DSCA Director's Blog

Here you will find thoughts and messages from the Director of the Defense Security Cooperation Agency and his staff.

Friday, October 9, 2009

Admin Fee

In 2005 DSCA and representatives from the Army, Navy and Air Force worked to redefine the policy and admin fee rate. This effort was a business imperative. Now after several years of experience, the trust fund is healthy, which is good for the security cooperation community and our partners.

As a segue, unfortunately many of our international partners, industry and even some in our government do not understand the admin fee. Without getting into the legal details, simply put we operate the FMS enterprise at no profit, no loss to the taxpayer. The business model is based on a rolling set of average costs, not linked to any one case. Fundamentally, under our standard level of service, at a minimum from the fee, our customers get an annual Program Management Review and a Financial Management Review.

Setting specific dollar issues aside, there is a much more important aspect to this subject than money…it is leverage. The leverage of competence, knowledge, experience and expertise. Imagine almost any scenario where you are confronted with an extremely challenging situation that involves technical forensics, security or safety. Now imagine you don’t know what to do, or how to do it. As a direct product of FMS, and the admin fee, you have access to literally thousands of government experts that has acquired, operates and maintains the same equipment. They work with industry and have the ability to solve complex problems.

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