F i ip Foreign Military Sales Customer Supply System Guide Naval Supply Systems Command •Department of the Navy •Washington, D.C 20376 UNIVERSITY OF . ILLINOIS UBNAAY AT UMANAiOHAMMIQN I60HITA0KI COG I Stock No. 0530-LP-526-0000 NAVSUP PUBLICATION 526 FOREIGN MILITARY SALES CUSTOMER SUPPLY SYSTEM GUIDE (FMS CUSTOMER GUIDE) :> '■',■ Revised 1 October 1979 WITHDRAWN University of Illinois Library atU^bana-Charrpaign Digitized by the Internet Archive in 2013 http://archive.org/details/foreignmilitarysOOunit poc, . ft DEPARTMENT OF THE NAVY NAVAL SUPPLY SYSTEMS COMMAND WASHINGTON, D.C. 20376 FOREWORD Since initial publication of the Naval Supply Systems Command Foreign Military Sales Customer Supply System Guide in January 1977, significant changes have occurred through- out the Department of Defense in FMS policies and procedures. Many of these changes are of special interest and importance to our foreign customers supported under FMS. This revised edition of the FMS Customer Guide is prepared for use by all foreign customers of the U.S. Navy Supply Sys- tem. It provides updated and expanded coverage in selected areas of FMS support operations of general interest to the foreign customer. Two new Chapters 8 and 9 have been added to provide the reader with current information of FMS Financial Operations and FMS Reports. In addition to these new chapters, the Guide also includes expanded coverage in other areas impor- tant to the FMS customer: Direct Requisitioning Procedures, Chapter 3 Cooperative Logistics Supply Support Arrangements, Chapter 4 Reporting of Item Discrepancies, Chapter 7 Freight Forwarder Guidance, Chapter 10. Each of these chapters has undergone extensive revision and updating. As a single source supply management document, available for ready reference use by the FMS customer, the Guide will serve as an important tool for the foreign supply officer or his representative engaged in FMS Supply operations. Focusing on special needs of the unit supply officer and his key person- nel, the Guide is designed primarily for their use at the operating level. It is our intent that the FMS Customer Guide provide all the basic information needed by the FMS customer to obtain timely and effective support from the U.S. Navy Supply System, Source document references are conveniently .cited at the end of each chapter for additional reading when desired. Suggestions from readers for improvement in format or content of the Guide are invited. A response form for use in submitting comments and recommendations concerning proposed changes to the Guide is provided in Appendix D. E.A. Grinstead Rear Admiral, Supply Corps United States Navy Commander, Naval Supply Systems Command and Chief of Supply Corps RECORD OF CHANGE TRANSMITTALS CHANGE NO. DATE OF CHANGE DATE ENTERED SIGNATURE OF PERSON MAKING CHANGE 1 2 3 4 5 6 7 8 9 10 DISTRIBUTION LIST NAVSUP Publication 526 has been pre- pared by the Commander Naval Supply Systems Command for general distribution and use by all FMS Customer representatives obtain- ing support from the U.S. Navy Supply System, The Guide also is distributed to a selected list of U.S. Navy and Department of Defense offices and activities, and other U.S. agencies involved with Foreign Mil- itary Sales Program Support. General distribution to all holders of the FMS Customer Guide by NAVSUP is limited to two (2) copies to each addressee. Additional copies of NAVSUP Publication 526 are available at a unit price of $7.00 per copy. These may be ordered direct from the Naval Publications and Forms Center (NPFC) , Philadelphia, PA 19120, in accord- ance with the special procedures for requisitioning publications described in Chapters 2 and 3. TABLE F CONTENTS FOREWORD RECORD OF CHANGE TRANSMITTALS DISTRIBUTION LIST Page Number CHAPTER 1 Section A Section B Section C INTRODUCTION AND OVERVIEW Introduction Overview of the U.S. Navy- Supply System The FMS Process REFERENCES FOR CHAPTER 1 1-1 1-3 1-19 1-28 CHAPTER 2 Section A Section B Section C REQUISITIONING SYSTEM The Requisitioning Process Requisitioning Under FMS: Detailed Procedures Areas of Special Interest REFERENCES FOR CHAPTER 2 2-1 2-21 2-95 2-112 CHAPTER 3 Section A Section B Section C DIRECT REQUISITIONING PROCEDURES (DRP) Description Procedures for Direct Requisitioning Areas of Special Interest REFERENCES FOR CHAPTER 3 3-1 3-17 3-23 3-26 CHAPTER 4 COOPERATIVE LOGISTICS Section A Description Section B Procedures REFERENCES FOR CHAPTER 4 4-1 4-5 4-9 CHAPTER 5 PROCESSING REPAIRABLES CHAPTER 7 DISCREPANCY REPORTING SYSTEM CHAPTER 9 REPORTS CHAPTER 10 FREIGHT FORWARDER GUIDANCE Page Number Section A General Section B Procedures Section C Areas of Special Interest REFERENCES FOR CHAPTER 5 CHAPTER 6 Section A Section B Section C REFERENCES CLASSIFIED MATERIAL REQUESTS General Information Classified Material Requisitioning Procedures Areas of Special Interest FOR CHAPTER 6 5-1 5-9 5-31 5-33 6-1 6-11 6-15 6-18 Section A Section B Section C Description Procedures Areas of Special Interest REFERENCES FOR CHAPTER 7 7-1 7-7 7-31 7-35 CHAPTER 8 Section A Section B Section C FINANCIAL OPERATIONS Introduction Terms of Sale and Billing and Collection Procedures Areas of Special Interest 8-1 8-7 8-37 Section A Section B Section C Overview Detailed Description Areas of Special Interest REFERENCES FOR CHAPTER 9 9-1 9-7 9-19 9-24 Section A Section B Section C Description Procedures Areas of Special Interest REFERENCES FOR CHAPTER 10 10-1 10-9 10-27 10-49 Page Number CHAPTER 11 SUPPLY ASSISTANCE TEAM AVAILABILITY AND SCOPE Section A Description 11-1 Section B Procedures 11-5 Section C Areas of Special Interest 11-7 CHAPTER 12 OTHER AREAS FOR SPECIAL ATTENTION FMS Implementation Reviews 12-1 NAVILCO Field Assistance Office 12-7 Training Conducted in the United States for Foreign Supply Personnel 12-9 APPENDIX A - Bibliography APPENDIX B - Glossary of Terms and Abbreviations APPENDIX C - Key USN Points of Contact for FMS Customers APPENDIX D - Procedure for Recommending Changes to FMS Customer Guide CHAPTER 1. INTRODUCTION AND OVERVIEW CHAPTER 1. INTRODUCTION AND OVERVIEW TABLE OF CONTENTS Page Number 1000 SECTION A~ INTRODUCTION 1-1 1010 Purpose of the FMS Customer Guide 1-1 1020 How to Use the Guide: Its Structure and Organization 1-1 1030 Scope of Coverage 1-1 1031 Section A 1-2 1032 Section B 1-2 1033 Section C 1-2 1040 Tables of Contents 1-2 1100 SECTION B--OVERVIEW OF THE U.S. NAVY SUPPLY SYSTEM 1-3 1110 General 1-3 1120 Overview: Functions of the U.S. Navy- Supply System and Its Customers 1-3 1121 Structure of the U.S. Navy Supply System 1-4 1122 Secretary of the Navy (SECNAV) 1-4 1123 Chief of Naval Operations (CNO) 1-4 1124 Chief of Naval Material/Naval Material Command (CNM/NMC) 1-4 1125 Navy Inventory Managers 1-6 1126 Other Inventory Managers 1-8 1127 U.S. Navy Stock Points 1-8 1128 Other Stocking Activities 1-8 1130 Design Features of the U.S. Supply System 1-9 1131 Military Standard Requisitioning and Issue Procedures (MILSTRIP) 1-9 1132 Uniform Material Movement and Issue Priority System (UMMIPS) 1-10 1133 Military Assistance Program Address Directory (MAP AD) 1-10 1134 Automated Digital Network (AUTODIN) 1-11 1135 Defense Automatic Addressing System (DAAS) 1-11 1136 Automated Data Processing (ADP) Systems 1-12 Page Number 1140 Cataloging and Identification of Material 1-12 1141 Defense Logistic Services Center (DLSC) 1-13 1142 Management List - Navy (ML-N) 1-13 1143 National Stock Number (NSN) 1-13 1144 The Master Cross Reference List (MCRL) 1-13 1145 The Master Repairable Item List (MRIL) 1-13 1150 Navy Cognizance Symbols for Inventory Managers 1-14 1200 SECTION C--THE FMS PROCESS 1-19 1210 The U.S. Navy and Foreign Military Sales 1-19 1220 The FMS Case 1-19 1221 Case Identifier 1-21 1222 Specialized "Pull" Cases: Direct Requisitioning, Cooperative Logistics, Repair Services 1-21 1230 FMS Role of the Chief of Naval Operations (CNO) 1-23 1240 FMS Role of the Chief of Naval Material/Naval Material Command (CNM/NMC) 1-24 1250 FMS Role of the Naval Supply Systems Command (NAVSUP) 1-24 1260 The U.S. Navy International Logistics Control Office (NAVILCO) 1-25 1270 The Security Assistance Accounting Center (SAAC) 1-26 1280 The FMS Supply and Financial Network 1-26 REFERENCES FOR CHAPTER 1 1-28 INDEX OF FIGURES Page Number 1-1 The U.S. Navy Supply System 1_5 1-2 Inventory Managers in the U.S. Navy Supply System 2_ 7 1-3 Navy Material Cognizance Symbols for Designated Inventory Managers 1_15 1-4 Illustration of an FMS Case ( Offer and Acceptance , DD Form 1513) 1_20 1-5 Construction of the FMS Case Identifier 1-6 The FMS Supply and Financial Network 1-22 1-27 CHAPTER 1 INTRODUCTION AND OVERVIEW 1000 1010 PURPOSE OF THE FMS CUSTOMER GUIDE SECTION A- -INTRODUCTION The purpose of this Customer Guide is to introduce the Foreign Military- Sales (FMS) customer to the U.S. Navy Supply System. 1020 HOW TO USE THE GUIDE: ITS STRUCTURE AND ORGANIZATION 1030 SCOPE OF COVERAGE The entire document has been pre- pared from the perspective of the foreign customer. It is presented in easy- to- read format and is intended for ready reference. The guide provides, in a single source, an authoritative digest of the basic information needed by the FMS customer to understand and use the U.S. Navy Supply System. The complete guide contains twelve separate chapters, each dealing with a major aspect of support under the Foreign Military Sales Program. Individual chapters provide detailed coverage on one or more areas of special importance to the foreign military customer and his supply personnel. In addition to the twelve chapters, supplemental sections identified as appendices are included at the end of the guide for general reference Each chapter has been fully devel- oped. Coverage on specific topics is presented as completely as possible within each chapter, to minimize the need for cross reference to related information elsewhere in the guide. The material in each procedural chapter is organized under three major sections . 1-1 1031 SECTION A 1032 SECTION B 1033 SECTION C 1040 TABLES OF CONTENTS Section A presents a general description of the subject being covered in the chapter. Information and guid- ance is included, where needed, to ensure a full appreciation and under- standing of the subject by the reader. Section B in each chapter presents the detailed procedures which apply to the specific subject area described. These are the "how to" portions of the guide — explaining in detail, in step-by- step sequence, the exact procedures to be followed by FMS customers. Finally, for added emphasis, Section C in each chapter highlights some signifi- cant areas of special interest as they apply to the foreign customer and the supply process under FMS. In some chapters, the material in- cluded in Section C covers a broad range of supply-related topics. Each matter discussed is presented for its special merit as useful and important guidance to the foreign customer, to further understanding of the supply process and to enhance the effectiveness of support being provided to the FMS country as a customer of the U.S. Navy Supply System. The full Table of Contents for the guide is shown on pages ii to iv at the front of the document. In addition, for convenience to the reader and greater ease of access to specific portions of the guide, a more detailed listing of the contents of individual chapters is included at the beginning of each chapter, 1-2 1100 SECTION B--OVERVIEW OF THE U.S. NAVY SUPPLY SYSTEM 1110 GENERAL 1120 OVERVIEW: FUNCTIONS OF THE U.S. NAVY SUPPLY SYSTEM AND ITS CUSTOMERS The U.S. Navy Supply System serves its foreign customers in much the same manner as it provides material support to its U.S. customers. However, the U.S. Navy believes that by developing a basic understanding of how its system works, the foreign military customer will be able to use the system more effectively to supply his own require- ments . Therefore, this portion of the guide provides an overview of the U.S. Navy Supply System, highlights some special areas of importance, and de- scribes how the Foreign Military Sales Program interfaces with the U.S. supply system. The following sections describe the organizations that plan and perform the functions of supplying customers with material. Major activities in the system are included, and the responsi- bilities of each are defined. Organi- zations of special interest and impor- tance to foreign military customers are described in detail, and their functions are closely examined. The U.S. Navy Supply System is made up of all those activities that identify material requirements, procure, store, and distribute material to support its military customers. These customers are: U.S. Navy Fleet Units U.S. Navy Shore Activities Other U.S. Armed Forces Foreign Military Customers. 1-3 1121 STRUCTURE OF THE U.S. NAVY SUPPLY SYSTEM Figure 1-1 shows the principal offices and activities of the U.S. Navy- Supply System, at three broad levels of management: 1122 SECRETARY OF THE NAVY (SECNAV) 1123 CHIEF OF NAVAL OPERATIONS (CNO) 1124 CHIEF OF NAVAL MATERIAL/NAVAL MATERIAL COMMAND ( CNM/NMC ) Policy level Inventory Management level Material Distribution level. The functions performed by activities at each level of management are described briefly in paragraphs which follow. The Secretary of the Navy (SECNAV) provides overall guidance and direction for the Navy supply management function. The Chief of Naval Operations (CNO) has primary responsibility for stating the overall requirements for naval material and equipment. The CNO also develops a general doctrine for supply support of U.S. Navy customers. CNO has special importance to foreign customers because his Office is responsible for the negotiation and approval of all Foreign Military Sales (FMS) agreements for which the U.S. Navy has responsibility. The specific role of CNO in the FMS program is explained in paragraph 1230. The Chief of Naval Material (CNM) heads the Naval Material Command (NMC), which includes a Headquarters and five subordinate Systems Commands: Naval Air Systems Command (NAVAIR) Naval Sea Systems Command (NAVSEA) 1-4 FIGURE 1-1 The U.S. Navy Supply System POLICY LEVEL PROVIDES GUIDANCE AND DIRECTION TO NAVY SUPPLY FUNCTION PROVIDES SPECIFIC PROCUREMENT GUIDANCE STATES OVERALL REQUIREMENTS FOR NAVAL MATERIAL PROVIDES DIRECTION FOR POSITIONING OF MATERIAL DETERMINES TRANSPORTATION REQUIREMENTS ESTABLISHES PERFORMANCE STANDARDS FOR THE SYSTEMS TRANSLATES CNO OVERALL REQUIREMENTS INTO SPECIFIC MATERIAL REQUIREMENTS PRESCRIBES INVENTORY MANAGEMENT PROCEDURES PRESCRIBES PROCEDURES NECESSARY TO ACCOMPLISH OTHER SUPPLY FUNCTIONS SECRETARY OF THE NAVY (SECNAVI CHIEF OF NAVAL OPERATIONS (CNO) CHIEF OF NAVAL MATERIAL (CNM) NAVAL MATERIAL COMMAND NAVAL SUPPLY SYSTEMS COMMAND (NAVSUP) INVENTORY MANAGEMENT LEVEL IDENTIFY AND QUANTIFY REQUIREMENTS OTHER SYSTEMS COMMANDS PROCURE MATERIAL DISTRIBUTE MATERIAL TO STOCK POINTS NAVY INVENTORY MANAGERS MATERIAL DISTRIBUTION LEVEL RECEIVE AND STORE MATERIAL ISSUE MATERIAL ARRANGE FOR TRANS- PORTATION OF MATERIAL TO CUSTOMERS NAVY INDUSTRIAL FUND (NIF) ACTIVITIES DEFENSE LOGISTICS AGENCY IDLAl GENERAL SERVICES ADMINISTRATION (GSAI NAVY STOCK POINTS DEFENSE LOGISTICS CENTERS U.S. CUSTOMER t INVENTORY MANAGERS OF THE U.S. ARMY AND AIR FORCE SUPPLY DISTRIBUTION FACILITIES ARMY/ AIR FORCE STOCK POINTS 1-5 1124 (Continued) 1125 NAVY INVENTORY MANAGERS Naval Electronic Systems Command (NAVELEX) Naval Facilities Engineering Command (NAVFAC) Naval Supply Systems Command (NAVSUP). The Chief of Naval Material (CNM) is tasked with development and implemen- tation of procedures necessary to perform the functions of the supply system, and to develop and maintain procedures for inventory management of Navy material. Primary responsibility for the supply system has been delegated to the Naval Supply Systems Command. Inventory managers are directly involved with the operation of the sup- ply system. These are the activities primarily responsible for identification of requirements, procurement, and distri- bution of Navy material. The objective of inventory management is to have the right amount of an item available when and where it is needed by a customer. Figure 1-2 shows the three groups of Navy inventory managers. The first group includes the five Systems Commands within the Naval Material Command. The Systems Commands perform inventory management for major equipments and components . The second group consists of Navy Inventory Control Points (ICP): Aviation Supply Office (ASO) Ships Parts Control Center (SPCC) Navy Publications and Forms Center (NPFC). 1-6 FIGURE 1-2 Inventory Managers in the U.S. Navy Supply System SYSTEMS COMMANDS NAVAL MATERIAL COMMAND NAVAL AIR NAVAL SEA NAVAL SUPPLY NAVAL ELECTRONIC NAVAL FACILITIES SYSTEMS COMMAND SYSTEMS COMMAND SYSTEMS COMMAND SYSTEMS COMMAND ENGINEERING COMMAND (NAVAIR) (NAVSEA) (NAVELEX) (NAVFAC) • MAJOR AIR WEAPONS • MAJOR SHIP (NAVSUP) • MAJOR • MAJOR SYSTEMS WEAPONS SYSTEMS • MATERIALS ELECTRONIC CONSTRUCTION • MAJOR AERONAUTICAL • MAJOR SHIP HANDLING EQUIPMENT EQUIPMENT EQUIPMENT EQUIPMENT (HULL, MECHANICAL, AND ELECTRICAL) • MAJOR INSTALLED ORDNANCE EQUIPMENT • SMALL BOATS AND LANDING CRAFT • EXPENDABLE EQUIPMENT • AUTOMOTIVE AND WEIGHT HANDLING EQUIPMENT ORDNANCE NVENTORY CONTROL PC >INTS NAVY PUB LICATIONS NAVY A\ /IATION SHIPS P ARTS AND FORMS CENTER SUPPLY OFFICE CONTROL CENTER Philadelphia, PA Philadelphia, PA Mechanicsburg, PA (NPFC) (ASO) (SPCC) PUBLICATIONS FORMS DOD SPECIFICATIONS AND STANDARDS DOD DIRECTIVES NAVY DIRECTIVES DATA ITEM DESCRIP- TIONS (DID) AERONAUTICAL REPAIR PARTS EQUIPMENT AND COMPONENTS HULL, MECHANICAL, ELECTRICAL, AND ELECTRONIC REPAIR PARTS FOR SHIPS AND AIRCRAFT CONVENTIONAL AMMUNITION NONEXPENDABLE ORDNANCE CONSTRUCTION EQUIPMENT PARTS OTHER INVENTORY MANAGERS NAVAL TRAINING EQUIPMENT CENTER (NTEC) DEFENSE SUPPLY CENTERS GENERAL SERVICES ADMINISTRATION U.S. ARMY INVENTORY MANAGERS (ICP'S) U.S. AIR FORCE INVENTORY MANAGERS (ICP'S) • TRAINING DEVICES AND EQUIPMENT 1-7 1125 (Continued) 1126 OTHER INVENTORY MANAGERS 1127 U.S. NAVY STOCK POINTS 1128 OTHER STOCKING ACTIVITIES : The ICP group, under NAVSUP direction, is responsible for management of re- pairable items, repair parts, publica- tions, and other consumable materials primarily used by the Navy. The third category of Navy inventory managers includes special activities not within the Naval Material Command. For example, the Naval Training Equipment Center (NTEC), shown in Figure 1-2, manages training devices and equipment. These items are often required by foreign military customers. Three other types of U.S. inventory management activities shown in Figure 1-2 are the Defense Logistics Agency (DLA), General Services Administration (GSA), and inventory managers of the U.S. Army and U.S. Air Force. These activities are designated inventory managers, and support various Navy material requirements. Activities that perform the function of storing and issuing of naval material are called "stock points." Examples of U.S. Navy stock points are Naval Supply Centers, Naval Supply Depots, Naval Shipyards, and Naval Air Stations. These activities store material that has been identified, procured, and distrib- uted by the inventory managers . Upon receipt of a customer order, the stock point issues the material and arranges for its transportation to the customer. Most U.S. Navy stock points are located in coastal regions of the continental United States, and at overseas locations. DLA, GSA, and the U.S. Army and U.S. Air Force also have stock points which serve as distribution activities for material. DLA activities are called Defense Depots and GSA activities are called Supply Distribution Facilities. Some DLA/GSA managed material may also be stocked by designated Navy stock points . 1-8 1128 (Continued) 1130 DESIGN FEATURES OF THE U.S. SUPPLY SYSTEM 1131 MILITARY STANDARD REQUISITIONING AND ISSUE PROCEDURES (MILSTRIP) U.S. Army and U.S. Air Force stock points are included in Figure 1-1. In instances where Army or Air Force material is required by Navy customers, these activities may serve as the distribution points . Within the overall U.S. supply system, there are some system design features that the foreign customer should understand. Most important among these are the: Military Standard Requisition- ing and Issuing Procedures (MILSTRIP) Uniform Material Movement and Issue Priority System (UMMIPS) Military Assistance Program Address Directory (MAPAD) Automated Digital Network (AUTODIN) Defense Automatic Addressing System (DAAS) Automated Data Processing (ADP) Systems . Some of these features are explained in more detail in later chapters of this guide and will be only briefly described in this chapter. Features not explained in other chapters are presented in more detail here. Military Standard Requisitioning and Issue Procedures are the U.S. Depart- ment of Defense procedures by which the documents used to order, follow up, pro- vide status, modify orders, and ship material are prepared. The procedures are used by both customer and supply activities . Documents prepared for the purposes noted are called MILSTRIP docu- ments. The key to MILSTRIP is a system 1-9 1131 (Continued) 1132 UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) 1133 MILITARY ASSISTANCE PROGRAM ADDRESS DIRECTORY (MAP AD) of codes which represent certain infor- mation pertaining to the processes of ordering, monitoring, and shipping material. These codes allow originators of documents to place much information on a small document. MILSTRIP codes are explained in detail in Chapter 2 . The foreign customer should become familiar with their uses and meanings. The processing of requisitions and the issue, handling, and transportation of material throughout the U.S. Depart- ment of Defense (DOD) is governed by the Uniform Material Movement and Issue Priority System . UMMIPS provides a way of ensuring that more urgent requirements, both in terms of the degree of need and the military importance of the requisi- tioner, are accorded greater priority. Customer countries ordering material under the FMS program are required to utilize UMMIPS. UMMIPS is discussed in greater detail in Chapter 2. The Military Assistance Program Address Directory , DOD publication 5105. 38D, is a document which contains addresses and corresponding address codes to identify where FMS material is to be shipped and documentation is to be sent. For this reason, it is a very important document for the foreign military customer. The foreign customer provides the proper addresses and coding by completing the Offer and Acceptance Document (DD Form 1513). Blocks 33 and 34 of the DD Form 1513 contain space for the appropriate coding of MAPAD entries. It is important to recognize that the foreign customer is normally responsible for the establishment and maintenance of MAPAD additions, revisions, and deletions. MAPAD changes must be forwarded by foreign customers to: Defense Automatic Addressing System Office (DAASO) Gentile Air Force Base Dayton, Ohio 45444, USA 1-10 1133 (Continued) Foreign customers then utilize the MAPAD codes on all MILSTRIP documents. The U.S. supply system activities use the MAPAD code to determine quickly where the material is to be shipped. Improper use of or failure to use MAPAD codes will delay the processing of customer requisitions and subsequent shipments of material . 1134 AUTOMATED DIGITAL NETWORK (AUTODIN) 1135 DEFENSE AUTOMATIC ADDRESSING SYSTEM (DAAS) MILSTRIP, UMMIPS, and the MAPAD are used by customers to prepare docu- ments for obtaining material. One frequently used method of transmitting these documents into and within the U.S. supply system is the Automated Digital Network (AUTODIN). This is a worldwide electrical communication network used by nearly all U.S. forces to transmit digital data in electronic accounting machine (EAM) punched card format. Many foreign customers also have access to AUTODIN. The system is used by customers to transmit requisitions to the U.S. Navy International Logistics Control Office (NAVILCO) for introduction into the system and by supply activities to provide supply and shipping status to NAVILCO. For those FMS customers with access to AUTODIN, it provides a rapid means of communicating requisitions to NAVILCO and receipt of resulting status from that office. Use of AUTODIN greatly increases the speed with which customer requirements can be processed. MILSTRIP documents transmitted using AUTODIN are routed to the proper activity by use of the Defense Automatic Addressing System (DAAS). DAAS ensures delivery of the document to the correct activity based on certain MILSTRIP codes mentioned earlier. DAAS, like AUTODIN, works with foreign customer documents coming from NAVILCO into the system and with resulting documents which the supply activities transmit back to NAVILCO. 1-11 1136 AUTOMATED DATA PROCESSING (ADP) SYSTEMS 1140 CATALOGING AND IDENTIFICATION OF MATERIAL Another system design feature is the use of Automated Data Processing (ADP) and the vital function it performs in today's U.S. supply system. An ADP system, as it applies to the U.S. supply system, can be described as the extensive use of computers to receive and process MILSTRIP documents. Navy inventory managers and stock points, GSA, DLA, and other U.S. Armed Forces supply activities utilize ADP systems in providing timely customer support. Computers are also used to record all supply transactions for historical purposes, and to prepare supply-related reports for U.S. and foreign government management personnel . Chapter 2 describes some of the specific uses of ADP systems and provides guidance to the customer on how to prepare MILSTRIP documents to take maximum advantage of ADP systems . A basic element of effective logis- tic support, both for the military ser- vices of the United States as well as foreign customer countries, is the accurate cataloging and identification of material. A full treatment of the details of cataloging lies beyond the scope of this guide. However, it is sufficient to recognize that an effec- tive cataloging program, based on accurate material identification, is essential to a successful FMS support effort. The special needs of the foreign military customer in the cataloging and identification of FMS material are dis- cussed in several chapters of this guide. Chapter 2 includes detailed information on how stock numbers are formed and assigned, while Chapter 5 includes detailed instructions on identi- fication and processing of repairable equipments under FMS procedures . The following is a summary of the key elements in cataloging and identification of U.S. Navy material. 1-12 1141 DEFENSE LOGISTIC SERVICES CENTER (DLSC) 1142 MANAGEMENT LIST - NAVY (ML-N) The focal point for the U.S. Navy's cataloging and material identification program is the Defense Logistic Services Center (DLSC), Battle Creek, Michigan. Each U.S. military service utilizes this centralized support activity, under the Federal Cataloging Program, for recording military applications of individual repair parts and components, for deter- mining their prior military use, if any, and for assigning National Stock Numbers when appropriate. The basic U.S. Navy catalog which provides item identification and manage- ment data is the Management List - Navy (ML-N) published on microfiche by the Defense Logistics Service Center (DLSC), Battle Creek, Michigan. The ML-N con- tains selected data for all Navy-managed and Navy-interest items, including material of U.S. Navy interest managed by the Defense Logistics Agency and the General Services Administration. The ML-N also provides a historical record of stock number changes and deletions. 