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FMS cases may be amended or modified to accommodate certain changes. The Defense Security Assistance Management System (DSAMS) should be used to prepare all Amendments and Modifications unless the Amendment or Modification is classified. It is important that the purpose of the Amendment or Modification be identified on each case. It is not sufficient to state that the purpose is to increase or decrease funds or lead-times without plainly stating the reason for the increase or decrease. The case reviewer, as well as the purchaser, must know the reasons why these actions are taking place on the case. Examples include: “This Amendment increases the estimated costs of line item 002 for additional requirements as requested by the purchaser”; or “This Modification increases the estimated costs of line item 002 to cover price increases based on contractual requirements”. These are examples only; IA should identify the applicable reasons for the changes needed.

C6.7.1. Amendments.

C6.7.1.1. Use of an Amendment. An Amendment is necessary when a change requires purchaser acceptance. The scope of the case is a key issue to consider in deciding whether to prepare an Amendment, Modification, or new LOA. A scope change takes place when the original purpose of a case line or note changes. This may be reflected through either an increase or decrease in dollar value, quantity, or lead-time. An LOA note revision can also be considered a scope change if it alters the original purpose of the line or case. Major increases in scope such as addition or deletion of Significant Military Equipment (SME), including Major Defense Equipment (MDE), normally require the preparation of a new LOA vice an Amendment. The reasons for the changes are the key determinants as to the type of LOA document that is appropriate. Table C6.T6. provides examples of changes that require an Amendment. This list is not all-inclusive.

Table C6.T6. Amendment Requirements

#	Example
1	Realigning or redistributing funds among case lines. The only exception is moving funds from lines on a case that have excess funds to other lines on the same case that have incurred price increases. A modification may be used in this scenario only.
2	Adding case lines
3	Deleting case lines (except for case closure)
4	Quantity increases or decreases to defined order lines
5	Dollar value increases or decreases to blanket order lines with the exception of price increases or decreases
6	Addition or deletion of requirements
7	Extending a lead time, period of performance, or availability of services for additional coverage even if there is no change in dollar value
8	Change in Delivery Term Code to add/delete transportation requirement
9	Revising line item descriptions or notes to increase or decrease scope
10	Changing a Military Articles and Services List (MASL) that has a corresponding configuration or scope change

C6.7.1.2. $50,000 Break Point. The DSCA database records Amendments reflecting net increases of more than $50,000 in the fiscal year the Amendment is accepted. Amendments that reflect net increases of $50,000 or less are recorded in the year of the basic LOA.

C6.7.1.3. Amendment Financial Requirements. Payments are included on the Amendment, see Chapter 9, when the existing payment schedule does not include sufficient amounts to cover costs from the expiration date of the Amendment until the next billing cycle. For under-collected cases, the amount due with Amendment acceptance also includes payments to cover current financial requirements, including termination liability, if applicable.

C6.7.1.4. 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. Expiration of the OED on the offered LOA or Amendment officially notifies the Purchaser that the original offer is no longer valid.. 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 amendment 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 Amendment; or the case should be cancelled and a new LOA amendment (new offer) prepared.

C6.7.1.5. Reactivating Cancelled Offers. Once an offered LOA document has been cancelled, it will remain cancelled in most instances. When a DSAMS data fix is used to reactive an LOA document that has been cancelled, the data history of the LOA document will be destroyed since all DSAMS milestones associated with the LOA document will be deleted. LOAs that are not yet offered can be cancelled/reactivated at the IAs discretion. Once an LOA Amendment is offered, cancellation in DSAMS should happen when it is determined that the document is no longer needed (e.g., the country stipulates they do not want it). Cancellation cannot be used to place a document on hold. The Hold and Suspend milestones are used for that purpose. A request for a reactivation/data fix should be forwarded to DSCA (Business Operations Directorate) and identify what actions are required along with sufficient justification warranting the changes. DSCA (Business Operation Directorate) will then either post the Reactivation Authorized Milestone (DREACT) in DSAMS, along with an explanatory remark, or notify the Defense Security Assistance Development Center (DSADC) Helpdesk, with a copy to the IA, to initiate a data fix against the document, and indicate the decision in DSAMS Case Remarks listing all deleted milestones once the data fix has been accomplished.

C6.7.1.5.1. A cancelled LOA document is reactivated by either placing the LOA document back in development status or by performing a data fix which is the deletion of DSAMS milestones. Performing a data fix places the LOA document in Offered status.

C6.7.1.5.1.1. If reactivation is approved, DSCA (Business Operations Directorate) 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 these cases loaded up to date. This takes the case back to Development status.

C6.7.1.6. 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 systemically deleted). DSCA (Defense Business Operations) will post the Reactivation Authorized Milestone (DREACT) in DSAMS and notify DSADC (info the IA) to data fix 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 these cases loaded up to date.

