in-country (e.g., lumber, sand, gravel, household goods), Technical Data Packages (TDPs), and ozone depleting substances are not provided on Blanket Order cases or lines. Refer to http://www.epa.gov/ozone/science/ods/ for information on ozone depleting substances.

C5.4.3.3. Cooperative Logistics Supply Support Arrangements (CLSSAs). CLSSAs provide for pre-stock and storage of DoD-stocked non-SME items that are needed and used by the FMS purchaser on a recurring basis. CLSSA LOAs reflect support for end items with no definitive listing of items or quantities, although items and quantities may be negotiated with the purchaser as part of the CLSSA management process. CLSSA programs consist of two separate cases: a Foreign Military Sales Order (FMSO) I case, and a FMSO II case. The FMSO I case provides for the purchase and sustainment of spare and repair parts in DoD inventory. The FMSO II case is used by the purchaser to requisition those spare and repair parts to replenish their in-country stock. Scope is limited by the LOA description of end items to be supported and dollar values of the FMSO I and II cases. FMSO I and II dollar values are based on the cost of forecasted requirements for the anticipated period of support. The purchaser submits requisitions through the MILDEP Case Manager or SCIP. See Section C6.4.3.2. for information on the CLSSA process.

C5.4.3.3.1. Items Provided on CLSSA Cases. Centrally stocked or centrally managed spare and repair parts of defense systems common to purchaser and U.S. forces. CLSSA item eligibility is based on the Acquisition Advice Code (AAC), see Section C6.4.3.2.8. which identifies an item as centrally managed or centrally stocked.

C5.4.3.3.2. Items Not Provided on CLSSA Cases. SME, Excess Defense Articles (EDA), parachutes, explosive ordnance items, commercial items of materiel more readily provided from in-country, controlled medical items, modification kits, ozone depleting substances, technical data packages or other similar documentation that conveys manufacturing process information, publications, tool sets, cryptographic equipment, classified materiel, or initial spare parts are not provided on CLSSA cases even when they are identified by an eligible AAC.

C5.4.3.4. Classified LOAs. LOAs are classified only in rare circumstances. Classified LOA data cannot be entered into DSAMS. LOAs may be classified only when the classification is directed, or the purchaser’s request for classification is approved, by the DoS, the Secretary of Defense or his or her designees to include the Director, DSCA. If a case is approved to be classified, the purchaser will be responsible for all costs associated with the development and execution of the case in a classified environment.

C5.4.4. LOAs for Nonstandard Support. LOAs may be used to provide nonstandard support. Nonstandard support may include hardware or services required to support commercial end items; support of obsolete end items, including end items that have undergone system support buy outs; and support of selected non-U.S. origin military equipment. Requests involving sensitive technology or that have significant impact on U.S. programs should be coordinated with DSCA (Programs and Strategy Directorates).

C5.4.5. General LOA Preparation Guidelines. All unclassified portions of LOAs are prepared using DSAMS. See Figure C5.F3. for instructions pertaining to general LOA preparation and see Section C5.4.10. for guidance pertaining to preparation of classified LOAs.

C5.4.5.1. Implementing Agencies (IAs). Organizations authorized to receive LORs and responsible for preparing and processing LOAs in accordance with the SAMM are known as IAs. See Table C5.T2. for IA listing. When an LOR received by an IA includes a requirement for an item managed by another IA, the LOR must be coordinated with all organizations involved. The IA should consider a Multi-Service LOA when the purchaser advises the USG that it requires multiple weapon systems on a single case for its own budgetary or other internally-based reasons. However, if the additional financial and logistical processing is required to prepare and execute a Multi-Service LOA, the LOR requirements may be split into multiple LOAs that are separated by IA, and major weapon system, and managed in coordination with one another. DSCA Operations Directorate will coordinate with the purchaser and SCO before separating between multiple IAs. The IAs must operate under mutually agreed terms, assigning a “Lead IA” to the LOAs to ensure a Total Package Approach is delivered. Questions relating to this subject, and the designation of the IA for Multi-Service LOA should be referred to DSCA (Operations and Strategy Directorates) for resolution. For the multiple-LOAs option, the IAs, involved must, to the greatest extent practicable, plan events such as Program Management Reviews (PMRs) as joint events in which all IAs participate. Regardless of the method used, IAs must operate within a framework that clearly defines the roles and responsibilities of each participant. If multiple LOAs separated by IA and major weapon system are used to respond to an LOR submitted for a single program, the IA that received the LOR must advise the purchaser that the response will be multiple LOAs instead of a Multi-Service LOA. IAs are encouraged to consolidate requirements as much as possible. Multiple LORs from the same purchaser may be answered by a single LOA.