1143 NATIONAL STOCK NUMBER (NSN) 1144 THE MASTER CROSS- REFERENCE LIST (MCRL) The ML-N lists only those items that have a known U.S. Navy application, which are cataloged for use in the Federal Supply System, and to which a National Stock Number (NSN) has been assigned. The formation of the NSN and its relationship to the Federal Cata- loging Program are discussed later, in Chapter 2 . An important adjunct to the ML-N is the Master Cross-Reference List ( MCRL ) . This document, also published on micro- fiche, enables the customer to cross- reference a manufacturer's part number to a NSN. 1145 THE MASTER REPAIRABLE ITEM LIST (MRIL) The Master Repairable Item List (MRIL) is the catalog of Navy-managed repairable items which identifies material to be returned to the manu- facturer or to a designated U.S. Navy overhaul point for repair. Detailed 1-13 1145 (Continued) 1150 NAVY COGNIZANCE SYMBOLS FOR INVENTORY MANAGERS instructions for processing repairable items under FMS procedures are included in Chapter 5 . Items assigned to a particular Navy inventory manager can be identified by a two-character code known as a cognizance symbol , or "COG" for short. This two- character code is placed before the National Stock Number (NSN) of each item listed in the ML-N and identifies that NSN as being managed by a particular inventory manager. The first character of the COG is a number which identifies the stores account within the U.S. supply system which finances the purchase of the item. The second character is a letter which identifies the type of material involved. An example of the use of the cogni- zance symbol with the NSN is: 1N5901- 00-471-1286 . Here the cognizance symbol "IN" identifies this item as being a consumable electronic part managed by the Ships Parts Control Center. The cognizance symbol is used in all Navy supply documents and allows for quick identification of the activity respon- sible for the management of that item. Navy cognizance symbols are also assigned to material managed by DLA and GSA. These cogs are coded in the same manner as the symbols for Navy-managed items. Even though the U.S. Army and U.S. Air Force do not utilize cognizance symbols within their distribution sys- tem, the U.S. Navy still assigns one for management and item routing purposes. These Navy assigned cognizance symbols also appear in the ML-N. Figure 1-3 shows the Navy cogni- zance symbols assigned to inventory managers. These "cogs" correspond in general to the material categories shown in Figure 1-2. A complete listing of 1-14 FIGURE 1-3 Navy Material Cognizance Symbols for Designated Inventory Managers INVENTORY MANAGER COGNIZANCE SYMBOL MATERIAL DESCRIPTION ASO :ms MT NPFC NTEC DLA GSA U.S. ARMY NT U.S. AIR FORCE 1R 2R 4R 5R 6R 01 II 20 9C 9G 9N 9L 9X 9Z 9Q 5L 5M 9A 9E 9H 9S 9W 9Y 5N 9F 91 9J 9K 9V CONSUMABLE AERONAUTICAL, PHOTOGRAPHIC, AND METEOROLOGICAL MATERIAL REPAIRABLE AERONAUTICAL, PHOTOGRAPHIC, AND METEOROLOGICAL MATERIAL REPAIRABLE CATAPULT, ARRESTING GEAR AND LANDING AID MATERIAL CONSUMABLE CATAPULT, ARRESTING GEAR, AND LANDING AID MATERIAL AERONAUTICAL GROUND SUPPORT EQUIPMENT NAVAL PUBLICATIONS NAVAL FORMS TRAINING DEVICE EQUIPMENT CONSTRUCTION MATERIAL GENERAL PURPOSE MATERIALS ELECTRONIC REPAIR PARTS MEDICAL SUPPLIES FUEL INDUSTRIAL MATERIAL GENERAL SUPPLIES & MATERIALS STRATEGIC COMMUNICATIONS COMMAND MATERIAL SECURITY AGENCY MATERIAL TANK-AUTOMOTIVE CENTER MATERIAL TROOP SUPPORT COMMAND MATERIAL ARMAMENT COMMAND MATERIAL MISSILE COMMAND MATERIAL AVIATION COMMAND MATERIAL ELECTRONICS COMMAND MATERIAL AIR FORCE CRYPTO LOGIC DEPOT MATERIAL WARNER ROBINS AIR LOGISTIC CENTER MATERIAL OGDEN AIR LOGISTICS CENTER MATERIAL OKLAHOMA CITY AIR LOGISTICS CENTER MATERIAL SACRAMENTO AIR LOGISTICS CENTER MATERIAL SAN ANTONIO AIR LOGISTICS CENTER MATERIAL 1-15/(1-16 blank) FIGURE 1-3 Navy Material Cognizance Symbols for Designated Inventory Managers INVENTORY MANAGER COGNIZANCE SYMBOL MATERIAL DESCRIPTION INVENTORY MANAGER COGNIZANCE SYMBOL MATERIAL DESCRIPTION NAVAIR 2M GROUND VEHICLES/CRYOGENIC FACILITIES ASO 1R CONSUMABLE AERONAUTICAL, PHOTOGRAPHIC, AND METEOROLOGICAL MATERIAL 4M METEOROLOGICAL MATERIAL 2R REPAIRABLE AERONAUTICAL, PHOTOGRAPHIC, AND 8M AERONAUTICAL LAUNCH AND RECOVERY SYSTEMS METEOROLOGICAL MATERIAL 8R MAJOR AERONAUTICAL SYSTEMS AND EQUIPMENT 4R REPAIRABLE CATAPULT, ARRESTING GEAR AND LANDING AID MATERIAL 2V AERONAUTICAL SUPPORT EQUIPMENT AND SONOBUOYS 5R CONSUMABLE CATAPULT, ARRESTING GEAR, AND LANDING AID MATERIAL 4V AIRCRAFT ENGINES 6R AERONAUTICAL GROUND SUPPORT EQUIPMENT 2W PHOTOGRAPHIC EQUIPMENT NPFC 01 NAVAL PUBLICATIONS NAVSEA 2F MAJOR SHIP ELECTRONIC EQUIPMENT 11 NAVAL FORMS 2S MAJOR HULL, MECHANICAL, AND ELECTRICAL EQUIPMENT NTEC 20 TRAINING DEVICE EQUIPMENT 2J MAJOR ORDNANCE EQUIPMENT DLA 9C CONSTRUCTION MATERIAL NAVELEX 2Z MAJOR ELECTRONIC EQUIPMENT 9G GENERAL PURPOSE MATERIALS NAVFAC 2C MAJOR CONSTRUCTION AND CIVIL ENGINEERING 9N ELECTRONIC REPAIR PARTS EQUIPMENT 9L MEDICAL SUPPLIES NAVSUP 2B MATERIALS HANDLING EQUIPMENT 9X FUEL SPCC 1A ORDNANCE EQUIPMENT & REPAIR PARTS FOR MAJOR ORDNANCE EQUIPMENT 9Z INDUSTRIAL MATERIAL i 2A ORDNANCE REPAIR PARTS GSA 9Q GENERAL SUPPLIES & MATERIALS 4A ORDNANCE REPAIR PARTS TO SUPPORT NAVAIR U.S. ARMY 5L STRATEGIC COMMUNICATIONS COMMAND MATERIAL EQUIPMENT 5M SECURITY AGENCY MATERIAL 6E AIR MISSILE REPAIR PARTS « 9A TANK-AUTOMOTIVE CENTER MATERIAL 2G REPAIRABLE AIR WEAPONS SYSTEMS EQUIPMENT AND PARTS 9E TROOP SUPPORT COMMAND MATERIAL 4G REPAIRABLE ELECTRONIC SYSTEMS EQUBPMENT AND PARTS 9H 9S ARMAMENT COMMAND MATERIAL MISSILE COMMAND MATERIAL 6G GENERAL PURPOSE ELECTRONIC TEST EQUIPME SJ T 9W AVIATION COMMAND MATERIAL 1H SHIPBOARD EQUIPMENT AND REPAIR PARTS 9Y ELECTRONICS COMMAND MATERIAL 2H SHIPBOARD EQUIPMENT AND REPAIR PARTS U.S. AIR FORCE 5N AIR FORCE CRYPTOLOGIC DEPOT MATERIAL 6M AERONAUTICAL GROUND SUPPORT EQUIPMENT 9F WARNER ROBINS AIR LOGISTIC CENTER MATERIAL IN ELECTRONIC MATERIAL 91 OGDEN AIR LOGISTICS CENTER MATERIAL 2N REPAIRABLE ELECTRONIC MATERIAL 9J OKLAHOMA CITY AIR LOGISTICS CENTER MATERIAL 4N REPAIRABLE ELECTRONIC MATERIAL FOR ORDNANCE 9K SACRAMENTO AIR LOGISTICS CENTER MATERIAL 8N TRAINING DEVICE REPAIR PARTS 9V SAN ANTONIO AIR LOGISTICS CENTER MATERIAL 2U SURFACE MISSILE REPAIR PARTS 4U ASW WEAPONS SUPPORT ITEMS 6U SURFACE WEAPONS SUPPORT ITEMS 1-15/(1-16 blank) 1150 Navy cognizance symbols identified to inventory managers and types of material (Continued) represented are found in the MILSTRIP/ MILSTRAP Operating Procedures Manual , NAVSUP publication 437. 1-17/(1-18 blank) 1200 1210 THE U.S. NAVY AND FOREIGN MILITARY SALES 1220 THE FMS CASE SECTION C— THE FMS PROCESS The previous section provides a general overview of the U.S. supply system. The principal activities are identified at each level of management, and a summary of some key features of the system included. This section focuses on an area of primary interest to foreign customers . The purpose of this portion of the guide is to explain the FMS process in the U.S. Navy by: Defining "FMS Case" Showing how the FMS Program interfaces with the U.S. Navy supply system Describing FMS roles of some principal USN participants. The term "Foreign Military Sales Case" describes a contractual sales agreement between the United States and an eligible foreign government. The FMS Case is documented by the U.S. Depart- ment of Defense Form 1513, Offer and Acceptance . Figure 1-4 is an illustration of a hypothetical letter of Offer and Accep- tance, DD Form 1513, covering shipboard equipment for the fictional Republic of Latonia. The Offer and Acceptance is a formal document by which the U.S. Gov- ernment offers to sell to a foreign government specified defense articles and services. The DD Form 1513 stipu- lates the items and/or services, estimated costs, the terms and conditions of sale, and provides for the foreign government's signature to certify acceptance. 1-19 FIGURE 1-4 Illustration of an FMS Case (Offer and Acceptance, DD Form 1513) UNITED STATES DEPARTMENT OF DEFENSE OFFER AND ACCEPTANCE (2) PURCHASERS REFERENCE (3) CASE IDENTIFIER Latonia Navy Minister tt_p_tat letter of 5 March 1979J Li v LAi (1) PURCHASER (flint and Address! (Zip Code) Republic of Latonia (Latonian Navy) Ministry of the Navy Admiralty House Barlang ,_ Latonia OFFER Pursuant lo the Arms Export Control Act, the Government of the United States (USG) heitby oilers to sell to the above purchaser the defense sni- des and defense services listed below (hereinafter referred to collectively as "items and individually as "defense articles" or "defense services"), sub- ject to the terms contained herein and conditions set forth in Annex A, and to such oth"r special terms and conditions which may be a part of, and appended to, this Offer .ind Acceptance (9) Signature (VS Dept. /Agency Authorized Representative i isi A.M. Gates, Deputy Director, Security Typed Nam. and Title Assistance Division (6i aodbess: Office of the CNO (OP63) Washington, DC 15 May 1979 20350 (81 THIS OFFER EXPIRES 30 July 1979 Countersignature (Office of the Comptroller. DSAA) do) B.A. Fidd, Deputy Comptroller, DSAA Typed Name and Title (11) OSAA ACCOUNTING ACTIVITY DSAA-SAAC Lowry AFB , Denver, CO 80729 ITEM DESCRIPTION Irtiludinn Sd«* Numbrt i} applu ahle/ AND REMARKS LIVERY TERM CODE AN/BOQ-21 Sonar, Complete Initial Spares and Repair Parts for AN/BOQ-21 Sonar Set Set $27,221 7,200 $54,442 14,400 P(26) X(26) (21) ESTIMATED COST S 68,842 (22) ESTIMATED PACKING. CRATING, AND HANDLING COST 2,409 (23) ESTIMATED GENERAL ADMINISTRATIVE COSTS 2,065 (24) ESTIMATED CHARGES FOR SUPPLY SUPPORT ARRANGEMENT (25) OTHER ESTIMATED COSTS (Specify) I26) ESTIMATED TOTAL COSTS $ 73,316 1271 TERMS (28) AMOUNT OF INITIAL DEPOSIT - $ 18,329 Dependable Undertaking (Type of Assistance, Code 5) ACCEPTANCE (29) I am a duly authorized representative of the Government of _ Latonia . and upon behalf ol said Government, accept this offer under the terms and conditions cuntamed herein 130) this 5th , day of_ July 79 (31) SIGNATURE (32) M.V. Rav. Captain. LN. Naval Attache TYPED NAME AND 1 ITLE MARK FOR CODE . R_ (341 FREIGHT FORWARDER CODE I 135) procuring agency Latonia Ministry of Navy (361 DESIGNATED PAYING OFFICE Latonia Treasury Department (37) ADDRESS OF DESIGNATED PAYING OFFICE 1801 King Street Barlang, Latonia DD ,a°uT7, 1513 PREVIOUS EDITIONS ARE OBSOLETE PAGE 1 of PAGES 1-20 1220 (Continued) 1221 CASE IDENTIFIER 1222 SPECIALIZED "PULL" CASES: DIRECT REQUISI- TIONING, COOP- ERATIVE LOGISTICS REPAIR SERVICES A separate "case identifier" is assigned to each FMS case for the pur- pose of identification, accounting and data processing documentation for each accepted offer (DD Form 1513). As indicated in paragraph 1220, letters of Offer and Acceptance sub- mitted to potential FMS customers are assigned a "case identifier." This case identifier is perpetuated after the letter of Offer and Acceptance is accepted; it is the unique means of identifying the case throughout its existence. The case identifier is a six-character symbol and consists of the following elements: The appropriate country code The implementing agency code The case designator. Figure 1-5 shows a sample case identifier and explains its derivation. Material or services (or both) may be furnished to FMS customers under either "push" or "pull" cases. There are, however, three specialized types of "pull" cases for which there are no "push" equivalents. These specialized types of "pull" cases are: Direct Requisitioning Procedure (DRP) cases, which are estab- lished for overall money value. These cases permit the FMS customer to requisition items within broad categories of materials or services in support of one or more weapons systems. DRP requisitioning is described in detail in Chapter 3 . 1-21 FIGURE 1-5 Construction of the FMS Case Identifier 2-letter Country Code, from Appendix 20 of the MILSTRIP/ MILSTRAP Procedures Manual, NAVSUP Pulication 347. ("LT" stands for fictional republic, of Latonia) LAT 3-digit Case Designator which is assigned by the implementing U.S. agency to identify a specific offer to a country. (LAT stands for the offer of two AN/BQQ-21 Sonars & Repair parts to Latonia) . 1-letter implementing agency code for the U.S. Military Service which main- tains control for the case. ("P" stands for U.S. Navy) . 1-22 1222 (Continued) 1230 FMS ROLE OF THE CHIEF OF NAVAL OPERATIONS (CNO) Cooperative Logistic Supply- Support Arrangement (COOPLOG or CLSSA) cases, under which the FMS customer and the U.S. Government share the cost of the logistic support system for a weapon system used by both countries. COOPLOG is described in detail in Chapter 4. Repair Service cases, which provide the FMS customer an arrangement with the U.S. De- partment of Defense to send unserviceable items to the United States for repair or overhaul. Repairables pro- cessing is described in detail in Chapter 5 . Within the U.S. Department of the Navy, the Chief of Naval Operations (CNO) has overall responsibility for the Foreign Military Sales Program. The Director, Security Assistance Division in the Office of the CNO (Code OP-63 ) has primary responsibility for Foreign Security Assistance. He exer- cises overall direction, guidance, and control of all Department of the Navy Security Assistance programs. The Office of the CNO arranges for and manages the training of foreign military personnel in the U.S. and over- seas under security assistance procedures CNO also negotiates and concludes Cooperative Logistics Arrangements (CLSSA) for logistics support with representatives of foreign governments and prepares service-to-service imple- menting procedures regarding logistic support of Navy weapons systems and equipment. 1-23 1240 FMS ROLE OF THE CHIEF OF NAVAL MATERIAL/NAVAL MATERIAL COMMAND ( CNM/NMC ) The Chief of Naval Material (CNM) is responsible for developing and imple- menting procedures by which foreign customers are served. The Deputy Chief of Naval Material (Security Assistance), Code MAT 08F, has primary responsibility for Foreign Security Assistance matters within the Naval Material Command. 1250 FMS ROLE OF THE NAVAL SUPPLY SYSTEMS COMMAND (NAVSUP) The CNM directs which Systems Com- mand or inventory manager is responsible for implementing a Foreign Military Sales support agreement, and assures that timely action is taken to satisfy the FMS requirements. CNM is also responsible for monitoring each agreement from the time it is signed until the last item of material has been delivered, billed, and paid for. Periodically, the Chief of Naval Material convenes status review meetings with foreign customers. The purpose of this meeting is to review the overall status of the FMS program support being provided by the U.S. Navy to a customer country. The Naval Supply Systems Command has two major roles in the FMS program. First, as a major Systems Command, NAVSUP has responsibilities in directing the actions of its Inventory Control Points (SPCC, ASO, NPFC ) and assigned stock points. Second, NAVSUP has over- all responsibility for the supply func- tion of the FMS program. To accomplish this second role for NAVSUP, the U.S. Navy International Logistics Control Office (NAVILCO) is located at Phila- delphia, Pennsylvania, and is responsible for the detailed supply functions of the Navy's FMS Program. 1-24 1260 NAVILCO is the focal point within the U.S. Navy for the introduction of U.S. NAVY all FMS requisitions into the U.S. INTERNATIONAL supply system and the monitoring and LOGISTICS reporting for these transactions until CONTROL OFFICE all material and services have been (NAVILCO) delivered. Its primary mission is to serve the Navy's foreign military customers . After the Offer and Accep - tance , DD Form 1513, has been approved and the FMS case has been implemented, NAVILCO becomes the FMS customer's single point of contact for supply matters . NAVILCO' s FMS requisition monitor- ship role includes the following specific functions : Validating customer requisi- tions to ensure proper infor- mation is included Directing the requisitions to the appropriate element of the supply system Taking action to ensure the timely delivery of material to meet customer requirements; this action includes necessary coordination with other ele- ments of U.S. supply system Providing status on availa- bility and delivery of material to foreign customers Preparing and distributing supply reports related to the Navy FMS Program Conducting orientation and training for U.S. and foreign personnel in FMS policies and procedures 1-25 1260 (Continued) 1270 SECURITY ASSIS- TANCE ACCOUNTING CENTER (SAAC) 1280 FMS SUPPLY AND FINANCIAL NETWORK Providing assistance and guid- ance to elements of the U.S. Navy Supply System and foreign customers in matters relating to FMS Providing for the detailed Accounting and Financial Management for the Navy FMS Program. To achieve greater standardization of FMS financial transactions, the Security Assistance Accounting Center was established at Lowry Air Force Base, Denver, Colorado, to perform FMS account- ing and billing for all the U.S. military services . SAAC serves as the central point-of-contact for all financial inquiries from the foreign customer. Figure 1-6 shows the U.S. system again, but it now highlights the rela- tionship between NAVILCO, SAAC, and the foreign customer. The precise methods by which NAVILCO and SAAC accomplish the supply and financial tasks are the subjects of the individual chapters of this guide. 1-26 FIGURE 1-6 The FMS Supply and Financial Network CHIEF OF NAVAL OPERATIONS (CNO) SECURITY ASSISTANCE ACCOUNTING CENTER ISAAC) CHIEF OF NAVAL MATERIAL (CNM) NAVAL MATERIAL COMMAND NAVAL SUPPLY SYSTEMS COMMAND (NAVSUPI POLICY AND MANAGEMENT GUIDANCE OTHER SYSTEMS COMMANDS NAVY INVENTORY MANAGERS MILSTRIP REQUISITIONS DEFENSE LOGISTICS AGENCY (DLA) NAVY INTERNATIONAL LOGISTICS CONTROL OFFICE (NAVILCO) NAVY INDUSTRIAL FUND(NIF) ACTIVITIES NAVY STOCK POINTS FINANCIAL I INQUIRIES I SUPPLY INQUIRIES GENERAL SERVICES ADMINISTRATION (GSA) INVENTORY MANAGERS OF THE U.S. ARMY AND AIR FORCE DEFENSE LOGISTICS CENTERS SUPPLY DISTRIBUTION FACILITIES ARMY/ AIR FORCE STOCK POINTS MATERIAL SUPPORT TO FMS CUSTOMERS I FOREIGN CUSTOMER U.S. CUSTOMER i I J 1-27 REFERENCES FOR CHAPTER 1 Introduction to Federal Supply Catalogs and Related Publi - cations Naval Supply Systems Command (NAVSUP) Publication 4000 (NSN 0588 LP 411 2000) Management List - Navy (ML-N) Naval Supply Systems Command (NAVSUP) Publication 4100 (NSN 0588 LP 411 1000) Master Repairable Item List (MRIL) Naval Supply Systems Command (NAVSUP) Publication 4107 (NSN 0588 LP 410 2600) Military Assistance and Sales Manual Department of Defense (DOD) Publication 5105. 38M Military Assistance Program Address Directory (MAP AD) Department of Defense (DOD) Publication 5105. 38D (NSN 0526 LP 510 5430) MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command (NAVSUP) Publication 437 (NSN 0530 LP 170 0083) 1-28 CHAPTER 2. REQUISITIONING SYSTEM CHAPTER 2. REQUISITIONING SYSTEM TABLE OF CONTENTS Page Number 2100 SECTION A--THE REQUISITIONING PROCESS 2-1 2110 Requisition - the Basic Ordering Document 2-1 2111 Basic Types of Requisitions - "Pull" and "Push" 2-1 2112 Requisition Flow 2-2 2120 Military Standard Requisitioning and Issue Procedure (MILSTRIP) 2-2 2121 Uniform Material Movement and Issue Priority System (UMMIPS) 2-4 2122 How UMMIPS Operates 2-4 2123 Deriving the Priority Number for a Requisition 2-4 2124 Force/Activity Designator (FAD) 2-5 2125 Urgency of Need Designator (UND) 2-5 2126 Use of the UMMIPS Matrix 2-5 2130 Requisition Transmission and Documents (General) 2-7 2131 Methods of Transmission: AUTODIN 2-7 2132 Mail Transmittal 2-7 2133 Message Transmittal 2-8 2134 Types of Requisition Documents; Mechanized Card Format, DD Form 1348M 2-9 2135 Manual Card Format, DD Form 1348 2-9 2136 Manual Document Format, DD Form 1348-6 2-9 2137 Message Format 2-10 2140 What Happens After Requisition Is Sent to NAVILCO 2-10 2150 Status Feedback 2-10 2160 NAVILCO - The Customer's Single Point of Contact 2-14 2161 Follow-Up 2-14 2170 Shipment of Material to the Customer 2-16 2171 Usual Method of Shipment 2-16 2172 Exceptions to the Usual Method of Shipment 2-16 2180 Reports Other Than Status Information 2-18 2181 The FMS Quarterly Requisition Report 2-18 2190 Summary 2-20 Page Number 2200 2210 2220 2221 2222 2230 2231 2232 2233 2240 2250 2251 2252 2253 2254 2255 2256 2257 2258 2259 2260 2261 2262 2263 2264 2265 2266 2267 2268 2269 2270 2271 2272 2273 SECTION B--REQUISITIONING UNDER FMS : DETAILED PROCEDURES 2-21 Authority for Requisitioning 2-21 Requisition Forms; Which Form To Use 2-21 Punched Card Requisition Forms 2-21 Non-NSN Requisition Form 2-25 How To Fill Out Requisition, DD Form 1348 and DD Form 1348M for Standard Material 2-25 Use of DD Form 1348-6 for Non-Standard Material 2-25 Use of MILSTRIP Format in Message Requisitions ( Standard Material) 2-25 Message Requisition ( Non-Standard Material) 2-39 Transmission of Requisitions to NAVILCO 2-39 Description of MILSTRIP Information Elements for FMS Requisitions Document Identifier Routing Identifier 2-44 Media and Status Code 2-44 Stock Number 2-44 National Stock Numbers (NSNs) and Federal Stock Numbers (FSNs); Conversion from FSN to NSN 2-45 Conversion of Stock Numbers for Publications and Forms 2-46 Use of "Stock Number" Section When Ordering Non-Standard Material 2-46 Unit of Issue 2-48 Quantity 2-50 Document Number 2-51 Service Code 2-51 Requisitioner 2-51 Date 2-53 Serial Number 2-53 Demand Code 2-54 Suffix Code 2-54 Supplementary Address Code 2-56 Service Code 2-57 Offer Release Code and Freight Forwarder Code 2-57 FMS Case Identification 2-60 Signal Code 2-61 Fund Code 2-61 Distribution Code 2-61 Page Number Project Code Priority Required Delivery Date Advice Code Card Columns 67-73; Block 23 Price Status Information Provided to Customers Use of MILSTRIP to Provide Status DD Form 1348M Status Card AUTODIN Transmission What a Status Card Looks Like Types of Status Documents How to Interpret Supply Status How to Interpret Shipment Status Customer Follow-Up for Status Information Use of DD Forms 1348M/1348 for Follow-Up How to Fill Out DD Form 1348M and DD Form 1348 When Used for Follow-Up Use of DD Form 1348M Preferred; Transmittal of Follow-Up to NAVILCO by AUTODIN or Mail Follow-Up Transmittal to NAVILCO by Message Caution Against Too Frequent or Too Early Follow-Up Other MILSTRIP Documents Which May Be Encountered by Customers Other MILSTRIP Documents Which the Customer Originates Other MILSTRIP Status Documents Which the Customer May Receive Summary 2-62 2-63 2-63 2-64 2-66 2-66 2-67 2-67 2-67 2-67 2-68 2-68 2-73 2-75 2-76 2-83 2-83 2-85 2-85 2-85 2-86 2-88 2-91 2-93 SECTION C--AREAS OF SPECIAL INTEREST 2-95 How to Obtain MILSTRIP Forms Communication System Features: AUTODIN, DAAS, and MINIMIZE AUTODIN DAAS MINIMIZE Changing Priority of a Requisition Priority Change; Entire Quantity Priority Change; Partial Quantity 2-95 2-96 2-96 2-97 2-97 2-98 2-99 2-100 Page Number 2340 2341 2342 2343 2344 2345 2350 2360 2361 2362 2363 2364 2365 2370 2371 2372 Special Requisitioning Situations 2-101 Major Weapons Systems or Equipment 2-101 Importance of Monitoring "Push" Requisitions 2-102 Recognizing "Push" Requisitions 2-102 Planning for Receipt of "Push" Material 2-103 Importance of Keeping Usage Data 2-103 "Push" Requisitions for Services 2-104 Requisitioning Publications 2-105 Document Numbers for Changes to Basic Publications 2-106 Requisitioning Changes Separately 2-106 Requesting Automatic Distribution of Changes and Revisions with the Basic Publication 2-107 Requesting Automatic Distribution of of Changes and Revisions Without the Basic Publication 2-107 Identification of Publication Changes and Revisions Under Automatic Distribution 2-108 Requisitioning Actions Which Should Be Taken or Avoided 2-108 FMS Requisitioning "Dos" - Actions Which Should Be Taken 2-109 FMS Requsitioning "Don'ts" - Actions Which Should Be Avoided 2-111 REFERENCES FOR CHAPTER 2 2-112 INDEX OF FIGURES Page Number 2-1 FMS Requisition Flow 2-3 2-2 Use of the UMMIPS Matrix to Determine a Priority Number 2-6 FMS Requisition Flow 2-11 FMS Requisition and Status Flow 2-13 FMS Requisition, Status, Follow-Up Flow 2-15 FMS Requisition, Status, Follow-Up, and Material Flow 2-17 The Complete FMS Requisitioning Process 2-19 Development of Requisitions from the FMS Case 2-23 Table for Determining Which Requisition Form to Use 2-26 Requisition Information Elements; Standard Stock 2-27 Sample Requisition Document, DD Form 1348-6, Non-Standard Material 2-33 FMS Requisition for Standard Stock, MILSTRIP Message Format 2-37 FMS Requisition for Non-Standard Material, MILSTRIP Message Format 2-41 Table for Determining Which Requisition Form and Transmission Form to Use 2-43 Conversion of a Federal Stock Number (FSN) to a National Stock Number (NSN) 2-47 Example of Identifying Information of Non-Standard Material on DD Form 1348-6 2-49 Page Number 2-17 2-18 2-19 2-20 2-21 2-22 2-23 2-24 2-25 2-26 2-27 Composition of a Requisition "Document Number" Source of Notice of Availability Data Frequently Used MILSTRIP Advice Codes Comparison of DD Form 1348M Requisition and Status Cards Sample DD Form 1348M Status Card Frequently Used MILSTRIP Status Codes MILSTRIP Mode of Shipment Codes Example of Shipment Status Card, DD Form 1348 Comparison of Requisition and Follow-Up Cards, DD Form 1348M and DD Form 1348 Table for Determining When to Initiate Customer Follow-Up MILSTRIP Requisition Rejection Codes 2-55 2-58 2-65 2-69 2-72 2-74 2-77 2-79 2-84 2-87 2-92 CHAPTER 2. REQUISITIONING SYSTEM 2100 2110 REQUISITION - THE BASIC ORDERING DOCUMENT 2111 BASIC TYPES OF REQUISITIONS - "PULL" AND "PUSH" SECTION A--THE REQUISITIONING PROCESS The key to supply support under FMS is the individual Requisition , the single, specific ordering document which shows exactly which particular item (or ser- vice), and how many of the items, is required by the customer country. An individual requisition applies to only one unique item, although the quantity of that single item ordered on each requisition may be more than one. Each requisition is assigned its own unique number to ensure positive identification and permit monitoring, follow-up, and other necessary action through the entire range of supply and financial processing. Under the FMS Program, requisitions are submitted on standard U.S. Department of Defense (DOD) forms, or by electri- cally transmitted messages. The two standard forms most frequently used are the DOD Single Line Item Requisition System Document (Mechanical) , DD Form 1348M, and the DOD Single Line Item Requisition System Document (Manual) , DD Form 1348. (These forms are illus- trated in Figure 2-10, following para- graph 2230.: Their use, and other requi- sitioning documents which may be used, are explained in detail in paragraphs 2130 through 2137 and in Section B of this chapter. Requisitions are initiated in two ways. One way of initiation is by a representative of the customer country (these are called "pull" requisitions, because the customer "pulls" material from the United States ) . The other way of initiation is by one of the many of- fices or agencies within the U.S. supply system which originate requisitions on behalf of the customer country (these are called "push" requisitions, because the U.S. supply system "pushes" material to the customer). 