Guide
What is the Special Defense Acquisition Fund in Foreign Military Sales?
The is a that buys defense articles and services before any partner has asked for them, so they can be delivered faster than a new procurement allows. decides what the fund buys and which partner gets it; the partner buys the item on a , and the proceeds go back into the fund.
What is the Special Defense Acquisition Fund?
The , authorized in Section 51 of the , 22 U.S.C. 2795, was created to address the issue of long lead times. The is a financially independent, that finances the procurement of defense articles and defense services in anticipation of future transfer to foreign countries and international organizations. The itself is a procurement authority, not a transfer authority. All assets are transferred to partners using the same laws, regulations, and rules that govern all foreign military transfers.
The provides both procurement authority and funds availability to engage in procurement actions prior to or pseudo- implementation. The allows the to deliver selected articles and services to partners in less than normal procurement lead-time, and it enhances U.S. force readiness by reducing the need to divert assets from U.S. forces when partners have urgent requirements that cannot otherwise be satisfied.
The is capitalized using selected receipts on sales, as provided in Section 51(b) of the .
When -purchased assets are transferred to a foreign government or international organization, the proceeds from the transaction are reimbursed to the and used to finance subsequent purchases.
DoW components identify the items or services proposed for procurement using the funds.
, in consultation with the Department of State, Bureau of Political-Military Affairs, selects the defense articles and defense services to be purchased by the . The defense articles and services approved for procurement are included in a spend plan that is provided to the congressional committees that oversee the authority.
The implementing agencies () execute the purchases of approved items. procurements are made in accordance with DoW regulations and procedures, as outlined in the and .
The are responsible for storing and maintaining accountability of defense articles purchased by the until the items are transferred to a foreign government, international organization, or Building Partner Capacity program. In addition, the must establish controls to ensure assets are not transferred to an international partner or used by the unless explicitly approved by .
An approved allocation request authorizes the to offer the requested item or service to a foreign government, international organization, or Building Partner Capacity program.
The allocation process begins when an eligible foreign country, international organization, or Building Partner Capacity program requests information on defense articles and/or services, and the articles and/or services are available in the inventory. When such a request is received, the should verify the availability of the requested asset and then submit an allocation request to .
-procured assets are allocated in accordance with the laws, regulations, and policies that apply to all and transfers. The allocation of an asset to support an eligible foreign country, international organization, or Building Partner Capacity program must be approved by before it can be added to an .
Generally, sales are made from assets in the inventory. In instances where the article or service requested has been purchased by the but not yet delivered to the , the international partner may purchase the equity that the owns in the acquisition contract.
assets may be offered on a separate or as one or more separate lines on an that includes articles and services that will not be sourced from the inventory. Sub-lines will not mix and non- material and services. Once a case is offered, the assets on the case will be held in reserve until the expires.
The payment for defense articles and services sourced from the must be included in the .
References
SAMM
- SAMM GLOSSARY/special-defense-acquisition-fund-sdaf — Special Defense Acquisition Fund (SDAF)
- SAMM C9.4.8.1.1
- SAMM C15.3.7.2.5 — USG-sourced Defense Articles and the Special Defense Acquisition Fund.
Related
Special Defense Acquisition Fund (SDAF)
Authorized in 1981 under section 51 of the Arms Export Control Act (AECA) (22 U.S.C. 2795), the SDAF is a revolving fund that finances the acquisition of defense articles and services in anticipation of their future sale to foreign governments and international organizations under the AECA.
SAMM Glossary, as of 12 September 2026
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Revolving Fund
Funds authorized by specific provisions of law to finance a continuing cycle of business-type operations. Receipts are credited directly to the revolving fund as offsetting collections and are available for expenditure without further action by Congress.
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) →
Letter of Offer and Acceptance (LOA)
The legal instrument used by the USG to transfer itemized defense articles, defense services, and design and construction services to foreign partners.
When used under the authorities provided in the Arms Export Control Act for Foreign Military Sales, the LOA is a binding agreement signed by the USG and the foreign partner to transfer such articles and services.
When used under Building Partnership Capacity (BPC) authorities, the BPC LOA is not signed by the Benefitting Partner.
SAMM Glossary, as of 12 September 2026
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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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SDAF — Special Defense Acquisition Fund
SAMM Acronyms, as of 12 September 2026
AECA — Arms Export Control Act
SAMM Acronyms, as of 12 September 2026
Security Cooperation
Activities undertaken by the DoD to encourage and enable international partners to work with the United States to achieve strategic objectives. It includes all DoD interactions with foreign defense and security establishments, including all DoD-administered security assistance programs, that: build defense and security relationships that promote specific U.S. security interests, including all international armaments cooperation activities and security assistance activities; develop allied and friendly military capabilities for self-defense and multinational operations; and provide U.S. forces with peacetime and contingency access to host nations.
SAMM Glossary, as of 12 September 2026
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LOA — Letter of Offer and Acceptance
SAMM Acronyms, as of 12 September 2026
FMS — Foreign Military Sale
SAMM Acronyms, as of 12 September 2026
National Funds
Source of funding that is provided directly from the purchaser.
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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Federal Acquisition Regulation (FAR)
The FAR is the primary regulation for use by federal executive agencies for the acquisition of supplies and services with appropriated funds. The document, published in 1984, consolidated the major procurement regulations of various departments and agencies. The intent of the FAR is to standardize the content, decrease the volume of documents, and to achieve consistency throughout government. The principal agencies involved in putting together the FAR were DoD, the General Services Administration, and the National Aeronautics and Space Administration, the three largest buyers. The FAR is broader than just contracting and applies to all goods and services. It directs the defense program manager in many ways, including contract award procedures, acquisition planning, warranties, and establishing guidelines for competition. Besides the FAR, each agency has its supplement to describe its own particular way of doing business. The DoD supplement is called Defense FAR Supplement.
SAMM Glossary, as of 12 September 2026
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DFARS — Defense Federal Acquisition Regulation Supplement
SAMM Acronyms, as of 12 September 2026
Military Department (MILDEP)
One of the departments within the DoD created by the National Security Act of 1947, as amended. The Military Departments are: the Department of the Air Force, the Department of the Army, and the Department of the Navy.
SAMM Glossary, as of 12 September 2026
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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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Offer Expiration Date (OED) (Letter of Offer and Acceptance (LOA))
The date on an offered LOA that indicates the last date on which the purchaser may accept the offer. The OED is normally 85 days from Military Department Approval in the Defense Security Assistance Management System, except for countries that have been approved for a longer OED.
SAMM Glossary, as of 12 September 2026
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Initial Deposit
Funds that are required to cover outlays and/or deliveries that are anticipated to occur before the receipt of the first quarterly payment. These funds must accompany the accepted Letter of Offer and Acceptance.
SAMM Glossary, as of 12 September 2026
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