WASHINGTON, November 3, 2014 -- The Defense Security Cooperation Agency (DSCA) announced today that it is reducing the cost to its international customers of doing business through the Foreign Military Sales (FMS) program. Effective 1 December 2014, the FMS Contract Administration Services (CAS) Surcharge Rate will decrease from 1.5 percent to 1.2 percent.
The surcharge is assessed on the total value of an FMS procurement item and covers the contract administrative management costs of the FMS program. These charges include assessments for quality assurance, inspection and contract management, and contract audit. This surcharge is separate from the 3.5 percent FMS Administrative Surcharge levied on all sales under the government-to-government sales program. FMS, authorized by the Arms Export Control Act, must be managed at no cost to the U.S. Government.
The 20-percent CAS rate reduction marks the first change to the rate in twelve years. It represents the initial step toward reducing the cost of FMS for foreign countries and international organizations - a goal of DSCA's recently published strategic plan - DSCA Vision 2020.
DSCA was able to lower the CAS rate after analyzing numerous financial indicators, including the overall health of the CAS surcharge account, CAS provider expense levels, and historical sales levels.
The Defense Security Cooperation Agency is the Department's lead agency for the execution of Security Cooperation programs. DSCA subject-matter expertise spans the gamut of Security Cooperation activities to include policy, financial, legal, legislative, programmatic, and weapons systems experts. For questions regarding the DSCA, call 703-601-1646. Visit our website at http://www.dsca.mil/.