1. Logistics Orientation
4/27/2017
Logistics Orientation
9/2/2015
SCM-OC 20

2. Security Assistance Logistics Policy and Procedures
Security Assistance Management Manual (SAMM) DoD M, C6 & C7.
Defense Transportation Regulation, Vol. II, Cargo Movement (DoD R), app. E. Security Cooperation, FMS and Pseudo FMS Shipments
Defense Logistics Management Standards (DoD M), Vol II, C17, Reporting of Supply Discrepancies.

3. Execution Implementing Agencies Freight Forwarder Bandaria Procurement
DoD Resources
Services
Training
As Required
Bandaria
As Required
Freight
Forwarder

4. Total Logistics Support
4/27/2017
Total Logistics Support
Initial Support
Follow-on Support
Pg. 207 Green Book for TPA checklist.
Spares/
Repair
Parts
Technical
Assistance
System
Technical Assistance
Publications
Training
Training
Publications
Support
Equipment
Munitions
Spares
Support Equipment
Maintenance
Modifications

5. Letter of Request Checklist
4/27/2017
Identification Information
Purpose:
P&A- Price & Availability
LOA-Letter of Offer & Acceptance
Lease
Purchaser
Pre-negotiations
Transparency
Acceptance Time Frame
International Solicitation
Major Item Considerations
Standard Model
Quantity
Unique Configuration
Delivery Timeframe
Transportation
Warranties
Sole Source
Support Considerations
Operations Concept
Maintenance Concept
Supply Concept
Initial Spares
Support Equipment
Facilities
Follow on Support
Publications
Services
FMS Case Reviews
Training
DOD/Contractor Services
Site Survey
Financial Considerations
Funding Source
Payment Schedule/Initial deposit
Financial Waivers
Special Considerations
Memorandum of Understanding (MOU)
Offsets
Commercial Negotiations
Special Reports
Interoperability
Total
Package
Approach
Purchaser Who and what organization in Bandaria is submitting the LOR (Army, Navy, Air Force, etc.)
Purpose: Does Bandaria want P&A or LOA? Explain the 3 basic differences.
Model: What specific version of the system do they want? Model designator or series.
Quantity: How many do they want?
Configuration: Do they want a special Bandarian configuration or do they want the standard U.S. version? The benefits of the standard version include: cheaper, easier to support, upgrade and mods, shorter lead time
Sole Source: Do they want sole source? Justification must be included in the LOR. Have they conducted their own competition?)
Delivery: What is the requested delivery timetable for all quantities?
Acceptance Timeframe: Will the country be able to accept in 60 days or will more time be needed?
Initial Spares: How many years of spares support will be requested? Usually 1-3 years are provided.
 Operational Concept: Under what conditions will the weapon system be deployed? High or low altitude. Dessert or tropical. 1 base or 3 bases. All impact spares and support equip.
 Maintenance Concept: Organizational, Intermediate, Depot (contractor, internal, third country, FMS). Impacts initials spares
 Supply Concept: Commercial, third country, internal, FMS? This impacts initial spares and follow on support cases rqmts.
 Transportation: Do they have a freight forwarder? Options: DTS internal, commercial, third country. Is staging/aggregation in U.S. or overseas required? Classified? Transportation plan required? Do they want insurance to cover shipment?
 Contract Services/Organic Services: What does the customer want?Technical assistance, engineering, maintenance, supply, operators, A WSLO?
 Training: What Kind? Operational, language, support to include maintenance. Options: commercial, internal, FMS, third country
 Waivers: We need to know what waivers to the std /SAMM/AECA rules are required by the customer up front..
 Warranties: Is a performance warranty required? (could increase cost)
 MOU Is there an associated MOU/MOA? MOU’s may contain cost waiver information, tech transfer, mutual logistics support, and RSI considerations which may impact the LOA.
 Commercial Negotiations: Have they previously purchased a similar item commercially? Are they currently engaged in serious negotiation with U.S. industry? Does national policy require price comparisons?
 Foreign Competition: Is there serious foreign competition? This may be a SCO input.
Transparency: Has the customer requested a detail line item break out with respect to cost? Will they request to observe contract negotiations? (SCO should not suggest these options)
 Offsets: Define Define quicly a offsett. Will the customer request an offset from the manufacturer(s)? This information is needed for notification to Congress and possible financial impact considerations in the LOA
 Site Survey: Has there been a site survey or is one being requested? Discuss the importance of a site survy . Read the text C-8 structure for a survey.
Define a site survey- survey for specific piece of equipment as opposed to a Defense Rqmts survey. Who does the survey, how is it paid for, when should it be done.
Bottom line-can get all required info. via a site survey
LOR Writing Guide