C5.4.5.2. Purchaser Participation in the LOA Preparation Process. Purchaser involvement early in the LOA development process is essential to ensure the final document best satisfies its requirements. Purchasers should be encouraged to attend meetings and receive correspondence designed to clarify LOR information. As the development of the LOA progresses, there are many instances where purchaser participation and input are necessary, (e.g., the purchaser should help identify unique requirements and special needs that must be accommodated in the final sales document.) Any unique notes or conditions being considered may be provided to the purchaser for advance review to ensure these special case or program-unique needs are addressed. Such meetings and agreements can be recorded in the Case Remarks area in DSAMS to preserve them with the document. The purchaser should be encouraged to participate in the acquisition process, see Section C6.3.5.2. for more information on purchaser’s involvement in the acquisition process.

C5.4.6. LOA Format. The LOA format including sample data, LOA Information, and instructions for preparation are provided in Figure C5.F3. through Figure C5.F6.

C5.4.7. Additional LOA Information.

C5.4.7.1. Standard Terms and Conditions and LOA Information. Standard Terms and Conditions (Figure C5.F4.) are an official part of each LOA, whether or not they are attached to a particular copy. The Standard Terms and Conditions that are in effect at the time the LOA is prepared and signed are the conditions that apply throughout the life of the FMS case. An LOA Information document (Figure C5.F6.) provides information describing some of the codes and language used on the LOA. Both the LOA Standard Terms and Conditions and the LOA Information documents must be attached to the original LOA that is sent to the purchaser for review or acceptance. The MILDEP Case Manager must retain a copy of the LOA and all attachments in the official case file.

Figure C5.F3. Sample Letter of Offer and Acceptance (LOA)

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Figure C5.F4. Letter of Offer and Acceptance (LOA) Standard Terms and Conditions

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Figure C5.F5. Letter of Offer and Acceptance (LOA) Information

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Figure C5.F6. Instructions for Preparing a Letter of Offer and Acceptance (LOA)

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C5.4.7.2. LOA Notes/Supplemental Information. Standard Terms and Conditions must be supplemented with additional items or notes for each offer in order to make obligations clear. Notes in LOAs provide more detailed information concerning items or services being offered. When LOAs are prepared before details are known, notes include general coverage of this information and an estimate of when specific information on these topics can be provided to the purchaser. These notes may be shared in advance with the purchaser to ensure any purchaser-unique requirements are accommodated.

C5.4.7.3. Deviations from the LOR. Extraordinary reservations concerning the price quoted, and the extent to which either the price or availability is dependent on action to be taken by the USG, e.g., selection of equipment for U.S. Forces, are examples where further explanation should be included. Advice should be obtained from the DSCA Office of General Counsel when special circumstances require an expansion of standard or supplemental indemnity clauses included in this Manual. Appendix 6 lists the notes that should be included in LOAs as indicated. The “Note Usage” column of this table is intended to show when the note should be included on a Basic LOA, Amendment, and Modification. This column is not intended to show when an Amendment or a Modification should be used. See Section C6.7. for information on determining which document is appropriate. See Figure C5.F6., for guidance on the ordering of notes within an LOA.

C5.4.7.4. Combining Requirements. LOAs for major systems or end items should include supporting items and services rather than offering for these items or services on separate LOAs.

C5.4.7.5. Estimated Delivery Schedule. The MOS (months) entry on the LOA provides the estimated lead-time from the LOA implementation date to the delivery date of the materiel or to the dates when services are provided. A schedule of estimated in-country or CONUS equipment deliveries by month is provided for major end items. When the purchaser’s request or program schedules require that items not be delivered or services not be performed earlier than a specified date, this must be stated in the LOA notes.

C5.4.7.6. Permanent Change of Station (PCS) Costs. The IA notifies the SCO by message of requirements for assignment of PCS (but not TDY) personnel to the purchaser country, including projected start date and duration, rank or grade and specialty, and in-country location. The DSCA (Operations Directorate), the Combatant Command (CCMD), the Department of State (DoS) (Resource Management (RM) and PM/RSAT), and the U.S. Embassy are information addressees. The SCO coordinates with the U.S. Chief of Mission and reports PCS personnel support cost data, as well as obstacles to their acceptance or support, to the IA. The IA includes PCS personnel support costs in the LOA, adds a note at the bottom of the item description (see Table C5.T5. for LOA Notes requirement), ensures the PCS block on the Case Detail Document Tab in DSAMS is checked, and lists the PCS requirement and any support problems in the LOA Checklist (formerly the LOA Cover Letter or Transmittal) when the LOA is transmitted to DSCA for countersignature.

C5.4.7.6.1. LOAs that include PCS or TDY personnel should specify the number of personnel who will perform the task, planned dates of arrival and departure, in-country destination and home station, and extent of in-country travel required.

C5.4.7.7. Personnel Protection and Related Costs. For the purpose of performing services outside of the United States, the term "U.S. personnel" as discussed below and in Appendix 6 pertains to personnel involved in the performance of actions under the LOA.

