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Can the Department of War sell to a U.S. company for a direct commercial sale?

Updated 3 October 2026Checked against the SAMM: 26 September 2026

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.
IS IT A SECTION 30 SALE? · TABLE S30.T1 fmsedge.com A U.S. company asks DoW for articles or services for a direct commercial sale it is making · S30.3.3 DoW sells the parts; the company sells the system “for incorporation into end items to be sold by such company on a direct commercial basis” · C4.3.13 Is the buyer a U.S. company selling it on a DCS basis under an export license? Table S30.T1, row 1 yes no Would the articles be GFE/GFM if the end item were for U.S. forces? Table S30.T1, row 2 yes no Are all services performed in the United States? Table S30.T1, row 3 yes no Available only from USG sources, or not from U.S. commercial sources in time? Table S30.T1, row 4 no Not a Section 30 sale the IA determines whether a request meets every criterion in Table S30.T1 · S30.2.1 yes to all four From DoW stock not below the reorder point unless USD(P) approves · S30.2.1.1 Procured or manufactured the IA decides; first-in, first-out production · S30.2.1.2 IA review the IA checks the four tests and sends the request to DSCA · S30.2.1 · S30.6.1 DSCA approval DSCA informs the IA of its decision in writing · S30.6.2 Sales agreement, cash before work paid on signature, before any work starts · S30.2.2 · S30.6.3 Price: not less than the estimated replacement cost (actual cost for services), or the USG’s contract or manufacturing cost; the FMS administrative surcharge and accessorial rates do not apply (S30.2.2). If the cost rises, the company makes additional cash payments; funds obligated may not exceed the cash received (S30.2.2). Not drawn: what the IA sends DSCA (Table S30.T2) and what the sales agreement must contain (Table S30.T3). FMS Edge a step · what Section 30 is for · only in some cases fmsedge.com · Current as of 30 September 2026 · SAMM Appendix 8, Section 30 · C4.3.13

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.

When DoW can sell to a U.S. company · Current as of 30 September 2026 · SAMM Appendix 8, Section 30 · C4.3.13 · Download PNG

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

Drawn exclusively from publicly available authorities.

SAMM

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