WASHINGTON -- The Defense Security Cooperation Agency (DSCA) announced today that it is reducing the Foreign Military Sales (FMS) Administrative Surcharge from 3.5 percent to 3.2 percent, effective June 1, 2018.
The FMS Administrative Surcharge is assessed on the total value of an FMS sale and covers the administrative management costs of the FMS program. Under FMS, the U.S. government uses the Department of Defense’s acquisition system to procure defense articles and services on behalf of its international partners.
DSCA manages FMS at no cost to the U.S. Government, in accordance with Section 21 of the Arms Export Control Act. The rate reduction will allow the United States to become more competitive in the global defense marketplace, supporting the administration’s objectives under the new Conventional Arms Transfer Policy to promote more transfers of defense arms and services to our foreign partners. This action enhances the United States’ position as the global Security Cooperation provider of choice.
DSCA reviews the FMS Administrative Surcharge Account annually and every five years, conducts a detailed analysis to determine whether an adjustment is needed.
“The FMS Administrative Surcharge rate reduction will immediately reduce the cost of doing business for our international partners,” said LTG Charles W. Hooper, Director of DSCA. “It demonstrates the Department of Defense’s commitment to charge only what is needed in order to support the administration of the FMS program which includes the sale of defense articles, defense services, and military training.”
DSCA’s mission is to advance U.S. national security and foreign policy interests by building the capacity of foreign security forces to respond to shared challenges.