DEFENSE SECURITY COOPERATION AGENCY
201 12th STREET SOUTH, STE 203
ARLINGTON, VA 22202-5408

MEMORANDUM FOR :

SEE DISTRIBUTION

SUBJECT :

Foreign Military Sales (FMS) Case-Related Manpower Functions and Funding Source (DSCA 06-25) (SAMM E-Change 48)

REFERENCE :

1. DSCA Memorandum I-06/000933, "Changes to Foreign Military Sales (FMS) Administrative Surcharge Structure and Rate (DSCA 06-14)," 15 Mar 06

Table C5.T6. in the Security Assistance Management Manual (SAMM) provides information on what Foreign Military Sales (FMS) case-related activities are covered by the Administrative Surcharge. This is a very important table as activities included in the "FMS Admin" column of this table represent the "Standard Level of Service" to be provided on each FMS case being executed. As part of our recent roll-out of surcharge-related initiatives (referenced memorandum), DSCA announced we would be updating this table. We have completed that revision - the updated table and other related SAMM changes are attached for your use and information. Minor changes to the FMS Case Reconciliation and Closure Manual (RCM) are also needed to ensure consistent guidance for case-related manpower. Those changes are provided as Attachment 3.

These SAMM and RCM changes apply to all FMS and FMS-like cases (e.g., pseudo, security cooperation program, etc.) and are effective immediately unless otherwise noted. The following key points are highlighted:

1. The purpose of the update is not to change the "Standard Level of Service" - the revised table does not move activities previously covered by the FMS Administrative Surcharge onto case-funded categories or vice versa. Instead, the purpose of the re-write is to clarify these activities to ensure more consistent implementation across our community.

2. As with the previous version of Table C5.T6., the table only covers those activities specifically related to FMS (and FMS-like) cases and case management. In addition to these case-related costs, the FMS Administrative Surcharge is also used to fund infrastructure and community-wide costs needed to manage and oversee all FMS programs (e.g., Information Technology investments). These activities are not included on the table.

3. Case managers, case writers, and others involved in the case development and review processes must use Table C5.T6. when developing/reviewing LOA documents to ensure functions are funded by the correct funding source. Lack of a particular type of funds will not be used as justification for charging activities to any other type of funding.

4. The revised table eliminates the use of Program Management Lines (PMLs) for any cases "accepted" on or after 1 Aug 06. New cases "accepted" after 1 Aug 06 may still include valid US Government program management services, but these requirements will be included as separate, well-defined line items on the FMS case with accompanying detailed notes tailored to the specific program and case. Activities previously in the PML column of this table have been moved to the FMS Case column and further defined. Existing PMLs already on cases "accepted" prior to 1 Aug 06 will continue to be executed under the previous guidance within their current scope.

5. The revised table identifies thresholds for when specific work must be case-funded. This will help ensure that purchasers who desire multiple iterations of data requiring specified levels of USG support pay for those additional services separately rather than using the community FMS Administrative Surcharge resources.

6. The revised table identifies activities that cannot be funded using FMS Administrative Surcharge monies. This does not represent a change in policy - but by documenting these restrictions on the table we hope to increase knowledge and thereby improve compliance.

7. The revised table requires "incremental" costing for certain activities that exceed the "Standard Level of Service." This will help ensure purchasers pay only for additional requirements - and not for services already covered by the FMS Administrative Surcharge. These additional requirements may be included on the case at the request of the purchaser or by the US Government based on analysis of what will be required to successfully implement and execute the requested program.

8. An update to the Manpower and Travel Data Sheet (MTDS) is also included in this SAMM change. The revised form now requires an entry to identify the specific activity listed on Table C5.T6. being supported. This data sheet continues to be mandatory for any manpower included on the case - regardless of whether that manpower is provided under a separate line item or included as part of a materiel line.

The revised Table C5.T6. represents a significant improvement over the previous version of this table. It is a difficult task to identify standards that can be applied consistently across all Implementing Agencies and cases while still allowing the flexibility to accommodate different case types and complexity. This new version strives to do all of those things. This has been an iterative process and we will continue to use your feedback and input to further refine and improve this table - publishing additional revisions as needed.

We recognize that our responsibility does not end with publication of this guidance. Implementing these standards and ensuring compliance are equally important and DSCA will work with the entire community to make sure these new policies are consistently and fairly applied. If you have any questions about these policies, please contact Beth Baker, DSCA/DBO/FPS, 601-3839, e-mail: beth.baker@dsca.mil or Steve Harris, DSCA/STR/POL, 604-6611, e-mail: steve.harris@dsca.mil.