2-1 2111 (Continued) 2112 REQUISITION FLOW 2120 MILITARY STANDARD REQUISITIONING AND ISSUE PRO- CEDURE (MILSTRIP) A typical example of a "pull" requi- sition is one originated by a supply activity within a customer country to re- plenish stock of a frequently used elec- tronic part. A typical example of a "push" requisition is one originated by a U.S. inventory manager in ordering the initial supply of spare parts to support a particular weapon system being supplied to a customer country. A customer coun- try representative will be aware of the existence of a "pull" requisition at the time he initially prepares the requisi- tion. The customer country first be- comes aware of a "push" requisition when initial status information is received from the U.S. Navy International Logis- tics Control Office (NAVILCO). Never- theless, it is important that the custo- mer closely monitor both "push" and "pull" requisitions. He must not assume that "push" requisitions will take care of themselves automatically, or require less of his attention, merely because they were initiated by someone else. Figure 2-1 is a simplified repre- sentation of the flow of the requisi- tion (either "push" or "pull") for an item being provided to a customer coun- try under the FMS program. Within the U.S. Department of Defense all the U.S. military services use stan- dard requisition procedures and docu- mentation governed by the Military Standard Requisitioning and Issue Pro - cedure (which is abbreviated as MILSTRIP). MILSTRIP is described in detail in the MILSTRIP/MILSTRAP Operating Procedures Manual , Naval Supply Systems Command (NAVSUP) Publication 437. Customer countries ordering material under the FMS program are also required to follow MILSTRIP procedures and use standard MILSTRIP documents. 2-2 FIGURE 2-1 FMS Requisition Flow WITHIN THE CUSTOMER COUNTRY WITHIN THE UNITED STATES REQUISITION ORIGINATOR 'PULL' REQUISITION NAVILCO "PUSH" REQUISITION U.S. OFFICE OR AGENCY ORIGINATING "PUSH" REQUISITION 2-3 2121 UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) Similarly, the processing of requi- sitions and the issue, handling, and transportation of material throughout the U.S. Department of Defense is gov- erned by the Uniform Material Movement and Issue Priority System (abbreviated as UMMIPS). The UMMIPS provides a way of ensuring that more urgent require- ments (both in terms of the degree of need and the military importance of the requisitioner ) are accorded greater priority. Customer countries ordering material under the FMS program are also required to utilize the UMMIPS. 2122 HOW UMMIPS OPERATES The UMMIPS directives (DOD Instruc- tion 4410.6 and OPNAV Instruction 4614.1) set forth a procedure for deriving a priority number from 01 to 15 for each requisition. A lower order priority number indicates more urgent priority, while a higher order priority number indicates a less urgent priority. For example, requisitions assigned Priority j?3 are for requirements of greater im- portance and urgency than requisitions assigned Priority 13. It is important to understand that a requisition originator cannot choose from the entire range of priority num- bers (01 through 15), but is normally limited to selection from among three priority numbers which the UMMIPS rules permit him to use. All requisition originators must abide by these rules . Abuse of UMMIPS must be avoided in order for the system to work for the benefit of all of its users. 2123 DERIVING THE PRIORITY NUMBER FOR A REQUISITION The priority number for a requisi- tion is obtained from a matrix provided in the UMMIPS directives. The priority number depends upon two elements : 2-4 2124 FORCE/ACTIVITY DESIGNATOR (FAD) The military importance of the activity which is to receive the material. This is indica- ted by a Force/Activity Designator (abbreviated as F/AD or FAD) shown by a Roman numeral from I through V. Normally, a customer country is assigned a F/AD by the U.S. Joint Chiefs of Staff which is applicable to all requisitions for material destined for the country. In some instances, a different F/AD may be as- signed to a specific military service (e.g., Army, Navy, or Air Force) of a customer coun- try, or to a particular FMS case. 2125 URGENCY OF NEED DESIGNATOR (UND) 2126 USE OF THE UMMIPS MATRIX The receiving activity's urgency of need for the mate- rial being requisitioned is indicated by an Urgency of Need Designator (abbreviated UND) in alphabetic character form A, B, or C. The requisi- tion originator determines the UND to be assigned, using the specific criteria set forth in the UMMIPS directives. In broad terms, UND "A" equates to an extremely urgent require- ment, UND "B" to a less urgent requirement, and UND "C" to a routine requirement. Figure 2-2 gives an example of the use of the UMMIPS matrix in determining the priority number for a requisition to replenish stock of an electronic part in the fictional country of "Latonia," which has been assigned F/AD IV. 2-5 FIGURE 2-2 Use of the UMMIPS Matrix to Determine a Priority Number LATONIA'S FORCE/ACTIVITY DESIGNATOR (F/AD IV) FORCE/ACTIVITY DESIGNATOR (F/AD) I II III IV V URGENCY A 01 02 03 01 08 OF NEED B 04 05 06 09 10 DESIGN Al OR (UND) C 11 12 13 14 15 URGENCY OF NEED FOR THIS REQUIREMEN T (STOCK REPL ENISHMENT- PRIORITY NUMBER FOR THIS UND "C") REQUISITION (PRIORITY 14) 2-6 2130 REQUISITION TRANSMISSION DOCUMENTS ( GENERAL ) All requisitions must contain cer- tain standard elements of information, irrespective of the type of document AND used in their preparation or the method of transmission used to forward the requisition to NAVILCO. These elements are listed in a prescribed order, using predetermined coding, for convenience and efficiency. This information and manner in which it is arranged and coded is termed "MILSTRIP format" which is described in greater detail in Section B of this chapter and in the MILSTRIP directive, NAVSUP Publication 437. How- ever, the type of document and the method of transmission are somewhat interdepen- dent. 2131 METHODS OF TRANS- MISSION: AUTODIN Three methods of requisition trans- mission are authorized for FMS require- ments : AUTODIN - Customer countries which have arrangements for access to the U.S. worldwide Automated Digital Network (AUTODIN), an electrical sys- tem for data transmission, are encouraged to use this method of forwarding requisitions to NAVILCO whenever possible. NOTE : Use of AUTODIN requires that requisitions be prepared in MILSTRIP format on DD Form 1348M, POD Single Line Item Requisition System Docu - ment (Mechanical) , described more fully below and in Sec- tion B of this chapter. 2132 MAIL TRANSMITTAL MAIL - Customer countries which do not have AUTODIN access should forward all but their most urgent requirements to NAVILCO via mail. 2-7 2132 (Continued) 2133 MESSAGE TRANSMITTAL NOTE : Requisitions forwarded via mail must be prepared in MILSTRIP format, but may- use DD Form 1348M mentioned previously, or DD Form 1348, POD Single Line Item Requi - sitions System Document (Manual ) . When a non-standard item is being ordered , the DD Form 1348-6, Non-FSN Requisition (Manual) , should be used. (A "non-standard item" is an item which has not been assigned a National Stock Number (NSN) and is not carried in the U.S. supply system. ) DD Form 1348-6 is described more fully below and in para- graph 2222. However, when ordering standard stock, use of DD Form 1348M is encour- aged whenever possible, since these documents can be pro- cessed more quickly after receipt at NAVILCO. Message - (i.e., electrical transmission methods other than AUTODIN. ) Customer coun- tries which do not have AUTO- DIN access may forward their most urgent requirements to NAVILCO via electrically transmitted message. NOTE: Requisitions transmitted via message must be in MILSTRIP for- mat and should normally be limi- ted to requirements having the greatest urgency, i.e., those which qualify for assignment of UND "A." It should be noted that message traffic is limited to a maximum of seven requisitions per message. 2-8 2134 TYPES OF REQUISI- SITION DOCUMENTS; MECHANIZED CARD FORMAT, DD FORM 1348M 2135 MANUAL CARD FORMAT, DD FORM 1348 2136 MANUAL DOCUMENT FORMAT, DD FORM 1348-6 As indicated above, all requisitions must be submitted in MILSTRIP format in one of the four documentary forms de- scribed below. Mechanized Form using DD Form 1348M, which is a punched card form, may be tranmitted to NAVILCO either by AUTODIN or mail, and should be used when- ever possible to permit speedy processing at NAVILCO. CAUTION: DD Forms 1348M con- taining written information in the "Remarks" section of the document cannot be trans- mitted to NAVILCO via AUTO- DIN. These must show the coding "A05" in the "Docu- ment Identifier" section of the card and must be forwarded to NAVILCO by mail. Manual Form using DD Form 1348, a card form which may be prepared by typewriter or legibly printed, and must be submitted to NAVILCO by mail. DD Form 1348 is available in two-, four-, and six-part (copy) sets. The choice of which type to use should be made by the customer based on his requirements for copies of the requisition; only the original of the DD Form 1348 need be submitted to NAVILCO . In instances when a non-stan- dard item is being ordered, the DD Form 1348-6, Non-FSN - Requisition (Manual) should be used. DD Form 1348-6 may be used only when ordering non- standard items. When the DD Form 1348-6 is used, the or - iginal and one copy should be forwarded to NAVILCO by mail . 2-9 2137 MESSAGE FORMAT 2140 WHAT HAPPENS AFTER REQUI- SITION IS SENT TO NAVILCO 2150 STATUS FEEDBACK Message Form , using the pre- scribed MILSTRIP format and whatever document is appropri- ate to the method of electri- cal transmission being used, is the fourth type of documen- tary form which may be used for requisition submission. As indicated in Figure 2-1, all customer requisitions (whether "push" or "pull") are forwarded to NAVILCO. Here they are recorded in the NAVILCO master files, and necessary financial review and commitment actions are taken. NAVILCO next forwards the requisition to the inventory manager within the U.S. supply system which has cognizance over the item or type of material requisitioned. The inventory manager initiates action to obtain the material desired and have it shipped to the customer. This may involve directing the release of material from stock already on hand in the U.S. supply system. Or, if the item is not in stock or is non-standard, the inventory manager will initiate ac- tion to purchase the material from a com- mercial contractor. This onward flow of the requisition to the U.S. inventory manager and the U.S. source of supply is shown in Figure 2-3. Throughout this process, status in- formation indicating the progress of sup- ply action will be provided to NAVILCO by the various U.S. activities involved in processing the requisition. In turn, as this status information is received, NAVILCO will forward it (in the punched card format prescribed by MILSTRIP) to the customer. For more detailed treat- ment of the status reporting process, refer to paragraphs 2280 through 2287. 2-10 FIGURE 2-3 FMS Requisition Flow WITHIN THE CUSTOMER COUNTRY L WITHIN THE UNITED STATES REQUISITION ORIGINATOR "PULL" REQUISITION "PUSH" OR "PULL' REQUISITION U.S. INVENTORY MANAGER "PUSH" REQUISITION "PUSH" OR "PULL' REQUISITION U.S. OFFICE OR AGENCY ORIGINATING "PUSH" REQUISITION U.S. SOURCE OF SUPPLY (GOVERNMENT SHELF STOCK OR CONTRACTOR) 2-11 2150 Usually the first element of status information received by the customer will (Continued) be an acknowledgement from NAVILCO that the requisition has been received and recorded. Following that, successive elements of status information forwarded from NAVILCO to the customer might typi- cally indicate: Receipt of the requisition by the cognizant inventory man- ager and indication of the source of supply designated to furnish the material (or that the material is being purchased, and a forecast delivery date) Confirmation of the price of the material as shown on the original requisition, or ad- vice as to a different price if the price on the requisition is not accurate Acknowledgement by the source of supply that the requisition has been received and supply action is being taken Advice by the source of supply that material has been issued Advice by the source of supply that the material has been shipped, indicating the method of shipment and other trans- portation data, as appropriate. Normally, after material has been shipped, further status provided to the customer takes the form of financial, rather than supply, information. Figure 2-4 adds the flow of status information to the requisition flow depicted previ- ously in Figures 2-1 and 2-3. 2-12 FIGURE 2-4 FMS Requisition and Status Flow WITHIN THE CUSTOMER COUNTRY "PULL" REQUISITION ORIGINATOR WITHIN THE UNITED STATES 1 REQUISITION _STATUS INFORMATION IMAVILCO "PUSH" OR "PULL- REQUISITION STATUS INFORMATION U.S. INVENTORY MANAGER "PUSH" REQUISITION U.S. OFFICE OR AGENCY ORIGINATING "PUSH" REQUISITION "PUSH" OR "PULL' REQUISITION STATUS INFORMATION I I I I U.S. SOURCE OF SUPPLY (GOVERNMENT SHELF STOCK OR CONTRACTOR) 2-13 2160 NAVILCO - THE CUSTOMER'S SINGLE POINT OF CONTACT It is important for customers to realize that NAVILCO is the single point of contact for all FMS requisitions sub- mitted to the U.S. Navy. Requisitions must be sent to NAVILCO. Status infor- mation is furnished to the customer by NAVILCO and, as indicated below in para- graphs 2161, 2290 through 2295, and in Chapter 7 of this manual, customer fol- low-up (and reports of discrepancy, when necessary) should be directed to NAVILCO. 2161 FOLLOW-UP NAVILCO conducts automatic follow- up action within the U.S. supply system on all open requisitions for which it does not have current valid status in- formation and forecast delivery dates (or for which the forecast delivery date is past). Status information received in response to these follow-ups is for- warded to the customer by NAVILCO in MILSTRIP format, soon after it is re- ceived. This should minimize the neces- sity for follow-up action by the customer. If a customer determines that follow- up is necessary, he should prepare it in MILSTRIP format (preferably in punched card form using DD Form 1348M or, alter- natively, using DD Form 1348 completed by typewriter or in legible printing). Follow-up cards should be transmitted to NAVILCO using AUTODIN in those cases where the customer has AUTODIN access or, alternatively, by mail. Follow-up may also be transmitted by message or telephone in MILSTRIP for- mat in instances of unusual urgency. Figure 2-5 adds customer follow-up to the flowchart of the requisition pro- cess. 2-14 FIGURE 2-5 FMS Requisition, Status, and Follow-up Flow WITHIN THE CUSTOMER COUNTRY OgOQj WITHIN THE UNITED STATES "PULL" REQUISITION ORIGINATOR REQUISITION STATUS INFORMATION _ CUSTOM ER FOLLOW-UP NAVILCO "PUSH" OR "PULL" REQUISITION _SJATUS INFORMATION" FOLLOW-UP U.S. INVENTORY MANAGER "PUSH" REQUISITION US OFFICE OR AGENCY ORIGINATING "PUSH- REQUISITION 'PUSH" OR "PULL' REQUISITION STATUS INFORMATION I I I I L_L U.S. SOURCE OF SUPPLY (GOVERNMENT SHELF STOCK OR CONTRACTOR) 2-15 2170 SHIPMENT OF MATERIAL TO THE CUSTOMER 2171 USUAL METHOD OF SHIPMENT Material is shipped from the source of supply, whether a U.S. Government ac- tivity or a commercial contractor, to the customer or his representative. In most instances, FMS customers utilize a freight forwarder in the United States to handle material shipments on their behalf. It is to these freight forwarders that the shipments are directed by the source of supply. If other than mail is used as the method of transportation, shipment is normally made "f.o.b. origin" on a "col- lect commercial bill of lading." This means that title, or ownership, of the material shifts from the U.S. Government to the customer country government at the time shipment is made from the source of supply. It also means that the freight forwarder (or other customer country representative) will be required to pay the costs of transportation from the source of supply upon arrival of the material. When mail shipment is used, postage is normally prepaid by the sender. The freight forwarder then makes neces- sary arrangements for onward transporta- tion of material to the customer country destination. 2172 EXCEPTIONS TO THE USUAL METHOD OF SHIPMENT Exceptions to the usual arrangement for shipment (f.o.b. origin using a col- lect commercial bill of lading) are most often made in the case of ammunition, classified material, or U.S. Government furnished equipments. In these instan- ces, shipment is usually made via U.S. Government transportation or via a pre- paid U.S. Government Bill of Lading. Arrangements for these methods of trans- portation are included in the Offer and Acceptance (DD Form 1513) agreed to by the customer country and the U.S. Govern- ment. Figure 2-6 adds the flow of material (and the freight forwarder) to the requi- sition process flowchart. 2-16 FIGURE 2-6 FMS Requisition, Status, Follow-up, and Material Flow WITHIN THE CUSTOMER COUNTRY L WITHIN THE UNITED STATES REQUISITION ORIGINATOR PULL' REQUISITION STATUS information custom er "follow-up NAVILCO "PUSH" OR "PULL" requisition _sjatus information" foTlow-up ~ U.S. INVENTORY MANAGER MATERIAL DESTINATION WITHIN CUSTOMER COUNTRY "PUSH" REQUISITION I 'PUSH OR "PULL' REQUISITION U.S. OFFICE OR AGENCY ORIGINATING "PUSH" REQUISITION STATUS INFORMATION I I I I JJ MATERIAL L FREIGHT FORWARDER (WHEN USED) } MATERIAL U.S. SOURCE OF SUPPLY (GOVERNMENT SHELF STOCK OR CONTRACTOR) 2-17 2180 REPORTS OTHER THAN STATUS INFORMATION 2181 THE FMS QUARTERLY REQUISITION REPORT In addition to status information which is forwarded by NAVILCO to the customer country as it is received, another periodic report is provided to customers which will assist them in monitoring the supply status of material requisitioned under the FMS program. This report is the FMS Quarterly Requi - sition Report . The FMS Quarterly Requisition Report provides, for each FMS case, a listing of all requisitions applicable to the case which have been received by NAVILCO and for which NAVILCO has not received shipment information. For these requisi- tions, a forecast delivery date is shown. The report also lists requisitions for which shipment data have been received during the preceding 3 months, as well as requisitions which may have been can- celed during that period. For material which has been shipped, the date of shipment and transportation information is also shown. Requisitions will continue to be listed on subsequent quarterly reports as long as the material is unshipped. After a requisition has been shown on one quarterly report as being shipped or canceled, it will not be included on subsequent reports . Figure 2-7 adds the flow of quarterly reports from NAVILCO to the customer to the requisition process flowchart. This completes the flowchart which now depicts the flow of: Requisitions Status information Customer follow-up inquiries Material Reports made by NAVILCO to the customer. 2-18 FIGURE 2-7 The Complete FMS Requisitioning Process WITHIN THE CUSTOMER COUNTRY WITHIN THE UNITED STATES REQUISITION ORIGINATOR MATERIAL DESTINATION WITHIN CUSTOMER COUNTRY "PULL" REQUISITION _STATUS INFORMATION _ CUSTOM ER FOLLOW-UP ~~ " QUARTERLY PERFORMANCE REPORTS MATERIAL NAVILCO 'PUSH" OR "PULL' REQUISITION _SJATUS INFORMATION" FOLLOW-UP u -i U.S. INVENTORY MANAGER "PUSH" REQUISITION U.S. OFFICE OR AGENCY ORIGINATING "PUSH" REQUISITION FREIGHT j FORWARDER (WHEN USED) L "PUSH" OR "PULL" REQUISITION STATUS INFORMATION I I I I J_l > MATERIAL U.S. SOURCE OF SUPPLY (GOVERNMENT SHELF STOCK OR CONTRACTOR) 2-19 2190 Thus far, this chapter has described in general terms: SUMMARY What a requisition is How FMS requisitions are orig- inated and transmitted to NAVILCO The flow of requisitions and status information How the customer takes follow- up action The flow of material to the customer Reports provided to the custo- mer by NAVILCO which can assist in monitoring the progress of supply action. The sections that follow will describe the requisitioning process in greater detail from the customer's viewpoint . 2-20 2200 SECTION B — REQUISITIONING UNDER FMS : DETAILED PROCEDURES 2210 AUTHORITY FOR REQUISITIONING 2220 REQUISITION FORMS; WHICH FORM TO USE 2221 PUNCHED CARD REQUISITION FORMS Each requisition submitted under the FMS program must be for material or services authorized, either in general of specific terms, in an active FMS case covered by a signed DD Form 1513, Offer and Acceptance . Usually, this authori- zation will be worded in quite general terms. It is very seldom that the DD Form 1513 will show the actual stock number and name of an item which will later be ordered in a requisition pre- pared by a customer country represen- tative. Usually the single item ordered on a requisition will be only one of many individual items to be ordered in filling the overall requirement represented by a single numbered item in the body of the DD Form 1513. Figure 2-8 illustrates this with a hypothetical example. As indicated in Section A of this chapter, requisitions for material under the FMS program must be submitted in MILSTRIP format. MILSTRIP format is a coding system for reporting essential elements of information in a standard sequence within the limited space avail- able in a standard data processing punched card. This permits mechanized handling and speeds up requisition processing. It was previously indicated that there are two punched card forms which may be used for requisitioning material. The first of these is the DD Form 1348M, POD Single Line Item Requisition System Document (Mechanical ) , which permits direct AUTODIN transmission and mechani- cal processing. This form should be used whenever possible. The second punched card form is the DD Form 1348, POD Single Line Item Requisition System Document , which is filled out by typewriter or in legible printing. This card can be con- verted for mechanical processing and is the alternative to the DD Form 1348M. 2-21/(2-22 blank) I tion Document ingle Line Item) DD Form 1348M Repair Part or Item of Material FIGURE 2-8 Development of Requisitions from the FMS Case DD 5105.38 MAP Address Directory (MAPAD) HiM"JM" , riil4 i wi If QUISItlON IS FftOw w. .I«r, l „ ,:l,jli4hsli»li7liih«1;oh I I I I I I I I I I I I I I Si ?6l J7l 39 1:9 ^:k~3r NS'-I-W I -" h'|-w fel MAPAD DD 5105.38 MAP ADDRESS DIRECTORY SECTION B FOREIGN MILITARY SALES MARK FOR MAP AC \ P LT R 00 • • • (ALWAYS) H SHIPTOMAPAC SUPPLEMENTARY • ADDRESS UJ LU o U > cc UJ S X w X SB UJ u. u. O o u_ t- X o UJ X u_ 2 1 p A 2 L A T 1 42 43 44 45 46 47 48 49 50 P LT 00 2 • f (ALWAYS) f CLEAR TEXT ADDRESS LAT0NIA NAVY MINISTRY NAVAL SUPPLY CENTER BARLANG, LAT0NIA LAT0NIA NAVY c/o BEHRING SHIPPING CO. BEHRING INTERNATIONAL 415 RARITAN CENTER EDISON N.J. 08219 2-23/(2-24 blank) DD FORM 1513 Offer and Acceptance FMS Case Accepted and Implemented Requisitioning Authority Established DD FORM 1348 MILSTRIP Requisition Document Individual Requisitions (Single Line Item) DD Form 1348M Required for Each Single Repair Part or Item of Material to be Ordered FIGURE 2-8 Development of Requisitions from the FMS Case DD 5105.38 MAP Address Directory (MAPAD) MAPAD DD 5105.38 MAP ADDRESS DIRECTORY SECTION B ■ FOREIGN MILITARY SALES CLEAR TEXT ADDRESS LATONIA NAVY MINISTRY NAVAL SUPPLY CENTER BARLANG, LATONIA LATONIA NAVY c/o BEHRING SHIPPING CO. BEHRING INTERNATIONAL 415 RARITAN CENTER EDISON N.J. 08219 2-23/(2-24 blank) 2222 NON-NSN REQUI- SITION FORM 2230 HOW TO FILL OUT REQUISITION, DD FORM 1348 AND DD FORM 1348M FOR STANDARD MATERIAL 2231 USE OF DD FORM 1348-6 FOR NON- STANDARD MATERIAL 2232 USE OF MILSTRIP FORMAT IN MESSAGE REQUISITIONS ( STANDARD MATE- RIAL) The DD Form 1348-6, Non-NSN Requi - sition (Manual) is a third form and should be used only for ordering non- standard items (i.e., items which do not have a National Stock Number). This form has been specifically designed to accommodate non-standard items and to facilitate supply system processing of these requirements . Figure 2-9 summarizes in tabular form the information given in the para- graphs above . Figure 2-10 shows examples of both the mechanized card format (at the left- hand side of the figure) and the manual card format (on the right-hand side of the figure) of a requisition for a stan- dard item. The text in the center of the figure identifies the information elements and shows what the customer should place in each section of the requisition form. Figure 2-11 illustrates preparation of a requisition for non-standard mate- rial using the DD Form 1348-6 document format. This form should only be used when ordering non-standard material. As indicated in paragraph 2133, requisitions for material having an es- pecially high degree of urgency (i.e., qualifying under UMMIPS criteria for assignment of UND "A") may be forwarded to NAVILCO by electrically transmitted message, rather than mail. In these in- stances, the information elements must be converted to MILSTRIP message format. Figure 2-12 provides an example of how the sample requisition for standard ma- terial previously shown in Figure 2-10 would appear in message form. 2-25 FIGURE 2-9 Table for Determining Which Requisition Form to Use If customer country activity preparing the requisition for transmission to NAVILCO . HAS capability to prepare key-punched Does NOT have capability to prepare cards, and . . . key-punched cards, and . . . Material is Material is Material is Material is STANDARD NON-STANDARD STANDARD NON-STANDARD 1 ' 1 ' ! f " Prepare MECHAN- MANUAL MANUAL MANUAL Requisition IZED CARD FORM CARD FORM Using . . . DD Form DD Form DD Form DD Form 1348-M 1348-6 1348 1348-6 2-26 FIGURE 2-10 Requisition Information Elements; Standard Stock l> CUSTOMER LOCATION (BLOCK) DO FORM 1348 SAMPLE DD FORM 1348 liING SENT. Always enter "NAV- REQUISITION ORIGINATES. fictional country used for illustra- lf no remarks are included in the liert "A05" if remarks are included fiich will route the requisition to »ion blank. ifcnal Stock Number (NSN) in card »fcks 4 through 6 (starting in the first ■graph 2255 describes the difference If formerly used and entered in this *r.) HIP abbreviation for the type of unit h item being ordered. For example, je paragraph 2258 for additional low the number of Units of Issue in this section; use zeros (0s) as 4 digits to accomplish this. For ex- iantity" entry should be "00005." ers and letters which are unique to other requisition. The "Document ns described below (and in para- lat the U.S. Navy has been assigned Department of Defense. FMS REQUISITION FOR STANDARD STOCK MATERIAL (MANUAL FORMAT) 2-27/(2-28 blank) FIGURE 2-10 Requisition Information Elements; Standard Stock SAMPLE DD FORM 1348|M FMS REQUISITION FOR STANDARD STOCK MATERIAL (MECHANIZED FORMAT) LOCATION (CARD COLUMNS) DDF0RM1348M IDENTIFICATION & FMS CUSTOMER INPUT LOCATION (BLOCK) DD FORM 1348 (Not Appli- cable to DD Form 1348M) (Not Appli- cable to DD Form 1348M) 8-22 23,24 25-29 30A3 ACTIVITY TO WHICH REQUISITION IS BEING SENT. Always enter "NAV- ILCO, Philadelphia, PA,- CUSTOMER COUNTRY FROM WHICH REQUISITION ORIGINATES. Enter name of your