6. Definitization Weapon system configuration Weapon system deployment
Location and use of repair facilities
Supply and transportation time from U.S.
Initial support period
Definitization is a process of tailoring or configuring a U.S. weapon system to meet the customer’s requirements. In many cases major weapon systems come in a U.S.-configured version, and an export version. This export version is modified based on the FMS customer’s operational requirements, their deployment plans, their maintenance capability, the environment, and the U.S’ willingness to release sensitive or classified technical data. Thus, every country’s configuration could be slightly different. In addition, the provisioning process identifies the quantity and duration of initial spares support, the customer’s preferred maintenance concept, and future follow-on support requirements. Definitization conferences are held over a series of days or weeks, depending upon the weapon system being purchased. Sometimes the definitization conference is held before the Letter of Request is formalized, and other times it occurs after the LOA has been accepted and implemented. LOA amendments and modifications are then used to adjust configuration and initial support requirements.

7. Primary & Secondary Item Management
Primary Items
Secondary Items
DLA
This chart illustrates how major end items (Primary Items) are managed differently than repairable or consumable items (Secondary Items). Primary items are managed exclusively by the military services. The pie chart on the left illustrates the approximate total volume of major materiel that each MILDEP manages. Percentages aren’t shown because we don’t have hard numbers, and they change as each MILDEP’s materiel requirements are adjusted.
The pie chart on the right illustrates that DLA manages about 93 percent of all secondary and consumable items in the DoD. The remaining 7 percent is managed by Army, Navy, Air Force, Marine Corps and GSA. The point is that the amount of secondary items managed by the services is extremely small. Yet these small quantities of secondary items may be critical to the performance of the primary items. These unique service-managed items are the basis of Cooperative Logistics Supply Support Arrangements (CLSSA).

8. DoD Acquisition Relationships
Program
Offices
System
Managers
Inventory
Control
Points
The system manager at the program office, also known as the program manager, is responsible for the weapon system acquisition and day-to-day coordination of all aspects of the program, including development of a management strategy, long range planning, programming & budgeting, coordinating the acquisition plan, monitoring program performance and contractor oversight. When we think of program managers, we think of major end items or primary items. Primary or major items will probably be procured from a contractor while secondary items may be issued from stock. Program managers develop LOA price and availability data and may manage lines on FMS cases for the major items they sell.
The secondary items are managed by item managers at inventory controls points. Item managers establish prices and determine availability of secondary and consumable items. They procure material and manage inventory levels. They identify authorized users and consumption levels, and service ICPs perform or arrange depot-level maintenance. Item managers ensure refurbished or repaired parts are returned to inventory for reissue. They may also receive supply requisitions from the ILCO for service managed items.
If a customer requisitions a secondary item, the item manager in most cases will be located at a Defense Logistics Agency (DLA) ICP. The item manager may fill the requisition from DLA stock, or may procure the item from a vendor.
Item
Managers

9. Program Management Functions
The Program Manager is responsible for the weapon system acquisition and day-to-day coordination of all aspects of the program, including:
Development of management strategy
Long range planning, programming & budgeting data
Coordinating the acquisition plan
Monitoring program performance
Effective contractor oversight

10. Item Management Functions
The Item Manager is responsible for inventory levels and keeping materiel on the shelf for issue.
The IM coordinates with contractor operated and government operated repair depots for their primary and secondary equipment.
In DLA, these positions are called supply planners and demand planners.

