Pricing Procurements for FMS
DEFENSE INST OF SECURITY ASSISTANCE MANAGEMENT WRIGHT-PATTERSON AFB OH
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Under Foreign Military Sales FMS, financially independent countries of the free world can buy needed military equipment and thereby carry a share of the common defense burden. FMS helps a developing nation attain the minimum security and stability needed for its development. Thus, the objective of the United States foreign military sales program is to promote the defensive strength of friends and allies. FMS also can promote the concept of cooperative logistics and equipment standardization, and offset some of the unfavorable balance of payments resulting from U.S. military deployments abroad. For these reasons, it is in the public interest to increase the sale of American-made military items to friendly nations. The pricing of procurements for FMS begins with the general premise that FMS contracts shall be priced using the same principles and with the same care attendant to pricing normal DoD contracts. However, the DFARS does allow the contractor to charge a slightly higher price for FMS to recover costs not otherwise permissible in DoD contracts. This fact notwithstanding, the foreign customer stands to gain from the DoD management expertise available through FMS, and can be assured of paying a fair and reasonable price.
- Economics and Cost Analysis
- Military Forces and Organizations
- Logistics, Military Facilities and Supplies