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LOA requirements are fulfilled within existing U.S. military logistics systems. An exception to this policy is the use of the Defense Transportation System (DTS) discussed in Chapter 7. With the exception of Excess Defense Articles (EDA) or obsolete equipment, items are furnished only when the Department of Defense (DoD) plans to ensure logistics support for the expected item service life. This includes follow-on spares support. If an item will not be supported through its remaining service life, including excess and obsolete defense articles, a note in the LOA should explain any limitations on that support. See Appendix 6.

C6.4.1. Priority. Chairman of the Joint Chiefs of Staff Instruction (CJCSI) 4110.01D, Joint Material Priorities and Allocation, establishes priorities for filling requisitions based on the purchaser’s Force Activity Designator (FAD) (established by the Chairman of the Joint Chiefs of Staff (CJCS)) and on the Urgency of Need Designator (UND), assigned on the requisition. FADs are ranked with FAD I being the highest and FAD V being the lowest priority. Per Enclosure (D) of CJCSI 4110.01D, the Joint Materiel Priority Allocation Board (JMPAB) is chartered to act on the Chairman’s behalf to review and act upon requests for changes to a FAD. Upon assignment, upgrade, or cancellation of a foreign country FAD by the JMPAB, the Defense Security Cooperation Agency (Strategy Directorate) ensures proper dissemination of FAD decisions to the Security Cooperation (SC) community.

C6.4.1.1. FAD Changes. Requests to change a foreign country FAD should be made by the Combatant Commander. The Combatant Commander’s request to increase a foreign country FAD must be in accordance with Appendix A to Enclosure A of CJCSI 4110.01D and must address the Combatant Commander’s plan to alleviate the situation or condition influencing the upgrade request.

C6.4.1.2. Coordination of FAD Change. Normal day-to-day foreign country FAD change requests will be staffed using standard procedures by the CJCS. The CJCS will review and provide a decision on all Combatant Commander operational, crisis, or emergency foreign FAD upgrade requests within 24 hours.

C6.4.1.3. Security Guidance for FADs. FAD assignment to a specific country or foreign force, unit, or activity may be released only to the recipient country and to U.S. Forces or agencies with the need to know and on a sensitive but unclassified basis. FAD assignments to a specific country are not released to other foreign countries. Compilations of foreign FAD assignments, combining two or more foreign countries or territories, are classified SECRET.

C6.4.2. Project Codes. Project codes assigned by the CJCS provide precedence for requisition processing and visibility within the transportation process. For processing purposes, requisitions with a CJCS 9-series project code will be ranked above all other requisitions with the same FAD and Urgency of Need Designator. CJCS project codes assigned to the Security Cooperation community are the “9-alpha-alpha” and “3-juliet-alpha” series. The “9-alpha-alpha” series identify a project, operation, program, force, or activity sanctioned by the CJCS that requires heightened logistic infrastructure visibility and support. The “3-juliet-alpha” series identifies a unique military project or operation when a CJCS project code is warranted for tracking purposes, but normal materiel allocation is to remain unaffected.

C6.4.3. Requisitions. The IA or the purchaser may initiate Military Standard Requisitioning and Issue Procedures (MILSTRIP) requisitions under implemented LOAs. Table C6.T2. identifies service points of contact for requisition entry.

Table C6.T2. Points of Contact for Requisition Entry

MILDEP	Address
Army	U.S. Army Security Assistance Command 54 M Avenue, Suite 1 New Cumberland, PA 17070-5096 For Infrastructure and Engineering LOAs: Headquarters, U.S. Army Corps of Engineers ATTN: Security Cooperation Branch (CEMP) 441 G Street, NW Washington, DC 20314-1000
Navy	Naval Supply Systems Command Weapon Systems Support Philadelphia, PA 19111-5095
Air Force	Air Force Security Assistance Center Wright-Patterson AFB, Ohio 45433-5000

C6.4.3.1. Standard Requisitions. For standard requisitions (non-Cooperative Logistics Supply Support Arrangements (CLSSA)), the Inventory Control Point (ICP) processing the requisition generally issues the assets down to the item’s reorder point level. To the extent authorized by the Type of Assistance (TA) and Source of Supply (SOS) codes assigned to the LOA line item, requirements that cannot be satisfied at reorder level may be filled by one of the following methods (the following may not be inclusive of all appropriate support options.)