C5.4.7.7.1. In carrying out LOA programs, it is desirable that USG personnel operate under conditions most advantageous to their legal status. In many cases a Status of Forces agreement (SOFA) will be in effect. USG employees, executing their duties under an LOA with a country which also has a SOFA with the United States, are covered by the provisions of that SOFA, which will typically grant substantial administrative jurisdiction, and other benefits that modify the host nation’s law. When DSCA (Office of the General Counsel) indicates a SOFA or SOFA-like agreement exists that is pertinent to the specific FMS or Building Partner Capacity (BPC) LOA, that agreement is referenced in the LOA for guidance of the U.S. personnel executing the LOA. The LOA itself does not create any rights or benefits. Inclusion of SOFA-like status provisions in an LOA requires that the LOA be staffed in accordance with procedures for staffing international agreements in DoD Directive 5530.3. Since these procedures are complex and require the development of specialized supporting documentation, inclusion of status provisions in LOAs should be avoided if possible. Status provisions are not normally used to require compliance when authority to ensure compliance is outside the purchaser’s defense establishment. Individual situations should be brought to the attention of the DSCA (Operations Directorate and Office of General Counsel) for coordination during LOA preparation.

C5.4.7.7.2. Provisions for recouping costs associated with in-country duty, (e.g., currency revaluation or unanticipated import or export charges), are covered in the LOA Standard Terms and Conditions and do not normally require special LOA provisions. When it is envisioned that the purchaser may fail to abide by existing SOFA or other status provisions and thus increase costs associated with an FMS program, special notes may be included in the LOA. Appendix 6 shows sample notes and required purchaser actions that can be used as a guide.

C5.4.7.8. Separate Memorandum of Understanding (MOU) Detailed Statement of Work (SOW), or Performance Work Statement (PWS). Major programs may call for an MOU, SOW, or PWS, which should be referenced or attached to the LOA. For routine LOAs, a detailed SOW or PWS can be avoided by providing the following information:

C5.4.7.8.1. Routine LOAs. A detailed SOW or PWS can be avoided if the description and purpose of the service to be performed; a statement of where and how the service will be performed; and a statement of the anticipated result when the service is completed, together with any information the purchaser should be aware of regarding USG reservations or qualifications to the probable success of the project.

C5.4.7.9. Schedule of Personnel Training. Defined order LOAs should include a confirmed schedule of personnel into specific training courses. When this is not feasible, LOAs should set forth training plans and schedules in general terms, and should show the need to define training needs at a later date. Blanket Order LOAs for training include notes to explain the scope of coverage and methods for definitizing and requesting courses. LOAs must specify purchaser responsibilities, such as providing pay and allowances; housing; medical expenses; insurance; qualified students; and any required supervision thereof.

C5.4.7.10. Logistics Information. LOAs show the configuration of equipment being sold but furnish detailed equipment specifications only if required. Variations from standard USG configurations are noted, together with risks that might be assumed as a result of the variance. The notes highlight any purchase of a configuration contrary to that recommended by the USG.

C5.4.7.10.1. LOAs include any requirement for, and scheduling of, logistics conferences or other program management actions for the purpose of definitization. The costs of such conferences that occur prior to acceptance of the LOA can be funded from the Administrative Budget Account Allocation of the IA, with reimbursement from the LOA after it is accepted. These actions pertain to approved programs and are distinguished from AECA, section 26 (22 U.S.C. 2766), Survey Teams.

C5.4.7.10.2. The IA assures that at least a one-year supply of concurrent (initial) spare parts, at U.S. peacetime usage rates, is included on the LOA with equipment being offered. Such spare parts packages should be identified on the LOA by category and total value (Blanket Order line) rather than by article.

C5.4.7.10.3. For offers of MDE items, the purchaser is advised of the estimated period that USG repair parts support is available.

C5.4.7.10.4. If the purchaser has requested that a particular item be provided from a sole source, and the IA has approved this request, the sole source designation is included in the notes. See Appendix 6.

C5.4.7.10.5. Any USG intent to develop logistics or maintenance support plans will be specified.

C5.4.7.10.6. The basis for logistics support costs will be specified. This must include the period of support of the initial spares package, operational deployment of equipment, level of maintenance to be accomplished by the purchaser, number of maintenance sites, or other cost basis as applicable.

C5.4.7.10.7. To ensure logistics support of weapons systems, the LOA should identify critical long lead-time items that must be procured in advance of total program definitization.

C5.4.7.10.8. Known limitations in condition must be shown using codes in Figure C5.F5., or in unique case notes. The LOA should specify that the cost of any rehabilitation is not included in the “as-is” price. The purchasers are encouraged to perform Joint Visual Inspection (JVI) of the materiel before accepting it, in advance of receipt of the LOA if possible. JVI of materiel cannot occur prior to transfer approval from DSCA unless DSCA (Programs and Strategy Directorates) has granted an exception. See Section C11.5.6., for more information on JVI.

