This response is based on the information provided.  We suggest you discuss with your contracting team, program manager and/or legal department as appropriate.

You are acting as agent for the FMS country.  Thus you are expected, within laws and regulations, to pursue the best deal just as if you were doing this action for the Navy.  If FAR part 12 would apply when executing the contract action for the Navy it would also be applicable for your FMS action.