C6.7.1.7. Pen and Ink Changes to Amendments. There may be times when minor changes to an Amendment are needed after it has been countersigned and offered to the purchaser. Minor changes can be made as long as: the Amendment is in “offered” status, the purchaser has not yet signed the Amendment, the OED has not yet expired, and all changes are consistent with FMS policies and procedures. The IA authorizes the purchaser to make any pen and ink changes by issuing a message or memorandum. A copy of the message or memorandum should be provided to Defense Finance and Accounting Services (DFAS) Indianapolis. DSAMS must be updated with any changes. Pen and ink changes should be kept to a minimum, with processing as follows:

C6.7.1.7.1. OED Changes to Amendments. The greater the period of time between offer and acceptance, the greater the likelihood of decreased accuracy of data. Requests by the purchaser to extend the expiration date are honored only after a review by the IA. The IA must ensure all pricing data are still valid for the extended period. All concerned should be advised of any consequences associated with the extension.

C6.7.1.7.2. Minor Changes to Amendments. Minor changes may include insignificant technical corrections such as a small arithmetic change that does not increase total value and administrative changes such as an address correction, initial deposit or payment schedule adjustment, or minor changes to note wording. The IA can review and approve these changes.

C6.7.1.7.3. Major Changes to Amendments. More significant changes such as revising quantities, revising unit prices or adding or deleting case lines, require a new or restated Amendment. Pen and ink changes for significant changes to Amendments may only be done in exceptional circumstances and with DSCA (Business Operations and Strategy Directorates) concurrence. Changes initiated after the purchaser has signed the Amendment are accomplished through a corrective Amendment or Modification.

C6.7.1.7.4. Unauthorized Pen and Ink Changes to Amendments. When an Amendment is signed by the purchaser and returned to the IA with unauthorized pen and ink changes, it is processed as a counteroffer. The Amendment should be restated and reoffered, or cancelled and a new Amendment prepared. If the Amendment is restated, the Amendment number remains the same. If the Amendment is cancelled, a new Amendment is prepared with a new number.

C6.7.1.8. Amendment Implementation. Amendments are implemented when the FMS purchaser has signed the Amendment and any amount due with Amendment Acceptance has been received by DFAS Indianapolis. When this occurs, the Case Manager posts the Amendment implementation milestone in DSAMS.

C6.7.2. Modifications.

C6.7.2.1. Use of Modifications. U.S. unilateral changes to an FMS case are made by a Modification and do not require acceptance by the purchaser. Concurrent Modifications are the exception for adding scope, as long as the change is not significant such as adding SME. See Section C6.7.2.3. for additional information. Table C6.T7. provides examples of changes that may be done using a Modification. This list is not all-inclusive.

Table C6.T7. Modification Requirements

#	Example
1	Price increase or decrease on a defined order line
2	Increasing or decreasing line values for case closure
3	Increases due to over commitments
4	Lead time slippages caused by source of supply impacts (e.g., delays in contract award or materiel deliveries)
5	Revising source, line manager, offer release, or type of assistance codes
6	Correcting accessorial charges
7	Minor administrative changes such as typographical errors
8	Revising payment schedules
9	Revising the Terms of Sale
10	Correcting the FMS Administrative Surcharge
11	Charges for Value Added Tax and other international requirements levied on the U.S. that must be funded by the FMS case (considered a price increase)
12	To add charges for storage and other U.S. requirements already received that must be funded on the FMS case
13	Concurrent Modifications are the exception for adding limited scope

C6.7.2.1.1. Monitoring Funds. Costs charged under an FMS case line must not exceed the funds available on that line. Program management responsibility includes analysis and tracking to ensure funding is adequate to avoid program disruption. If tracking shows that costs incurred on the line are deviating from those estimated to the degree that later deviations are unlikely to bring overall costs into balance, or Obligational Authority above line value is required at some point in the program, a Modification should be processed. A Modification should also be provided for relatively minor cost adjustments when all items are on order and prices are reasonably firm. Price increase Modifications must be provided by the IA before the actual accrued costs reported to the purchaser exceed those estimated on the case unless the case is in the closure process.

C6.7.2.1.2. Price Increases During Case Closure. Price increases discovered during case closure (i.e., after the case becomes supply/services complete) will be validated during final reconciliation. For FMS cases that are in the closure process, the following rules apply:

C6.7.2.1.2.1. If expenditures exceed FMS case ordered values, a Modification or Amendment is required. The majority of actions related to expenditures reconciled prior to closure are addressed on a Modification. Contact DSCA (Strategy Directorate) for questions regarding Amendment or Modification usage.

C6.7.2.1.2.2. If the case is anticipated to close and expenditures do not exceed ordered value, the case may be closed without doing an Amendment or Modification.