11. International Logistics Control Organization/Office (ILCO)
US Army Security Assistance Command (USASAC)-New Cumberland, PA
Air Force Security Assistance & Cooperation Directorate (AFSAC), Wright-Patterson AFB, OH
NAVSUP Weapon Systems Support-International Programs-N52, Philadelphia, PA

12. Role of International Logistics Control Organizations (ILCOs)
4/27/2017
Role of International Logistics Control Organizations (ILCOs)
The ILCO is the FMS customers’ entry point into the DoD logistics system, and is responsible for:
Case development and implementation
Logistics oversight of all LOAs
Requisition processing
Management information systems
Processing discrepancy reports
Transportation/quality assurance liaison
Program management reviews
Coordinates repair and return maintenance

13. DLA Transaction Services Blanket Orders & CLSSA cases
4/27/2017
MILSTRIP Requisition
FMS
Customer
ICP
ILCO
DLA Transaction Services
Blanket Orders & CLSSA cases
Defined
Order cases
ILCOs
After this slide, bring in the MILSTRIP animated flowchart slide from IL-508.
Army
Item Manager
Navy
Item Manager
Air Force
Item Manager
DLA
Supply Centers

14. MILSTRIP to LOA Relationship
Deep dive.
Need to tell them there is a relationship between LOA and requisition.
Textbook p

15. MILSTRIP Transactions
AE2B EA00001BBNA5N BA2JAELLUB BABY
AE2AKZ EA00035BBNB5N2135D001 BA2UANLYYB BBBY
AE2AKZ EA00005BBNB5N2135D003 BA2UANLYYB BBBY
AE2AKZ EA00004BBNB5N2135D005 BA2UANLYYB BBBY
AE2S9T EA00504BBNA5N0272D139BBA2UAMLYYB BBBY
AE2AKZ EA00025BBNA5N0333D008 BA2BADLYYB BBBY
Sent electronically to customer via ILCS
May be only source of supply status
May require action by customer or SCO
Data appears in SCIP’s Requisition Query
Deep dive
The MILSTRIP requisition number is the tracking number for a supply item. In order to find out the supply status of an item, you must know the document number, which is part of the requisition number. To track an item through the shipment process you need the entire requisition number, because most transportation information is in the supplementary address information. SCOs may be asked to interpret MILSTRIP documents for customers. These documents are often status documents in response to an order, which may require the customer to provide a response back. The MILSTRIP requisition number is perpetuated through the life-cycle of the item, from initial order, through contracting, transportation and billing. Think of it as a widget’s social security number. It cannot be changed once it is issued, and it may not be repeated. Without knowing the requisition number it will be very difficult to locate the item’s status.
See DISAM publication Military Standard Requisition and Issue Procedures for Foreign Military Sales for information on creating and interpreting supply transactions at

16. 4/27/2017
Supply Priorities
International customers assign a supply priority to each requisition based upon their urgency of need and the force activity designator (FAD) assigned to their country by the JCS
FAD is assigned based on political/military relationship between USG and international partner
The supply priority enables the customer to compete equally with US forces for the same supply items
Deep dive.

17. Urgency of Need Designator (UND)
4/27/2017
Urgency of Need Designator (UND)
Equipment and repairs necessary
for mission accomplishment. A
Auxiliary equipment and repairs.
Operational capability impaired.
Replacement for last item out of bin. B
Deep dive
Admin equipment - not essential to
mission. Routine stock replenishment. C

18. 4/27/2017
Force Activity
Designator
Urgency of Need
Designator A 01 02 03 07 08 B 04 05 06 09 10 C 11 12 13 14 15 I II
III IV V
Deep dive.
Customers are assigned a FAD by the Joint Chiefs of Staff, and it’s all based on politics. Our dirt poor, non-influential, and less significant customer countries (like the entire Sub-Saharan African region), receive lower fads than the countries with whom we do greater business and have more political interests.
Customers receive the same level of support from the DoD supply system as US units with an equal FAD. Consequently, DISAM and Zambia get to compete equally for that last widget on the shelf. 31

19. Follow-on Support Programs

20. Follow-On Support Cases
4/27/2017
Follow-On Support Cases
Defined Order
Blanket Order
Cooperative Logistics Supply Support Arrangement (CLSSA)

21. Cooperative Logistics Supply Support Arrangement (CLSSA) Principles
4/27/2017
Cooperative Logistics Supply Support Arrangement (CLSSA) Principles
Customer purchases equity in DoD supply system
Support equal to U.S. units with same supply priority
Used to support active, standard systems also used by DoD
Excludes ammunition, end items, bulk fuel, commercial equipment
Resupplies an in-country supply distribution system