country. ("Latonia" is a fictional country used for illustra- tive purposes only.) DOCUMENT IDENTIFIER. Insert "A01" if no remarks are included in the "Remarks" section, Blocks L through V. Insert "A05" if remarks are included in Blocks L through V. ROUTING IDENTIFIER. Insert "N65" which will route the requisition to NAVILCO. MEDIA AND STATUS CODE. Leave this section blank. STOCK NUMBER. Insert the correct National Stock Number (NSN) in card columns 8-22 of DD Form 1348M or in blocks 4 through 6 (starting in the first position of block 4) of DD Form 1348. (Paragraph 2255 describes the difference between the 11 -digit Federal Stock Number formerly used and entered in this space, and the 13-digit National Stock Number.) UNIT OF ISSUE. Insert the 2-letter MILSTRIP abbreviation for the type of unit by which the U.S. supply system counts the item being ordered. For example, "EA" (each), "CS" (case), "FT" (foot). See paragraph 2258 for additional details. QUANTITY. Insert numeric characters to show the number of Units of Issue being ordered. Be sure to fill all five spaces in this section; use zeros (0s) as necessary in spaces to the left of significant digits to accomplish this. For ex- ample, if 5 of an item are desired, the "Quantity" entry should be "00005." DOCUMENT NUMBER. A series of 14 numbers and letters which are unique to each requisition and never duplicated for any other requisition. The "Document Number" is subdivided into four subsections described below (and in para- graphs 2261 through 2264). SERVICE CODE. Insert "P." This indicates that the U.S. Navy has been assigned responsibility for this FMS case within the U.S. Department of Defense. SAMPLE DD FORM 1348 FMS REQUISITION FOR STANDARD STOCK MATERIAL (MANUAL FORMAT) 2-27/(2-28 blank) MER LOCATION (BLOCK) DD FORM 1348 , shown in Appendix 20 of ual, NAVSUP publication i the MAPAD) in the third ation within the customer ;livery Term Code" in item ce of this subsection. is the "Type of Assistance I, in the fifth space of this ed for transmission. In the ismission, enter the date of jgistics system. h day will begin with 000 1 ;ries serial numbers may be However, in no event will ted with the same date. Do sary in spaces to the left of stance (T/A)" shown in the jrm 1513 is other than T/A T/A "V," insert "R" in the 2ss otherwise directed by o receive the material being aterial. Insert "D" if the Air der Code, respectively. See nation. ase identifier shown in Item the last three spaces of this (First two spaces 1 (Last three spaces 16 FIGURE 2-10(2) Requisition Information Elements; Standard Stock SAMPLE DD FORM 1348 FMS REQUISITION FOR STANDARD STOCK MATERIAL (MANUAL FORMAT) 2-29/(2-30 blank) FIGURE 2-10(2) Requisition Information Elements; Standard Stock LOCATION (CARD COLUMNS) DD FORM 1348M IDENTIFICATION & FMS CUSTOMER INPUT LOCATION (BLOCK) DD FORM 1348 SAMPLE DD FORM 1348M FMS REQUISITION FOR STANDARD STOCK MATERIAL (MECHANIZED FORMAT) 46,47 10 (First tw spaces) REQUISITIONER. Enter the two-letter MILSTRIP country code (as shown in Appendix 20 of the MILSTRIP/MILSTRAP Operating Procedures Manual, NAVSUP publication 437) in the first two spaces of this subsection Enter the "Mark For (M/F)" code (as shown in the MAPAD) in the third space of this subsection. // consignment to a destination within the customer country is not desired, enter "0 " in this space. Enter the same numeric digit shown as the "Delivery Term Code" in item 20 of the FMS case, DD Form 1 5 1 3, in the fourth space of this subsection. Enter the same numeric digit or letter shown as the "Type of Assistance (T/A)" in item 27 of the FMS case, DD Form 1513, in the fifth space of this subsection. DATE. Enter Julian date the requisition was released for transmission. In the event of delays known to be imposed prior to transmission, enter the date of planned or anticipated transmission into the service logistics system. SERIAL NUMBER. The serial number assigned each day will begin with 000 1 and continue consecutively through 4999. Other series serial numbers may be authorized by NAVILCO on a case by case basis. However, in no event will duplicate numbers be assigned to requisitions initiated with the same date. Do not leave any spaces blank; use zeros (0s) as necessary in spaces to the left of significant digits. DEMAND CODE. Insert "N" if the "Type of Assistance (T/A)" shown in the "Terms" section of the applicable FMS case, DD Form 1513 is other than T/A "V." If the T/A entry in the applicable FMS case is T/A "V," insert "R" in the "Demand Code" space on the requisition unless otherwise directed by NAVILCO. SUPPLEMENTARY ADDRESS CODE. Insert "P" if the Navy of the customer country is to receive the material being ordered. Insert "B" if the Army is to receive the material. Insert "D" if the Air Force is to receive the material. Enter an Offer Release Code and Freight Forwarder Code, respectively. See paragraph 2269 and Figure 2-18 for additional information. Enter the 3-letter FMS case designator of the case identifier shown in Item 3 of the applicable FMS case, DD Form 1513, in the last three spaces of this section. SIGNAL CODE. Insert "L" in this spacer^ SAMPLE DD FORM 1348 FMS REQUISITION FOR STANDARD STOCK MATERIAL (MANUAL FORMAT) 16 2-29/(2-30 blank) FIGURE 2-10(3) Requisition Information Elements; Standard Stock LOCATION (BLOCK) DD FORM 1348 SAMPLE DD FORM 1348 FMS REQUISITION FOR STANDARD STOCK MATERIAL (MANUAL FORMAT) 18 (First space) >ry ("Cog symbol") 18 : two spaces of this (Last two spaces) on of the customer 19 ived by the F/AD 20 ink except in those 21 When authorized, m the list in Figure 22 spaces to the left of 23 :s are filled. (last seven spaces) 3-10A(3) 2-31/(2-32 blank) FIGURE 2-10(3) Requisition Information Elements; Standard Stock LOCATION (CARD COLUMNS) 0D FORM 1348M IDENTIFICATION & FMS CUSTOMER INPUT LOCATION (BLOCK) DD FORM 1348 SAMPLE DD FORM 1348M FMS REQUISITION FOR STANDARD STOCK MATERIAL (MECHANIZED CARD FORMAT) 54-56 52, 53 FUND CODE. Leave these spaces blank. DISTRIBUTION CODE. Leave this space blank. 18 (First space) Insert stores account and inventory management category ("Cog symbol") 18 as shown in the Management List - Navy (ML-N) in the last two spaces of this (Last two section. PROJECT CODE May be left blank or used at the discretion of the customer country. See paragraph 2273 for additional details. PRIORITY. Enter proper 2-digit Priority Number as derived by the F/AD assigned to the customer, and the applicable UND. REQUIRED DELIVERY DATE. This field will be left blank except in those instances when UMMIPS time frames are not applicable. When authorized, entries will be made. ADVICE CODE. May be left blank. If desired, an entry from the list in Figure 2 - 19 at the end of this chapter, may be inserted. PRICE. Enter item unit price in U.S. dollars and cents. Fill spaces to the left of 23 significant digits with zeros as necessary to be sure all 7 spaces are filled. (last seven spaces) SAMPLE DD FORM 1348 FMS REQUISITION FOR STANDARD STOCK MATERIAL (MANUAL FORMAT) 3-10A(3) 2-31/(2-32 blank) FIGURE 2-11 Sample Requisition Document, DD Form 1348-6 Non-Standard Material LOCATION (SPACE) 36-39 40-43 IDENTIFICATION AND FMS CUSTOMER INPUT 74-80 DATE. Enter Julian date the requisition was received for transmission. In the event of delays known to be imposed prior to transmission, enter the date of planned or anticipated transmission into the service logistics system. SERIAL NUMBER. The serial number assigned each day will begin with 0001 and continue consecutively through 4999. Other series serial numbers may be authorized by NAVILCO on a case by case basis. However, in no event will duplicate numbers be assigned to requisitions initiated with the same date. Do not leave any spaces blank; use zeros (0s) as necessary in spaces to the left of significant digits. DEMAND CODE. Insert "N" if the "Type of Assistance (T/A)" shown in the "Terms" section of the applicable FMS case, DD Form 1513 is other than T/A "V". If the T/A entry in the applicable FMS case is T/A "V", insert "R" in the "Demand Code" space on the requisition unless otherwise directed by NAVILCO. SUPPLEMENTARY ADDRESS CODE. Insert "P" if the Navy of the customer country is to receive the material being ordered. Insert "B" if the Army is to receive the material. Insert "D" if the Air Force is to receive the material. Enter an Offer Release Code and Freight Forwarder Code, respectively. See paragraph 2269 and Figure 2-18 for additional information. Enter the 3-letter FMS case designator shown in Item 3 of the applicable FMS case, DD Form 1513, in the last three spaces of this section. SIGNAL CODE. Insert "L" in this space. FUND CODE. Leave these spaces blank. DISTRIBUTION CODE. Leave this space blank. If ships parts are being ordered, insert "1H" in the last 2 spaces; if aircraft parts, insert "1R"; if electronic parts, insert "IN"' if training devices, insert "20" (not "20"); if publications are being ordered, insert "01" (not "OI"). PROJECT CODE. Unless otherwise authorized by NAVILCO, the customer will leave the project code blank. See paragraph 2274 for additional detail. PRIORITY. Enter proper 2-digit Priority Number as derived by the F/AD assigned to the customer, and the applicable UND. REQUIRED DELIVERY DATE. This field will be left blank except in those instances when UMMIPS time frames are not applicable. When authorized, entries will be made. ADVICE CODE. May be left blank. If desired, an entry from the list in Table 3-3 , at the end of this chapter, may be inserted. PRICE. Enter item unit price in U.S. dollars and cents. Fill spaces to the left of significant digits with zeros as necessary to be sure all 7 spaces are filled. 2-33/(2-34 blank) IDENTIFICATION & FMS CUSTOMER INPUT LOCATION (SPACE) DOCUMENT IDENTIFIER. Insert "A05' ROUTING IDENTIFIER. Insert "N65" which will route the requisition to NAVILCO. MEDIA AND STATUS CODE. Leave these spaces blank. MANUFACTURER'S CODE AND PART NUMBER. Insert the 5-digit manu- facturer's Federal Supply Code for Manufacturers in the "FSCM" position (first 5 spaces) of this section. Insert the manufacturer's part number in the "Part Number" Oast 10 spaces) of this section. Use block 1 in the "Identification Data" section of the form if there is insufficient room in spaces 8 - 22. See paragraph 2257 for additional details. UNIT OF ISSUE. Insert the 2-letter MILSTRIP abbreviation for the type of unit by which the U.S. supply system counts the item being ordered. For example, "EA" (each), "CS" (case), "FT" (foot). See paragraph 2258 for additional details. QUANTITY. Insert numeric characters to show the number of Units of Issue being ordered. Be sure to fill all five spaces in this section; use zeros (0s) as necessary in spaces to the left of significant digits to accomplish this. For ex- ample, if 5 of an item are desired, the "Quantity" entry should be 1-3 4-15 8-22. 23,24 25-29 31-35 DOCUMENT NUMBER. A series of 14 numbers and letters which are unique to ; M3 each requisition and never duplicated for any other requisition. The "Document Number" is subdivided into four subsections described below (and in para- graphs 2261 through 2264). SERVICE CODE. Insert "P." This indicates that the U.S. Navy has been assigned responsibility for this FMS case within the U.S. Department of Defense. REQUISITIONER. Enter the two-letter MILSTRIP country code (as shown in Appendix 20 of the MILSTRIP/MILSTRAP Operating Procedures Manual, NAVSUP publica- tion 437) in the first two spaces of this subsection. Enter the "Mark For (M/F)" code (as shown in the MAPAD) in the third space of this subsection. // consignment to a destination within the customer country is not desired, enter "0" in this space. Enter the same numeric digit shown as the "Delivery Term Code" in Item 20 of the FMS case, DD Form 1513, m the fourth space of this subsection. Enter the same numeric digit or letter shown as the "Type of Assistance 07 A)" in Item 27 of the FMS case, DD Form 1513, in the fifth space of this subsection. RC IT- II > ioe n- PART NUMBER Si OOCUME T NUMBER ft f SERIAL * uiJLlLJlJI Itll JtlJlUL^iULJUJlUUiUJUJU'JUIt^SSBBSBJI^L'Jtllt^UJtJt.lt^UJtJIilJUJLJUJLJ LOCATION (SPACE) 44 45-50 FIGURE 2-11 Sample Requisition Document, DD Form 1348-6 Non-Standard Material IDENTIFICATION AND FMS CUSTOMER INPUT 36-39 DATE. Enter Julian date the requisition was received for transmission. In the event of delays known to be imposed prior to transmission, enter the date of planned or anticipated transmission into the service logistics system. 4043 SERIAL NUMBER. The serial number assigned each day will begin with 0001 and continue consecutively through 4999. Other series s^riaLnumbers may be authorized by NAVILCO on a case by case basis. However, in no evenT wilt duplicate numbers be assigned to requisitions initiated with the same date. Do not leave any spaces blank; use zeros (0s) as necessary in spaces to the left of significant digits. DEMAND CODE. Insert "N" if the "Type of Assistance (T/A)" shown in the "Terms" section of the applicable FMS case, DD Form 1513 is other than T/A "V". If the T/A entry in the applicable FMS case is T/A "V", insert "R" in the "Demand Code" space on the requisition unless otherwise directed by NAVILCO. SUPPLEMENTARY ADDRESS CODE. Insert "P" if the Navy of the customer country is to receive the material being ordered. Insert "B" if the Army is to receive the material. Insert "D" if the Air Force is to receive the material. Enter an Offer Release Code and Freight Forwarder Code, respectively. See paragraph 2269 and Figure 2-18 for additional information. Enter the 3-letter FMS case designator shown in Item 3 of the applicable FMS case, DD Form 1513, in the last three spaces of this section. SIGNAL CODE. Insert "L" in this space. FUND CODE. Leave these spaces blank. DISTRIBUTION CODE. Leave this space blank. If ships parts are being ordered, insert "1H" in the last 2 spaces; if aircraft parts, insert "1R"; if electronic parts, insert "IN"' if training devices, insert "20" (not "20"); if publications are being ordered, insert "01" (not "OI"). PROJECT CODE. Unless otherwise authorized by NAVILCO, the customer will leave the project code blank. See paragraph 2274 for additional detail. PRIORITY. Enter proper 2-digit Priority Number as derived by the F/AD assigned to the customer, and the applicable UND. REQUIRED DELIVERY DATE. This field will be left blank except in those instances when UMMJPS time frames are not applicable. When authorized, entries will be made. ADVICE CODE. May be left blank. If desired, an entry from the list in Table 3-3 , at the end of this chapter, may be inserted. 74-80 PRICE. Enter item unit price in U.S. dollars and cents. Fill spaces to the left of significant digits with zeros as necessary to be sure all 7 spaces are filled. 2-33/(2-34 blank) FIGURE 2-11(2) Sample Requisition Document, DD Form 1348-6, Non-Standard Material LOCATION (SPACE) IDENTIFICATION AND FMS CUSTOMER INPUT Block -2 Block - 5 Block - 6 MANUFACTURER'S NAME. Enter the name and address (if known) of the commercial supplier who manufactures the item being requisitioned. (CAU- TION : The manufacturer of the item being requisitioned may not be the same as the manufacturer of the equipment in which the item is used.) TECHNICAL MANUAL NUMBER. Enter the identifying number of the techni- cal or operating publication which describes the item being ordered. These manuals may be published by the U.S. Government or they may be published by the commercial supplier of the item. In most instances, the publication will be identified to the parent equipment of the item being ordered, rather than the item itself. For example, NAVSEA B-66 19337 shown in block 5 is the technical manual for the Class AF62 air compressor, rather than for the piston assembly being ordered. NAME OF ITEM REQUESTED. Enter the name of the item being ordered. Block END ITEM APPLICATION AND SOURCE OF SUPPLY. Enter identifying 8 information concerning the next higher assembly and parent equipment of which the item being ordered is a part. Entries in Blocks 8, 8a., 8b., 8c, and 8d. all refer to the parent equipment rather than the item being ordered. 2-35/(2-36 blank) FIGURE 2-11(2) Sample Requisition Document, DD Form 1348-6, Non-Standard Material LOCATION (SPACE) IDENTIFICATION AND FMS CUSTOMER INPUT SAMPLE REQUISITION DOCUMENT DD FORM 1348-6 NON STANDARD MATERIAL 10 2. L F.013. J J DOCU- MENT IDENTI- FIER t 2 3 ROUT- ING IDENTI- FIER 4 5 6 N JL MANUFACTURER'S CODE AND PART NUMBER 8 9 10 11 12 TART NUMBER 13 14 15 16 17 18 19 20 21 22 448 UNIT OF ISSUE 25 26 27 28 29 EA0000 DOCUMENT NUMBER Si ' , , I REOUISI- | Si TION2R I OATt 30 31 32 33 34 35 36 37 38 39 40 41 42 43 PiLT 04 4!2 18 SUPPLEMENTARY r"j ADDRESS " I 45 46 47 48 49 50 MPA5UPAL FUND CODE DISTRI- BUTION CODE 1H PRO- JECT CODE e. - M RE- QUIRED DELI- VERY DATE 62 63 64 m 70 71 72 73 74 75 76 77 78 79 80 L_L IDENTIFICATION DATA WMjM 412 REJECT CODE (FOR USE BY SUPPLY SOURCE ONLY) 65 66 * 1. MANUFACTURER'S CODE ft PART NO. (When they exceed Card Column 8 thru 22) 2. MANUFACTURER'S NAME Lavalie Industries, 2328 u Griffith Ave., Dep't "J", Caldwell, New Jersey 3. MANUFACTURER'S CATALOG IDENTIFICATION AND DATE 4. TECHNICAL ORDER NUMBER 9. TECHNICAL MANUAL NUMBER NAVSEA B-6619337 6. NAME OF ITEM REQUESTED Piston Assembly, P/N 43 1 0448 7. DESCRIPTION OF ITEM REQUESTED 8. END ITEM APPLICATION AND SOURCE OF SUPPLY For first stage of P/N 83848 on Class AF62 Air Compressor Worthington 8 6. MODEL NUMBER 27 J 1668-2 11 Bd. SERIAL NUMBER 9218334 __ FORM -_ ._ - EDITION OF 1 JAN 71 MAY BE DDl MAR 741348-6 USED UNTIL EXHAUSTED NON-NSN REQUISITION (manual) Block MANUFACTURER'S NAME. Enter the name and address (if known) of the ~2 commercial supplier who manufactures the item being requisitioned. (CAU- TION : The manufacturer of the item being requisitioned may not be the same as the manufacturer of the equipment in which the item is used.) Block TECHNICAL MANUAL NUMBER. Enter the identifying number of the techni- ■ 5 cal or operating publication which describes the item being ordered. These manuals may be published by the U.S. Government or they may be published by the commercial supplier of the item. In most instances, the publication will be identified to the parent equipment of the item being ordered, rather than the item itself. For example, NAVSEA B-6619337 shown in block 5 is the technical manual for the Class AF62 air compressor, rather than for the piston assembly being ordered. NAME OF ITEM REQUESTED. Enter the name of the item being ordered. Block - 6 Block END ITEM APPLICATION AND SOURCE OF SUPPLY. Enter identifying 8 information concerning the next higher assembly and parent equipment of which the item being ordered is a part. Entries in Blocks 8, 8a., 8b., 8c, and 8d. all refer to the parent equipment rather than the item being ordered. 2-35/(2-36 blank) FIGURE 2-12 S Requisition for Standard Stock, MILSTRIP Message Format 1 s s o a S OF E QUANTITY A < 1 1 1 1 0,0,0 2,5 -!° IS IV nmt\nHHnifi7nnK DD FORM 1348 NOTE THAT MILSTRIP MESSAGE FORMAT REQUIRES THAT THE FIRST LINE OF THE MESSAGE REQUISITION EXTEND THROUGH THE "SIGNAL CODE" INFORMATION ELEMENT, CORRESPONDING TO BLOCK 16 IN THE DD FORM 1348 XXX UNCLASSIFIED XXX NAVAL MESSAGE NAVY Trom^ latonia to: i navilco, philadelphia, pa MILSTRIP REQUISITION N65/10051 DEPARTMENT A01 /N65/ B LN K/1 005001 752087/EA/00025/PLT04313601005/N/PA2XYZ/L/ 1K/2B/000000450 J-- XXX UNCLASSIFIED XXX MILSTRIP MESSAGE FORMAT 2-37/(2-38 blank) FIGURE 2-12 S Requisition for Standard Stock, MILSTRIP Message Format XXX UNCLASSIFIED XXX NAVAL MESSAGE NAVY FROM^ LATONIA TO: I NAVILCO, PHILADELPHIA, PA NOTE THAT MILSTRIP MESSAGE FORMAT REQUIRES THAT THE FIRST LINE OF THE MESSAGE REQUISITION EXTEND THROUGH THE "SIGNAL CODE" INFORMATION ELEMENT, CORRESPONDING TO BLOCK 16 IN THE DD FORM 1348 DEPARTMENT A01 /N 65/ B LN K/1005RJB1 752J087/E A/0025/P LT043 1 3601005/N/P A2X YZ/ L/ -- NOTE THAT THE LETTERS "BLNK" (WHICH STAND FOR THE WORD "BLANK") MUST BE ENTERED IN THE MESSAGE FORMAT WHEREVER THERE IS NO ENTRY IN THE INFORMATION ELEMENT FIELD OF THE DD FORM 1348. IN "MEDIA & STATUS," "FUND,"' THIS ILLUSTRATION, "BLNK" APPEARS WHERE "PROJECT" AND "REQ. DEL. DATE" WOULD APPEAR IN THE DD FORM 1348, BLOCKS 3, 17, FIRST SPACE OF 18, 19, AND 21. XXX UNCLASSIFIED XXX MILSTRIP MESSAGE FORMAT 2-37/(2-38 blank) 2233 MESSAGE REQUISI- TION (NON-STANDARD MATERIAL) Figure 2-13 provides a similar ex- ample of how the sample requisition for non-standard material previously shown in Figure 2-11 would appear in message form. The key difference for non- standard material is inclusion in the message of the identifying information normally provided in the "Identification Data" section of DD Form 1348-6. 2240 TRANSMISSION OF REQUISITIONS TO NAVILCO Section A of this chapter stated that requisitions could be transmitted to NAVILCO in three different ways: AUTODIN for requisition DD Form 1348M for standard stock items MAIL for requisition DD Form 1348M and DD Form 1348 for standard stock items , or DD Form 1348-6 only for non- standard items MESSAGE using MILSTRIP format and an electrical transmission method other than AUTODIN, for most urgent requirements. Figure 2-14 repeats the information of Figure 2-9 showing the proper requi- sition form to use. Figure 2-14 also adds information showing how each of the different requisition forms should be transmitted to NAVILCO. 2250 DESCRIPTION OF MILSTRIP INFORMA- TION ELEMENTS FOR FMS REQUISITIONS Figures 2-10 through 2-13 identified the various information elements which are needed to complete a MILSTRIP requisi- tion for FMS material. These figures also showed the location in which each of the information elements is placed on DD Form 1348M, DD Form 1348, DD Form 1348-6, and in a message requisition in MILSTRIP format. Paragraphs 2251 through 2278, below, describe each MILSTRIP information element more fully. They also specify the location of each element on the req- uisition form and emphasize particular details which must be observed carefully in preparing FMS requisitions. 2-39/(2-40 blank) FIGURE 2-13 FMS Requisition for Non-Standard Material, MILSTRIP Message Format FIRST LINE OF MILSTRIP MESSAGE REQUISITION EXTENDS THROUGH THE "SIGNAL CODE" INFORMATION ELEMENT XXX UNCLASSIFIED XXX NAVAL MESSAGE |lAVY DEPARTMENT FROM: LATONIA TO: NAVILCO, BAYONNE, N.J. CODE 41 H MILSTRIP REQUISITION A05/N65 /BLNK /986324310448/EA/00004/PLT04421842242/N/PA5UPA/L/ BLNK /1H/BCNK/08 /BLNK /2D /BLNK /00000040103 PISTON ASSEMBLY, pJUt NUMBER 4310448, MANUFACTURED BY L/f/ALIE llJoUSTRIES, 2328 GRfFFITH AVE. DEPT. "J", CALDWELL, NEW JERSEY FqR FIRStItAGEOrJpART NUMBER 83848 ON CLASS AF 62 AIR C dMPRESSqR, WORTllNGTON MODEL 27J1668-2, SERIES 1 1, SERIAL I I NUMBER 92| 8334 I I I I .J I XXX UNCLASSIFIED XXX MILSTRIP MESSAGE FORMAT 2-41/(2-42 blank) FIGURE 2-13 FMS Requisition for Non-Standard Material, MILSTRIP Message Format DOCU- MENT IDENTI- FIER I A0 ROUT- ING IDENTI- FIER N MANUFACTURERS CODE AND PART NUMBER I SUPPLEMENTAR , ADDRESS Ml PA5UP 33 FUND CODE PART NUMBf* 24 DISTRI- BUTION COOE H 48 UNIT OF ISSUE PRO- JECT CODE BE m QUIRED UELI- VERV DATE 1 2D DOCUMENT NUMBER PjLT 34 I 35I36 4JJ2 IDEN TIFICATION * I. MANUFACTURERS COdI ft PART NO. (WWrt |Act arawa Card Column* ft thru 2M 5517 LOG I l ICT ATA MaEES X REJECT CODE (FOR USE BY SUPPLY SOURCE ONLY) 65 66 2 MANUFlCTURER'SNAME 3. MANUFACTURER'! CATALOG IDENTIFICATIOIUftND DATS + 1 WAN Lavalie Industries, 2328 Griffith Ave., Dept "J", Caldwell, New Jersey S. TECHNICAL MANll 7. DESCRIPTION OFl >L MANUkL NUMBER I NAVJH1PSB-66193B7 ITEM Rl I FK ± 4. TECHNICAL ORDER NUMBER ,ME Of ITEM REQUESTFn TUESTFn Piston Assembly, P/N 4310448 a. END fTEM APPLIi y ON I SOURC For frst stage jf P/N 83JB48 on Class AF62 Air Compressor ^k ngton |86 JYIODEL NUMBEl C7J1668 I l 11 Bd. SERIAL NUMBER 9218334 __ FORM __!_ , EDITION OF | JAN 71 MAY BJE fc ._ .1 . . — ... A rAl lirm/M ■ DP 1 mar 74 1348-6 | used until Exhausted I NON-NSN REQUISITION (MANUAL) DD FORM 1348-6 I i "BLNK" INCLUDED IN MESSAGE FORMAT WHEREVER THERE IS NO ENTRY IN THE INFORMATION ELEMENT FIELD OF DD FORM 1348-6 FIRST LINE OF MILSTRIP MESSAGE REQUISITION EXTENDS THROUGH THE "SIGNAL CODE" INFORMATION ELEMENT l XXX UNCLASSIFIED XXX NAVAL MESSAGE JlAVY DEPARTMENT FROM: LATONIA TO: NAVILCO,BAYONNE,N.J. CODE 41 MILSTRIP REQUISITION A05/N65 /BLNK /986324310448/EA/00004/PLT04421842242/N/PA5UPA/L/ BLNK /1 H/b{nK/08 /BLNK /2D /BLNK /00000040103 PISTON ASSEMBLY, PART NUMBER 4310448, MANUFACTURED BY L/f/ALIE IIvIdUSTRIES, 2328 GR|FFITH AVE. DEPT. "J", CALDWELL, NEW JERSEY FGjR FIRST ITAGE ORPART NUMBER 83848 ON CLASS AF 62 AIR CoV/IPRESSOR, WORTtlNGTON MODEL 27J1668-2, SERIES 11, SERIAL ! 1 1 NUMBER 92| 8334 XXX UNCLASSIFIED XXX MILSTRIP MESSAGE FORMAT 2-41/(2-42 blank) FIGURE 2--14 Table for Determining Which Requisition Form and Transmission Form to Use If customer country activity preparing the requisition for transmission to NAVILCO . HAS capability to prepare key-punched cards, and . . . Does NOT have capability to prepare key-punched cards, and . . . Material is STANDARD Material is NON-STANDARD Material is STANDARD Material is NON-STANDARD i 1 i i !' il Prepare Requisition MECHAN- IZED CARD MANUAL FORM MANUAL CARD MANUAL FORM Using . . . DD Form 1348-M DD Form 1348-6 DD Form 1348 DD Form 1348-6 And submit (original copy only) to NAVILCO AUTODIN or Mail Mail Mail Mail using . . . NOTE: Requisitions for most urgently needed material (i.e., bearing Urgency of Need designator and UND-"A") may be transmitted to NAVILCO via message. 2-43 2251 DOCUMENT IDENTIFIER Document Identifier (card columns 1 through 3 on DD Form 1348M; block 1 on DD Form 1348). Entries in these spaces identify what the document is being used to accomplish. The characters "A01" indicate that the document is a requisi- tion for an NSN and that there is no in- formation contained in the "Remarks" section of the document. The characters "A05" indicate that the document is a requisition and that information is in- cluded in the "Remarks" section of the document. Be sure that a numeric zero (0), rather than an alphabetic "O" (0), is entered as the second character of the "Document Identifier." 