C5.4.7.10.9. CLSSA and Blanket Order LOAs must show supported major items. CLSSA FMSO II LOAs must reference the associated FMSO I LOA.

C5.4.7.10.10. Responsibility for Initiation of Requisitions. The LOA will show which party is to initiate requisitions. If requisition input is a purchaser responsibility, the LOA contains information to enable correct requisition initiation and routing.

C5.4.8. Manpower on LOAs. Manpower in support of specific FMS programs is provided on FMS cases; either on applicable services lines or included directly in the price of materiel for activities that are not part of the Standard Level of Service. See Section C9.4.2. for information on pricing and tracking manpower requirements.

C5.4.8.1. Case-Related Manpower Functions and Funding Sources. Table C9.T2. describes case related manpower functions and indicates which activities are covered under the FMS Administrative Surcharge and which should be included as line items on the LOA.

C5.4.9. Contingency Lines. Contingency/undefined requirements lines (MASL R9B 079200N0NSPRQ, Non-Specific Requirements) may be included on FMS cases when requested by the purchaser as a holding place for funds budgeted but not yet programmed. Contingency lines cannot be used to requisition items or to provide services. Contingency lines are generally written without a defined period of performance. Funds collected for a contingency line will normally be at the end of a payment schedule until the requirements are further defined and broken out on separate lines. Any transactions inadvertently assessed against contingency lines must be “backed out” and applied to an eligible line.

C5.4.9.1. Including Contingency Lines on an LOA. The FMS Administrative Surcharge is applied to the contingency line value. Contingency lines are limited to ten percent or less of the LOA value. LOAs funded with FMF may not include contingency lines.

C5.4.9.2. Execution of Contingency Lines. Obligation authority is not granted for contingency lines. Orders cannot be placed against contingency lines. When requirements are identified by the purchaser, the applicable dollar values included in the contingency line must be moved to specific defense articles or services (non-contingency) lines, with commensurate payment schedule and other LOA adjustments, as needed. LOA Amendments are used for reallocation of contingency line authority.

C5.4.10. Preparing Classified LOAs. Classifying LOAs at the secret level or higher should be strongly discouraged. Section C5.4.3.4. provides information on when LOAs may be classified. DSAMS is an unclassified system; therefore classified information cannot be entered into this system even on a temporary basis. Preparation of cases classified on a temporary basis in advance of Congressional Notification is described at Section C5.5. In all other cases where classification is required, the following procedures should be applied when using DSAMS to write these cases.

C5.4.10.1. The country must ensure LORs are marked in accordance with classification guidelines described in Section C5.5.4.4., and must specify the classified data. For example, some purchasers may wish for the nomenclature of the item to remain classified, others may want to classify the quantity or information normally provided in the line item description note. At a minimum, each paragraph must be annotated with the specific classification markings, to include data that can remain unclassified.

C5.4.10.2. Any piece of information that is considered classified cannot be entered into DSAMS. The bulk of the case (containing all unclassified information) may be created using DSAMS. Any classified information must be entered on the document using approved classified systems after the document has been printed (e.g., using a typewriter, SIPRNET) or via separate classified annex. Pseudo or generic MASL lines may be used within the system to prevent the item from being disclosed. Using a pseudo MASL line does not allow automated application of pricing or waivers that are linked to the real MASL (e.g., Nonrecurring Cost (NC) Recoupment Charges). The case developer must ensure all appropriate charges are applied. If the application of specific pricing within DSAMS could reveal the item being purchased (e.g., inputting a specific NC value could be used to determine the exact item being sold), the pricing must be done off-line and only a total price for the line should be entered. When generic MASL lines are used, the correct MASL lines must be entered on the document off-line after it has been printed. The hard copy document must be marked in accordance with classification guidelines. Costs incurred to write and execute classified cases will be charged to the purchaser in accordance with Table C9.T4.

C5.4.11. Quality Control of LOA Documents. IAs must ensure that adequate controls exist to ensure the LOA package is factually accurate, complete and compliant with all statutory, regulatory, and fiscal requirements. See Table C5.T8. for more specifics on IA and DSCA (Case Writing Division (CWD)) responsibilities.

