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  • Question

    How is Admin Surcharge calculated, charged, disbursed? Is there a percentage calculated on the delivery of the total dollar amount of a particular article or service?


    Answer

    The DoD Financial Management Regulation Volume 15 governs security assistance (FMS) financial policies and procedures.  Chapter 3, paragraph 030601 says the following:
     
    “Reimbursement for FMS Administrative Expenses
    A. Price FMS administrative expenses in accordance with Chapter 7, Section 0706 and charge directly to the allotment received from DFAS SCA for actual FMS administrative expenses.”
     
    Section 070602 paragraph A1 says the following:
     

    “1. Effective November 1, 2012. A uniform 3.5 percent FMS administrative surcharge is effective for all new LOA lines accepted by the purchaser on or after November 1, 2012.”
     
    While DAU is not the authority on foreign military sales (FMS), it is understood that Country Managers at the Air Force Security Assistance Center oversee the execution of FMS cases when the Air Force is the implementing agency.  I would certainly recommend consulting with them.
     Here at WPAFB, you have a number of resources including
    the Defense Institute of Security Cooperation Studies (DISCS formerly DISAM)),  Air Force Security Assistance Center (AFSAC) and within your fighter/bomber directorate, there are offices, F-15 Saudi program for example, that can provide valuable guidance.
     

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