C15.5.1. General. The IA receives obligation authority upon case implementation, and is then responsible for obligating the funds and executing the case to meet Requesting Authority timelines. Unless specifically exempted by law, BPC program funds are subject to applicable U.S. Government (USG) procurement law and policy. The USG is responsible for transporting BPC materiel all the way into the Benefitting Country, according to delivery requirements provided by the Security Cooperation Organization (SCO). The SCO will transfer custody to the Benefitting Country after materiel has been inventoried and when the Benefitting Country is ready to maintain and employ them.

C15.5.2. Funds Obligation. DoD must obligate USG appropriations in accordance with the rules described in the DoD Financial Management Regulation (FMR) (see Volume 3, Chapter 8). Case financial documents will indicate the FMS Trust Fund cite (97 X 8242). The Implementing Agency (IA) and the Procuring Agency must review the “Fund Source, Availability and Amount” note on the pseudo LOA document to identify the period in which case funds are available for obligation and expenditure. The IA may also refer to Table C15.T2. for BPC program funds expiration and cancellation dates. See Section C15.3.8.3.1. for specific guidance for handling LOAs offered under a CR Appropriation.

C15.5.2.1. Obligation Against Materiel and Services. To ensure funds are obligated prior to their expiration, Requesting Authorities should submit information and documentation to the IA Procuring Agency as early as possible, allowing sufficient time for that agency to submit requisitions or award contracts. The processing time required to obligate funds on contract will depend on the complexity of the requirement. The IA will ensure that participants in the sourcing, procurement and acquisition processes are informed of the BPC case financial timeline. Instructions should be included in funding documents to ensure that all contributors are aware of the expiring/cancelling nature of the case funds. An example of such wording follows:

C15.5.2.2. Obligation Against DTS Transportation. The IA will plan for transportation of BPC case materiel from the earliest stages of case development in order to ensure delivery of materiel and services meets the Requesting Authority’s required delivery date (RDD). Below-the-line transportation funds on a case are considered obligated when the item requisitions are filled or the procurement contract is signed. If transportation costs will be paid by a separate transportation case, estimated costs for transportation will be calculated and tracked so that an adequate request for resources can be made. Above-the-line transportation funds are obligated when transportation is contracted or when a manifest is received from the U.S. Transportation Command (USTRANSCOM) (a manifest is issued after the materiel has been loaded on the Defense Transportation System (DTS) conveyance). The IA will confirm with the SCO that shipment delivery information provided in the Memorandum of Request (MOR) (e.g., Military Assistance Program Address Code (MAPAC), point of debarkation (POD), and RDD) is complete and valid. The shipping data will then be submitted by the IA to the Procuring Agency, along with any other specific transportation guidance. When the BPC materiel is ready for shipment, the DoD entity responsible for ensuring DTS transportation will enter the shipment requirements into the DTS booking system.

C15.5.3. Funds Expenditure. Once obligated, BPC case funds may be expended at any time until the funds cancel, at which time they are no longer available for any purpose. The Fund Source, Availability, and Amount note on the LOA will specify the date by which funds must be expended. See Table C15.T2.

C15.5.3.1. Expenditure Authority. Prior to processing disbursements, the disbursing activity must obtain expenditure authority from Defense Finance and Accounting Service - Indianapolis (DFAS-IN). The IA will maintain oversight of deliverables and coordinate with the Defense Contract Management Agency (DCMA) to ensure inspection, acceptance, and timely processing of contractor invoices. See the Federal Acquisition Regulation (FAR) 32.905.

C15.5.3.2. Reporting. DFAS-IN provides DSCA (Business Operations Directorate) and the Funding Authority with quarterly reports of program activities using DD Form 645, “FMS Billing Statement.” Though cash must be made available for a BPC case before shipment of the articles, this document indicates items shipped and amounts charged.

C15.5.3.3. Review and Reconciliation. The DoD FMR, Volume 3, Chapter 8, requires a Triannual Review of commitments, obligations, accounts payable, and accounts receivable. The IA will review and reconcile financial documentation regularly to identify and correct errors. The goal in performing these reviews is to ensure the full use of appropriations before they expire and to ensure that open obligations are valid and liquidated before the cancellation of the appropriation. This should be a collaborative effort among multiple IA offices, to include Resource Management; Accounting; Program Management; Contracting Office; and Acquisition/Logistics functions. Both case and financial data should be reconciled throughout the execution phase to facilitate timely case closure. During the funds execution period following expiration, price increases and other activities may occur on the BPC case. Appropriation law allows upward obligation adjustments only in select situations. Increases in scope, quantity increases on defined order lines, or extending the period of performance are not usually allowed. DSCA (Business Operations Directorate) will review any price/quantity increase or extension of the period of performance at the line or sub-line level. For adjustments to obligations incurred on a BPC case, fiscal year funds from the original period of availability should be used if available, and current year funds should only be used if there are no more original year funds available. See DoD FMR Volume 3, Chapter 10.

C15.5.3.4. Requests for Additional Funding After Period of Availability Expires. If a situation occurs that requires additional prior year funds or extensions of the period of performance, the IA will identify the amount required, the reason for the additional funds or time, and provide supporting documentation to the DSCA Country Financial Director (CFD). If additional funds are required for a procurement action, a determination by the IA Contracting Officer and an opinion by the IA’s legal counsel are required. The DSCA CFD will determine an appropriate fund source and coordinate approval by the DSCA Principal Director for Business Operations. In certain instances, Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) or Congressional Notification may be required. Once notified by DSCA CFD that the request has been approved, the IA will amend/modify the case and add a case note to the pseudo LOA document providing details of the fund use.