C5.4.12. Pre-Countersignature Meetings for New LOAs for Major Sales. DSCA (Business Operations Directorate) will convene a meeting on selected “major sales” when warranted. Attendees include DSCA, IAs, and prime contractor representatives, as appropriate. The purpose of the meeting is to review the purchaser requirements; ensure the proposed financial payment schedule correlates to the proposed program/delivery plan, and Dependable Undertaking term of sale if applicable; LOA notes and transportation methods are appropriate; MASLs are correct; disclosure and releasability review process was conducted as required, etc. The IA is responsible for presenting a plan to manage the program/delivery performance schedule within the financial requirements in the payment schedule and should address the contract financing vehicle, anticipated contract payment milestones, and known purchaser budget constraints. For the purpose of this paragraph “major sales” include: sales that trigger AECA section 36(b) (22 U.S.C. 2776) thresholds or proposed sales that represent an increase of more than fifteen percent to the FMS purchaser’s current active program. The IA notifies the DSCA Country Financial Director (CFD) at least 15 days prior to submitting an LOA for a “major sale” for countersignature. The DSCA CFD is responsible for scheduling the meeting.

C5.4.13. Coordination and Countersignature of LOA Documents. All LOA documents require DSCA countersignature. The DSCA point of entry for LOA document coordination and countersignature is the CWD. Once IAs have approved the LOA Data (LOAD) for an LOA document, they submit it to DSCA CWD using electronic procedures for countersignature.

C5.4.13.1. Preparation of LOA Documents. Preparation of Basic LOAs, Amendments, and Modifications is divided between the IAs and the DSCA CWD. LOAs progress through the following case preparation milestones: Development, Writing, Review, and Proposed. Table C5.T8. shows the basic allocation of the responsibilities between the IAs and the CWD. Table C5.T9. shows the LOA preparation milestones from Case Initialized to Case Implemented.

Table C5.T8. General LOA Preparation Responsibilities

Implementing Agency

DSCA Case Writing Division

LOA Data (LOAD) Development Input Letter of Request Create Case/Line Structure Manpower and Travel Data Sheets (MTDS) Military Technology Control Regime (MTCR) Review Critical Program Information (CPI) Anti-tamper Requirements Pricing (to include accessorial charges) and Delivery Data Terms of Sale Line Item Description Notes Case-unique Notes (to include Short OED, if needed) Service-unique Notes Congressional Notification (36b) Information Waiver Requests (to include NRC, Yockey, TLA) Releasability Sole Source Site Surveys Offset Information Price and Availability Data Leases AECA Section 30 Sales to U.S. companies Restatements Pen and Ink Changes (to include associated payment schedules) Input Applicable Case-related Milestones in DSAMS Review of LOAD and Preparing/Processing of LOA Prior to Sending to the CWD Approval of Customer-Requested Payment Schedules

Finalize the LOA Document in DSAMS Sequence Line and Note Order Enter DSCA Standard and DSCA-unique LOA Notes Adjust OEDs to Comply with Chapter 5, Figure C5.F6. Validate Accessorial Charges Prepare and Validate Payment Schedules (except for Pen and Ink changes) Perform Review of Entire Package to Ensure Compliance with Laws (AECA and FAA), Regulations, and Policies Obtain DSCA/IA Coordination/ Review Prepare and Coordinate DoS List Perform Internal Case Tracking and Reporting Load Case-related Milestones in DSAMS Obtain DSCA Approval and Countersign

Table C5.T9. LOA Preparation Milestones

Click to view : Table C5.T9. LOA Preparation Milestones

C5.4.13.1.1. In case development status, the IA is responsible for development of the LOA data (LOAD) and initial quality assurance. The IA loads the LOR and develops the basic structure of the LOA to include pricing and availability, individual case lines, releasability coordination, AECA section 36(b) (22 U.S.C. 2776) data for notification (if appropriate) manpower worksheets, and other related supporting documents into DSAMS. All waivers, releasability coordination and any special approvals should be complete before the LOAD is submitted to the CWD for final processing. The IA should conduct a quality review of the LOAD before submission for further processing.

C5.4.13.1.2. When the IA has completed the LOAD process and its quality review of the LOAD package for the Basic LOA, Amendment or Modification, it will post the MILDEP Approval (MILAP) milestone in DSAMS, which moves the document from Development to Writing status. DSAMS reports used by the CWD will advise when case documents have moved to Writing status.

C5.4.13.1.3. Concurrent with movement of the document to Writing status, the IA must send an e-mail to the CWD no later than 24 hours after the MILAP notification with all applicable supporting files (LOA Checklist (former DSCA Cover Memo or transmittal), Letter of Request (LOR), manpower worksheet, AECA 36(b) notification, Missile Technology Control Regime (MTCR) Approval, etc., to support preparation of the case. All unclassified e-mails submitting LOAD supporting data must be sent to: LOA-DRAFT-CWD@cwd.dsca.mil. For cases that include classified documentation, also send to: DSCA.CWD@afmc.af.smil.mil, LOA.OPS@osd.dsca.smil.mil, LOA-FPIO@osd.dsca.smil.mil and LOA-POL@DSCA.osd.smil.mil. The CWD cannot initiate action to prepare the case until both of these actions have taken place. If the e-mail is not received within 24 hours, CWD will return the document to the IA via DSAMS for resubmission. If system problems prevent meeting this requirement, the IA should contact the CWD.