C6.4.3.1.1. The ICP director or designee may authorize issuance below the reorder point if the item can be readily procured; assets are due in from contract; and/or U.S. Forces’ support is not jeopardized.

C6.4.3.1.2. The Item Manager may place the requirement on backorder. Once the procurement lead-time elapses, the backorder is eligible for release.

C6.4.3.1.3. The Item Manager may initiate an immediate procurement action.

C6.4.3.1.4. If an item is supported by direct vendor delivery, prime vendor, or contractor custody inventory, the requisition may be processed without delay, as long as the contract allows Security Assistance orders and U.S. Forces’ support is not jeopardized.

C6.4.3.2. Cooperative Logistics Supply Support Arrangements (CLSSAs). CLSSA requirements are satisfied on the same basis as U.S. Force requirements in accordance with the country’s FAD and Uniform Material Movement and Issue Priority System (UMMIPS). The FAD identifies the priority that is given to a purchaser’s request. For information on what items can be provided on CLSSA cases see Section C5.4.3.3.

C6.4.3.2.1. The Foreign Military Sales Order (FMSO) I case provides for the purchase and sustainment of equity in the DoD inventory and pipeline. Following the receipt of adequate stocks to sustain the fill of incoming requisitions, which is referred to as FMSO I maturity, the FMSO I provides for 5 months of on hand stock (FMSO IA) and 12 months of on order stock (FMSO IB). The DoD Components use this equity investment (capitalization) to procure additional stocks of secondary items, in preparation for purchaser stock withdrawals.

C6.4.3.2.2. The Foreign Military Sales Order (FMSO) II case is used by the purchaser to requisition spare and repair parts that are needed to replenish in-country stocks.

C6.4.3.2.3. Terms and Conditions unique to the CLSSA program are provided with each FMSO I LOA in addition to the Letter of Offer and Acceptance Standard Terms and Conditions.

C6.4.3.2.4. The purchaser withdraws stocks from DoD inventories and deposits funds for routine FMSO I replenishment using the FMSO II case. Unless item stock levels are adequate to support all purchasers, FMSO II case requisitions received prior to receipt of augmentation stock are placed on backorder pending maturity of the FMSO I. As augmentation stocks become available, requisitions received under the FMSO II can be filled from stock.

C6.4.3.2.5. For items supplied by DLA, the IA submits requirements to DLA. The IA accepts and manages the FMSO I deposits submitted by the purchaser on DLA’s behalf.

C6.4.3.2.6. When items subject to CLSSA augmentation are transferred from one DoD Component to another, CLSSA program data and funds are provided to the receiving DoD Component during the transfer process.

C6.4.3.2.7. The DoD Components, including DLA, maintain performance standards and measurement records to show effectiveness and timeliness of CLSSA support.

C6.4.3.2.8. When there is an excess quantity of an item in DoD stock, demand records are reviewed before excess materiel is transferred or declared surplus. If CLSSA requirements caused the excess condition, IA notifies the purchasers of their liability and asks for disposition instructions.

C6.4.3.2.9. If it is necessary to reduce the level of a purchaser’s investment in the U.S. supply system or to terminate part or all of a CLSSA, closeout should minimize impact on the DoD Working Capital Fund (WCF) and the purchaser. CLSSA and other FMS purchasers pay their share of depreciation and other WCF operating costs during the life of each LOA. When a purchaser builds an initial FMSO I, then terminates the CLSSA before substantial orders are placed, and no other purchaser exists, liability may apply for assets on hand and due-in. When liability is determined, countries are required to pay for the items via the CLSSA. Purchasers have the option of receiving the items, or sending them to DLA Disposition Services. The purchaser is responsible for all disposal costs. If proceeds exceed disposal costs, the net proceeds are credited to the purchaser’s FMS trust fund account.

C6.4.4. Commercial Buying Service (CBS). The International Logistics Control Office (ILCO) is authorized to use a CBS to support FMS purchaser requirements for nonstandard and difficult to support standard items when DoD organic capability or contractual supportability is not available or timely. Existing CBS options include Parts and Repair Ordering System (PROS) and Simplified Non-Standard Acquisition Process (SNAP).

