How training is priced on a case

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1. Five rates, and a rule about which one applies

Training on a case is priced from a published set of tuition rates lettered A to E. The method itself sits outside the manual: "DoD 7000.14-R, Volume 15, Chapter 7, provides detailed guidance for the pricing of training on FMS cases and under the International Military Education and Training (IMET) funded program" (SAMM C9.4.3). What the manual adds is policy about which rate a given country gets.

Two of the five carry most of the weight. Rate A is the full cost of the course. Rate C is the incremental cost, recovering only the added expense of putting foreign students into a course the United States is running anyway. The gap is large, and eligibility for the lower rate is not negotiable. What a place costs is set out in what a training place costs.

2. Why grant money changes the price of a purchase

The incremental rate is tied to the statute. Under the arms export control act, countries buying education and training with their own national funds are charged the incremental rate if they are concurrently in receipt of grant training funds. Concurrently means in the same fiscal year as the case (SAMM C9.4.3.1.1).

So a country receiving a grant allocation this year pays less for the courses it buys with its own money. Lose the allocation and the discount goes with it. "If a country is not concurrently in receipt of IMET, it is not eligible for incremental pricing of education and training paid on LOAs accepted/signed after the end of the fiscal year of its IMET funding allocation" (SAMM C9.4.3.1.1). The grant program itself is described in what IMET funds.

3. The rate is fixed at the moment of sale

Timing is settled in a single sentence. The rate charged is established at the time of sale, not when the training begins or over the period it may run (SAMM C9.4.3.1.2). It then persists: whichever rate applies continues for all training under the agreement until the value of the training line has been obligated.

One line cannot carry both. "Note: Incremental pricing and full pricing rates may not be mixed on the same training line" (SAMM C9.4.3.1.2).

The two tests are therefore mechanical. A country receiving grant funds when the agreement is signed is priced at the incremental rate (SAMM C9.4.3.1.2.1). Otherwise, "If a country is not in receipt of IMET funding at the time of LOA acceptance/signature, then the full rate (Rate A) for education and training is to be charged" (SAMM C9.4.3.1.2.2).

4. What happens when the status changes later

Countries move in and out of grant eligibility, and the manual handles movement in both directions by separating an adjustment from a change of scope.

Where a country has lost eligibility but holds an incrementally priced line, a top up to that line keeps the old price. The example given is a student whose training ran a week beyond the programd time, incurring additional cost. The pricing that applied when the case was signed is the pricing charged (SAMM C9.4.3.1.2.3). Adding a course or more students is different, and a new line priced at full cost is required for it.

In the other direction, a country that begins receiving grant funds while a full priced case is still running can have unobligated money moved. The case may be amended to delete unobligated funds from the full priced line and add a new line at the incremental rate for future requirements (SAMM C9.4.3.1.2.4).

Students already in the pipeline do not benefit. "There will be no retroactive/backward adjustments for training already started or scheduled" (SAMM C9.4.3.1.2.4), and the point is repeated in plainer words: "Students that began education and training with the full rate cannot retroactively receive the incremental rate when the case is amended" (SAMM C9.4.3.1.2.4). Only those starting on or after the amendment is signed get the lower rate.

5. What sits inside a civilian hour

Underneath the tuition rates are acceleration factors, which turn a salary into a cost. Three apply to civilian staff.

The first covers paid absence. "The leave and holidays acceleration factor of 18 percent is not applied to civilian personnel assigned full time to a given requirement" (SAMM C9.4.3.2.1). Someone dedicated to the work does not attract it.

The second recovers employer contributions to retirement, insurance and health plans, at rates published annually (SAMM C9.4.3.2.2). The third carries the most exclusions, recovering retirement, post retirement health benefits and life insurance (SAMM C9.4.3.2.3). It does not apply everywhere. "The UCR factor is applicable to full cost tuition rates and not applied to incremental tuition rates" (SAMM C9.4.3.2.3), and "It is also not applied to BPC cases nor when calculating personnel costs to be reimbursed by the FMS Administrative Surcharge Budget" (SAMM C9.4.3.2.3).

6. Military pay, and the double counting rule

Military instructors are priced from a composite rate plus an acceleration factor covering health care for serving personnel and their dependents. A per capita cost for retiree health care accruals is added (SAMM C9.4.3.3). The benefits themselves are listed: quarters, subsistence, medical, and support such as commissary and exchange access.

Two rates leave all of it out. "Tuition rates D and E exclude both direct and indirect military salaries; therefore, military fringe benefits are excluded as well" (SAMM C9.4.3.3).

Because the same costs can reach a tuition rate by two routes, one through base operating support and one through pay, the manual closes the door: "The costs must not be duplicated in the tuition rates by also being included as direct and indirect costs under Pay and Fringe Benefits" (SAMM C9.4.3.3). Facilities travel the same way. "When training facilities are used for security assistance (SA) courses, the costs are included as indirect costs in the tuition rates" (SAMM C9.4.3.4), so a schoolhouse is not billed separately.

7. Who pays when a student breaks something

Training on real equipment carries a risk of losing it. Attrition charges are included in Rate A for courses using training or operational equipment as training aids. For the other rates, and for training not priced by tuition, a liability statement from the financial regulation applies instead (SAMM C9.4.3.5).

On a dedicated program the agreement has to say which applies, stating whether an attrition factor is charged or another arrangement covers destruction of equipment (SAMM C9.4.3.5). The money collected goes into a dedicated account, and spending from it needs approval.

The replacement route is specific. "When equipment is damaged beyond repair due to FMS student error, a report of the loss and request for funding to cover procurement of the replacement items is submitted for DSCA (Office of Business Operations (OBO)) approval" (SAMM C9.4.3.5). Only after that does the military department ask the finance service to pay out of the account.

8. What a supplier can take from this

The price of a training place depends on the buyer’s grant status in the year the agreement is signed, not on the course. Two partners in the same classroom may be paying materially different amounts, and neither figure moves later.

For anyone quoting contractor training alongside a government course, the exclusions matter. Rates D and E carry no military salary, and the retirement factor drops out of incremental pricing and capacity building cases. A comparison built on one published rate is likely comparing different things.

Key terms

Rate A	The full cost tuition rate, charged where a country is not receiving grant training funds.
Rate C	The incremental rate, recovering only the added cost of foreign students on an existing course.
Concurrent receipt	Holding a grant training allocation in the same fiscal year as the case.
Unfunded civilian retirement factor	A cost factor applied to full rates but not to incremental ones or capacity building cases.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

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