2252 ROUTING IDENTIFIER 2253 MEDIA AND STATUS CODE 2254 STOCK NUMBER Routing Identifier (card columns 4 through 6 on DD Form 1348M; block 2 on DD Form 1348). Entries in these spaces indicate to which activity in the United States the document is being sent. "N65" is NAVILCO's routing identifier coding, and should always be used on requisitions originated by the customer country. Media and Status Code (card column 7 on DD Form 1348M; block 3 on DD Form 1348). Entries in this space indicate which U.S. activity should receive status information from other activities in the U.S. supply system. This space will always be left blank. Stock Number (card columns 8 through 22 on DD Form 1348M; blocks 4, 5, and 6 on DD Form 1348). Each of the many hun- dreds of thousands of "standard" items in the U.S. supply system is assigned a unique stock number. Use of the stock number permits precise identification of a particular item in a very abbrevia- ted format, avoiding the need for a lengthy narrative description. Stock numbers consist of 13 charac- ters which are entered in these spaces. Except for publications and forms , all 2-44 2254 (Continued) 2255 NATIONAL STOCK NUMBERS (NSNs), AND FEDERAL STOCK NUMBERS (FSNs); CONVERSION FROM FSN TO NSN 13 characters are digits and the stock number is called a National Stock Number (NSN). Stock numbers for publications and forms also contain 13 characters, but two of the characters are letters rather than digits. Therefore, the stock num- bers for publications and forms are not NSNs , although they are entered in the "Stock Number" section of MILSTRIP docu- ments . When written, typed, or printed in documents other than data processing punched cards, hyphens (-) will usually be inserted between the fourth and fifth digits, between the sixth and seventh digits, and between the ninth and tenth digits of the NSN. Thus, an NSN which would appear in a MILSTRIP document as: 5905004103897 would appear in the Management List - Navy (ML-N) as: 5905-00-410-3897 Prior to 1 October 1974, the stock number for each standard item in the U.S. supply system consisted of an 11-digit Federal Stock Number (FSN). On 1 October 1974, all FSNs were converted to 13- digit National Stock Numbers (NSNs). Use of the NSN is now required in order for MILSTRIP documents to be processed prop- erly. FSNs were converted to NSNs by inserting two numeric zeros (00) follow- ing the fourth digit of the FSN. Fig- ure 2-15 illustrates this conversion. All FSNs which were converted to NSNs, and all NSNs newly assigned within the U.S. supply system until 31 March 1975 , contain 00 as the fifth and sixth digits of the stock number. All NSNs newly assigned in the U.S. supply system after 31 March 1975 contain 01 as the fifth and sixth digits of the stock number . 2-45 2255 (Continued) The latest catalogs and technical documentation furnished by the U.S. Navy will show NSNs, rather than FSNs . Therefore, it is recommended that FMS customers consult these references rather than attempt to convert their records from FSNs to NSNs by insertion of 00 between the fourth and fifth digits of the FSN. 2256 CONVERSION OF STOCK NUMBERS FOR PUBLICATIONS AND FORMS 2257 USE OF "STOCK NUMBER" SECTION WHEN ORDERING NON-STANDARD MATERIAL The stock numbers of publications and forms were converted from 11-char- acter to 13-character numbers by inser- tion of the alphabetic characters "LP" or "LF" between the fourth and fifth digits of the 11-character number (i.e., in the fifth and sixth positions of the "Stock Number" section of MILSTRIP documents ) . The letters "LP" were inserted in stock numbers for publications, and the letters "LF" were inserted in the stock numbers for forms . The U.S. Navy Stock List of Publications and Forms , NAVSUP Publication 2002, provides the 13-char- acter stock number for each U.S. Navy publication and form. If the item being order is non- standard (i.e., it has no FSN to be con- verted to an NSN), or if the NSN/FSN of the item is unknown, the "Stock Number 1 section of the requisition form is used to show other identifying information. The identifying information should be that which best describes the item being ordered. Because the "Stock Number" section is limited in size, additional identifying data for non-standard items is almost always shown in the "Remarks" section of the requisition as well. Manufacturers usually assign a "Part Number" to each item which, when coupled with a description of the equip- ment in which the item is used, will permit identification of the item. In addition, most U.S. manufacturing firms 2-46 FIGURE 2-15 Conversion of a Federal Stock Number (FSN) to a National Stock Number (NSN) FEDERAL STOCK NUMBER (FSN) 11 DIGITS 7 59054103897 TWO NUMERIC ZEROS (M) ENTERED IN 5TH AND 6TH POSITIONS. REMAINING DIGITS (4 103897) SHIFTED TWO SPACES TO THE RIGHT. NATIONAL STOCK NUMBER (NSN) 13 DIGITS 5905004103897 I I 2-47 2257 have been assigned a five-digit Federal Supply Code for Manufacturers (FSCM) . (Continued) A full listing of FSCMs is contained in the U.S. Defense Supply Agency Cataloging Handbook , Defense Supply Agency (DSA) Publication H-4. Positive and precise identification of the item is almost always possible if the information listed below is shown in the "Stock Number" and "Remarks" sections of the requisition. Manufacturer's FSCM Number Manufacturer's part number for the item Name of the item Name of the manufacturer of the item Name (or short description) of the parent equipment in which the item is used Manufacturer of the parent equipment. Additional identifying or descriptive information, such as manufacturer's drawing number, use for which the item (or parent equipment) is intended, technical manual figure and index from illustrated Parts Breakdown (IPB), etc., should also be included in the "Remarks" section of the requisition if the infor- mation is available. Figure 2-16 is an example of how this identifying informa- tion would be shown in a DD Form 1348-6. 2258 Unit of Issue (card columns 23 and 24 in DD Form 1348M; block 7 in DD Form UNIT OF ISSUE 1348). This entry is a two-letter abbre- viation which identifies the kind of unit by which the quantity of the item being ordered is counted or measured for the purpose of keeping records, making issues from stock, etc. Examples of some common units of issue and their MILSTRIP abbreviations are: 2-48 FIGURE 2-16 Example of Identifying Information of Non-Standard Material on DD Form 1348-6 MANUFACTURER'S FEDERAL SUPPLY CODE FOR MANUFACTURER'S (FSCM) MANUFACTURER'S PART NUMBER MANUFACTURER OF THE ITEM BEING ORDERED Nt|P|AJ5MP[AlL DOCU MENT IOENTV FIER N M mVstr:- 3UTIGN COOC 1H PRO- JECT code: r -'f HG \ i fell T A0000 QUlRFO DELI VLRi DATE 2JD DOCUMENT NUMBER \ I REOUiSi- I I Si t,ONi« I °" e I SE "'« PlL 044l2 "fl|0]4,0'l|0 4!2 24 REJECT CODE i FOR USE BY SUPPLY iOURCEONLY) IDENTIFICATION DATA * 1. MANUFACTURER'S CODE a PART NO. (When lVv orawfl I 2 MANUFACTURER'S NAME , •• . . . - M>i* a card column* a oiru 22) Lavane industries, CSi.0 Griffith Ave., Dep't "J", Caldwell, New Jersey 3 MANUFACTURER'S CATALOG IDENTIFCATIOf ■ AND DATS 4 TECHNICAL ORDER NUMBER 5. TECHNICAL MANUAL NUMBER NAVSHIPS B-6619337 6 NAME Or ITEM REQUESTED Piston Assembly, P/N 4310448 7. DESCRIPTION OF ITEM REQUESTED /a COLOR B END TTEM APPLICATION AND SOURCE OF SUPPLY For first stage of P/N 83848 on Class AF62 Air Compressor Worthington MODEL NUMBER 27J 1668-2 11 9218334 NON-NSN REQUISITION ( manualj MANUFACTURER OF PARENT EQUIPMENT NAME OF PARENT EQUIPMENT NAME OF THE ITEM BEING ORDERED 2-49 2258 (Continued) 2259 QUANTITY "Each" (abbreviated "EA" ) "Case" (abbreviated "CS") "Pad" (abbreviated "PD" ) "Reel" (abbreviated "RL" ) "Foot" (abbreviated "FT") The Navy catalog (Management List - Navy or "ML-N, " NAVSUP Publication 4100) shows the proper Unit of Issue abbrevia- tion for use when requisitioning each of the many thousands of U.S. Navy stan- dard stock items listed in the ML-N. A complete listing of authorized Units of Issue, their definitions, and their MILSTRIP abbreviations is given in Chapter 2 of the Introduction to Federal Supply Catalogs and Related Publications , NAVSUP Publication 4000. This publica- tion should be used to determine the appropriate Unit of Issue abbreviation if doubt exists when non-standard items are being ordered. Quantity (card columns 25 through 29 on DD Form 1348M; block 8 on DD Form 1348). Numeric entries in these spaces show how many Units of Issue of the item are being ordered. Because the "Quantity" entry is directly associated with the "Unit of Issue" entry, the two must be read together to gain a clear idea of how much of the item is actually being requisitioned. For example, a quantity of "00006" coupled with a unit of issue of "DZ" (dozen) would be equivalent to a quantity of "00072" coupled with a unit of issue of "EA" (each). Thus, it is extremely important to use the proper unit of issue applicable to the item being ordered and to be sure that the "Quantity" entry shows the number of those units of issue which is desired . MILSTRIP rules also require that all five-card columns or spaces in the "Quantity" section contain a numeric digit (i.e., no space is left blank). Therefore zeros (0s) should be inserted to the left of the first significant 2-50 2259 (Continued) 2260 DOCUMENT NUMBER 2261 SERVICE CODE 2262 REQUISITIONER digit, are to should are to should which format than 9 requis For example be ordered, be "00006." be ordered, be "00600." can be repres is 99,999. 9,999 is requ itions must b , if six of an item the "Quantity" entry If 600 of the item the "Quantity" entry The maximum quantity ented in the MILSTRIP If a quantity larger ired, two or more e submitted. Document Number (card columns 30 through 43 on DD Form 1348M; blocks 9 through 12 on DD Form 1348). Entries in this section form the unique identifica- tion number for each individual requisi- tion. This number should never be reused, regardless of what FMS case is involved. The "Document Number" section is subdi- vided into four portions, each of which is described more fully in the pargraphs which follow. These portions are: Service Code Requisitioner Date Serial Number. Service Code (card column 30 on DD Form 1348M; block 9 on DD Form 1348). The entry in this subsection of the "Document Number" section identifies the U.S. military service (U.S. Army, Navy, or Air Force) which maintains FMS case control for the active DD Form 1513 under which the requisition is being originated. For requisitions going to NAVILCO, the letter "P" should be inser- ted in this space. Requisitioner (card columns 31 through 35 on DD Form 1348M; block 10 on DD Form 1348). The five-character entry in this section identifies: The customer country which originates the requisition. Enter the proper two-letter country code as shown in Ap- pendix 20 of the MILSTRIP/ MILSTRAP Operating Procedures 2-51 2262 (Continued) Manual, NAVSUP Publication 437. This entry should be made in the first two spaces (card columns 31 and 32) of the "Requisitioner" sub- section. The destination within the customer country . Enter the proper "Mark For" (M/F) code as shown in Section B of the Military Assistance Program Address Directory (MAPAD), DOD publication 5105. 38D. If con- signment to a destination within the customer country is not desired, enter a numeric "0" in this space. These entries should be made in the third space (card column 33) of the "Requisitioner" subsection . NOTE: The "Mark For" code cited on the applicable DD Form 1513 will normally apply. Exceptions to the "Mark For" cited will be made at the Customer Countries' discretion. After a requisition has been entered into the supply system, the "Mark For" code cannot be changed. The "Delivery Term Code" indi- cating the terms of delivery to the customer country. Enter the same numeric digit as shown in item 20 (Delivery Term Code) of the applicable DD Form 1513. This entry should be made in the fourth space (card column 34) "Requisitioner" subsection . The "Type of Assistance" ("T/A") code which identifies the payment arrangements which have been agreed to by the customer coun- try and United States for the applicable FMS case. Enter the same alpha/numeric digit as 2-52 2262 (Continued) 2263 DATE 2264 SERIAL NUMBER shown in the "Terms" section of the applicable DD Form 1513 . This entry should be made in the fifth space (card column 35) of the "Re q- uisitioner" subsection . Date (card columns 36 through 39 on DD Form 1348M; block 11 on DD Form 1348). Entries in these spaces indicate the "Julian Date" (using a 365-day year be- ginning January 1st) when the requisition is forwarded to NAVILCO. The first of the four digits which make up this coded date indicates the year. The last three digits indicate the day within the year when the requisition is forwarded. For example, the date 14 August 1975 on the Gregorian calendar is the 226th day in the year 1975. The Julian Date for 14 August 1975 would be written as "5226." It is constructed by combining the last digit of the year number (5 from 1975) with the ordinal number (226) of the day within the year. Serial Number (card columns 40 through 43 on DD Form 1348M; block 12 on DD Form 1348). Entries in these spaces consist of four characters beginning each day with 0001 and continuing con- secutively through 4999. Serial numbers in the 5000 thru 9999 series are reserved for use by activities within the U.S. supply system for "push" requisitions, and should not be used by customer coun- tries. This entry will always be in numeric characters unless advised other- wise by NAVILCO. However, this exact combination of characters must not be used for any other requisition submitted on the same Julian Date. CAUTION: Do not leave any spaces in the "Serial Number" section blank . Fill spaces to the left of the first significant digit with zeros. Examples of correct and incorrect Serial Numbers are shown below: 2-53 2264 (Continued) 2265 DEMAND CODE 2266 SUFFIX CODE CORRECT 0003 0015 0367 INCORRECT 3 15 367 Figure 2-17 shows how a "Document Number" for a requisition is developed, illustrating the information given in paragraphs given in paragraphs 2260 through 2264 above. Demand Code (card column 44 on DD Form 1348M; block 13 on DD Form 1348). The one-letter entry in this space for the item represented by the requisition is recurring or non-recurring from the U.S. inventory manager's viewpoint . If the authorizing FMS case (DD Form 1513) shows Type of Assistance (T/A) "V" (i.e., it is a CLSSA), enter the letter "R" in the Demand Code sec- tion of the requisition. For all other T/As, the letter "N" should be entered in the Demand Code section. It is sometimes necessary for the U.S. supply system to make one or more shipments in order to provide the total quantity of an item ordered under an FMS requisition. This could occur, for example, when stocks of the item are not on hand in sufficient quantity at any one storage site in the U.S. supply system to fill the entire quantity or- dered. In such instances, partial ship- ments might be made from stock on hand at two or more storage sites, or part of the total quantity might be shipped from stock on hand, while the remainder might be shipped from a commercial sup- plier. In such situations, a one-letter Suffix Code is added to the "Document Number" of the requisition. This pro- vides identification of documents in- volving partial quantities, without 2-54 FIGURE 2-17 Composition of a Requisition "Document Number" TAKEN FROM INFORMATION IN THE APPLICABLE FMS CASE, DD FORM 1513 IS 2-LETTER COUNTRY AS SHOWN IN APPEN- DESTINATION-" " INDICATES THAT FMS CASE DOES NOT PROVIDE FOR WITHIN-COUNTRY CONSIGNMENT DELIVERY TERM CODE - "4" INDICATES DELIVERY FOB POINT OF ORIGIN WITHIN THE U.S. AND SHIPMENT VIA COLLECT COMMERCIAL BILL OF LADING TYPE OF ASSISTANCE-"-*" ASSISTANCE (T/A) 4 INDICATES TYPE OF JULIAN DATE *5226" INDICATES THE 226TH DAY IN THE YEAR 1975, 14 AUGUST 1975, THE DATE THIS REQUISI- TION WAS SUBMITTED SERIAL NUMBER "0021" INDICATES THAT THIS IS THE 21ST REQUISI- TION PREPARED BY THE ORIGINATOR ON THIS JULIAN DATE 2-55 2266 (Continued) losing the identity of the original docu- ment number. When a Suffix Code is as- signed, it will be shown in card column 44 of DD Form 1348M (block 13 of DD Form 1348). A different Suffix Code will be assigned to each partial quantity shipment to be made in fulfillment of a single original requisition. NOTE: Partial issues are not made on COG I material. See paragraph 2361 for card column 44 entries on MILSTRIP documents for COG I material . I 2267 SUPPLEMENTARY ADDRESS CODE The space on MILSTRIP documents in which the Suffix Code appears (when one is assigned) is the same space used for the "Demand Code" (described in para- graph 2265). However, Suffix Codes can easily be distinguished from Demand Codes because Suffix Codes will be other than "N" or "R." The Demand Code for an FMS requisition will always be either "N" or "R." Supplementary Address Field (card columns 45 through 50 on DD Form 1348M; block 15 on DD Form 1348). This field within the requisition form consists of four elements of information: Service code of the FMS custo- mer (card column 45) Offer release code providing for whether or not a notice of availability is required (card column 46) Freight forwarder code which identifies the first destina- tion of shipment (card column 47) FMS Case Designator which identifies the DD Form 1513 offer and acceptance which is the authority for the requisition (card columns 48-50). 2-56 2267 (Continued) 2268 SERVICE CODE 2269 OFFER RELEASE CODE AND FREIGHT FORWARDER CODE It is important to recognize that once a requisition is established at NAVILCO none of the elements within the supplementary address may change. Service Code (card column 45 on DD Form 1348M; block 14 on DD Form 1348). The one-letter entry in this space desig- nates the military service of the custo - mer country which will receive the item being requisitioned. Enter "P" in the space if the recipient military service in the customer country is Navy Enter "B" if the recipient military service in the custo- mer country is Army Enter "D" if the recipient military service in the custo- mer country is Air Force. CAUTION: The "Service Code" entry must be the same for all requisi- tions submitted under the authority of any one FMS Case (DD Form 1513). The offer release code (card column 46) identifies the manner in which material will be released to the customer. Ship- ments can be released automatically to the freight forwarder or a Notice of Availability (NOA) may be furnished to the freight forwarder. The notice of availability will request a shipping destination and shipping arrangements . The code cited in block 20 of the appli- cable DD Form 1513 is the only one which may be cited in any requisition under that case. Whenever an NOA is required the offer release code in conjunction with the freight forwarder code is used to identify the address to which an NOA is provided. The type address code 3 within the Military Assistance Program Address Code (MAPAC) applicable to the freight forwarder code (DOD 5105. 38D) 2-57 FIGURE 2-13 Source of Notice of Availability Data LETTER OF OFFER/ACCEPTANCE DD FORM 1513 AUTHORIZES NOTICE OF AVAILABILITY BY INDICATING EITHER "Y" OR "Z" IN BLOCK 19 MILSTRIP REQUISITION DOCUMENT DD FORM 1348 ADVISES SHIPPER OF REQUIREMENT FOR NOTICE OF AVAILABILITY BY INDICATING EITHER "Y" OR "Z" IN CARD COLUMN 46 il MAP AD FREIGHT FORWARDER/MAPAC TAC 3 ADDRESS IDENTIFIES THE ADDRESS TO WHICH NOTICE OF AVAILABILITY WILL BE PROVIDED Note: Refer to Figure 2-8 for a detailed illustration of the three documents cited above. 2-58 2269 (Continued) identifies the clear text address to which Notice of Availability will be sent. Figure 2-18 illustrates this rela- tionship. The following offer release codes are available: CODE ACTION A Indicates the shipment will be released automatically Y Indicates an NOA will be pro- vided; however, if shipping instructions are not received within 15 days the material will be released to the freight forwarder Z Indicates an NOA will be pro- vided and shipment will be held until shipping instructions are received. The freight forwarder code (card column 47) identifies the first destination of shipment. The Military Assistance Pro- gram Address Directory (DOD 5105. 38D) pro- vides clear text identification of the Freight Forwarder address. A Military Assistance Program Address Code (MAPAC) exists for each freight forwarder code. The specific address to which material and documentation are provided is identi- fied by the Type of Action Code (TAC) within the MAPAC: TAC 1 Identifies the address to which parcel post deliveries will be made TAC 2 Identifies the address to which freight will be shipped (ship- ments other than parcel post) TAC 3 Identifies the address to which NOA will be provided TAC 4 Identifies the address to which MILSTRIP status will be furn- ished 2-59 2269 (Continued) TAC 5 Identifies the address to which parcel post documentation will be furnished TAC 6 Identifies the address to which freight documentation will be furnished. 2270 FMS CASE IDENTIFICATION There are two additional TAC codes which require prior approval and authorization before they may be used. TAC codes A and B identify freight forwarder addresses which are cleared to receive classified materials. The procedures to acquire a clearance are available in paragraph 10350. Figure 2-8 provides an illustration of the requisitions relationship to the MAP AD. There are two exceptions to the use of an offer release code and a freight fowarder code. The use of either excep- tion is restricted to exceptional circum - stances and must be specifically authorized by the applicable DD Form 1513 offer and acceptance : CODE ACTION XX Shipment will be made directly to an in-country destination as identified by card column 33 of the requisition. The DD Form 1513 offer and accept- ance must provide for reimbur- sable transportation cost. XW Whenever this code is used clear text shipping instructions must be identified in the remarks section of the requisition and specifically identified on the applicable DD Form 1513 offer and acceptance . FMS Case Identification (card columns 48 through 50 on DD Form 1348M; last three spaces of block 15 on DD Form 1348). Enter in these three spaces the three- 2-60 2270 (Continued) 2271 SIGNAL CODE 2272 FUND CODE 2273 DISTRIBUTION CODE letter FMS case designator as shown in Item 3 of the authorizing FMS case, DD Form 1513. For example, Item 3 of the FMS case, DD Form 1513 might read: LT-P-ABC The proper entry in the "FMS Case Iden- tification" section of the requisition would be "ABC." Case designators, which are a part of the case identifier, are explained in detail in paragraph 1221 of Chapter 1. Signal Code (card column 51 on DD Form 1348M; block 16 on DD Form 1348). The entry in this space is for use by supply system activities in the United States. It indicates where material is to be shipped and where the supplier is to submit the bill associated with the requisition. Enter the letter "L" in this space. Fund Code (card columns 52 and 53 on DD Form 1348M; block 17 on DD Form 1348). Entries in these spaces, together with information entered in other sec- tions of the requisition, ensure that detailed financial processing of costs associated with the requisition are re- corded properly. Leave the "Fund Code" section of the requisition blank. Distribution Code (card columns 54 through 56 on DD Form 1348M; block 18 on DD Form 1348). The entry in the first space of this three-space section indi- cates the U.S. Navy activity which is to receive status information from the U.S. supply system. Leave the first space of this section blank. NOTE: For FMS requisitions all status is processed by NAVILCO and then fur- nished by NAVILCO to the customer. 2-61 2273 (Continued) Entries in the last two spaces of this three-space section identify the stores account and inventory management category used in the U.S. supply system for the item being requisitioned. For items having a National Stock Number (or a Federal Stock Number), enter the ma- terial cognizance symbol ("cog symbol") for the item being requisitoned (e.g., 9N, 2H, 1R, etc.). When the item being requisitioned does not have a National (or Federal) Stock Number, enter the appropriate symbol chosen from the fol- lowing listing. For Ships Parts — Enter "1H" For Aircraft Parts -- Enter "1R" For Electronic Parts -- Enter "IN" For Training Devices -- Enter "20" (Not "20") For Publications -- Enter "01" (Not "01") For Forms — Enter "II". 2274 PROJECT CODE Project Code (card columns 57 through 59 on DD Form 1348M; block 19 on DD Form 1348). Entries in these spaces may be used only when a project code is specifically authorized by NAVILCO. When a project code is used, the entries will be any combination of alphabetic or alphabetic/numeric characters, subject to the two restrictions given below. The letters A, D, E, F, H, P, R, S, X and Z must not be used in the first space (card column 57) of this section. These letters have been reserved for U.S. use. An alphabetic char- acter must always be inserted in card columns 57 and 58, and a numeric character in card column 59. 2-62 2274 (Continued) 2275 PRIORITY 2276 REQUIRED DELIVERY DATE The first two spaces must have letters and the third space must have a number, OR all three spaces must be left blank. Do not make an entry in only one, or in only two, of the spaces. Priority (card columns 60 and 61 on DD Form 1348M; block 20 on DD Form 1348). Entries in these spaces are the two- digit Priority Number (0"1 through 15) assigned to the requisition in accor- dance with the U.S. Uniform Material Movement and Issue Priority System (UMMIPS). UMMIPS is described in para- graphs 2121 through 2126. Use the Force/Activity Designator (F/AD) assigned to the customer country (or to the customer military service or particular FMS case, if different from the country F/AD) to determine the ap- plicable row or column in the UMMIPS Priority Number Table. Determine whether the UND should be "A," "B, " or "C" and use the UND to determine which of the three possible Priority Numbers appli- cable to the authorized F/AD is proper for the requisition. Enter this number in the "Priority" section of the requisition. Be sure to fill both spaces in the "Priority" section. Use a numeric zero (0) in the first space if the Priority Number is 1 through 9 (i.e., 01, 02, 03, 04, etc . ) . Required Delivery Date (card columns 62 through 64 on DD Form 1348M; block 21 on DD Form 1348 ) . No entry is required in this section, since UMMIPS prescribes time standards for processing, issue, and shipment of material. However, if delivery is required prior to the elapsed time specified by UMMIPS, that date may be en- tered in the "Required Delivery Date" section. 2-63 2276 (Continued) 2277 ADVICE CODE If an entry is made in this sec- tion, it should be in "Julian Date" for- mat, omitting the "year code." This means that the "Required Delivery Date" entry will consist of three digits show- ing the day within the year when deliv- ery is required. For example, if de- livery is required by 14 February, the 45th day of the year, the "Required Delivery Date" entry would be "045." If an entry is made in this sec- tion, all three spaces must be filled. Zeros should be used to the left of significant digits if necessary to en- sure all spaces are filled. For ex- ample, 006 (not 6), 045 (not 45). Advice Code (card columns 65 and 66 on DD Form 1348M; block 22 on DD Form 1348). An entry is made in this section only when the requisitioner wishes to give special advice or in- structions to the U.S. supply system. If this section is used, the choice of entries is limited to the "2" and "3" series of advice codes provided in Ap- pendix 1 of the MILSTRIP/MILSTRAP Op- erating Procedures Manual, NAVSUP pub- lication 437. Additionally, advice code 5G will be used for the Return and Ex- change of Repairables (NAVMAT Instruc- tion 4900.13). A description of the most frequently used advice codes is provided in Figure 2-19. If no advice is entered in the req- uisition, the U.S. supply system will automatically either: Issue the item requested Back-order the item requested and make the issue when stock is received Issue a replacement or substi- tute item Procure the item from a com- mercial source. 