C6.4.5. Foreign Military Sales Tailored Vendor Logistics (FMS TVL). The ILCO is authorized to use DLA’s FMS TVL to support FMS purchaser requirements. An expansion of the existing DoD Tailored Vendor Logistics support program (DoD PV), FMS TVL is a supply support option that augments existing USG support. By accessing the Tailored Vendor Logistics' electronic catalog, the FMS purchaser can identify the item, price and supply lead-time with the added flexibility of being able to define special requirements and delivery needs, before submitting the requisition. In addition to providing support for standard items, this program also supports requirements for non-standard items.

C6.4.6. Diversions and Withdrawals of Materiel. Materiel procured or stocked for FMS may be diverted to meet higher priority requirements with the prior concurrence of the Director, DSCA. The following policies implement the Arms Export Control Act (AECA), section 21(i), 10 U.S.C. 138a and 2390.

C6.4.6.1. Operational Readiness Impact. Under normal circumstances, IA fill FMS requirements from production on a first-in, first-out basis. National security considerations and foreign policy objectives may require deviation from this DoD policy in order to expedite equipment delivery to a purchaser. Items may be diverted from production or from U.S. Forces to meet high priority FMS requirements. While the language of AECA, section 21(i) pertains only to shipments from stocks, impacts can occur when the Department of Defense diverts materiel from production. The diversion or withdrawal must not significantly lower the operational readiness of U.S. Forces as determined by the DoD Component.

C6.4.6.1.1. If the MILDEPs or the Office of the Secretary of Defense (OSD) staff identify an undesirable effect on U.S. Forces’ combat readiness, the Under Secretary of Defense for Policy (USD(P)) through DSCA will request a written MILDEP assessment. The MILDEP Secretary verifies the assessment and submits it to USD(P) and the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) for review. USD(P) refers the coordinated recommendation to the Secretary of Defense for review and decision.

C6.4.6.1.2. Any diversion or withdrawal that would impact U.S. National Guard or Reserve Forces is coordinated with DSCA, who coordinates the proposal with the Assistant Secretary of Defense for Reserve Affairs (ASD(RA)), pursuant to DoD Directive 1225.6. If the proposed diversion or withdrawal includes tanks, a determination that the proposed sale will not increase the shortage of tanks in the U.S. National Guard or Reserve during the current 5-year defense plan is included in the Congressional notification and Congress is advised of the plan to replace the tanks.

C6.4.6.1.3. Report to Congress - Diversions. The AECA requires a report by the President to Congress when a sale could have significant adverse effect on the combat readiness of the U.S. Armed Forces. There may be instances when the MILDEP Secretary determines that a proposed supply action warrants Secretary of Defense’s review, but does not constitute a significant adverse impact on DoD requiring a Presidential report to Congress. When the MILDEP Secretary refers a potential impact case to USD(P) and USD(AT&L), the referral includes the purchaser, sale value, item description, and an assessment. The assessment must state whether the supply action affects the Service’s readiness, or has other impacts that warrant Secretary of Defense’s review, or constitutes a significant adverse impact requiring either alteration or termination of the supply action, or a Presidential report to Congress.

C6.4.6.1.4. The Secretary of Defense determines whether the DoD provides items on an expedited basis and whether the impact of doing so is significant within the meaning of AECA, section 21(i).

C6.4.6.1.5. When the Secretary of Defense advises the President of the requirement for a report to Congress, the Secretary provides the analysis relevant to the justification and certification called for in AECA, section 21(i)(1)(E). No Presidential report is required if the decision is not to make a sale. AECA, section 21(i) also applies when the significant adverse effect becomes apparent after a sales contract is concluded. However, no Presidential report is required with respect to supply action under a sales contract where the supply action is altered in order to avoid a significant adverse effect on U.S. combat readiness that would otherwise occur.

C6.4.7. System Support Buyout. For weapons systems soon to be obsolete to U.S. Forces and not supported under a CLSSA, the responsible MILDEP must identify the unique and common items associated with the system to DLA and provide the close out date for U.S. use of the item. The MILDEP and DLA identify purchasers that have this system and associated unique spare parts and advise them of the system phase out. The purchaser should have a minimum of 2 years to place a final order for secondary items to support the system for its remaining useful life. After this time period, the following are authorized:

C6.4.7.1. Items with no demand for 4 years, including the system support buyout period, may be processed for disposal.

C6.4.7.2. Items with demand during the 4-year period may be retained and managed in support of Security Assistance (SA) requirements.

C6.4.8. Repair Programs.