Jeffrey B. Kohler
Lieutenant General, USAF
Director

ATTACHMENT :

1. SAMM Change
2. Revised Table C5.T6.
3. RCM Change

DISTRIBUTION :

DEPUTY ASSISTANT SECRETARY OF THE ARMY
DEFENSE EXPORTS AND COOPERATION (DASA-DEC)
DEPARTMENT OF THE ARMY

DEPUTY ASSISTANT SECRETARY OF THE NAVY
INTERNATIONAL PROGRAMS (NAVIPO)
DEPARTMENT OF THE NAVY

DEPUTY UNDER SECRETARY OF THE AIR FORCE
INTERNATIONAL AFFAIRS (SAF/IA)
DEPARTMENT OF THE AIR FORCE

DIRECTOR, DEFENSE LOGISTICS AGENCY

DIRECTOR, NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY

DIRECTOR, DEFENSE THREAT REDUCTION AGENCY

DIRECTOR, DEFENSE REUTILIZATION AND MARKETING SERVICE

DIRECTOR, DEFENSE CONTRACT MANAGEMENT AGENCY

DIRECTOR, DEFENSE INFORMATION SYSTEMS AGENCY

DIRECTOR, DEFENSE LOGISTICS INFORMATION SERVICE

DEPUTY DIRECTOR FOR INFORMATION ASSURANCE,
NATIONAL SECURITY AGENCY

DEPUTY DIRECTOR FOR SECURITY ASSISTANCE
DEFENSE FINANCE AND ACCOUNTING SERVICE - DENVER CENTER

CC :

STATE/PM-RSAT
USDP/ISA
USDP/ISP
DISAM
USASAC
SATFA TRADOC
NAVICP
NETSAFA
AFSAC
AFSAT
JFCOM
SOCOM
EUCOM
CENTCOM
NORTHCOM
PACOM
SOUTHCOM

DoD 5105.38-M, Security Assistance Management Manual (SAMM) Changes
Related to Case-Related Manpower Functions and Funding Sources

1. Delete paragraph C5.4.9. and its sub-paragraphs in their entirety and replace with the following revised paragraphs:

   C5.4.9. 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 and/or services lines. See Chapter 9, paragraph C9.4.2. for information on pricing and tracking manpower requirements.

   C5.4.9.1. Case-Related Manpower Functions and Funding Sources. Table C5.T6. describes case manpower functions and indicates which activities are covered under the FMS Administrative Surcharge and which should be included as line items on the case. Items listed under the "FMS Admin" column should not be included and/or priced on the LOA as these services represent the "Standard Level of Service" covered by the FMS Administrative Surcharge. Requests to deviate from the funding sources shown on this table must be coordinated with DSCA (Business Operations and Strategy Directorates).

   C5.4.9.2. Program Management Services. The Implementing Agency may determine that additional USG program management services, beyond those covered in the "Standard Level of Service," are necessary for successful program implementation and execution.

   C5.4.9.2.1. Cases "Accepted" After 1 Aug 06. For LOAs or case line items "accepted" after 1 Aug 06, any justified program management services will be included on well-defined, services line items. The tailored line item description note for each of these line items must include details describing exactly what services will be provided and the length of time they will be performed.

   C5.4.9.2.2. Cases "Accepted" Prior to 1 Aug 06. For cases "accepted" prior to 1 Aug 06, program management services were included on Program Management Lines (PMLs). Table C5.T7. identifies the types of sales where PMLs may have been used. PMLs were identified on LOA documents using Generic Code R6B. Generic Code L8A was used on older cases to identify Case Management Lines. While R6B and L8A may no longer be added to cases, PMLs and Case Management Lines that were "accepted" prior to 1 Aug 06 may be used until closure of those cases. Adjustments may be made to these existing PMLs via LOA Modifications or LOA Amendments as long as these adjustments are within the current scope of the PML - no adjustments will be made to increase the scope of these line items. Any additional scope required may be added as new line items in accordance with paragraph C5.4.9.2.1. The FMS Administrative Surcharge is not applied to PMLs. The following must be included on all LOAs, Amendments, or Modifications that include PMLs: "Subtotal Cost of Ordered Articles and Services and PML total value." The total of these two values is the block (8) value of the document.

2. Delete Table C5.T6. in its entirety and replace it with the revised table at Attachment 2.

3. Delete Table C5.T7. in its entirety and replace it with the following revised table:

   Table C5.T7. Historical Rules for Use of Program Management Lines (PMLs)

   What Types of Sales MAY Include Program Management Lines?

   What Types of Sales MAY NOT Include Program Management Lines?

   System sales of aircraft, ships, shipboard equipment, missiles, combat vehicles, radars, or communications electronics which include the major end item and necessary logistical and training support Modifications that improve the operational capability of systems already in purchaser inventories Non-standard equipment, systems, or services Sales that include program acceleration Coproduction programs

   Sales from stock other than weapon systems Follow-on support, including publications, maps, and charts Entirely for services Individual major end item sales Modifications other than those that improve the operational capability of systems Routine non-MDE sales

   NOTE: FMS cases "accepted" prior to 1 Aug 06 may have included PMLs. This table provides historical information for the rules that governed the use of PMLs on those cases. No new PMLs may be included on cases (or new case lines) "accepted" on or after 1 Aug 06.