2-64 FIGURE 2-19 Frequently Used MILSTRIP Advice Codes ADVICE CODE (Card Col. 65, 66, on DD Form 1348M; Block 22 on DD Form 1348) Explanation 2B 2C 2D 2F 2H 2J 3B 5G Requested item only will suffice. Do not substitute/interchange. Do not back order. Reject any unfilled quantity not available to meet PDD/RDD. Suitable substitute acceptable. Furnish exact quantity requested (i.e., do not adjust to unit pack quantity). Item known to be coded "obsolete" but still required for immediate consumption. Special textile requirements for use in airborne operations where personal safety is involved. Do not substitute or back order any unfilled quantities. Item being requisitioned has been designated as a commercial type item. Unable to obtain from commercial sources. Request supply of requisitioned quantity be ac- complished against the FMS case reflected in card columns 48-50. Exchange certification. Requested item is a mandatory turn in repairable for which an unserviceable unit will be turned in on an exchange basis under the same document number as that used in the requisition. • Advice Codes are to be used only when it is desired to give special advice to the supply system as indicated by the advice codes above. • When no advice code is inserted in card columns 65-66, the supply system will provide one of the following actions: 1 . Issue the requested item from stock 2. Back order any unfilled quantities 3. Issue a replacement item from stock 4. Issue a substitute item from stock 5. Procure from commercial source 2-65 2278 Card columns 67 through 73 on DD Form 1348M or the first three spaces in CARD COLUMNS block 23 of DD Form 1348 are not used in 67-73; BLOCK 23 the FMS requisition process. Do not make any entries in these columns/spaces. 2279 Price (card columns 74 through 80 on DD 1348M; last seven spaces in block PRICE 23 on DD Form 1348). This section is not specifically identified (labeled) on either DD Form 1348M, DD Form 1348, or DD Form 1348-6. However, for FMS requi- sitions these seven spaces are always used to enter the unit price (i.e. , the price of one Unit of Issue of the item being requisitioned). Prices are always stated in U.S. money and include both dollars and cents. Card columns/spaces 79 and 80 are always used to show the "cents" portion of the price. All seven card columns/spaces must be filled. Zeros should be used to the left of significant digits if neces- sary to ensure all spaces are filled. For example, material with a unit price of $16.32 would be shown in the "Price" section of the requisition as "0001632 . " Each requisition forwarded to NAVILCO must contain a unit price . The best source of price information is the current edition of the Management List - Navy (ML-N). If the ML-N is not avail- able, or if the item being ordered is not listed in the ML-N, the price paid for the item if previously ordered by the customer country may be used. However, prices previously paid should be increased by approximately 10 percent per year (since the date of last delivery) to allow for potential procurement price escalation. If neither an ML-N price nor a price previously paid is available, then the requisitioner should enter an estimated price based on his best judgment. 2-66 !279 (Continued) 2280 STATUS INFORMATION PROVIDED TO ZUSTOMERS 2281 JSE OF MILSTRIP TO PROVIDE STATUS 2282 )D FORM 1348M STATUS CARD 2283 \UTODIN TRANSMISSION Corrections to the price shown on the requisition when submitted will be made during the processing of the requi- sition through the U.S. supply system. The customer will be advised of these price changes through status information provided by NAVILCO. However, it is important that a unit price be included on the requisition when originally sub - mitted, even though the price may be changed later in the processing cycle . This completes the description of MILSTRIP information elements and the manner in which they are entered on FMS requisitions . Paragraph 2150 describes in general terms the process by which NAVILCO pro- vides the customer with status informa- tion indicating the progress of supply action on the requisition. This section of the chapter discusses the process in greater detail. In addition to providing a standard format and coding system for requisitions, MILSTRIP includes similar provisions for communicating status information. These include use of standard formats and coded information elements to permit use of data processing punched cards, electri- cal transmission, and mechanized process- ing. The standard form used to provide status is DD Form 1348M. This is the same document which is used to requisi- tion material, now being used for another of the many different purposes for which the form was designed. When used as a Status Card, the DD Form 1348 will be transmitted from NAVIL- CO to the customer using AUTODIN if the customer representative designated to receive status has AUTODIN access. 2-67 2283 (Continued) If the customer representative does not have access to AUTODIN, NAVILCO will forward status cards, DD Form 1348M, by mail to the customer country represen- tative designated to receive status. Because of AUTODIN' s greater speed, cus- tomers who have AUTODIN access are strongly encouraged to request its use by NAVILCO in transmitting status infor- mation to them. 2284 WHAT A STATUS CARD LOOKS LIKE 2285 TYPES OF STATUS DOCUMENTS Status cards received by the custo- mer from NAVILCO at an AUTODIN terminal will be punched, but the information represented by the punched holes in the card will not be interpreted. Cards must be interpreted and printed before they can be read. Status cards forwarded to the customer from NAVILCO by mail will be punched, interpreted, and printed before being mailed. A punched, interpreted status card, DD Form 1348M, looks almost identical to the original MILSTRIP requisition, with information printed across the top of the card. The key to distinguishing a status card from the requisition for which it is being furnished is in the document identifier, card columns 1-3. Generally, a sequence of three document identifiers (four if procurement is required) will be provided during the life of a requisition: Document Identifier "AEA" , (AEE for non-standard requisi- tions) acknowledges that NAVIL- CO has received and processed the requisition. Figure 2-20 illustrates an AEA acknowledge- ment card, DD Form 1348M. Document Identifier "AE2" . After an acknowledgement has been received, a number of AE2 status cards will be received. Each AE2 status card provides 2-68 FIGURE 2-20 Comparison of DD Form 1348M Requisition and Status Cards REQUIRED DELIVERY DATE BLANK -SHOWS DELIVERY WITHIN UMMIPS STANDARDS IS ACCEPTABLE. REQDEL DATE 2B ADV STAT ADVICE CODE "2B"- TELLS SUPPLY SYSTEM NOT TO ISSUE A SUBSTITUTE OR INTERCHANGEABLE ITEM. 1348M STANDARD STOCK) REQUIRED DELIVERY DATE "045" - SHOWS THE DATE NAVILCO RECORDED THE REQUISITION. ADVICE CODE "BW" - SHOWS THAT NAVILCO HAS RECEIVED AND RECORDED THE REQUISITION. ("BW" INDICATES A "PULL" REQUISITION; "BU" WOULD INDICATE A "PUSH" REQUISITION.) 1 1348M IN ACKNOWLEDGEMENT) 2-69/(2-70 blank) FIGURE 2-20 Comparison of DD Form 134 8M Requisition and Status Cards DOCUMENT IDENTIFIER "A01"- IDENTIFIES A REQUISITION FOR STANDARD STOCK. ROUTING IDENTIFIER REQUIRED DELIVERY DATE BLANK - SHOWS DELIVERY WITHIN UMMIPS STANDARDS IS ACCEPTABLE. ADVICE CODE "2B"- TELLS SUPPLY SYSTEM NOT TO ISSUE A SUBSTITUTE OR INTERCHANGEABLE ITEM. DD FORM 1348M REQUISITION (FOR STANDARD STOCK) DOCUMENT IDENTIFIER "AEA"- IDENTIFIES A STATUS CARD. ROUTING IDENTIFIER NAVILCO HAS RECEIVED AND RECORDED REQUISITION REQUIRED DELIVERY DATE "045" - SHOWS THE DATE NAVILCO RECORDED THE REQUISITION. ADVICE CODE "BW" - SHOWS THAT NAVILCO HAS RECEIVED AND RECORDED THE REQUISITION. ("BW" INDICATES A "PULL" REQUISITION; "BU" WOULD INDICATE A "PUSH" REQUISITION.) DD FORM 1348M STATUS CARD (REQUISITION ACKNOWLEDGEMENT) 2-69/(2-70 blank) 285 information concerning actions taken by the supply system on Continued) the requisition. Figure 2-21 illustrates examples of AE2 supply status cards. Detailed instructions for interpreting supply status are furnished in paragraph 2286. Document Identifier "AB2" . Whenever the supply system in- ventory manager determines that procurement is required and the requirement is placed on contract, an AB2 document in- dicating the contract number will be furnished. An AE2 document, with "B7" advice code in cc 64-65, will nor- mally be furnished along with the AB2 document. This AE2 status card provides the con- tract unit price. Document Identifier "AS2" . When the supply system ships the material, an AS2 shipment status card is furnished. The AS2 document provides shipping data pertinent to the shipment of the material. Paragraph 2287 provides more detailed infor- mation on shipment status . It is important to recognize that certain fields in a MILSTRIP document will never change throughout the life of a requisition. These fields enable anyone involved to correctly identify the requi- sition at any point in its requisition process . The fields which always remain constant are : FIELD NAME CARD COLUMNS Document Number 30-43 Supplementary Address Code 46-50 Project Code 57-59 2-71 FIGURE 2-21 Sample DD Form 1348M Status Card "AE2' "N35" "9225 IDENTIFIES DOCUMENT AS A STATUS CARD. THE ACTIVITY WHICH WILL PROCURE THE MATERIAL. NEW ESTIMATED SHIPPING DATE IS THE 225TH DAY OF THE YEAR 1979. DESCRIBES ACTION BEING TAKEN. "BV" INDICATES ITEM IS UNDER PROCUREMENT FOR DIRECT DELIVERY. SHIPPING ACTION WILL BE DELAYED. REVISED ESTIMATED SHIPPING DATE IS IN CARD COLUMNS 70 THROUGH 73. DD FORM 1348M AE2 DOC IDENT u "AE2" - IDENTIFIES DOCUMENT AS A STATUS CARD '0000250" - NEW UNIT PRICE ($2.50) FOR THE ITEM *B7" DESCRIBES ACTION BEING TAKEN. "B7" INDICATES "UNIT PRICE CHANGE. THE LATEST UNIT PRICE FOR THE ITEM ... IS REFLECTED IN CARD COLUMNS 74 THROUGH 80." AE2 SHE ■ KOJTING J- MN ADC CK NUMBC" rr*~n DD FORM 1348M 2-72 2286 HOW TO INTERPRET SUPPLY STATUS The purpose of the supply status card is provided by the supply status code, cc 65-66, in an AE2 document. Figure 2-22 lists examples of frequently used status codes with an explanation of each. More than one item of status information can be conveyed by a single supply status card. Particular atten- tion should be given to the following: CARD COLUMNS INFORMATION PROVIDED 65 and 66 ACTION TAKEN , i.e., what is happening to the requi- sition. 8 through 22 STOCK NUMBER CHANGE from the stock number part num- ber, or other identifying data shown in the original requisition or a previous status card. 23 and 24 UNIT OF ISSUE CHANGE from the unit of issue shown in the original requisi- tion or a previous status card. 25 through 29 62 through 64 QUANTITY CHANGE from the quantity shown in the original requisition or a previous status card. The DATE (day of the year) action taken (shown in card columns 65 and 66) occurred. 67 through 69 The ACTIVITY or organiza- tion within the U.S. sup- ply system to which the requisition has been for- warded for the action identified in card columns 65 and 66. 2-73 FIGURE 2-22 Frequently Used MILSTRIP Status Codes STATUS CODE (Card Cols. 65, 66 on DD Form I348M*) MEANING BA Item being processed for release and shipment. *BB Item back-ordered. The estimated shipping date is entered in card columns (cc) 70-73. BC Item on original requisition containing this document number has been back ordered. Long delay is anticipated and estimated shipping date is in cc 70-73. Item in stock number field (or "Remarks" field if stock number field cannot accommodate the item number) can be furnished as a substitute. The price for the substitute item is in cc 74-80. If desired, submit cancellation of original requisition and requisition the offered substitute. BD Suspended. Action on this requisition is being delayed due to need to verify requirement relative to authorized application, item identification or technical data. Upon completion of review, additional status will be provided to indicate action taken. BG Stock number changed or national stock number assigned to part number submitted. Examine unit of issue and quantity for possible changes. BH Substitute/interchangeable item being supplied. See substituted/interchanged stock or part number in stock number field. Examine unit of issue and quantity fields for possible changes. BJ Unit of issue and/or quantity changed. BL Notice of availability was forwarded to the country representative or freight forwarder on date entered in cc 70-73. BU Item being supplied against your Foreign Military Sales Case Designator reflected in cc 48-50. This document represents a duplicate of the requisition prepared by the U.S. Military Service. BW Your FMS requisition containing this document number has been received by NAVILCO and submitted to the supply system. A current ESD is not presently available but will be provided by subsequent status transactions. BV Item being procured for direct shipment to consignee. The estimate shipping date is entered in cc 70-73. B7 Unit price change. The latest unit price for the item identified by the stock or part number in cc 8-22 is reflected in 74-80. BH Quantity requested for cancellation not accomplished. B9 The activity identified by the code in cc 4-6 is in receipt of your cancellation request. Action to cancel the demand or to divert the applicable shipment is being attempted. Advice of final action will be furnished in subsequent status transactions. *Status information will always be furnished by NAVILCO to the designated customer representative using DD Form I348M. 2-74 2286 (Continued) 70 through 73 74 through 80 The DATE (day of the year) when material is expected to be available or is to be shipped to the freight forwarder. UNIT PRICE CHANGE (either estimated or actual) from the price contained in the original requisition or in previous status card. 2287 HOW TO INTERPRET SHIPMENT STATUS Complete interpretation of the pur- pose of any supply status card cannot be accomplished without relating the in- formation shown to data previously re- ceived. Maintenance of a complete file history on supply status is required for each requisition submitted. The AS2 shipment status document notifies the customer that NAVILCO has received notification that the material has been shipped. The project code, sup- plementary address, and the basic docu- ment number shown in the AS2 status card will be identical to the original MILSTRIP requisition and to all previously re- ceived status. In reviewing shipment status, the customer should give particular atten- tion to the suffix code in card column 44. When data appear in this field, it indicates that a partial shipment has been made. Any alpha character may ap- pear in the suffix code with the excep- tion of "N" and "R, " which are used ex- clusively as demand codes in the original requisition. When a suffix code appears, the quantity indicated in card columns 25-29 represents the quantity shipped. Supply action will then continue on any undelivered balance remaining due. 2-75 2287 (Continued) 2290 CUSTOMER FOLLOW- UP FOR STATUS INFORMATION The information contained in card column 77 represents the mode of ship - ment , i.e., how the material was shipped Figure 2-23 explains the MILSTRIP mode of shipment codes. Card columns 62-76 represent the shipment serial field. This field provides identity to the shipping documentation; parcel post registration or insurance numbers; gov- ernment bills of lading; transportation control numbers, etc. In most instances, this information can be useful in tracinc a shipment. Card column 57-59 indicates the date the item was shipped. Receipt of shipping status does not signify a need to purge records. On the contrary, shipment records should be maintained for a period of time after the receipt of shipping status for possi- ble use in preparation of Reports of Item Discrepancies (ROIDs), as discussed in Chapter 7, and for any additional cor- respondence which may arise. When the limitation for filing a report of item discrepancy has passed (1 year from re- ceipt of material or billing date, which- ever is later), the customer's retain file records may be transferred to an inactive status. Figure 2-24 illustrates two types of AS2 shipment status docu- ments using DD Form 1348. Paragraph 2161 describes NAVILCO' s automatic follow-up process to activi- ties within the U.S. supply system con- cerning open requisitions for which NAVILCO does not have current valid status information or a forecast shipping (delivery) date. Paragraph 2161 also states that information received by NAVILCO in response to its automatic follow-up program will be forwarded to the customer as status information. 2-76 FIGURE 2-23 MILSTRIP Mode of Shipment Codes Shipment Code (Card Col. 77 on DD Form 1348M Status Cards)* Motor, Truckload Motor, Less Truckload MAC Surface Parcel Post Air Parcel Post Government Truck RE A Express Rail, Carload Rail, Less Carload Freight Forwarder Air Freight Air Express Air Freight Forwarder MSC (Controlled/Contract/ Arranged Space) ♦Mode of shipment information will be shown in Card Column 77 of Status Information cards furnished to the designated customer representative on DD Form 1348M. 2-77/(2-78 blank) FIGURE 2-24 Example of Shipment Status Card, DD Form 1348 2-79/(2-80 blank) FIGURE 2-24 Example of Shipment Status Card, DD Form 1348 2-79/(2-80 blank) FIGURE 2-24 (2) Example of Shipment Status Card, DD Form 1348 AS2 CC 1-3 DD FORM 1348 SHIPMENT STATUS CARD FOR COLLECT SHIPMENT ON COMMERCIAL BILL OF LADING 2-81/(2-82 blank) FIGURE 2-24(2) Example of Shipment Status Card, DD Form 1348 DOCUMENT IDENTIFIER "AS2" INDICATES SHIPMENT STATUS SHIPMENT STATUS CARD FOR COLLECT SHIPMENT ON COMMERCIAL BILL OF LADING SHIPMENT B/L IDENTIFIER (LOCALLY ASSIGNED SERIAL NUMBER) 2-81/(2-82 blank) 2291 USE OF DD FORMS 1348M/1348 FOR FOLLOW-UP However, despite this automatic follow-up program, there may be occasions when the customer wishes to initiate in- dependent follow-up with NAVILCO. Thus far, the uses of the DD Form 1348M and DD Form 1348 as requisition documents and as status card documents have been described. These forms may also be used by the customer to initiate follow-up with NAVILCO. 2292 HOW TO FILL OUT DD FORM 1348M AND DD FORM 1348 WHEN USED FOR FOLLOW-UP When used as a follow-up document, the DD Form 1348M or DD Form 1348 look almost identical to the requisition for the item for which the follow-up is being submitted or a duplicate of the last status card received. The only dif- ference is in the "Document Identifier" section (card columns 1 through 3 on DD Form 1348M; block 1 on DD Form 1348). When the form is used as a follow-up document, the characters "AFl" should be entered in the "Document Identifier" section. The remainder of the entries are identical to those made when the form is used as a requisition or dupli- cated from the last status card received. Figure 2-25 illustrates the difference between use of DD Form 1348M and DD Form 1348 as requisitions and as follow- up documents . Follow-up documents showing "AFl" in the "Document Identifier" section will yield a response from NAVILCO which pro- vides all available status information. However, a specialized type of follow-up document may be used if material is ur- gently needed and it is necessary to re- quest improvement in the estimated ship- ping date which has been provided in earlier supply status information. This specialized type of follow-up may be used only for requisitions bearing Priority Numbers 01 through 08 . When the estimated shipping date shown in card columns 70 through 73 of the Supply Status Card (MILSTRIP Document 2-83 FIGURE 2-25 Comparison of Requisition and Follow-up Cards (DD Form 1348M and DD Form 1348) "DOCUMENT IDENTIFIER" IS "A01" FOR REQUISITION; "AFV'FOR FOLLOW-UP. REMAINDER OF ENTRIES IS IDENTICAL. A01 DOC IDENT DD FORM 1348M USED AS REQUISITION AF1 DOC IDENT DD FORM 1348M USED AS FOLLOW-UP "DOCUMENT IDENTIFIER" IS "A$1" FOR REQUISITION; "AF1" FOR FOLLOW-UP. REMAINDER IS IDENTICAL DOC. IDENT. "n r A 1 _l I DOC. IDENT. tt — r~ A F 1 _l l_ DD FORM 1348 USED AS REQUISITION SEND TO: BfflE^g ESE f act: NAVILCO PHILADELPHIA, PA SEND TO: IhJ-lURiI 6l_JO TTTTT I TT — I - A0 1 ' I I KM I fail TT — [— N65 IhR rirui ,v * v ir» fiitt EQUISITION IS FROM: LATONIA ttt i — r + STOCK NUMBER ADDITION n— t~ 1.^,0.5,0,0,1,7,5,2,0,8,7, OOCUMfNT NUMK8 DATE I SfalAt a ^ot ■Jaipr UISITION IS FROM: iminoitn ) w llil«lill -OKI 'no' «o- w- «o»] UWKJ It "™ 1W """' I ITT MTI ICt | NAVILCO PHILADELPHIA, PA LATONIA EDITING OATA 2-1 l_ 81 -TO 4 I 5 |6 DOCUMENT NUMBER TT — T - A F 1 8EQUISITIOKH8 rm — i — i — i — hn — i — i lu i i — r~ ^1,0,43,1,36,0.1,0,0 5 T5T — r~ 1 A loT - 1.5 tt — r - !L*1 STOCK NUMBER I.I.I FUN | ADDITIONAL TTTT — I — I - 1 — T 1.0.0.5, 0,0,1,7,5,2,0,8,7, Trtm — i — i — i — P.A2XYZ STOCK NUMBE8 C fun addt-i US """"" I 2 1 I 1 I 7 I 1 10 II II II II 11 16 17 II 11 70 71 22 21 24 21 21 U 21 21 ATUS DATA 42 I 03 I 64 REMARKS: UNITO ISSUE OOCUMENT NUMBE8 1 1 1 3 7\ m RfOUlSlllOWl | DATE | SERIAL [° &| II » J! 24 11 X 17 D 1! 40 41 42 41 14 « « 47 li sal si 7 .1 « 50 SI 12 51 W 11 56 " 51 11 W 11 17 61 M 65 66 67 U I DD FORM 1348 USED AS FOLLOW-UP 2-84 2292 (Continued) 2293 USE OF DD FORM 1348M PREFERRED; TRANSMITTAL OF FOLLOW-UP TO NAVILCO BY AUTODIN OR MAIL 2294 FOLLOW-UP TRANS- MITTAL TO NAVILCO BY MESSAGE 2295 CAUTION AGAINST TOO FREQUENT OR TOO EARLY FOLLOW- UP Identifier "AE2" discussed in paragraphs 2280 through 2287) is unsatisfactory, the FMS customer may submit a follow-up document showing the characters "AFC" in the "Document Identifier" section (card columns 1 through 3 on DD Form 1348M; block 1 on DD 1348). This will automa- tically initiate action within the U.S. supply system to attempt improvement in the estimated shipping date. As is true for requisitions, use of the mechanized card form, DD Form 1348M , and transmission by AUTODIN to NAVILCO are preferred for follow-up cards . Where AUTODIN facilities are not available to the customer, follow-up cards should be transmitted to NAVILCO by mail. Use of the manual card, DD Form 1348 , made out by typewriter or legibly handwritten and forwarded to NAVILCO by mail, is also acceptable . The DD Form 1348-6, "Non- FSN Requisition (Manual)," may not be used for follow-up. In situations of unusual urgency, follow-up inquiries may be prepared in MILSTRIP message format and be forwarded to NAVILCO by electrical means. Para- graphs 2232 and 2233 describe MILSTRIP message format for requisitions, and Figures 2-12 and 2-13 show examples of message requisitions. The MILSTRIP message format for follow-up is identical to that for requisitions except that the characters "AF1" are substituted for "A01" (or "A05" in requisitions for non-standard material) in the first line of message text. The need for selective customer follow-up is clearly recognized. Never- theless, it is also true that, while most follow-up actions and their responses communicate valuable information to the customer, very few really contribute positively to more rapid or more effi- cient supplying of material or services. 2-85 2295 (Continued) 2296 OTHER MILSTRIP DOCUMENTS WHICH MAY BE ENCOUNTERED BY CUSTOMERS To the extent that both those of the U.S. supply system low-up and respons divert efforts and supply processing, follow-up must be straint and on a s efforts and resources customer and of the — are expended on fol- e, they can actually resources from direct Therefore, customer exercised with re- elective basis. Similarly, it is pointless to fol- low up until the U.S. supply system has had reasonable time to take action with respect to the requisition. Figure 2-26 reflects the conditions discussed in this paragraph. It also provides a guide in determining how long the custo- mer should wait after receipt of last status (or requisition submission, if NAVILCO has not furnished receipt acknov. edgment) before initiating follow-up. Three important MILSTRIP documents have been discussed thus far in this chapter. They are: The MILSTRIP Requisition , for- warded by the customer (a "pull" requisition), or on the customer's behalf (a "push" requisition), to the U.S. supply system The MILSTRIP Status Card , for- warded from NAVILCO to the customer The MILSTRIP Follow-up , for- warded by the customer to NAVILCO. There are other MILSTRIP documents (in addition to those which physically ac- company the material) which the custome: may have occasion to originate or re- ceive. These MILSTRIP documents are identified and briefly described below. The first group includes those which th< customer may originate; the second grou] includes documents which the customer 2-86 FIGURE 2-26 Table for Determining When to Initiate Customer Fo11ow-ud IF ORIGINAL REQUISITION UMMIPS PRIORITY NUMBER IS: 01, 02, or 03 | 04, 05, 06, 07, or 08 || 09, 10, 11, 12, 13, 14, or 15 AND REQUISITION WAS SUBMITTED BY AUTODIN Air mail I AUTODIN or message or message Mail AUTODIN or mail DO NOT INITIATE FOLLOW-UP TO NAVILCO UNTIL: 5 days after submission of 20 days after submission of 1 5 days after submission of 30 days after submission of 30 days after submission of requisition requisition requisition requisition requisition OR OR OR 5 days after the estimated delivery date provided in the last status information has passed and no ship- ment status has been provided. 10 days after the estimated delivery date provided in the last status information has passed and no ship- ment status has been provided. 1 5 days after the estimated delivery date provided in the last status information has passed and no ship- ment status has been provided. AND SUBMIT FOLLOW-UP BY: AUTODIN or message AUTODIN or mail NOTE: If specialized follow-up to improve the estimated shipping date (MILSTRIP Document Identifier "AFC is being submitted, it must be forwarded to NAVI LCO by Al R MAI L, NOT BY AUTODIN. 2-87 2296 (Continued) 2297 OTHER MILSTRIP DOCUMENTS WHICH THE CUSTOMER ORIGINATES may receive. All of these documents and their use are described more fully in the U.S. Navy MILSTRIP guide, NAVSUP Publication 437. Follow-up/Requisition Reinstate - ment , MILSTRIP document identifier "ATI" (for standard stock items) or "AT5" (for non-standard items), is a specialized type of follow-up document originated by the customer. It is used when the initial status card acknowledging receipt of the requisition has not been received from NAVILCO after a reasonable time. It advises NAVILCO that the customer has not received a requisition acknowledge- ment and tells NAVILCO to consider the follow-up as a requisition if NAVILCO has no record of the original requisition. The Follow-up/Requisition Reinstate- ment document is identical to the orig- inal requisition except for the "Docu- ment Identifier" section. If the orig- inal requisition was an item of standard stock, the characters "ATI" are inserted in the "Document Identifier" section, card columns 1 through 3 of DD Form 1348M (block 1 of DD Form 1348). If the orig- inal requisition was for a non-standard item, the characters "AT5" are inserted in the "Document Identifier" section of DD Form 1348-6. Exception data on the original MILSTRIP requisition must be included on the "AT5" follow-up document. Increase in Quantity . The MILSTRIP system does no the "Quantity" through 29 DD DD Form 1348) has been submi to order more included on a mitted, this c either of two t permit an increase in Section (card columns 25 Form 1348M; block 8 of of a requisition after it tted. If it is necessary of an item which has been requisition previously sub- an be accomplished in ways : 2-88 297 . Submit a second, separate requisition, using a different Continued) document number, for the addi - tional quantity required, OR Cancel the original requisi- tion (as described in the paragraphs below), and submit a new requisition, using a dif- ferent document number, for the total quantity required. If a second requisition for the additional quantity is submitted, the total quantity ordered under both requi- sitions will almost invariably be for- warded to the FMS customer in two or more separate shipments. If the orig- inal requisition is canceled and a new requisition is submitted for the total quantity, material may be forwarded in a number of separate shipments. It is likely, however, that initial receipt of material by the FMS customer will occur later than if the method of submitting a second requisition for the additional quantity is used. Cancellation , MILSTRIP document identifier "ACl," is the document orig- inated by the customer to cancel a req- uisition which has previously been sub- mitted. If cancellation of the entire quantity ordered is desired, the card is identical to the original requisition document except that the characters "ACl" are inserted in the "Document Identifier" section, card columns 1 through 3 of DD Form 1348M (block 1 of DD Form 1348). If cancellation of only part of the quanti- ty order is desired, "ACl" should be entered in the "Document Identifier" section and the reduction (i.e., the amount to be canceled ) should be entered in the "Quantity" section (card columns 25 through 29 on DD Form 1348M; block 8 on DD Form 1348) . 