C15.5.3.5. Residual Funds. Often, the value of the Implemented case is greater than the actual funding needed to execute the case. IAs should review their BPC cases/lines for possible excess obligation authority throughout the period of funds availability to ensure any residual funds are quickly identified so they can be returned or redirected. DSCA (Business Operations Directorate) retains residual funds for upward adjustments. The funds are returned to the Funding Authority during the last months before they cancel. Options available to the Requesting Authority for use of residual funds, in priority order, are:

C15.5.3.5.1. Use for other requirements within the existing case, assuming that the requirement is consistent with any Departmental or Congressional authorization or program notification.

C15.5.3.5.2. Modification of the case to reduce case value. DSCA (Business Operations Directorate) will then direct DFAS-IN to return residual funds to the appropriate account. This action does not require an MOR from the Requesting Authority.

C15.5.4. Delivery of Materiel and Services. The IA has overall responsibility for transportation of BPC case materiel and will ensure that requirements and schedules are communicated appropriately to USTRANSCOM and the SCO. The SCO will provide shipping documents and bills of lading to the Benefitting Country representative so that materiel off-load, customs clearance, storage, onward movement, security, staging, and integration can be arranged. The IA will confirm that the SCO and Benefitting Country are ready to receive the materiel before delivery, and if any classified or sensitive cargo is on the manifest, proper arrangements have been made to receive and move the cargo to a secure location.

C15.5.4.1. Materiel Accountability. The IA will enter serial numbers, vehicle identification numbers (VINs), and country of origin (for those defense articles that have them) into the Security Cooperation Management Suite (SCMS) on the Security Cooperation Information Portal (SCIP) prior to the materiel shipment. For radios with serial numbered components only, the IA should enter the serial number of the receiver/transmitter. SCMS should be referenced during case planning to identify the status of already-programmed BPC cases by country. See Section C13.6.3.2.

C15.5.4.2. Materiel Preparation. The IA and SCO should use the Enhanced Freight Tracking System (EFTS) in SCIP to track transportation of all BPC materiel. The IA will ensure that specific requirements for materiel packing and shipping are properly addressed, and that necessary plans have been made for EEUM, classified, or sensitive materiel.

C15.5.4.3. Export Authorization. BPC defense articles and services are exported as USG-owned materiel to the SCO (or USG representative) in the Benefitting Country. The defense articles will remain USG-owned materiel until they pass through Customs and are transferred to the Benefitting Country. See Section C15.5.5. Contractors that execute BPC cases are required to comply with the International Traffic in Arms Regulation (ITAR) in their dealings with the USG and Benefitting Country.

C15.5.4.4. Advance Notice of Delivery. Approximately two weeks prior to materiel delivery, or as soon as possible thereafter, the SCO will provide the Benefitting Country MoD (or other government ministry, as appropriate) with a written notice of the pending delivery. The notice should state what materiel or service is arriving for the Benefitting Country, when (if known) and where the materiel will be delivered, and which unit is to receive the materiel or service. A copy of the Case Advisory and materiel shipment information should be attached to the notice, which may be used by the Benefitting Country to facilitate Customs processing. See Figure C15.F2. and Figure C15.F3.

Figure C15.F3. Example Notice of Delivery

C15.5.4.5. Arrival. BPC case materiel will be delivered to the Mark For address (or text address) provided at the time of DTS booking. The SCO should provide any corrections to this information to the IA as soon as they are known. Upon arrival in the Benefitting Country, BPC materiel will normally be processed through customs by Benefitting Country officials before being released into the SCO’s custody. The SCO will report the receipt date of BPC materiel to DSCA CPD.

C15.5.4.6. Joint Inventory. The SCO and the Benefitting Country representative will conduct a joint materiel inventory using the shipper’s manifest while the materiel remains in the custody of the SCO. The SCO will inform the IA of any materiel suspected to be missing, in case it has been included in a separate delivery. Items that are confirmed to be missing will be reported by the SCO on a Transportation Discrepancy Report (TDR). Items that are damaged or appear to have latent defects will be reported by the SCO on a Supply Discrepancy Report (SDR) in accordance with guidance for FMS purchasers. See Section C6.4.10.

C15.5.5. Transfer and Receipt of Materiel and Services. The SCO will retain control and ownership of the BPC equipment until such time as the Benefitting Country is ready to receive and properly employ the equipment. The Transfer and Receipt document (or a comparable form established for this purpose) and a complete materiel/services listing will be prepared by the SCO in advance of title transfer. See Figure C15.F4. When title transfer is appropriate, or when defense services are ready to begin, the SCO and the Benefitting Country representative will sign a Transfer and Receipt document, acknowledging that the Benefitting Country is assuming custody, title to, and responsibility for the items or services being transferred. The attached materiel inventory should contain item descriptions, quantities, and National Stock Number (NSN) or part numbers. The Case Advisory will also be attached to the Transfer and Receipt document. See Figure C15.F2. The SCO will provide a copy of the signed Transfer and Receipt document to the IA. If the Benefitting Country representative does not sign the Transfer and Receipt document, the SCO will provide an explanatory memo to the IA, along with the unsigned document and attachments. The IA will discuss resolution with the CPD. The SCO and the Benefitting Country will track and conduct EUM inspections as required by the DoD Golden Sentry program and guidance in Chapter 8, maintaining appropriate records within the SCIP EUM community.

Figure C15.F4. Transfer & Receipt Document