C6.4.8.1. Direct Exchange (DX). A repairable item may be exchanged for the same type serviceable item in DoD stocks under certain conditions.

C6.4.8.1.1. The repairable item must have been obtained under the AECA, must not be an end item, and the DoD must have requirements for the repairable item. Programs may be executed under defined line, blanket order, or CLSSA cases.

C6.4.8.1.2. Purchaser funds must be available for the cost of the serviceable replacement. The requisition for the replacement is generally filled according to normal supply procedures.

C6.4.8.2. Repair and Return. Repair and Return is used when a serviceable replacement is not available from stock on hand or due in within a reasonable time, or if the purchaser requests Repair and Return of a specific item. Repair of a purchaser-owned article requires that the repairable article be returned under an LOA. The purchaser must wait for the article to be repaired. SDRs for non-receipt of Repair and Return items must be submitted in accordance with C6.4.10.1.1.

C6.4.9. Returns. Returns may be accepted if the defense article was previously provided under the AECA, is not significant military equipment (SME), and is in fully functioning condition without need of repair or rehabilitation. In addition, there must be either a DOD or FMS funded requirement for the defense article. The purchaser’s FMS account is credited with the appropriate type of funds, dependent upon the buyer.

C6.4.9.1. Return credits may be applied to collections of specific cases when requested by the purchaser.

C6.4.10. Supply Discrepancies. The USG makes every effort to provide the correct defense article or service in the quantity and quality shown in the LOA. In the event of a discrepancy, the purchaser submits an SDR using (Standard Form (SF) 364). Instructions for SF 364 completion, DoD processing timeframes, and responsibilities is found in the Defense Logistics Management System (DLMS) Manual, DoD 4000.25-M, Volume 2, Chapter 17.

C6.4.10.1. Timeframes for Submission. SDRs are more easily resolved when they are submitted promptly. The longer the time between when the discrepancy occurs and when the SDR is submitted, the more difficult it is to find supporting documentation and informed personnel. The purchaser agrees to submit an SDR no later than one year after delivery or after passage of title to the defense articles, whichever comes first. For defense services, the purchaser agrees to submit an SDR no later than one year after the end of the scheduled period of performance of the defense service. SDRs submitted beyond these timeframes will be disallowed by the USG unless the USG determines that unusual and compelling circumstances involving latent defects justify consideration of the claim. SDRs for non-shipment or non-receipt will be disallowed by the USG if such claims are received more than one year after the scheduled delivery date or initial billing, whichever is later. Consideration may be given to receiving claims for non-shipment or non-receipt made more than one year after the scheduled delivery date to the extent that the actual delivery date is later.

C6.4.10.1.1. The Purchaser agrees to report misdirected or unordered shipments. The Purchaser further agrees to report such shipments containing items that are identified as classified/sensitive materiel, and/or arms, arms parts, or explosives, within 24 hours of discovery, regardless of dollar value, for disposition instructions from the USG. The Purchaser agrees to ship such classified/sensitive materiel, and/or arms, arms parts, or explosives within 30 days of USG direction for such return. For all other items, the Purchaser agrees to ship discrepant articles within 180 days of receiving USG direction for such return. When appropriate, the USG may direct the Purchaser to expedite the return of the discrepant articles so the source of supply can inspect and evaluate the items prior to issuing further direction.

C6.4.10.2. Time limits for reporting discrepancies relating to contractor warranties are prescribed in the individual warranty clauses and/or contracts. SDRs must be submitted by the purchaser within the contractor warranty timeframe, even when the warranty timeframe is less than one year after delivery or passage of title to the defense articles or less than one year after the scheduled period of performance of the defense service. SDRs are processed only when the estimated value is $200 or greater regardless of the type of discrepancy except for misdirected or unordered shipments as described in Section C6.4.10.1. This minimum value includes the value of the item plus any transportation and handling costs. Purchasers may submit SDRs regardless of the dollar value so that problems can be documented, but only those over the minimum dollar value are reviewed for possible compensation.

C6.4.10.3. Causes of Discrepancies. Supply discrepancies result from shortages or overages, improper packing or marking, duplicate shipments, incorrect items, and condition or quality discrepancies, including damage, prior to release to the carrier by the originating shipper. Supply discrepancies also result from documentation and/or billing errors, deficiencies in the performance of services, and instances where no evidence of shipment (signed carrier receipt and shipping document) can be produced by the shipper. The LOA Standard Terms and Conditions, Figure C5.F4., set forth assumptions of risk for the purchaser.

