Letters of Request · 3 of 3
The offer that ends a case development process is a contract in everything but name. "The Letter of Offer and Acceptance (LOA) is the legal instrument used by the USG to sell defense articles, defense services including training, and design and construction services to a foreign country or international organization under authorities provided in the Arms Export Control Act (AECA)" (SAMM C5.6.1).
Its parts are not all in the envelope. "Standard Terms and Conditions ( See Figure C5.F9.) are an official part of each LOA, whether or not they are attached to a particular copy" (SAMM C5.6.5.4.1). Those terms are also frozen at a moment in time: "The Standard Terms and Conditions that are in effect at the time the LOA is prepared and signed are the conditions that apply throughout the life of the FMS case" (SAMM C5.6.5.4.1). A case signed years ago runs on the terms of that year, not the current ones.
Two documents travel with the offer. One explains the codes and language used on the face of it, and both that and the terms "must be attached to the original LOA that is sent to the purchaser for review or acceptance" (SAMM C5.6.5.4.1).
"The three types of FMS cases are Defined Order, Blanket Order, and Cooperative Logistics Supply Support Arrangement (CLSSA)" (SAMM C5.6.4). The choice is not administrative preference. It fixes what can later be changed without renegotiating, because scope is defined differently for each.
A defined order case names what is being sold. It is used "for the sale of items that require item-by-item security control throughout the sales process or that require separate reporting" (SAMM C5.6.4.1), with items stated explicitly and with quantities. Major and significant military equipment must appear on their own lines and "must not be embedded in a line coded as non-SME or non-MDE" (SAMM C5.6.4.1.2).
A blanket order case names a category and a sum. It provides "categories of items or services (normally to support one or more end items) with no definitive listing of items, quantities, or MOS with the intent to use the lines until funds are exhausted" (SAMM C5.6.4.2). Spares, support equipment, supplies, maintenance, technical assistance, publications, unclassified software and training aids all fit there. Classified material, major equipment, technical data packages and items better bought locally do not (SAMM C5.6.4.2.3).
The third is an equity arrangement, built from two linked cases. It provides "pre-stock and storage of DoD-stocked non-SME items that are needed and used by the FMS purchaser on a recurring basis" (SAMM C5.6.4.3). How that works in practice is set out in cooperative logistics supply support arrangements.
Scope is the boundary that decides whether a later change needs the buyer's signature, and each case type draws it differently.
One item is inside the boundary in all three: "Any service provided by the Defense Transportation System (DTS) is included as part of the scope of the case" (SAMM C5.6.4.1.1).
Scope is also judged at the smallest unit, not across the document. "Scope changes to a case are determined at the line level, including associated case notes" (SAMM C5.6.4). The consequences of crossing that line are set out in amendments and modifications.
Most of what a buyer actually needs to read is not in the standard terms. "Standard Terms and Conditions must be supplemented with additional items or notes for each offer in order to make obligations clear. Notes in LOAs provide more detailed information concerning items or services being offered" (SAMM C5.6.5.4.2).
Notes also handle the ordinary case where an offer has to be made before everything is known. Where details are still open, the note gives general coverage and an estimate of when specifics will follow, and such notes "may be shared in advance with the purchaser to ensure any purchaser-unique requirements are accommodated" (SAMM C5.6.5.4.2). A buyer that asks to see draft notes early is using the process as intended.
Some notes are mandatory and catalogued centrally, with a published column stating whether each belongs on a basic offer, an amendment or a modification (SAMM C5.6.5.4.3). One of them addresses something buyers rarely expect to be paying for. Some lines carry articles bought to execute the case that stay in American hands, such as special tooling and test equipment, and those lines are flagged with a note saying so (SAMM C5.6.1.2).
Classifying the document itself is unusual. "LOAs are classified only in rare circumstances" (SAMM C5.6.4.4), and classified data cannot be held in the case system at all. Classification requires a direction, or an approved request from the buyer, from the state department or the defense secretary and designees including the agency director.
The cost lands on the buyer. Where a case is approved as classified, "the FMS purchaser will be responsible for all costs associated with the development and execution of the case in a classified environment" (SAMM C5.6.4.4). Classified training and classified publications have their own narrower answer, which is a separate line rather than a classified case.
Acceptance is not a single act. "LOA implementation occurs when an authorized representative of the partner nation signs the LOA, any required initial deposit has been received by DFAS and deposited, and any required data system implementing transactions have occurred" (SAMM C5.6.13). A signature without the deposit does not implement anything.
Signing is not the whole of it. The buyer must complete the typed name and title fields, the agency field, and a block of information the document asks it to supply (SAMM C5.6.13.1). Some countries have no American office, and in others offers are routinely signed without one involved. There the document carries a note requiring the signing authority to notify the accounting office and the implementing agency of the acceptance date (SAMM C5.6.13.2).
What results is described in plain terms. "Once implemented, the FMS case is a government-to-government agreement between the purchaser government or international organization and the United States" (SAMM C5.6.13).
Its life then runs on delivery rather than on dates. "An implemented FMS case is effective until all articles offered are delivered and all services have been performed. Blanket Order LOAs remain in effect until the purchaser has requisitioned articles or services up to funds available on the LOA" (SAMM C5.6.13.4).
| Defined order | A case naming specific items and quantities, scoped to the original quantity. SAMM C5.6.4.1. |
|---|---|
| Blanket order | A case naming categories and a value, used until funds run out. |
| CLSSA | A standing supply arrangement built from two linked cases. |
| Standard terms | Part of every offer whether attached or not, frozen at the date of signature. |
| Case note | Where the specific obligations on a line are actually written down. |
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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