22. Allocation of Resources
Defined Order &
Blanket Order
Requisitions
(All Requisitions)
CLSSA Requisitions
Priority 9-15
Priority 2-8
Reorder
Point
BACK ORDER
Safety
Level

23. Materiel Return Concepts
Repair & Return
Defined Order or Blanket case
Same item returned
Actual repair cost
Offered by all Services
Repair & Replace (AF), Reparable Item Replacement Option (N)
CLSSA or Blanket case
Like item returned
Average repair cost
Not offered by Army or USMC
Army terminated the DX program in 2010 due to participation from only a few customers who provided low volume requisitions, and because the Army’s new Logistics Management Program (LMP) fielded in 2009 was not programmed to handle DX transactions from FMS customers.
USMC never offered DX program because of insufficient quantities on hand to support a DX.

24. 4/27/2017
Non-Standard System 34

25. Reasons for Non-Standard Support
Older system : System is obsolete
Item no longer in production:
Industry is not structured to support aging equipment. Order quantities do not support production line.
Business model supports development of new systems and high volume.
Item not actively managed by DoD:
May have at one time been managed by DoD, but system is no longer in use by US forces

26. Nonstandard Item Support
Nonstandard Items - Contractor Supported
PROS (Parts & Repair Ordering System) used by Air Force, Navy and Army; provides nonstandard spares and maintenance support
Nonstandard Items - Service Supported
SNAP (Simplified Nonstandard Acquisition Process) used by Army; provides ground systems, communications nonstandard spares, and UH-1 helicopter spares
When the DoD no longer has parts or support equipment available for the FMS customer’s weapon system, we may have to resort to commercial buying services for non-standard item. Just because the USG has retired the system from its inventory doesn’t relieve the USG from its commitment to support the FMS customer’s weapon system for as long as the FMS customer operates it. To fulfill this obligation, the military departments have established non-standard buying programs. The contractor operated PROS system provides non-standard parts, as well as out-of-stock standard parts and maintenance services to FMS customers of the Air Force, Army and Navy. The Army’s SNAP program is conducted in-house and provides both non-standard and out-of-stock standard parts to FMS and domestic Army customers through various commercial sources, but not maintenance. Other Army LCMCs and all Navy SYSCOMs contract for nonstandard spares and maintenance through their program offices.

27. Worldwide Warehouse Redistribution Services (WWRS)
WWRS is designed to reduce FMS customers’ excess inventories of secondary and support items (Non-SME).
Through a virtual, online warehouse
Provides access to materiel at reduced cost
Reduces lead time through redistribution of assets instead of new procurement
Enables sellers to purchase needed FMS assets with the proceeds
Multi-service program
Original source of material sold under WWRS must have been FMS.

28. Excess Defense Articles
FMS sale at reduced price [§21, AECA]
Grant transfer [§516, FAA]
For any country justified for such assistance
Countries identified in a DSCA notification to Congress
Determined preferable over sale because of benefit to U.S. foreign policy
Presidentially determined to have no adverse effect on U.S. marketing
30-day notification for SME or articles originally valued at $7M or more

29. Two Sources of EDA Military Departments DLA Disposition Services
Read eSAMM C11.5 on EDA, and DSCA Policy 20

30. MILDEP-Owned EDA Excess Defense Articles – primarily major items
Items may be SME and MDE
Items may or may not be in operating condition
General rule: “As is - Where is”
No transportation or supporting equipment/services included
FMS customer may get upgrades/repairs on a separate FMS case prior to delivery, at customer expense
FPASA: Federal Property and Administrative Services Act of 1949

31. DLA-Managed EDA
DLA Disposition Services - primarily support items, vehicles, non-SME
Military services transfer responsibility to DLA
Items may be in any condition
“As is - Where is”
No transportation or supporting equipment/services included
No upgrades or repairs available

32. Transportation of FMS Materiel
4/27/2017
Transportation of FMS Materiel 20

33. Definitions
Shipper: The DoD depot (MILDEP, DLA or GSA), or commercial contractor or vendor
Carrier: The trucking company, rail company or barge that moves the material from the shipper to the port or to the freight forwarder
Freight Forwarder: The commercial import/export company hired by the FMS customer to arrange transportation of material to, from or within the US