C5.4.13.1.4. Table C5.T10. provides the specific naming convention taxonomy for files submitted for countersignature. Each file name starts with the case identifier and then indicates which version of the document is being submitted. The file name should also include an abbreviation for the specific attachment that is being provided (i.e., termination liability worksheet, financial analysis worksheet, etc.).

Table C5.T10. Taxonomy for DSAMS Electronic Countersignature

File Name	Document Applies To
BN-B-SAA-BASIC-PKG.pdf	Master pdf file which includes sub-files as required
BN-B-SAA-BASIC-LOR.pdf	Letter of Request for the Basic case
BN-B-SAA-BASIC.pdf	Letter of Offer and Acceptance (LOA)
BN-B-SAA-BASIC-MNP.pdf	Manpower and Travel Data Sheet for the Basic case, as required
BN-B-SAA-BASIC-MTCR.pdf	Missile Technology Control Regime (MTCR) information for the Basic case
BN-B-SAA-BASIC-RESTATE.pdf	Restatement of the Basic case
BN-B-SAA-BASIC-REV1.pdf	Revision 1 to the Basic case -- used when the case is rejected and returned with changes made
BN-B-SAA-A01.pdf	Amendment 1 to the LOA
BN-B-SAA-A05-NCWAIVER.pdf	Nonrecurring Cost (NC) Waiver information for A05
BN-B-SAA-M03-REV1.pdf	Revision 1 to M03 -- used when the Modification is rejected and returned with changes made
Note: This list is not all-inclusive. File names provided are samples only. The e-mail sent to DSCA should also include the case identifier in the subject line and should indicate what action is required (i.e., approval, resubmittal, etc.). For example: "BN-B-SAA-BASIC Approval Request." The individual file conventions are used when documents are not included as part of the Basic, Amendment, or Modification package.

C5.4.13.2. In Case Writing status, the CWD will assemble the LOAD data provided by the IA and conduct final preparation of the Basic LOAs, Amendments or Modifications, including quality review of the LOAD, validation of all accessorial and manpower data, adding payment adjustments; developing the payment schedule; adding appropriate DSCA standard and unique notes, if necessary; and conducting a final quality assurance review of the entire LOA version before moving the package to Review status in DSAMS.

C5.4.13.3. During the Case Review process, the CWD forwards the final version of the LOA for review to both the DSCA staff, and the originating IA. Once the required DSCA offices have approved and the IA approves and enters the MILSGN milestone in DSAMS, the case is moved to Case Proposed status in DSAMS.

C5.4.13.4. In Case Proposed status, staffed and approved LOA documents will be added to the daily State FMS List and submitted for review and approval by DoS. See Section C5.4.13.11. for additional information on the DoS List Report.

C5.4.13.5. All case reviewers enter comments in the "Case Remarks" section of DSAMS when necessary. Since this field is at the case level and does not automatically identify the document version (e.g., Amendment 2, Modification 1, Basic LOA, etc.), reviewers must use a specific format when creating a title for their comments. The title must be entered as follows: Individual’s Office, Accept/Return, Document Version, and Revision Number (if applicable). A sample entry is: "OPS-EAF, Return-A02, Rev2." Reviewers must enter Case Remarks for all returns; however, comments for acceptances are optional.

C5.4.13.6. IAs should use DSAMS Management Flags to provide notification, as a minimum, when documents have been countersigned by DSCA (Milestone - DCSGN), returned from Writing Status (Milestone – CWDDOCRTN) by the CWD, or returned from Review Status (Milestone - WDOCRTN) by DSCA. A WDOCRTN milestone moves a case back to Writing Status for corrections, at which point CWD returns it to Case Development status for the IA to make the corrections.

C5.4.13.7. DSAMS allows holds and suspensions to be placed on documents. These capabilities cannot be used as a substitute for returning documents or for moving documents through the process in a timely manner. Holds do not "stop the clock." The time period during which the case is on hold is included in the LOA processing metric time calculations.

C5.4.13.8. When the case is countersigned and the IA receives notification that the case is in "Offered" status, the IA signs the document and sends it to the purchaser.

C5.4.13.9. For Taiwan case documents, all milestones are entered in DSAMS and the IA is responsible for transferring signature dates and information onto the cover memorandum to the American Institute in Taiwan.

C5.4.13.10. For emergency situations and classified cases, the IA enters all DSAMS milestones and notifies DSCA (Operations Directorate) in advance that these documents are being processed in hardcopy form. Concurrent with the MILAP milestone and subsequent processing of unclassified supporting documentation to the LOA-DRAFT-CWD@cwd.dsca.mil mailbox, IAs must forward classified documentation to the following SIPRNET addresses: DSCA-CWD@afmc.af.smil.mil, LOA-OPS@osd.dsca.smil.mil, LOA-FPIO@osd.dsca.smil.mil and LOA-POL@osd.dsca.smil.mil.

