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September 20, 2012
New FMS Administrative Surcharge Rate
(WASHINGTON, Sept. 20, 2012) The Defense
Security Cooperation Agency announced today that it is reducing
the cost of doing business through the Foreign Military Sales
(FMS) program. Effective
November 1, the FMS Administrative Surcharge Rate, which all FMS
customers pay, will be reduced from 3.8 percent to 3.5 percent;
an 8 percent decrease.
This surcharge is assessed on the total value of an FMS
sale and covers the administrative management costs of the FMS
program which, in accordance with Section 21 of the Arms Export
Control Act, is managed at no cost to the U.S. Government.
The FMS Administrative Surcharge rate reduction is supported by
FMS leadership in the Department of Defense, Department of State
and Office of Management and Budget and allows
DSCA to maintain sufficient resources to fund the security
cooperation community without adversely affecting its business
processes. In addition,
DSCA revised its procedures that calculate a safe level of
reserve in the FMS Administrative Surcharge Account in order to
better react to any changes in the business environment.
DSCA and the security cooperation community will continue
to have the resources needed to perform their missions in
accordance with the AECA.
administrative surcharge rate change is the latest in a series
of improvements to the FMS system, including reducing the time
to develop a sale, revising the method for calculating
termination liability, rescinding the Small Case Management
Line, and implementing more anticipatory efforts such as the
Special Defense Acquisition Fund.