C6.4.10.4. SDR Responses. The IA, in conjunction with the DoD or commercial supply source, resolves SDRs and determines financial responsibility. The IA designates a single point of contact for SDR corrective action. Only this point of contact and DSCA are authorized to accept and convey USG liability or originate a commitment for corrective action. Commitments to the purchaser for U.S. financing of discrepancies are not made until all reviews are complete. SDR responses should be provided by the IA within timeframes established by DoD 4000.25-M, Volume 2, Chapter 17. The IA SDR point of contact approves extensions.

C6.4.10.5. SDR Documentation. A complete document package prepared by the IA is key to effective SDR resolution. Table C6.T3. lists the required items. DSCA will return a deficient document package for corrective action.

Table C6.T3. Supply Discrepancy Report (SDR) Documentation Requirements

#	Document	Requirement
1	SF 364	Copy of the SDR, SF 364, and supporting data from the purchaser.
2	LOA Documents	Copy of the LOA and any Amendment or Modification bearing on the discrepancy.
3	Chronology of Events	The following statement should be included – it covers pertinent events for most SDRs: The SDR was filed within the time period allowed by the LOA, which in this instance is [time period on the LOA] from [the date of shipment/the date of furnishing of services or the date of billing]. Date of [shipment/completion of services] was [date]. Date of billing was [date]. The SDR was received by [organization] on [date] with document origination date of [date signed by initiator].
4	Key Actions	Principal SDR processing actions and dates, present status of any assets, and other information pertinent to the SDR background.
5	General Counsel Position	An IA General Counsel position regarding USG liability, to include: This office was furnished relevant documents pertaining to SDR [number]. The determination of USG liability for this SDR is supported by [list LOA General Terms and Conditions paragraph(s), footnotes, attachments, legal principle, legal precedent, or other bases for the determination]. Where relevant, the General Counsel opinion must discuss USG claims against the contractor that supplied the allegedly discrepant defense article(s).
6	Options	A list of options, with costs, to remedy the SDR. In addition to this list, the IA should address the following items as applicable: article or service received vice what was stipulated in the LOA; whether the supply source repurchases the item(s), hold the item(s) for DoD/FMS sale, repair, or replace the item; detailed cost estimates, including transportation, temporary duty (TDY), and other associated charges for each remedy; and, if rework or repair is indicated, include source documents from the office responsible for correcting the SDR upon receipt of authority.
7	Preventive Action	Discuss policy, procedure, or systems change; education; or other actions to reduce probability of recurrence.
8	Retention of Records	Show status of records required for resolution, including present and anticipated preservation.

C6.4.10.6. Shipment Documentation. Any movement document or receipt, signed by a carrier representative, showing that the U.S. shipped or released materiel to a carrier for shipment to the country’s designated representative, constitutes evidence of shipment. Such documents generally show the quantity; National Stock Number (NSN); mode of shipment; date; Transportation Control Number (TCN); notice of availability number; bill of lading, parcel post insured, or registered number; addressee; vessel, voyage, or flight number (to the extent possible); and names of the shipper and carrier. This information is essential for adjudication of SDRs. If proof of delivery to a carrier is requested and the freight forwarder has not received the consignee copy of the bill of lading, then a duplicate of the appropriate documents establishing evidence of shipment is provided to the purchaser’s representative.

C6.4.10.7. DSCA SDR Review. DSCA (Business Operations and Strategy Directorates) reviews and approves or disapproves SDRs when the IA determines the USG is liable for correction and recommends use of FMS funds in excess of $50,000; or, the SDR involves an issue likely to be raised to DSCA or USD(P). When either or both of these criteria are met, the IA submits an SDR package to DSCA (Business Operations and Strategy Directorates) in accordance with Table C6.T4. DSCA will make a final decision on the SDR within 30 days of receipt of the SDR package.

C6.4.10.8. SDR Financial Guidelines. AECA, sections 21 and 22 require that the USG recover full costs. This requirement applies to SDRs. When purchasers re-requisition items, the current price is paid even if the item was initially released at a lower price. Purchaser problems involving Government Furnished Equipment (GFE) obtained under AECA, section 30 (see Section C11.5 for more information) should be addressed to the U.S. contractor possessing the GFE. FMS funding and FMS SDR processing do not apply to these sales. GFE/GFM items purchased under the auspices of an FMS case are processed under normal SDR guidelines.