C5.4.13.11. DoS approval is required for LOA and subsequent Amendments that add or increase scope. CWD submits the DoS List Report daily, which provides the DoS with descriptions of defense articles and services being transferred on LOA documents. The report is produced by DSAMS and includes the “State Description” entered by the IA on the DSAMS Case Detail Window. The IA is responsible for ensuring the State Description as shown in Table C5.T11.

Table C5.T11. IA Responsibilities concerning the State Description

Step	IA Responsibilities
A	A clear and concise description of the major defense articles and or services being transferred or sold to include quantities and if follow-on support or spares are also being provided (e.g., “This LOA is for the purchase of 6 PATRIOT PAC-3 Fire Units and related support equipment, spare parts and initial maintenance teams”). Sensitive munitions (e.g., White Phosphorus or Depleted Uranium) must also be highlighted in this field.
B	Lists additional end items being provided on Amendments to Major Defense Equipment (MDE) cases. Quantities should be included only if there is an increase or decrease with a brief explanation of the change (e.g. “This Amendment provides 2 additional MIDS Terminals and associated support equipment per customer’s request”). Amendments that realign funds between lines, adjust delivery schedules or periods of performance should provide a succinct statement that indicates the intent of the document (e.g., “This Amendment realigns funds between lines to reflect actual costs and adjusts delivery schedules for M1A2 Tanks and support equipment”).
C	List the major end items being supported and provide descriptions of items previously delivered if multiple platforms are being supported for follow-on support documents, Basic LOAs, Amendments or Modifications, (e.g., “This LOA provides follow-on support for the M1A1Abrams Tank, M2 Bradley IFVs, M113 APCs, M109 Howitzer and related support equipment including maintenance teams, spare parts and related services”).

C5.4.14. Documents to Accompany LOAs During Coordination.

C5.4.14.1. Letter of Request (LOR). The LOR must be included in electronic LOA packages submitted to DSCA for countersignature.

C5.4.14.2. Manpower and Travel Data Sheet (MTDS). LOA documents that include case-funded manpower (program management or any other manpower) must include an (MTDS) as part of the electronic package. See Figure C9.F1. for more detailed information on this worksheet.

C5.4.14.3. Missile Technology Control Regime (MTCR). Cases that add MTCR items must include a copy of the DoS (ISN/MTR) approval as part of the electronic package. See Section C3.2., for more information on MTCR.

C5.4.14.4. Previous Versions of the Document. When LOA documents are restated, a copy of the previously approved version must be included along with the restated version as a part of the electronic package. When LOA documents have been rejected and are resubmitted for countersignature, the electronic package must include the returned version as well as the new version. If there are concerns, changes must be clearly identified in DSAMS Case Remarks and the LOA Checklist. If no changes were made in response to a return reason that was identified, DSAMS Case Remarks and the LOA Checklist must provide the rationale. The IA should contact the individual(s) who initiated the return action to discuss the reason for the return and corrective action prior to resubmission to CWD to avoid further returns or delays in processing.

C5.4.14.5. Other Documents. If there are any waivers or unique circumstances related to the case, applicable documentation should be included as part of the electronic package. Such information includes, but is not limited to, EDA approval; NC waivers; DTSA approval; 36(b) notification; Yockey Waiver; National Security Agency (NSA) approval; and Grant Agreements.

C5.4.14.6. Restatements. There may be times when major changes need to be made to a document after it has been countersigned and offered to the Purchaser. If the Purchaser wants to retain the existing designator (instead of canceling the offer and issuing a new case), the offered case may be restated. Restatements can be made as long as the document is in “Offered” status, the purchaser has not yet signed the case, the Offer Expiration Date (OED) has not yet expired, and changes are consistent with FMS policies and procedures. Before restating an LOA, the Purchasing country must be notified in writing by the IA that the original offer is no longer valid. Expiration of the OED on the offered LOA is considered written notice. Restated documents must clearly state that they are restated and supersede the previously offered version and must be coordinated and countersigned using the same procedures as the original case. A copy of the previous version(s) of the LOA must accompany the coordination request. If the Purchaser signs the original offer, it is considered an invalid acceptance because the original offer either expired or was withdrawn. This action is considered a counteroffer and a new offer should be made to the Purchaser by extending and then restating the LOA, or the case should be cancelled and a new LOA (new offer) prepared.