34. DEPOT (Military Shipper) CONTRACTOR (Commercial Shipper)
4/27/2017
FMS Materiel Movement
DEPOT (Military Shipper)
FREIGHT
FORWARDER
PURCHASER
CONTRACTOR (Commercial Shipper)
DTS military or
commercial carrier
Customer military or
commercial carrier

35. FMS Outbound Delivery Term Codes
POE
Commercial
ILCO 5
Military 8
ICP 4 5
Origin
Freight Forwarder 2
Staging
POD
This slide illustrates the Delivery Term Codes for FMS shipments, as explained in the SAMM. For Commercial sales, these are not the same thing as INCOTERMS. The only INCOTERM that comes close to an FMS DTC is EXW or “ex-works” which has the buyer assuming all risk and responsibility. 9 7
Only the Title transfers at the Point of
Origin, not responsibility for security!

36. Definitions
Port of Embarkation (POE): The air or sea port from which material is shipped overseas, and where US Customs is cleared. Also referred to as the port of exit.
Port of Debarkation (POD): The air or sea port at which FMS material is offloaded for pickup by the customer (DTC 9) or scheduled for onward movement (DTC 7). Also referred to as the port of discharge. This location may be in a third country.
Consignee: The person or organization designated to receive the material at the final destination.
Note that these definitions are from a perspective of outbound shipments originating in the US. If this were returning material, the customer’s country would be the POE and the US port would be the POD.

37. The Defense Transportation System (DTS)
4/27/2017
The Defense Transportation System (DTS)
USTRANSCOM Oversees DTS.
Military Sealift Command (MSC) controls Navy ships and commercial and private ships under DoD contract.
Air Mobility Command (AMC) coordinates with military air bases, commercial airports, Air Force aircraft and commercial aircraft under DoD contract.
Surface Deployment and Distribution Command (SDDC) controls sea ports, ground transportation, including rail, and coordinates with military and commercial shippers.
Deep dive

38. Defense Transportation System (DTS)
DTS is any transportation that is contracted for or controlled by DoD
All DTS case transportation is paid (unless waived) by the FMS customer or the USG (e.g. FMF or BPC) via:
Separate transportation line item(s) on the LOA
Included in LOA Line Item Unit and Total Price
Calculated based on applicable Line USG transportation responsibilities (e.g. DTCs and/or TBCs) and totaled in the LOA Block #11 (Transportation)

39. The U.S. Government: Validates export value on DSP-94 (SAMM C7.17)
Packs, crates, and HAZMAT certifies material for overseas shipment (SAMM C7.8)
Initiates shipments to freight forwarders or arranges DTS transportation (SAMM C7.6 and C7.9)
Maintains proof of shipment (SAMM C6.2.1)
Assists purchaser by processing claims (SAMM C6.4 and C7.21)
Provides technical assistance and guidance to country representatives/ freight forwarders through military departments liaison activities (SAMM C6.4)
Develops a transportation plan for shipments of classified or sensitive material (SAMM C7.13)

40. The Purchasing Country : (SAMM C7)
Obtains import/export documents (can be delegated to Freight Forwarder)
Must respond to Notices of Availability
Should Obtain insurance
Ensures current addresses in the Military Assistance Program Address Directory (MAPAD)
Ensure prompt payment of transportation charges
Provides Freight Forwarder with copy of LOA
See DISAM publication Foreign Purchaser Guide to Freight Forwarder Selection for information on freight forwarder selection options at

41. The Freight Forwarder :
Must be registered with the Department of State to handle ITAR-controlled material (SAMM C7.5)
Makes onward transportation arrangements:
Obtains import/export documents
Clears Customs in US; can arrange for customs clearance in purchaser’s country)
Arranges for pilot pickups at DoD terminals (surface and air).
Must be capable of receiving, storing, consolidating, moving, documenting and reporting shipments
Initiates claims against the carrier, if necessary
Must be cleared by Defense Security Services to handle classified materiel.
See DISAM publication Foreign Purchaser Guide to Freight Forwarder Selection for information on freight forwarder responsibilities at