2-89 2297 FMS customers should realize that cancellation of requisitions cannot (Continued) always be accomplished by the U.S. sup- ply system. This occurs most often when supply or purchase action is al- ready well advanced at the time the "ACl" cancellation request is received by NAVILCO. For example, if material has already been shipped (even though not yet received by the FMS customer or his representative), cancellation cannot be effected. In situations where a purchase con- tract has been entered into with a com- mercial supplier, it is sometimes not possible to cancel the contract without requiring the FMS customer to pay part, or all, of the contract price for materi ordered. In situations such as this, NAVILCO will advise the FMS customer of the cost involved before taking action to cancel the requisition. As a general rule, if the FMS custo mer has received a MILSTRIP supply statu card (MILSTRIP Document Identifier "AE2" in card columns 1 through 3 of DD Form 1348M) with either code "BA, " "BH, " or "BL" in card columns 65 and 66, it is probable that cancellation cannot be accomplished. Similarly, if a MILSTRIP shipment status card with Document Iden- tifier "AS2" in card columns 1 through 3 as described in paragraph 2287, has beer received by the FMS customer, cancella- tion is usually impossible. Follow-up on Cancellation , MILSTRII document identifier "AK1," is a special- ized type of follow-up document origi- nated by the customer if no acknowledg- ment or confirmation of cancellation is received from NAVILCO within a reason- able time after he has submitted a can- cellation. It is identical to the MILSTRIP cancellation document except that the characters "AK1" are inserted in the "Document Identifier" section, card columns 1 through 3 of DD Form 1348M (block 1 of DD Form 1348). 2-90 2297 (Continued) Document Modifier , MILSTRIP docu- ment identifier "AMI" (for standard stock items) or "AM5" (for non-standard items), is the document originated by the customer to change the priority or Required Delivery Date from that orig- inally submitted. It is used by FMS customers to change the priority or re- quired delivery date for the entire quantity of an item being ordered. The AMI may not be used for partial quan- tities. Detailed instructions on what the customer should enter in DD Form 1348M or DD Form 1348 to accomplish a change in priority are contained in paragraph 2330, Section C of this chap- ter. 2298 OTHER MILSTRIP STATUS DOCUMENTS WHICH THE CUSTOMER MAY RECEIVE Other MILSTRIP documents which the customer may receive from NAVILCO include those described below. Requisition Rejection , MILSTRIP document identifier "AE2" with a two-letter entry beginning with the letter "C" in the "Status Code" section (card columns 65 and 66 of DD Form 1348). This is a specialized type of status information which indicates to the customer that the requisition originally submitted cannot be accepted by the U.S. supply system. The coded entries in card columns 65 and 66 will indicate the reason for rejection. These codings and their meaning are included in Figure 2-27. Reply to Cancellation , MILSTRIP document identifier "AU2," is an acknowledgment from the supply system that the custo- mer's cancellation request (MILSTRIP document identifier "AC1", described in paragraph 2297 above) could not be honored since shipment had already been accomplished. 2-91 FIGURE 2-27 MILSTRIP Requisition Rejection Codes REJECTION CODE (Card Cols. 65,66 on DD Form 1348M)* Explanation CA CB CD CF CG a CK CL CS CT C6 Rejected. Explanation for rejection is stated in the Remarks field (continued on reverse side of card as necessary). In this case, the status card will be mailed. This code will not be used when other status codes have been established to convey a specific condition. Rejected. Initial requisition requested rejection of that quantity not available for immediate release or not available by the PDD or RDD. Quantity field indicates quantity not filled. This code is specifically applicable in responding to Advice Codes 2C and 2J. Rejected. Unable to process because of errors in the quantity, date, serial number and/ or signal code fields. Rejected. This requisition is an exact duplicate of a previously received requisition presently in process. Rejected. Unable to identify requested items. Re-requisition and furnish correct NSN or Part Number. If correct NSN or part number is unknown or if part number if correct, resubmit on DD Form 1348-6 furnishing as much data as is available. Rejected. Item coded (or being coded) "obsolete" in latest stock lists/ catalogs and not available for issue. If still required, re-requisition for procurement on DD Form 1348-6, citing Advice Code 2F and furnish technical data, e.g., end item usage, com- ponent, make, model, series, serial number, drawing, piece and/or part number, manual reference, applicable publication. Rejected. Item not available. Requisition next higher assembly. Rejected. Item not available. Requisition component parts if practicable. Rejected. Quantity requisitioned is suspect of error or indicates excessive quantity. Partial quantity being supplied. Quantity field in this transaction reflects quantity rejected. If requirement still exists, submit a new requisition for the required quantity using Advice Code 2L. Rejected. NSN item cited in the requisition needs further identification. Submit new A05 or A0E requisition citing make, model, series, serial number and/or end item usage or publication reference, as applicable in order to determine item required. Rejected. Requisition is for commercial type item which is not authorized for supply under the Foreign Military Sales program. If unable to obtain desired item from commercial sources, submit new requisition containing Advice Code 3B. ♦Rejection cards will always be furnished by NAVILCO to the designated customer representative using DD Form 1348M. 2-92 2299 This section of Chapter 2 has de- scribed the requisitioning process in SUMMARY detail from the customer's viewpoint. It has described: How the customer should make out a requisition and the forms to use for this purpose How requisitions should be transmitted to NAVILCC What the MILSTRIP data ele- ments in a requisition mean How, and in what form, status information is provided to customers How, and when, the customer may conduct follow-up with NAVILCO if it becomes neces- sary MILSTRIP documents other than requisitions, status cards, or follow-up cards which the customer may originate or re- ceive. Section C of this chapter is devoted to: Items of special interest to the customer Requisitioning situations which are different from the unusal situations previously described Conditions which require special attention or special caution by the customer. 2-93/(2-94 blank) 2300 SECTION C — AREAS OF SPECIAL INTEREST This section of Chapter 2 covers a wide range of topics which are directly or indirectly associated with FMS req- uisitioning but which have not been covered in Sections A or B. This sec- tion also reemphasizes some topics which have been previously mentioned, and lists some "dos" (i.e., actions which the req- uisitioner should take) and some "don'ts" (i.e., actions which the requisitioner should avoid). The purpose of this sec- tion is to answer questions which may arise occasionally and to assist requisi- tioned in avoiding pitfalls. 2310 HOW TO OBTAIN MILSTRIP FORMS MILSTRIP forms, DD Form 1348M, DD Form 1348, and DD Form 1348-6 for cus- tomer use in requisitioning, follow- up, cancellations, etc., are items of standard stock. They may be requisi- tioned from the U.S. supply system in the same manner as any other item of material. Pertinent identification data are provided below. FORM NUMBER MATERIAL COGNIZANCE UNIT OF ISSUE SYMBOL STOCK NUMBER STANDARD UNIT PRICE DD Form 1348M BX (Box, 2000 cards per box) II 0102-LF-013-4840 $ 4.40 DD Form 1348 (2 part) DD Form 1348 (4 part) DD Form 1348 (6 part) BX (700 forms II per box) BX (600 forms II per box) BX (500 forms II per box) 0102-LF-013-1002 $11.50 0102-LF-013-1010 $11.50 0102-LF-013-1020 $12.50 DD Form 1348-6 PG (Package of 100 forms) II 0102-LF-013-2272 $ 2.30 2-95 2310 (Continued) 2320 COMMUNICATION SYSTEM FEATURES; AUTODIN, DAAS, AND MINIMIZE 2321 AUTODIN NOTE : Standard prices shown are those in effect in August 1979 and are subject to change. The customer should refer to the Navy Stock List of Forms and Publications , NAVSUP Publication 2002, to validate stock numbers and obtain cur- rent prices before submitting requisi- tions . The customer should be aware of those features of the U.S. Department of Defense communication system which may have an effect on processing of FMS requisitions. These features are AUTODIN , the Automated Digital Network; DAAS , the Defense Automatic Addressing System; and MINIMIZE , a method for reducing electrical transmissions during periods of peak communications workload. AUTODIN is the abbreviation for the U.S. Department of Defense Auto mated Digital Network which was identified in paragraph 2131. AUTODIN is a capability for electrical transmission of informa- tion in a form which is directly pro- cessable by automatic data processing machines. Input to, and output from, AUTODIN terminals are in standard, 80- column punched card format. Most U.S. forces worldwide have AUTODIN capability. Many FMS customer countries have made arrangements with U.S. commands in their geographic area to use AUTODIN for re- ceipt and transmission of MILSTRIP infor- mation associated with the FMS Program. Customer use of AUTODIN is strongly encouraged because it provides a two- fold advantage in speeding up information processing. Because AUTODIN is an electri- cal transmission medium, in- formation sent by AUTODIN travels much more quickly than by mail 2-96 2321 (Continued) 2322 DAAS 2323 MINIMIZE Because AUTODIN communications are in machine processable form, they can be input directly into automated data processing systems without the need for time-consuming "translation" from plain language. DAAS is the abbreviation for the Defense Automatic Addressing System. DAAS ensures that AUTODIN communications involving standard stock material are routed to the proper supply activity within the U.S. supply system. Because DAAS can utilize the 13-digit NSN (as well as other MILSTRIP codes) as the routing key, it will direct FMS requisi- tions from NAVILCO to the proper inven- tory manager even if the customer has entered the wrong stores account and inventory management category in the last two spaces of the "Distribution Code" section of the requisition (card columns 55 and 56 of DD Form 1348M; block 18 of DD Form 1348). MINIMIZE is the short title of a restrictive condition imposed upon elec- trical communications transmission with- in the U.S. Department of Defense com- munication system. It is designed to ensure that the most important communi- cations are transmitted without undue delay during periods of heavy traffic load (or overload) in the communication system. MINIMIZE accomplishes this aim by diverting less essential communica- tions from electrical transmission to mail . Typically, MINIMIZE will be imposed for periods ranging in length from a day or two up to as long as 2 weeks. During MINIMIZE periods, electrical transmission of communications concerning FMS requisi- tions would normally be prohibited for all but requisitions bearing UMMIPS pri- ority numbers 01, 02 or 03. MINIMIZE may be imposed in a relatively small 2-97 2323 (Continued) 2330 CHANGING PRIORITY OF A REQUISITION geographical area by the local U.S. forces commander, in a larger area by the U.S. unified forces commander, or worldwide by the U.S. Joint Chiefs of Staff. MINIMIZE may be selectively im- posed on message (or "record") traffic, on voice (telephone, using the U.S. world- wide Automatic Voice Network, AUTOVON), or on data (AUTODIN) traffic. MINIMIZE affects only communications within the U.S. Department of Defense communications system; it does not apply to commercial telephone, telegraph, cable, TELEX, or other electrical communications transmis- sion media. Thus, imposition of MINIMIZE will affect FMS customers only to the extent that communications concerning their requisitions are being transmitted within the U.S. Department of Defense communication system. There are certain emergency condi- tions which may arise after a requisi- tion has been submitted which may make it necessary to increase the UMMIPS priority assigned to all, or a portion, of the material ordered on the requisi- tion. Emergencies which justify such an increase in priority are: Inability of an operational unit to perform assigned opera- tional tasks Requirement to make emergency repairs to primary weapon sys- tems or equipment An imminent work stoppage for lack of material at an activity engaged in the repair, modifi- cation or manufacutre of pri- mary weapons, equipment, or supplies . 2-98 However, even when such emergencies arise, customers should exercise great restraint. Priority may be increased only on that quantity of material neces- sary to remedy the emergency. For ex- ample, three electronic transistors are required for emergency repairs to the radio of an operating aircraft. The customer had previously submitted a requisition for 100 of the item to re- plenish stock at an operating air sta- tion. Under these conditions, justifi- cation exists to increase the priority for a quantity of 3 of the item. How- ever, priority on the remaining 97 should not be changed. PRIORITY CHANGE; ENTIRE QUANTITY The customer should also evaluate carefully whether an increase in prior- ity is likely to have any significant favorable effect on material delivery. This is especially important if the po- tential increase in priority is appli- cable to the entire quantity which was requisitioned, and if status information has been received that the material is being purchased (rather than being is- sued from stock on hand). In such a situation, it is unlikely that an in- crease in priority will have any real impact in improving delivery from the commercial supplier. It is also un- likely that the U.S. supply system will have an alternative source which can provide faster delivery. If the requisitioner has decided that an increase in priority is justi- fied and is desirable, it is necessary to determine whether the priority change is to apply to the entire quantity pre- viously requisitioned, or to only part of the quantity. If the priority change is to apply to the entire quantity, the customer must then review the original requisi- tion to determine if the item is stan- dard stock or non-standard material. 2-99 2331 (Continued) 2332 PRIORITY CHANGE; PARTIAL QUANTITY If standard stock, the customer should prepare a MILSTRIP Document Modifier card, entering the characters "AMI" in the "Document Identifier" section of the card (card columns 1 through 3 of DD Form 1348M; block 1 of DD Form 1348). The remainder of the card should be identical to the original requisition except for the "Priority" section (card columns 60 and 61 on DD Form 1348M; block 20 of DD Form 1348) and the "Required Delivery Date" section (card columns 62 through 64 on DD Form 1348M; block 21 on DD Form 1348). The new, increased priority and new "Required Delivery Date" should be entered in these sections. The card should be transmitted promptly to NAVILCO. If the item ordered is non-standard, a MILSTRIP "Document Mondifier" should be prepared, entering the characters, "AM5" in the "Document Identifier" sec- tion. The changed priority and required delivery date should be entered in the "Priority" and "Required Delivery Date" sections, respectively, and the card should be transmitted promptly to NAVILCO. If the priority change is to apply to only part of the quantity ordered on the original requisition, the customer should: Submit an entirely new requi- sition for the quantity urgently needed, indicating the increased priority and earlier required delivery date Submit a MILSTRIP cancellation for the quantity of the item being ordered on the new requi- sition. This will be identical to the original requisition except for the "Document Iden- tifier" and "Quantity" sections. Enter the characters "AC1" in the "Document Identifier" 2-100 2332 (Continued) 2340 SPECIAL REQUISITIONING SITUATIONS 2341 MAJOR WEAPON SYSTEMS OR EQUIPMENT section (card columns 1 through 3 of DD Form 1348M; block 1 of DD Form 1348). Enter the amount by which the originally ordered quantity is being re- duced in the "Quantity" sec- tion (card columns 25 through 29 on DD Form 1348M; block 8 on DD Form 1348). This entry should be the same as the quan- tity being ordered on the new requisition with increased priority. Thus far, this chapter has provided information applicable to FMS requisi- tioning situations which follow the usual pattern. In addition, there are some special requisitioning situations that involve action by the customer which is different from, or in addition to, the usual pattern. Paragraphs 2341 through 2364, below, explain those "special req- uisitioning situations" which the custo- mer is most likely to encounter. The FMS purchase of a major weapon system (such as one or more squadrons of modern fighter aircraft) or equipment (such as shipboard sonar or radar) pre- sents the customer country with extremely complex logistic support responsibilities, These responsibilities are not limited to supply support but also include some or all of the following: Operating site preparation Operating personnel training Special support and testing equipment Maintenance, overhaul, and repair. For FMS cases in which the Navy is the implementing U.S. military ser- vice, every effort is made to ensure 2-101 2341 (Continued) that the case (or other cases) provides for U.S. assistance to the customer in fulfilling these logistic support re- sponsibilities. For instance, Chapter 11 of this manual describes the capabili- ties of a Supply Assistance Team. This type of team is one example of the many types of assistance which can be made available. 2342 IMPORTANCE OF MONITORING "PUSH" REQUISITIONS 2343 RECOGNIZING "PUSH" REQUISITIONS During the introduction of a major weapon system or equipment in a customer country, most material will be ordered and shipped without any requisitioning action by the customer. Frequently, there will be many thousands of these "push" requisitions originated by ac- tivities within the U.S. supply system for a single FMS case. As indicated in paragraph 2111, it is extremely im - portant that the customer record and begin monitoring "push" requisitions as soon as initial status information is received . MILSTRIP documents applicable to "Push" requisitions can easily be recog- nized by looking at the "Serial Number" portion of the "Document Number," card columns 40 through 43 on DD Form 1348M. For "Push" requisitions, these spaces will contain a number from 5000 to 9999. MILSTRIP documents applicable to "Pull" requisitions will contain a serial number from 0001 to 4999 in these spaces. When specifically authorized by NAVILCO, a combination of numbers and letters may be entered in the "Serial Number" of either "Push" or "Pull" requisitions. Similarly, the MILSTRIP status code (in card columns 65 and 66 of DD Form 1348M) indicating that the requi- sitioned item is being supplied is "BU" 2-102 2343 (Continued) 2344 PLANNING FOR RECEIPT OF "PUSH" MATERIAL 2345 IMPORTANCE OF KEEPING USAGE DATA for "Push" requisitions, while it is "BW" for "Pull" requisitions. Thus, the presence of the letters "BU" in card columns 65 and 66 of MILSTRIP status cards provides a second means for recognizing "Push" requisitions. In addition to being prepared and alert to receive, record, and monitor the heavy volume of documents associated with "push" requisitions, the customer country should also plan for the receipt of the material which has been ordered by the requisitions. This planning must include: Preparation for customs clearance Transportation from the port of entry to the location in the customer country where material will be stored Preparation of warehouse space to store the material Protection of material against damage and loss during transit and while in storage Use of an accurate location system to ensure that material is not misplaced. This planning is especially important during the introduction and early opera- tional periods of weapon systems or equipment. It is equally important that the customer keep careful records of how frequently each item is issued from stock, in what quantity the item is is- sued, and the purpose for which the is- sued items are used. This information, called "usage data," will enable the customer country to analyze its experi- ence in using the system or equipment. 2-103 2345 (Continued) 2350 "PUSH" REQUISITIONS FOR SERVICES From this analysis, future requirements for the item can be predicted more ac- curately. Using these predictions, the customer country will know when to ini- tiate requisitions for replenishment of material originally provided under "push" requisitions. Careful analysis of usage data can also: Permit adjustment of stock levels to reflect the operat- ing and maintenance practices of the customer country Assist in identifying potential changes in operating and mainte' nance practices, enabling the customer to make more efficient use of the system or equipment. This chapter has concentrated on the requisitioning process for material . How' ever, there are occasions when customers will require services of some type. How- ever, the FMS customer cannot obtain ser- vices by initiating a "pull" requisition in the same manner as he might requisi- tion material . In order to obtain services, they must be included as part of an FMS case. Based on this, the appropriate U.S. agen- cy will originate "push" requisitions to furnish the necessary services to the FMS customer. In some instances, there will be an FMS case which is limited exclu- sively to the furnishing of services. Examples of this are cases bearing desig- nators "GAA" through "GZZ," which denote Technical or Engineering Services. In other instances, the furnishing of ser- vices may be included as part of an FMS case for material, such as major compo- nents and equipment (bearing designators in the "LAA" through "LZZ" series) or an FMS case for a ship or aircraft weapon system (bearing designators in the "SAA" through "SZZ" series). 2-104 2350 (Continued) 2360 REQUISITIONING PUBLICATIONS There are also specialized types of services which are specifically covered in other sections of this guide. Training services for customer country personnel are discussed in Chapter 12. Services necessary to overhaul repairable components and spares are covered in Chapter 5 . "Push" requisitions for services can be recognized as follows: The "Stock Number" section (card columns 8 through 22 on DD Form 1348M) will contain a short, general description of the services to be provided. The "Unit of Issue" section (card columns 23 and 24 on DD Form 1348M) will contain the letters "SR." The entry in the "Quantity" section (card columns 25 through 29 on DD Form 1348M) will be "00000." Although publications are a type of material, the customer should be aware of some special conditions which apply only to the requisitioning pro- cess for publications. Paragraph 2256 provides an explana- tion of the stock numbers associated with publications and forms. NAVSUP Publication 2002 is the source for identifying a publication or form stock number . When the desired publication can be identified to a stock number, the custo- mer country shall prepare a requisition in accordance with the instructions pro- vided in paragraph 2230 and Figure 2-10. Document identifier A04 will be entered in card columns 1-3 in lieu of A01 . 2-105 2360 (Continued) 2361 DOCUMENT NUMBERS FOR CHANGES TO BASIC PUBLICATIONS 2362 REQUISITIONING CHANGES SEPARATELY Chapter 6 will include coverage of publications (and other material) which must be protected from unauthorized disclosure. This is called "classified information" (or "classified material"). In response to a requisition pre- pared in this manner, customers will first receive the basic publication and all changes which are in effect up until the shipment date. The Navy Publications and Forms Center (NPFC) will prepare and forward with the shipment a DD Form 1348-] for the basic publication and each effec- tive change at the time of issue . MILSTR] documents accompanying the initial ship- ment will bear an identical "Document Number" to that shown in card columns 30 through 43 (blocks 9 through 12) of the original requisition. Except card column 44 (Demand/Suffix) will be blank for the basic publication. Each change or revision which is forwarded at the time the basic publica- tion is furnished will be accompanied by MILSTRIP documents showing the "Docu- ment Number" of the original requisition in card columns 30 through 43. The "Document Number" will be followed by a "Suffix Code" in card column 44. A different "Suffix Code" will be assigned to each change forwarded with the basic publication. The customer country will be charged only for material where card column 44 is blank. If changes are desired without the basic publication, they may be requisi- tioned separately. However, an individual MILSTRIP requisition must be prepared for each specific change desired. Each change is assigned its own stock number. These stock numbers are shown in the Navy Stock List of Publications and Forms , NAVSUP Publication 2002 . Customers must be very careful to use the correct stock number of the changes and not the stock number of the basic publication. Basic publications and changes can be identi- fied in NAVSUP Publication 2002 under the B/C or BC column. 