C5.4.14.7. Reactivating Cancelled Offers. Once an offered LOA has been cancelled, it will remain cancelled in most instances. Reactivating cancelled cases eliminates the data history. LOAs that are not yet offered can be cancelled/reactivated at the IA’s discretion. Once an LOA is offered and it is determined that the document is no longer needed, e.g., the country stipulates they do not want it, the case should be cancelled in DSAMS. Cancellation cannot be used to place a document on hold. The Hold and Suspend milestones are used for that purpose. If the IA wishes an exception to allow reactivation, a request for a reactivation/data fix should be forwarded to the DSCA (Business Operations Directorate) that identifies what actions are required along with sufficient justification warranting the changes. The request will be coordinated with the DSCA Country Program Director, Country Financial Manager, and Strategy Directorate for their input on whether to approve or disapprove the request.

C5.4.14.7.1. Positive resolution could involve reactivating the document which takes it back to development status, or doing a data fix (removing milestones), which takes it back to a more appropriate status.

C5.4.14.7.2. If reactivation is approved, the DSCA (Business Operations) will post the Reactivation Authorized Milestone (DREACT) in DSAMS and notify the IA by e-mail. The IA will then post the MILDEP Reactivation (MILREACT) milestone in the DSAMS Case Milestone List Window and bring other systems that may have this cases loaded up to date. This takes the case back to Development status.

C5.4.14.7.3. If a data fix is more appropriate, the IA must determine if there have been any changes, (e.g., lines or notes originally added to this document version that may have been deleted). DSCA (Business Operations Directorate) will post the Reactivation Authorized Milestone (DREACT) in DSAMS, and notify DSADC (info the IA), to do a data fix on the document placing it in the appropriate status. Once the data fix has been completed, the IA must then post the MILDEP Reactivation (MILREACT) milestone in the DSAMS Case Milestone List Window, replace/modify data in document, (e.g., lines/notes that were deleted), update the milestone as appropriate, and bring other systems that may have this cases loaded up to date. This cannot be done systemically, as DSAMS does not retain this information.

C5.4.15. Pen and Ink Changes. There may be times when minor changes need to be made to an LOA after it has been countersigned and offered to the purchaser. Minor changes can be made as long as the LOA is in “Offered” Status, the purchaser has not yet signed the LOA, the OED has not yet expired, and all changes are consistent with FMS policies and procedures. The purchaser must be authorized via email or memorandum to make any Pen and Ink changes, with a copy to DFAS Indianapolis. DSAMS must be updated with any changes. Pen and Ink changes should be kept to a minimum, with processing as follows:

C5.4.15.1. OED Changes. Normally, the greater the period of time between Offer and Acceptance, the greater the likelihood of decreased accuracy of pricing and availability data. Requests by the purchaser to extend the expiration date are honored only after a review by the IA to ensure data are still valid for the extended period. All concerned should be advised of any consequences associated with the extension.

C5.4.15.2. Minor Changes. Minor changes may include insignificant technical corrections such as small arithmetical changes that do not increase total case value or administrative changes, such as address corrections, initial deposit or payment schedule adjustments, or minor changes to note wording. The IA may review and approve these changes.

C5.4.15.3. Major Changes. More significant changes, such as an increase in program scope, including a revision of the terms of sale or total costs, generally require a new or restated document. Pen and Ink changes for scope changes may be done only in exceptional circumstances and with prior DSCA (Business Operations and Strategy Directorates), concurrence. Changes initiated after the purchaser has signed the LOA are accomplished through a corrective Amendment or Modification implemented subsequent to the basic LOA. See Section C6.7.1.4. and Section C6.7.2.4.

C5.4.15.4. Unauthorized Pen and Ink Changes. When an LOA is signed by the purchaser and returned to the IA with unauthorized Pen and Ink changes, it is processed as a counteroffer. The LOA should be restated and reoffered, or cancelled and a new LOA prepared.

C5.4.16. LOA Acceptance. LOA acceptance occurs when an authorized purchaser’s official signs the LOA and provides any required initial deposit to DFAS Indianapolis. Once accepted, the FMS case is implemented and becomes a government-to-government contract between the purchaser government or international organization and the United States or in the case of the Foreign Assistance Act (FAA) 607 certain voluntary non-profit relief agencies.

C5.4.16.1. In addition to signing the LOA, the purchaser must complete the “Typed Name and Title,” “Agency,” and “Information to be Provided by the Purchaser” fields on the LOA.

C5.4.16.2. When the LOA has been accepted or rejected, the SCO advises DSCA (Operations Directorate) and the IA by priority message. When LOAs are accepted for a foreign country or international organization not served by a SCO, or where LOAs are often routinely signed without direct SCO involvement, the LOA includes a note requiring the purchaser country signature authority to notify DFAS Indianapolis and the IA of the acceptance date.

C5.4.16.3. The purchaser should forward a copy of the signed LOA to the IA, which will maintain the original on file. DFAS Indianapolis requires only a copy of the signed LOA cover page.

C5.4.17. LOA Period of Performance. An implemented FMS case is effective until all articles offered are delivered and all services have been performed. Blanket Order LOAs remain in effect until the purchaser has requisitioned articles or services up to funds available on the LOA.

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