4. Add the following sentence to the end of existing paragraph C5.4.11.2.2.:

   Costs incurred to write and execute classified cases will be charged to the program in accordance with Table C5.T6.

5. Delete Figure C9.F1. in its entirety and replace it with the following revised figure:

   Figure C9.F1. LOA Manpower and Travel Data Sheet (MTDS)

   Personnel Position/ Function Grade/Rank/ Contractor Location Line Item on LOA Work Years of Effort Duration (From/To) Total Salary Corresponding Table C5.T6. Row #                                                 Total:   Travel Purpose of Trip CONUS or In-Country Line Item on LOA Number of Trips Duration of Each Trip Number of People Each Trip Total Cost Corresponding Table C5.T6. Row #                                                 Total:   Personnel Support Costs (i.e., office space, equipment, furniture, communications, supplies, etc.) Type of Support Total Cost Corresponding Table C5.T6. Row #                   Total:   Narrative Description: (Use this section to describe the life of any services lines and any Program Management Lines (PMLs) in relation to the delivery schedule of the item(s). Provide the number of months of program management support beyond final delivery (not to exceed 6 months) and supporting information. [NOTE: Cases "accepted" on or after 1 Aug 06 will not include new PML requirements. Existing PMLs may continue until fully executed and will continue to be reported using this data sheet.] Clearly define for each of these line items exactly what support beyond the "Standard Level of Service is required. This information must also be included in the LOA line item description notes and must be unique/tailored for each individual case.) Additional Comments: Point of Contact for Further Information Regarding Manpower on this Case: (Name, organization, phone number, e-mail address).

6. Delete paragraphs C9.4.2.2 and C9.4.2.3. in their entirety and replace with the following revised paragraphs:

   C9.4.2.2. Manpower Funding Sources. Manpower for FMS case-related programs is funded from one of two sources: the FMS Administrative Surcharge or FMS case line items. See Chapter 5, Table C5.T6. for a description of case manpower functions and how each function should be funded. Requests to deviate from these funding sources must be coordinated with DSCA (Business Operations and Strategy Directorates).

   C9.4.2.3. Program Management Services - Tracking Costs. An auditable methodology must be used to document work each individual performs on a program management services line or a Program Management Line (PML). Personnel charges must be identifiable by position number, employee identification number, or other traceable means.

7. Delete paragraph 5 in Figure C11.F2. and replace with the following revised paragraph:

   5. Administrative Surcharge: DSCA will assess an administrative surcharge of 3.8 percent on all items and services provided pursuant to this request.

8. Delete paragraph VII.B. in Figure C11.F8. and replace with the following revised paragraph:

   B. Administrative Surcharge: DSCA will assess an administrative surcharge of 3.8 percent on all items and services provided pursuant to this request.

Table C5.T6. Case-Related Manpower Functions and Funding Source

DoD 5105.65-M, Foreign Military Sales (FMS) Case Reconciliation and Closure Manual (RCM) Changes
Related to Case-Related Manpower Functions and Funding Sources

1. Delete Table C2.T12. in its entirety and replaced with the following revised table:

   Table C2.T12. Active Case Execution Phase Reconciliation Manpower Funding

   RECONCILIATION FUNCTION	FUNDING SOURCE
   Financial and logistical reconciliation until the case becomes SSC	FMS Administrative Surcharge
   Expedited reconciliation efforts requested by the purchaser beyond normal financial management standards	Purchaser requests to expedite reconciliation and/or closure may be funded on a services line on a case. See SAMM Table C5.T6. for more information on appropriate funding source.

2. Delete Table C3.T9. in its entirety and replaced with the following revised table:

   Table C3.T9. SSC Phase Reconciliation Manpower Funding

   RECONCILIATION FUNCTION	FUNDING SOURCE
   Reconciliation and closure efforts for SSC cases, including non-ACCP, ACCP, EACC, and DSCA-directed force closures	FMS Administrative Surcharge
   Expedited SSC reconciliation and case closure efforts requested by the purchaser beyond normal financial management standards.	Purchaser requests to expedite reconciliation and/or closure may be funded on a services line on a case. See SAMM Table C5.T6. for more information on appropriate funding source.

3. Delete Table C4.T10. in its entirety and replace with the following revised table:

   Table C4.T10. Closure Manpower Funding

   CLOSURE FUNCTION	FUNDING SOURCE
   Closure efforts for SSC cases, including non-ACCP, ACCP, EACC, and DSCA-directed force closures.	FMS Administrative Surcharge
   Hasten case closure efforts requested by the purchaser beyond normal financial management standards.	Purchaser requests to expedite closure may be funded on a services line on a case. See SAMM Table C5.T6. for more information on appropriate funding source.

4. Delete paragraph C5.6. in its entirety and replace with the following revised paragraph:

   C5.6. REPORTING MANPOWER FUNDING

   FMS Administrative Surcharge is the funding source for all reporting efforts addressed in this chapter. See SAMM, Table C5.T6. for policy on funding sources for case-related activities.