42. Notice of Availability
FMS Transportation Policy (Defense Transportation Regulation – Part II, 19 March 2015)
Notice of Availability
By DD (cover sheet) with attachments (DD Forms A, 250, 1149 or WAWF forms)
Transmit NOAs for Classified material to Country Representatives listed in the MAPAD (Embassy)
Always required for DTC 8, B or C shipments
Sometimes required for DTC 4,5, or E shipments
Follow Z Procedures for
Sensitive, hazardous, pilferable, classified or any other transportation characteristic requiring special preparation by the receiver.
Oversized or Outsized Dimension shipments (10,000 lbs or greater, Exceeding 84 inches)
Per DTR II-E-6 para b(1) – NOAs do not apply to DTCs 2,7,9,A,D,F,G, or J shipments

43. Transportation Plans SAMM C.7.16 and DoD 5100.76-M
4/27/2017
Transportation Plans
SAMM C.7.16 and DoD M
Requirements: For classified materiel and shipments of sensitive Arms, Ammunition & Explosives (AA&E).
Preparation: The DoD FMS case implementing agency is responsible, in coordination with the recipient foreign government.
Approval: The approval of the Transportation Plan is the responsibility of the responsible DoD security officials supporting the case manager (per the SAMM), and the recipient foreign government.
Transportation plans are required for ALL classified shipments and ALL sensitive AA&E shipments, regardless of how far DTS is involved, if at all.
For FMS sales, it is the FMS implementing agency’s security officials and the weapons system program managers who are responsible.
The basic requirements for a completed and approved TP prior to the projected delivery date, as well as responsibilities, should be placed in the LOA – and in the contract, when a contractor is to be involved.
The transfer is a two-party transaction; therefore, the TP must be prepared in coordination with the purchasing government.
Even if delivery is to take place in the United States, the implementing agency still must ensure that secure arrangements have been made for shipment to the final destination the consignment contains U.S. classified material which is also used by U.S. forces and other allies, and thus U.S. authorities have a responsibility to ensure that the material is properly secured during transfer.
The FMS implementing agency has the authority to delay a shipment if the TP has not been properly prepared prior to scheduled delivery.

44. Freight Forwarders Handling Classified Material
4/27/2017
Freight Forwarders Handling Classified Material
The FF must be cleared by the Defense Security Services.
The FF may NOT be the recipient government’s Designated Government Representative (DGR).
Security responsibility remains with U.S. Government until transfer to foreign government DGR.
FF may not physically possess or store sensitive or classified AA&E, but may arrange for onward transportation of such materiel (DoD R, C205).
Deep dive
Only freight forwarders that have been granted an appropriate security clearance by the DoD or the recipient government are eligible to receive, process, and store U.S. classified materiel authorized for release to foreign governments. However, a freight forwarder that does not have access to or custody of the classified materiel need not be cleared. (SAMM C7)
The reason a FF cannot be a foreign government’s DGR is because most FF’s are cleared by DSS (even though they may be foreign owned), and thus they still are under U.S. security control. There are only a few foreign governments which will use their own FF or shipper – Germany, Belgium, Colombia, Netherlands, and Israel. A DGR must be a citizen of the purchasing government, and must have the necessary security clearance from that government to be able to receive classified material on behalf of that government. Most FFs are operated by US personnel, or are foreign personnel working for the US company, not official government employees of the purchasing country.
Section of the NISPOM states “A commercial freight forwarder (FF) may be used to arrange for the international transfer of classified material as freight. The FF must be under contract to a Government Agency, U.S. contractor, or the recipient foreign government. The contract shall describe the specific functions to be performed by the FF. The responsibility for security and control of the classified material that is processed by the FF remains with the U.S. Government until the freight is transferred to a DGR of the recipient government. Only freight forwarders that have a valid DSS clearance and storage capability at the appropriate level are eligible to take custody, or possession of classified material for delivery as freight to foreign recipients. Freight Forwarders that only process unclassified paperwork and make arrangements for the delivery of classified material to foreign recipients do not require an DSS clearance .”

