Foreign Military Sales

The Foreign Military Sales (FMS) program is the U.S. Government’s' program for transferring defense articles, services, and training to other sovereign nations and international organizations.

Under FMS, the U.S. government procures defense articles and services on behalf of the foreign customer. Countries approved to participate in this program may obtain defense articles and services by paying with their own national funds or with funds provided through U.S. government-sponsored assistance programs. In certain cases, defense articles, services and training may be obtained on a grant basis. The Defense Security Cooperation Agency (DSCA) administers the FMS program for the Department of Defense (DoD).

The President designates countries and international organizations eligible to participate in FMS. The Department of State makes those recommendations and approves individual programs on a case-by-case basis. Currently some 160 countries are eligible to participate in FMS.

Foreign customers may obtain U.S. defense articles and services through direct commercial sales (DCS). Under DCS rules, U.S. companies obtain commercial export licenses from the Department of State allowing them to negotiate directly with foreign customers. As with FMS, all DCS are subject to the approval of the Department of State, the U.S. Congress, and applicable U.S. exports laws and regulations.

The following table provides relevant regulations to FMS Acquisitions

Table C6.T1. Selected FAR and DFARS Sections Relevant to FMS Acquisition

Topic	FAR	DFAR
Acquisitions for FMS		Subpart 225.73
Contingent Fees (Agent Fees & Commissions)	Subpart 3.4	225.7303-4
Options FMS		Subpart 217.2
Costs of Doing Business with a Foreign Government		225.7303-2
Selling Costs/Expenses	31.205-38	225.7303-2(a)(1)
Other Than Full and Open Competition - International Agreement	6.302-4	206.302-4
Contract Type Risk – FMS		215.404.71-3(d)(1)(vii)
FMS Customer Involvement		225.7304
Source Selection		225.7304
Limitation of Liability		225.7305
Offset Arrangements		225.7306
Contract Clauses		225.7307
Applicability of Acquisition Warranty		225.7304
Pricing Acquisitions for FMS		225.7303
Buy America Act	Part 25
Balance of Payments Program		225.75

Related Pages

Foreign Military Sales (FMS) - Offsets