Guide
Can the Department of War sell to a U.S. company for a direct commercial sale?
Yes, under Section 30 of the . The Department of War can sell defense articles and services to a U.S. company that builds them into an it sells to a friendly country on a direct commercial basis, if the sale passes four tests: the buyer is a U.S. company selling under an export license, the articles would be government-furnished if the were for U.S. forces, any services are performed in the United States, and the items are not available from U.S. commercial sources in time. approves each sale, the company pays in cash before any work starts, and the administrative surcharge does not apply.
Can the Department of War sell to a U.S. company for a direct commercial sale?
The AECA, Section 30, authorizes the to sell defense articles and services to U.S. companies in support of a proposed and pursuant to an approved export license from the , for incorporation into end items being sold to an international partner. Per Appendix 8, Table S30.T1, the sales must meet the following criteria:
- Sale is to a company incorporated in the United States that has an approved export license for final assembly, manufacture, or concurrent or follow-on support of an being procured for the armed forces of a friendly country or for an international organization.
- The articles would be supplied to the prime contractor as / if the were being procured for the use of the U.S. Armed Forces.
- Any services being provided must be performed in the United States and may include any service, test, inspection, repair, training, publication, technical or other assistance, or defense information in support of sales of defense articles.
- The articles and services are available only from sources or are not available to the prime contractor directly from U.S. commercial sources at such times as may be required to meet the prime contractor’s delivery schedule.
Section 30 of the Arms Export Control Act lets the Department of War sell defense articles and services to a U.S. company for a direct commercial sale, if the request passes the four tests in SAMM Table S30.T1; a request that fails any one of them is not a Section 30 sale. A request that passes is filled from stock, which may not drop below the reorder point unless USD(P) approves, or from procurement or manufacturing; DSCA approves it, and the company pays in cash before any work starts. DoW sells the parts; the company sells the system.
The uses a unique sales agreement for the sale of defense articles and/or services to U.S. companies. Appendix 8, Table S30.T3, outlines the information included in the sales agreement. Payment is required upon signature of the sales agreement. If there is an increase in the cost, the company is required to make additional cash payments to fund the costs. To allow for planning and marketing, are authorized to provide cost and delivery data to authorized potential companies before executing a sales agreement. Such data are identified as estimates that are not binding on the .
References
SAMM
- SAMM AP8.S30.1.1 — Section 30 Sales Authority.
- SAMM AP8.S30.2.1.1 — Section 30 Sales from Stock.
- SAMM AP8.S30.2.1.2 — Section 30 Sales from Procurement or Manufacturing.
- SAMM AP8.S30.3.3 — United States Company.
- SAMM AP8.S30.6.2 — Approval.
- SAMM AP8.S30.2.2 — Pricing for Section 30 Sales.
- SAMM AP8.S30.6.3 — Section 30 Sales Format.
Related
Arms Export Control Act (AECA)
The basic U.S. law providing the authority and general rules for the conduct of Foreign Military Sales and commercial sales of defense articles, defense services, and training. The Arms Export Control Act (AECA) came into existence with the passage of the Foreign Military Sales Act (FMSA) of 1968. An amendment in the International Security Assistance and AECA of 1976 changed the name of FMSA to the AECA.
SAMM Glossary, as of 12 September 2026
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End Item
The final production product when assembled, or completed, and ready for issue or deployment.
SAMM Glossary, as of 12 September 2026
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DSCA — Defense Security Cooperation Agency
SAMM Acronyms, as of 12 September 2026
Glossary entry →Defense Security Cooperation Agency (DSCA) →
Foreign Military Sales (FMS)
A process, authorized by the Arms Export Control Act, through which eligible foreign governments and international organizations may purchase defense articles, services, and training from the United States Government.
SAMM Glossary, as of 12 September 2026
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Direct Commercial Sale (DCS)
A sale of defense articles or defense services made under a Department of State issued license by U.S. industry directly to a foreign buyer, and which is not administered by DoD through Foreign Military Sales procedures.