45. Arms, Ammunition & Explosives, and Sensitive Items (DoD 5100.76-M)
4/27/2017
Sensitive items, such as NVDs, and AA&E, such as missiles and associated equipment, and munitions must go through a DoD-controlled air or sea port.
Must be moved on a US carrier or one registered in the purchasing country, to include in-country surface movement.
Deep dive

46. Cargo Carrier Preference
100% of U.S.-funded defense articles must be carried by U.S.-flagged carriers unless a 50% waiver is granted by DSCA or the Maritime Administration (MARAD).
Applies to FMFP, grant EDA, Emergency Drawdown, BPC (pseudo LOA) programs and any other transfers in which the foreign recipient is NOT paying for the product with their national funds.
Required by the Cargo Preference Act of 1954 and the National Defense Authorization Act of 2009.
Deep dive
There should be a note in the LOA that requires the use of US-flagged carriers for the movement of grant EDA, FMFP-funded, or BPC program defense articles. Freight forwarders must comply with these Acts when they are arranging transportation. SCOs should advise customers that transportation may be delayed pending contract award to a qualified US carrier, and that the customer may be expected to pay more for a US carrier.
SAMM C.7.9

47. Transportation of “Pseudo” LOA Materiel
4/27/2017
Transportation of “Pseudo” LOA Materiel 20

48. Differences Between FMS and BPC (“Pseudo LOA”) Programs
Non-FMS (“Pseudo)
Title transfer
At origin; at initial shipment
At destination upon physical acceptance by customer from SCO
Transportation
Customer arranged or DTS
DTS only
Assumption of liability (risk) until title transfer
FMS Customer
USG
What do these differences mean to the SCO? The Pseudo material will all arrive into country via DTS, and the SCO will be responsible for receiving the material and transferring it to the foreign government. The SCO will have to document the transfer per DSCA policy 08-14, and any COCOM guidance. Any loss or damages to the material must be resolved by the USG prior to transfer to the customer. With FMS, the customer assumes all liability, and since title transfers at origin, the shipping documents serve as their receipt and evidence of ownership.
Note: A DSP-94 is also required by US Customs for BPC material.

49. Pseudo LOA Materiel Movement
4/27/2017
Pseudo LOA Materiel Movement
SCO/Embassy
DEPOT
DoD Consolidation Point or DTS Port
Foreign Recipient
CONTRACTOR
DTS military or commercial

50. BPC (“Pseudo LOA”) Material Shipments
4/27/2017
BPC (“Pseudo LOA”) Material Shipments
All shipments are made via the DTS.
DoD assumes all liability.
The SCO or other DoD representative must prepare any applicable Transportation Discrepancy Reports (TDR) or Supply Discrepancy Reports (SDR) prior to the transfer.
The USG retains title to material shipped against a non-FMS (“pseudo”) case until transfer to the foreign recipient in the destination country.
The SCO reports BPC materiel deliveries in SCIP
Narrative for one of the previous slides

51. Supply Discrepancy Reports
4/27/2017
Supply Discrepancy Reports 62

52. Supply Discrepancy Report (SDR)
The SF364 Supply Discrepancy Report (SDR)
-- Catch-all document
-- Filed by customer
-- Report virtually any problem
Packing Shipping
Billing Quality
Quantity Incorrect item
Shelf life Incomplete service

53. Claim must be submitted within one year of title transfer!
4/27/2017
Criteria: Time
Claim must be submitted within one year of title transfer!
Letter of Offer
and Acceptance
“Any claim (except for
non-shipment/ non-receipt of
entire lot) received after 1 year
from passage of title to article or
scheduled performance of service
are disallowed unless the USG
determines that circumstances
involving latent defects justify
consideration. (LOA para 5.4)”
SAMM C 65

54. 4/27/2017
Criteria: Value
Claim must have a value of at least $200, including transportation and PC&H!
Letter of Offer
and Acceptance
“DoD will not accept claims related
to items of $200 or less for
overages, shortages, damages, non-
shipment, or non-performance.”
(LOA para 5.4)
SAMM C
Read DSCA Policy 03-15 65

55. General Discrepancy Rules
Whenever possible, customers should inspect equipment for accuracy and functionality before placing it in storage.
Approved SDRs usually result in a cost reimbursement, not a replacement item.
Misdirected or unordered shipments of classified or sensitive end items or components must be reported to the ILCO within 24 hours of discovery regardless of value.

56. 4/27/2017
Points to Remember
The probability is high that any end item or major component requested on an LOR is not yet built.
DoD acquisition priorities focus on US forces first, especially in wartime.
Any nonstandard configuration complicates acquisition and delays delivery.
DoD has limited transportation capabilities and not everything can be delivered when the customer wants it.

57. Logistics Orientation
4/27/2017
Logistics Orientation
SCM-OC 20