C6.4.10.9. Financing Approved SDRs. Table C6.T4. shows the most common SDRs and methods of financing when an IA or DSCA determines an SDR should be approved. Corrections are financed:

C6.4.10.9.1. Within contract costs for Defense Working Capital Fund (DWCF), Operation and Maintenance (O&M), Procurement Appropriation (PA), and Research, Development, Test and Evaluation (RDT&E) items obtained from procurement.

C6.4.10.9.2. Within the surcharge for DWCF items or services supplied from stock.

C6.4.10.9.3. From the O&M, PA, or RDT&E account for O&M, PA, or RDT&E items supplied from stock.

C6.4.10.9.4. From the FMS (Administrative, Transportation, or Packaging, Crating and Handling (PC&H)) fund accounts when sources above do not apply. These SDRs are financed from current year FMS Administrative or Logistics Support Funds budget obligation authority, or reissuance of past unused budget authority. The DSCA FMS Administrative Budget Call, issued on an annual basis to MILDEPs and Defense Agencies, provides procedural guidance for the inclusion of estimated SDR costs that are financed from FMS administrative funds.

Table C6.T4. Methods of Financing Approved SDRs

Nature of Discrepancy	Source of Supply	FMS Funds 1 (Admin, PC&H, Transportation)	USG Funds/Appropriations (DWCF, PA, O&M, RDT&E)
Damage, Defect, or Other Deficiency	Procurement2	Generally not applicable except where U.S. action or inaction caused inability of USG to obtain satisfaction from contractor for purchaser.	Generally not applicable. Usually corrected by contractor within existing contract terms.
	Stock	Peripheral costs of correction (e.g., testing, transportation, TDY)	Replacement, refund to purchaser account, or rework of defective items for costs not listed under FMS Fund heading.
Non-receipt or Shortage	Procurement2	Generally not applicable except where U.S. action or inaction caused inability of the USG to obtain satisfaction from contractor for purchaser.	Generally not applicable. Usually corrected by contractor within existing contract terms.
	Stock	Not applicable except where item shipped DTS and U.S. action or inaction caused inability to obtain satisfaction from carrier. See next column.	(Shortage/misdirection at origin based on no evidence of shipment.) Credit to purchaser account, charged to USG fund or appropriation initially credited. Lost items are absorbed as inventory losses.
Overage	Procurement2	Generally not applicable	Generally not applicable
	Stock	Generally not applicable. See next column.	If billed and purchaser does not want item - amount charged is refunded to purchaser account and USG appropriation fund charged. If USG directs no return, absorb as inventory loss.
Incorrect Item	Procurement2	Generally not applicable. See next column.	Generally not applicable. Normally corrected by contractor within contract terms.
	Stock	Generally not applicable. See next column.	Unless the item manager chooses to reissue, refund to the purchaser account, charged against appropriation or fund initially credited. If USG directs no return, absorb as inventory loss.
Missing or Improper Documentation	Procurement2	Generally not applicable. See next column.	Generally not applicable. Normally corrected by contractor.
	Stock	Generally not applicable. See next column.	Issue documentation and/or proper items without additional charge to FMS purchaser. If not available for issue, refund against USG appropriation/fund initially credited. If USG directs no return, absorbed as inventory loss.
Duplicate or Erroneous Billings	From procurement2 or stock	Generally not applicable. See next column.	Refund or adjustment to purchaser account. Adjustments charged against appropriate USG or purchaser account.
Loss of Purchaser Item (provided for repair, etc.)		Reimburse purchaser when item is nonstandard (no longer maintained in USG inventory).	Reimburse purchaser when item is DoD standard (currently maintained in USG inventory) and the loss is bookkeeping or inventory control only.
1 : In some instances, Administrative, Transportation, or PC&H funds may complement other financing for SDR resolution. For example, it could be appropriate to reimburse PC&H or transportation costs for initial delivery of an overage when this is the sole means for resolution. 2 : Procurement includes defense articles and services acquired to fill the FMS requirement and therefore not supplied from on-hand DoD assets. Both stock and procurement guidance may apply in some instances (e.g., item on hand in DoD inventory reworked through a commercial contract prior to shipment).

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