SAMM Glossary, as of 12 September 2026
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SAMM — Security Assistance Management Manual
SAMM Acronyms, as of 12 September 2026
Glossary entry →Security Assistance Management Manual (SAMM) →
GFE — Government Furnished Equipment
SAMM Acronyms, as of 12 September 2026
Government Furnished Material (GFM)
USG property which may be incorporated into, or attached to an end item to be delivered under a contract or which may be consumed in the performance of a contract. It includes, but is not limited to, raw and processed material, parts, components, assemblies, small tools, and supplies.
SAMM Glossary, as of 12 September 2026
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Implementing Agency (IA)
The military department or defense agency responsible for the execution of military assistance programs. With respect to FMS, the military department or defense agency assigned responsibility by the Defense Security Cooperation Agency to prepare an LOA and to implement an FMS case. The implementing agency is responsible for the overall management of the actions that will result in delivery of the materials or services set forth in the LOA that was accepted by a foreign country or international organization.
SAMM Glossary, as of 12 September 2026
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Reorder Point
The point at which time a stock replenishment requisition is submitted to maintain the predetermined stock age objective.
SAMM Glossary, as of 12 September 2026
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USD(P) — Under Secretary of Defense for Policy
SAMM Acronyms, as of 12 September 2026
USD(A&S) — Under Secretary of Defense for Acquisition and Sustainment (USD(A&S))
SAMM Acronyms, as of 12 September 2026
Materiel Management
Direction and control of those aspects of logistics which deal with materiel, including the functions of identification, cataloging, standardization, requirements determination, procurement, inspection, quality control, packaging, storage, distribution, disposal, maintenance, mobilization planning, industrial readiness planning, and item management classification; encompasses materiel control, inventory control, inventory management, and supply management.
SAMM Glossary, as of 12 September 2026
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Continental United States (CONUS)
U.S. territory, including the adjacent territorial waters, located within the North American continent between Canada and Mexico. Does not include Hawaii or Alaska.
SAMM Glossary, as of 12 September 2026
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Defense Transportation System (DTS)
The portion of the worldwide transportation infrastructure that supports DoD transportation needs in peace and war. DTS consists of two major elements: military and commercial resources. These resources include aircraft, assets, services, and systems organic to, contracted for, or controlled by the DoD. DoD's infrastructure, including ports, airlift, sealift, railway, highway, in-transit visibility, information management systems, customs, and traffic management that the DoD maintains and exercises in peacetime, is a vital element of the DoD's capability to project power worldwide. It provides for responsive force projection and a seamless transition between peacetime and wartime operations.
SAMM Glossary, as of 12 September 2026
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Payment Schedule
List of dollar amounts and when they are due from the foreign customer. The payment schedule is included in the Letter of Offer and Acceptance (LOA) presented to the customer. After acceptance of the LOA, the payment schedule generally serves as the basis for billing to the customer. Changes in the estimated costs of an Foreign Military Sales case may require changes in the accompanying payment schedule.
SAMM Glossary, as of 12 September 2026
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Contracting Officer
A person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings. The term includes certain authorized representatives of the Contracting Officer acting within the limits of their authority as delegated by the Contracting Officer. A Contracting Officer whose primary responsibility is to enter into contracts is called a procuring contracting officer. One whose primary responsibility is to administer contracts is called an administrative contracting officer. One whose primary responsibility is to terminate contracts and/or settle terminated contracts is called a "termination contracting officer." A single contracting officer may be responsible for duties in any or all of these areas.
SAMM Glossary, as of 12 September 2026
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Military Interdepartmental Purchase Request (MIPR)
An order issued by one military service to another to procure services, supplies, or equipment for the requiring service. The MIPR (DD Form 448) may be accepted on a direct citation or reimbursable basis. It is an Economy Act (31 U.S.C. 1535) order subject to downward adjustment when the obligated appropriation is no longer valid for obligation.
SAMM Glossary, as of 12 September 2026
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