C6.7.2.1.2.3. Refer to DoD 5105.65-M, FMS Case Reconciliation and Closure Manual (RCM) for comprehensive FMS case reconciliation and closure policies.

C6.7.2.2. Purchaser Acknowledgement. Acknowledgement of receipt of the Modification, although not required for implementation, confirms that a purchaser’s authorized representative has received the Modification.

C6.7.2.3. Concurrent Modifications. Case value may be transferred between two or more cases by concurrent Modifications. Concurrent Modifications are prepared in DSAMS and identified using the DSAMS Concurrent Funding Tab under Case Detail to record the transfer from or to cases and amounts. DSAMS automatically relates the documents and prints the correct statements in accordance with Section C6.7.2.3.6. This process ensures that all the documents are implemented at the same time. The following conditions must be met for valid concurrent Modifications:

C6.7.2.3.1. The FMS country official who requests the shift in value has the authority to accept LOAs and a copy of the LOR must be attached to each Modification. Any shift that results in a scope increase or decrease must be as requested in the LOR.

C6.7.2.3.2. Must not include a significant scope change (e.g., adding SME).

C6.7.2.3.3. Total amount(s) increased are no more than the total amount(s) decreased. If addition(s) to the LOA(s) being increased generate a requirement for an initial deposit, an Amendment must be used.

C6.7.2.3.4. LOA(s) decreased have adequate funds available to cover remaining obligations.

C6.7.2.3.5. All cases being modified must be in “implemented” status. Closed cases are not identified in concurrent Modification packages.

C6.7.2.3.6. All Modifications are provided to DSCA as a package for countersignature and cross-reference each other in the “This Modification is for:” section of the Modification as follows:

On decreased LOA:
“Value of $____ is hereby transferred to FMS Case __-_-__ (reference Modification__).”
On increased LOA:
“Value of $____ is hereby transferred from FMS Case __-_-__ (reference Modification __).”

C6.7.2.4. Pen and Ink Changes to Modifications. Pen and ink changes to Modifications are NOT authorized. After a Modification has been signed and countersigned by the USG, any further changes must be accomplished by using a new Modification (or Amendment if applicable).

C6.7.2.5. Modification Implementation. Modifications do not require purchaser signature and are implemented upon countersignature. If countersignature is not required for a particular Modification, the Modification is implemented upon USG signature.

C6.7.3. Amendment and/or Modification Formats. Amendment and Modification formats, including sample data and document-unique instructions for preparation, are provided in Figures C6.F2. – C6.F3. and C6.T8.

Figure C6.F2. Amendment Format

Full Size Image (Page 1) PDF Form Version of Figure

Figure C6.F3. Modification Format

Full Size Image (Page 1) PDF Form Version of Figure

Table C6.T8. Instructions for Preparing an Amendment or Modification

#	Instruction
1	“Based On.” Each Amendment or Modification includes a reference to the document, meeting, review, etc. that prompted the change.
2	Description. The “This Amendment (or Modification) is for:” includes a concise and clear purpose of the Amendment or Modification, using the following guidelines: Program. Identify the major program involved (e.g., “Apache Program”). Overview. Provide an overview of the Amendment or Modification. Actual changes are shown in detail subsequent to page 1. References. Enter references to specific parts of the basic LOA, Amendments, or Modifications; e.g., Basic LOA, Item 001, Attachment 2; Amendment 2, Item 003. Show if the action is an addition, modification, deletion, increase, or decrease. This must show whether value increases (line or total LOA) are due to scope or price changes. Previous Unaccepted Amendments. If a previous Amendment offer has expired, note that Amendment (number) was not accepted and state that data prior to the Amendment is being used herein. The unaccepted Amendment number should not be reused. LOA Acceptance Date. Include “Basic LOA was accepted [insert date].”
3	SC/MOS/TA or Notes. This column includes the source code (also referred to as the Source of Supply (SOS) code), the availability (estimated number of months FROM IMPLEMENTATION OF THE BASIC LOA to when items are available), Type of Assistance (TA) code, and training notes.
4	Term(s) of Sale. The Term(s) of Sale must be recorded on the first page of the Amendment or Modification. Cases that include multiple sources of funding must list all sources. The Amendment or Modification includes a dollar breakout for each credit term used.
5	DSCA Congressional Notification Transmittal Number. Include the DSCA transmittal number used in the statutory Congressional notification (e.g., Congressional Notification 92-15) when applicable. When multiple notification numbers apply, they must all be listed.
6	Expiration Date. The Amendment expiration date follows the same rules as for an LOA. See Chapter 5, Figure C5.F6. for current country level timeframes.
7	Other Fields. Quantity, notes, codes, and financial fields should be changed to reflect the previous and revised values. The payment schedule should be adjusted accordingly.

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