The United States conducts Security Assistance business with over 150 nations and international organizations around the world. These programs are conducted under two primary U.S. legislative authorities: The Arms Export Control Act (AECA) (22 U.S.C. 2751 et seq.), as amended, and the Foreign Assistance Act of 1961 (FAA) , as amended (22 U.S.C 2151 et seq.) Under these authorities, there are several options that we may use to provide you with U.S. defense articles and services. The most common options are Foreign Military Sales (FMS) and Direct Commercial Sales (DCS). There are benefits, limitations and trade-offs associated with each of these options that should be carefully considered for each particular sale. While you usually have a choice in whether to purchase items using FMS or DCS, the U.S. Government may require that FMS procedures be followed for certain purchases. 

Although these options, as well as others, are discussed separately below, they may be used in many different combinations to satisfy your unique requirements. For example, a total program might consist of some items purchased through FMS, additional items through DCS, and still others obtained via lease. The USG will work with you to help determine the most beneficial Security Assistance option(s) based on your unique circumstances. Our goal is to provide you with the best “fit” for your program. 

Under FMS, a government-to-government agreement, known more commonly as a Letter of Offer and Acceptance (LOA), is written by the USG and accepted by your government. You may also see the phrase “FMS case” used to describe this document. The LOA specifies the items and services to be provided as well as the estimated cost. The USG will supply items from stock or may contract for them on your behalf. Any contracts required will be written by the USG using standard USG contracting procedures. You will pay the full costs associated with the sale---including not only the cost of the items but also any costs incurred by us to provide you with this support. The FMS case may be changed many times during the life of your program using Amendments and Modifications. The rules and procedures for these types of sales are contained in the Security Assistance Management Manual (SAMM), DoD 5105.38-M.

FMS allows you to receive program management services and weapon system expertise from the applicable U.S. Military Department (MILDEP). Access to DoD logistics and training is also available under FMS. Quite often, FMS also provides you with economies of scale and the same cost basis applicable to procurements by the DoD for its own use.

Under DCS, you engage directly in contract negotiations and program management decisions with a U.S supplier or manufacturer. DCS might be considered when your military requirements differ appreciably from standard U.S. configurations. DCS arrangements may also be appropriate when your government is seeking licensed-production between a U.S. manufacturer and your own domestic industry or your government seeks a closer relationship with a particular weapon system manufacturer.

An extensive comparison of the advantages of FMS and DCS has been compiled and published by the Defense Institute of Security Assistance Management (DISAM). You may find it useful to review this study by selecting "more information on comparing FMS and DCS”.