2-106 2363 REQUESTING AUTOMATIC distribution of :hanges and revisions with rHE BASIC PUBLICATION Another characteristic of publica- tions which is different from most other material is that revisions or changes to the basic publications are often is- sued from time to time after the basic publications are published. It is im- portant that the customer receive these revisions and changes to ensure that publications in use are always up to date. If they wish, customers may arrange to have changes and revisions sent to them automatically. This is most con- veniently accomplished at the same time, and using the same requisition which orig- inally orders the basic publications. To do this, a requisition for the basic publication is prepared in the usual manner with the following exceptions. Enter the characters "A05" in the Document Identifier" sec- tions, card columns 1 through 3 on DD Form 1348. Since ex- ception data will be required on this requisition, the requi- sition must be mailed to NAVILCO Enter the words "Request Auto- matic Distribution" in the re- marks section of the DD 1348; blocks L through V. Subsequent changes and revisions will then be furnished to the freight forwarder identified in card column 46 and "marked for" the in-country destina- tion as indicated in card column 33. >364 requesting auto- matic distribution )f changes and revisions without che basic publi- :ation There may be instances when only automatic distribution of changes and revisions are required. Caution should be exercised when requesting automatic distribution in this manner. Prior to initiating the request, customers should ensure that all existing changes and revisions are in their possession. 2-107 2364 (Continued) This type of request should be made in a letter addressed to NAVILCO. The letter should include: Title of the publication Stock number of the publica- tion 2365 IDENTIFICATION OF PUBLICATION CHANGES AND REVISIONS UNDER AUTOMATIC DISTRIBUTION 2370 REQUISITIONING ACTIONS WHICH SHOULD BE TAKEN OR AVOIDED Quantity desired Freight forwarded address which is consistent with the MAPAD, DOD 5105. 38D An appropriate FMS case for funding the requirement. Prior notification of a change or a revision to a publication will not be provided. Additionally, the DD 1348-1 which accompanies initial distribution will not be provided for automatic dis- tribution. All identifying information will be included in the shipping label affixed to the exterior packaging. Not all automatic distributions will be iden- tified to a MILSTRIP document. Billings for automatic distribution will be made against the most current FMS case desig- nated for publication support. It is of utmost importance that a customer advise NAVILCO of any changes of information included on automatic distribution files. This includes changes in quantities and shipping in- structions. Paragraph 2371 , below, reemphasizes actions which the customer should take to ensure efficient, accurate, and speedy processing of FMS requisitions and ma- terial by the U.S. supply system. Paragraph 2372 reemphasizes actions which the customer should avoid to pre- vent delay or error in FMS requisition and material processing. 2-108 2371 In preparing and transmitting FMS requisitions, and other MILSTRIP docu- FMS REQUISITIONING ments , customers should be careful to: "DOs" -- ACTIONS WHICH SHOULD BE . Requisition material using DD TAKEN Form 1348M in preference to other MILSTRIP forms whenever possible. Transmit requisitions for stan- dard stock material by AUTODIN if possible. Use English whenever plain language (i.e., other than MILSTRIP coding) is used in a requisition. When using DD Form 1348 or DD Form 1348-6, make entries by typewriter if available. Be sure requisitions are legible if they are manually prepared. Printed block letters and num- erals should be used, rather than writing. Print numerals as shown below: (not 0), 1 (not I), 2, 3, 4, 5, 6, 7, (not ?), 8, 9. Check stock numbers carefully to be sure they are in NSN rather than FSN format, i.e., 13 characters rather than 11. When ordering non-standard material, provide as much identifying information as is available. Be sure that entries on requi- sitions are in proper MILSTRIP coding. Be sure that the priority num- ber assigned to a requisition reflects the authorized F/AD and proper UND. 2-109 2371 . Include a price in U.S. dollars and cents on all requisitions. (Continued) If the correct price is not known, enter an estimated price, Use NAVILCO as the single point of contact within the U.S. supply system for all FMS requisitions submitted to the U.S. Navy. Use SAAC as the single point of contact for FMS financial inquiries. Be sure to use the proper "Unit of Issue" for the item being ordered. Be sure that the "Quantity" ordered is the number of units of issue de- sired. Use zeros (0) as necessary to fill spaces to the left of significant digits in the "Quantity," "Document Number," "Priority, " "Required Delivery Date," and ''Price" sections of requisitions. Respond promptly to NAVILCO price increase authorization requests . Enter the Julian Date on which the requisition is released for transmission in the "Date" portion of the "Document Num- ber" section of a requisition. Use only numbers from 0001 to 4999 in the "Serial" portion of the "Document Number" sec- tion of a requisition. 2-110 2372 In preparing and transmitting FMS requisitions, and other MILSTRIP docu- FMS REQUISITIONING ments, customers must be careful to "DON'Ts" — ACTIONS avoid the actions listed below. WHICH SHOULD BE AVOIDED . Do not duplicate the "Docu- ment Number" assigned to a requisition. Do not requisition material unless it is authorized, either in specific or general terms, under an active FMS case . Do not requisition items which are available from normal com- mercial sources. Do not attempt to transmit DD Form 1348-6 with information in the "Remarks" section by AUTODIN. Instead, use mail. 2-111 REFERENCES FOR CHAPTER 2 Cataloging Handbook — H4, Federal Supply Code for Manufac - turers, United States and Canada Defense Supply Agency (Defense Logistic Services Center, Battle Creek, Michigan) (NSN 0581 LP 004 1709) Introduction to Federal Supply Catalogs and Related Publications Naval Supply Systems Command (NAVSUP) Publication 4000 (NSN 0588 LP 411 2000) Management List - Navy (ML-N) Naval Supply Systems Command (NAVSUP) Publication 4100 (NSN 0588 LP 411 1000) Military Assistance Program Address Directory (MAP AD) Department of Defense (DOD) Publication 5105. 38D (NSN 0526 LP 510 5430) MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command (NAVSUP) Publication 437 (NSN 0530 LP 170 0083) Navy Stock List of Publications and Forms Naval Supply Systems Command (NAVSUP) Publication 2002 (NSN 0535 LP 004 0100) Uniform Material Movement and Issue Priority System (UMMIPS) Department of Defense Instruction (DODINST) 4410.6 Uniform Material Movement and Issue Priority System (UMMIPS) Chief of Naval Operations Instruction (OPNAVINST) 4614.1 2-112 CHAPTER 3. DIRECT REQUISITIONING PROCEDURES (DRP) CHAPTER 3. DIRECT REQUISITIONING PROCEDURES (DRP) TABLE O F CONTENTS Page Number SECTION A--DESCRIPTION 3-1 Background Description of Direct Requisitioning Why DRP Is Important Advantages of DRP Restrictions and Limitations Under DRP Restricted Categories of Material Pricing Policy for FMS Material Standard Items Non-Standard Items Pricing DRP Requisitions Criteria for Referral of Price Increases to the Customer Summary 3-1 3-1 3-2 3-2 3-3 3-4 3-10 3-10 3-13 3-13 3-13 3-14 SECTION B— PROCEDURES FOR DIRECT REQUISITIONING 3-17 Authority for Direct Requisitioning 3-17 Requisition Processing Limitations Under DRP 3-17 Exceptions: Material Not Authorized for Requisitioning Under DRP 3-17 Commercial -Type Items 3-18 Classified Publications and Material 3-18 Requests for Waiver 3-19 Requisition Format 3-19 Description of MILSTRIP Information Elements 3-20 Method of Submission 3-20 Customer Follow-Up 3-20 Change of Priority 3-20 DRP Billing Procedures 3-20 Page Number 3300 SECTION C--AREAS OF SPECIAL INTEREST 3-23 3310 Automatic Distribution of Technical Manual Changes Under DRP 3-23 3320 Referral of Price Increases to Customers: Importance of a Prompt Response 3-23 3321 Ways to Limit the Need for Price Increase Referrals 3-24 3330 Other Areas of Special Interest 3-25 REFERENCES FOR CHAPTER 3 3-26 INDEX OF FIGURES Page Number 3-1 Categories of Designated Commercial -Type Items Not Authorized Under Direct Requisitioning Procedures 3-5 3-2 Navy Material Cognizance Symbols Restricted From Use Under Direct Requisition 3-11 3-3 Criteria for Referral of Price Increases to the Customer 3-12 CHAPTER 3. DIRECT REQUISITIONING PROCEDURES (DRP) 3100 3110 BACKGROUND 3120 DESCRIPTION OF DIRECT REQUISITIONING SECTION A--DESCRIPTION It is the desire of the U.S. Navy to expedite supply action on certain "common use" items for which the FMS customer will have a recurring need. Included in these broad categories of common use items are unclassified spares, repair parts, minor components, training films, and publications . Whenever such material is required by the foreign customer, special arrangements can be made to fill these requirements through use of Direct Requisitioning Procedures (DRP). This chapter describes Direct Requisitioning Procedures which are authorized for use by FMS customers . Chapter 3 supplements the general guide- lines and procedures in Chapter 2 for processing MILSTRIP requisitions. The instructions and procedures included in Chapter 3 apply specifically to direct requisitioning. However, in most in- stances, the detailed procedures for preparation and processing of MILSTRIP requisitioning under DRP are identical to those prescribed in Chapter 2 for all other FMS requisitions. Therefore, much of the procedural content of Chapter 2 remains applicable for use under DRP, and Chapter 3 should be used in combina- tion with Chapter 2 . Under the DRP concept, separate FMS cases for direct requisitioning are authorized and established annually by the U.S. Chief of Naval Operations (CNO). A separate Letter of Offer and Acceptance , DD Form 1513, is required for each DRP case to be used by a cus- tomer country during a given fiscal year. 3-1 3120 (Continued) The DD Form 1513 for DRP cases does not list or describe any specific line items or material to be furnished. Instead, the Offer and Acceptance , when executed by the customer, serves as his annual monetary limitation. It estab- lishes a "blanket" authority, within the funding limitation, for requisitioning DRP requirements throughout the year. Upon acceptance of the DRP case by the customer, MILSTRIP requisitions (i.e., "pull" requisitions prepared by the customer) and bearing DRP case identifiers, may be submitted for supply action director to NAVILCO. 3121 WHY DRP IS IMPORTANT 3122 ADVANTAGES OF DRP DRP cases are not limited to sup- port of a specific weapon system or major end item. Instead, DRP provides opportunity to the customer for requi- sitioning a variety of different items required to support one or more weapons systems. For example, all U.S. Navy publications required for any weapon system being procured by a customer country may be requisitioned under a single DRP case for publications. Direct requisitioning is important to the customer because it expedites supply action and greatly simplifies the requisitioning and ordering process. DRP is important to the U.S. Navy be- cause it permits better support and service to the foreign customer at less cost, in terms of the time and overall supply effort involved. A number of important advantages can result from direct requisitioning, both to the foreign customer and the U.S. Navy. Some of these advantages of DRP are shown here: It provides for supply to the FMS customer of a variety of different items, within broad categories of materials. 3-2 3122 . It eliminates the unnecessary administrative burden to the (Continued) customer of requiring separate cases for different articles or services, under each weapon system supported. DRP enables the foreign cus- tomer to submit MILSTRIP requisitions directly to NAVILCO, using AUTODIN where available. It permits rapid processing of DRP requisitions at NAVILCO, directly into the computer, thus avoiding delays in docu- ment preparation and transfer of data into required ADP format . It permits verification of data by the computer, and results in an overall speedup of the entire supply system processing of DRP requisitions, It reduces error rates by eliminating manual processing of DRP requisitions. The administrative lag in requisition processing is reduced, and delivery lead times are improved. 3130 Requisitions submitted under DRP are limited to the following general RESTRICTIONS categories of unclassified material: AND LIMITATIONS UNDER DRP . Spares Repair Parts Minor Components Training Films Publications. 3-3 3131 Under DRP cases, certain restriction in requisitioning are imposed. The fol- RESTRICTED lowing criteria identify the types of CATEGORIES materials which may not be requisitioned OF MATERIAL by FMS customers under direct requisi- tioning: Designated Commercial-Type Items , which must be obtained direct from available commer- cial sources. Figure 3-1 identifies the commercial-type items which fall under this restriction. Classified Materials and Pub - lications , not specifically authorized for release by the Chief of Naval Operations ( CNO ) . NOTE: The terms "Classified Material" and "Classified Publications" are explained in Chapter 6 . The source for identifying classification of material is the ML-N. The source for identifying the classification of publications is NAVSUP Publication 2002. Technical Support Services , including Quality Control Services/ Inspection/Audit. Initial Provisioning of Spare and Repair Parts , applicable to all end items requiring such support. Ammunition and Explosive Items , including torpedoes, mines, warheads, and including all hand guns and small arms. 3-4 FIGURE 3-1 Categories of Designated Commerical Type Items Not Authorized Under Direct Requisitioning Procedures TABLE OF DESIGNATED COMMERCIAL-TYPE ITEMS Federal Federal Stock Stock Material Description Group Class 26 10 Tires and Tubes Pneumatic 26 30 Tires Solid and Cushioned 26 40 Tire Rebuild and Tire and Tube Repair Material 35 50 Vending and Coin Operated Machines 35 90 Misc. Service and Trade Equipment 37 ALL Agricultural Machinery and Equipment 39 90 Misc. Materiels Handling Equipment 41 20 Air Conditioning Equipment 41 41 Fans Air Circulators and Blower Equipment 45 ALL Plumbing, Heating and Sanitary Equipment 55 ALL Lumber, Millwork, Plywood and Veneer 56 ALL Construction and Building Materials 65 05 Drugs, Biologicals and Official Regeants 65 08 Medicated Cosmetics and Toiletries 65 10 Surgical Dressing Materials 65 15 Medical and Surgical Instruments 3-5 Prices for non-standard items should be estimated using the most recent invoice price available for the item, or using price information from another source document. A 20-percent annual increase should be added to the unit price for each year since the date of the invoice or other source document. 3151 Figure 3-2 shows the price increase criteria used to determine whether purchase CRITERIA FOR action may be taken by the U.S. supply system REFERRAL OF PRICE without specific authorization from the cus- INCREASES TO THE tomer. CUSTOMER Application of these criteria is demon- strated in the following example: Example 1. The customer requi- sition is for eight units of a standard stock item. The esti- mated unit price entered in the requisition by the customer is $16.00 each. The actual current standard unit price is $13.00 each, The actual purchase price is $40.00 each. Because this is a requisition for a standard stock item , the requisition value is $104.00 (8 units x $13.00 each = $104.00). Therefore, the purchase price exceeds the requisition value by $216.00 ($320.00 - $104.00 = $216.00). Since the requisition value ($104.00) is $100 or more, but less than $500, the "50 percent or $200, whichever is greater" criterion from the lower portion of Figure 3-2 applies. The purchase would not be made without referral for specific authorization by the customer, since the increase is more than $200. 3-6 FIGURE 3-1(3) Categories of Designated Commercial Type Items Not Authorized Under Direct Requisitioning Procedures TABLE OF DESIGNATED COMMERCIAL-TYPE ITEMS Federal Stock Class Material Description Except 7540 Except 7930 20 25 30 32 49 45 40 45 50 10 20 30 40 50 ALL ALL ALL ALL ALL ALL ALL ALL ALL Dental Instruments, Equipment, and Supplies X-Ray Equipment and Supplies, Medical, Dental and Veterinary Hospital Furniture, Equipment, Utensils and Supplies Hospital and Surgical Clothing and Textile Special Purpose Items Opticians' Instruments, Equipment and Supplies Medical Sets, Kits and Outfits Laboratory Equipment and Supplies Time Measuring Instruments Optical Instruments Cameras, Motion Picture Cameras, Still Picture Photographic Projection Equipment Photo Developing and Finishing Equipment Photographic Supplies Chemicals and Chemical Products Furniture Household, Commercial Furnishings and Appliances Office Machines, Visible Record Equipment and Data Processing Equipment Office Supplies and Devices Standard Forms Musical Instruments, Phonographs and Home-type Radios Recreational and Athletic Equipment Cleaning Equipment and Supplies Cleaning and Polishing Compounds and Preparations Brushes, Paints, Sealers and Adhesives 3-7 FIGURE 3-1(4) Categories of Designated Commercial Type Items Not Authorized Under Direct Requisitioning Procedures TABLE OF DESIGNATED COMMERCIAL-TYPE ITEMS Federal Federal Stock Stock Material Description Group Class Except 8030 Preservatives and Sealing Compounds Exce 3t 8040 Adhesives 81 05 Bags and Sacks 81 15 Boxes, Cartons and Crates 81 35 Packaging and Packing Bulk Material 83 ALL Textiles Only 84 ALL Clothing Only 85 ALL Toiletries 87 ALL Agricultural Supplies 88 ALL Live Animals 89 ALL Subsistence Except 8970 Composite Food Packages 91 ALL Fuels, Lubricants, Oils 93 10 Paper and Paperboard 93 20 Rubber Fabricated Materials 93 30 Plastic Fabricated Materials 93 40 Glass Fabricated Materials 93 50 Refractories and Fire Surfacing Materials 93 90 Misc. Fabricated Non-Metallic Materials 94 ALL Non-Mettalic Crude Materials 95 05 Wire, Non-Electrical, Iron and Steel 95 10 Bars and Rods, Iron and Steel 95 15 Plate, Sheet and Strip, Iron and Steel 95 20 Structural Shapes, Iron and Steel 95 25 Wire, Non-Electrical, Non-Ferrous Base Metal 95 30 Bars and Rods, Non-Ferrous Base Metal 95 35 Plate, Sheet, Strip, and Foil: Non-Ferrous Base Metal 3-8 FIGURE 3-1(5) Categories of Designated Commercial Type Items Not Authorized Under Direct Requisitioning Procedures TABLE OF DESIGNATED COMMERCIAL-TYPE ITEMS Federal Stock Group Federal Stock Class Material Description 95 95 96 99 40 45 ALL ALL Except 9930 Structural Shapes, Non-Ferrous Base Metal Plate, Sheet, Strip, Foil and Wire: Precious Metal Ores, Minerals and Their Primary Products Miscellaneous Materials; Cemeterial and Mortuary Equipment and Supplies 3-9 3131 (Continued) 3140 PRICING POLICY FOR FMS MATERIAL 3141 STANDARD ITEMS Weapon Systems, Major End Items and Major Components , including aircraft and associated major support equipment, ships, boats, craft, vehicles, missiles and missile equipment, radar and sonar. NOTE: The above includes all repairable end items which have been assigned identifi- cation numbers and are sup- ported by Allowance Parts Lists (APL's) and Component Identi- fication (CID). Figure 3-2 lists material cognizance codes which have been restricted from DRP. The materials assigned to these categories meet the criteria for restric- tion under DRP. In addition to those listed, a small percentage of materials applicable to material cognizance code 4G are APL-supported. Requisitions for those materials will be returned to the customer. All prices for FMS material which are ultimately charged to a customer by the U.S. Government include an FMS administrative charge . For a detailed description of the FMS administrative charge and additional costs which apply to FMS transactions, see Chapter 8 . Standard items (i.e., those items which are assigned a National Stock Number (NSN) ) will be supplied to the customer at the latest price when avail- able from stock. When a standard item is not available from stock, purchase action to procure the desired item from an available commercial source is taken automatically by the inventory manager. However, the purchase price must not ex- ceed the latest standard price by more than the amounts shown in Figure 3-3. 3-10 FIGURE 3-2 Navy Material Cognizance Symbols Restricted From Use Under Direct Requisition TABLE OF USN MATERIAL COGNIZANCE SYMBOLS RESTRICTED FROM USE UNDER DRP Cognizance S> mbol Inventory Manager Material Description 6A SPCC Fleet Ballistic Missile-Related Ordnance Equipment :b NAVSUP Excess Material and Dehumidifying Equipment 2C NAVFAC Major Construction and Civil Engineering Equipment :e SPCC Conventional Air Ammunition 4E SPCC Major Aviation Ordnance 6E SPCC Air Missile Repair Parts 8E SPCC Air Launched Missile Materia] 2F NAVSEA Major Shipboard Electronic Equipment :j NAVSEA Major Ordnance Equipment 4J NAVSEA Metrology Equipment 2M NAVAIR Ground Vehicles/Cryogenic Facilities 4M NAVAIR Meteorological Equipment 8M NAVAIR Aeronautical Launch and Recovery Systems 20 NTEC Training Device Equipment 90 USMC Consumable USMC Controlled Materials 4R ASO Repairable Catapult Arrest ing Gear and Landing Aid Material 8R NAVAIR Major Aeronautical Systems and Equipment 2S NAVSEA Major Hull, Mechanical and Electrical Equipment 2T SPCC Conventional Ammunition 4T SPCC Torpedoes and Components 6T NMBF Mines and Underwater Ordnance 8T NAVS Surface Launched Guided Missile Components 2V NAVAIR Aeronautical Support Equipment and Sono- buoys 4V NAVAIR Aircraft Engines 6V NAVAIR Technical Directive Aeronautical Change Kits 2Z NAVELEX Major Electronic Equipment 6U SPCC Surface Weapons Support Items 3-11 FIGURE 3-3 Criteria for Referral of Price Increases to the Customer IF THE REQUISITION VALUE* IS: Less than $199 $200 - $499 $500 - $999 $1,000 -$4,999 I $5 ,000 -$9,999 $10,000 and above \ Then the U.S. supply system may take purchase action without specific price increase authorization from the customer country if the purchase price** does not exceed the requisition value by more than: 1 1 I 1 1 1 100% or $100, 80% or $200, 60% or $500, 40% or $1,000, 30% or $2,000, 10% or $5,000, whichever is whichever is whichever is whichever is whichever is whichever is greater greater greater greater greater greater * Requisition Value is defined as follows: • (For standard stock) the current standard unit price multiplied by the number of units being ordered. • (For non-standard material) the estimated unit price as originally entered on the requisition multiplied by the number of units being ordered. **Purchase Price is defined as the unit price at which the item may be purchased from a commercial source multiplied by the number of units being ordered. 3-12 3141 (Continued) 3142 NON-STANDARD ITEMS 3150 PRICING DRP REQUISITIONS 3151 CRITERIA FOR REFERRAL OF PRICE INCREASES TO THE CUSTOMER Specific authorization by the customer to NAVILCO is required before purchase can be made at a price higher than the limitations shown in Figure 3-3. Non-standard items, by definition, are those items which have not been assigned a National Stock Number (NSN), and which are not carried in centrally managed inventories. Non-standard items are purchased for the customer whenever the purchase price does not exceed the extended price on the requisition by more than the amounts shown in Figure 3-3. As in the case of standard items, specific authorization by the customer to NAVILCO is required before procurement can be made at the increased price. Estimated prices for standard items identified by National Stock Numbers (NSNs) can be obtained from the Manage- ment List-Navy (ML-N). Due to two fac- tors, normal price escalations and the probability that the item will be pro- cured, a price escalation factor of at least 20 percent should be added to the standard price appearing in the ML-N. For example, if the standard price listed in the ML-N is $100, the price entered in the DRP requisition should be at least $120. Prices for non-standard items should be estimated using the most recent invoice price available for the item, or using price information from another source document. A 20-percent annual increase should be added to the unit price for each year since the date of the invoice or other source document. Figure 3-3 shows the price increase criteria used to determine whether pur- chase action may be taken by the U.S. supply system without specific authori- zation from the customer. Application of these criteria is demonstrated in the following example: 3-13 3151 (Continued) 3160 SUMMARY Example 1 . The customer req- uisition is for eight units of a standard stock item. The estimated unit price entered in the requisition by the cus- tomer is $26.00 each. The actual current standard unit price is $29.00 each. The actual purchase price is $56. OC each. Because this is a requi- sition for a standard stock item , the requisition value is $232.00 (8 units x $29.00 each = $232.00). Therefore, the purchase price exceeds the requisition value by $216.00 ($448.00 - $232.00 = $216.00). Since the requisition value ($232.00) is $200 or more, but less than $500, the "80 percent or $200, whichever is greater, 1 criterion from the lower portic of Figure 3-3 applies. The purchase would not be made wit! out referral for specific authorization by the customer, since the increase is more thai $200 . This section has provided a general description of Direct Requisitioning, highlighting the advantages and limita- tions which apply. It has shown that DR] is a practical and useful method for the foreign customer in processing "pull" requisitions to NAVILCO for many common use, unclassified items. The restriction which apply under DRP have been briefly noted, and the pricing policy for re- quisitions which result in purchase actio is explained. The following section of Chapter 3 provides special instructions for the customer in preparing and processing MILSTRIP requisitions under DRP. To the extent that procedures for processing DRP requisitions are identical with those for regular MILSTRIP requisitions, 3-14 3160 already covered in detail in Section B of Chapter 2, no attempt is made to (Continued) repeat these procedures in this chapter. 3-15/(3-16 blank) 3200 3210 AUTHORITY DIRECT REQUISITIONING 3211 REQUISITION PROCESSING LIMITATIONS UNDER DRP 3220 EXCEPTIONS: MATERIAL NOT AUTHORIZED FOR REQUISITIONING UNDER DRP SECTION B— PROCEDURES FOR DIRECT REQUISITIONING As indicated in Chapter 2, the authority for each requisition submitted under the FMS program is an active FMS case covered by a signed DD Form 1513, Offer and Acceptance . The procedures in this chapter apply to those FMS cases designated by the Chief of Naval Operations (CNO) as Direct Requisitioning Procedure (DRP) cases on the DD Form 1513, and funded under Type of Assistance 4 as dependable undertaking. The requisitioning format shown here for DRP requisitions is the same MILSTRIP format described in Chapter 2 for general requisitioning use by all FMS customers . The DD Form 1513 specifies the authorized period during which a cus- tomer country may submit requisitions on a DRP case. This period is generally the fiscal year for which the case is established. Commencing in 1976, each fiscal year begins on 1 October and con- tinues until 30 September of the follow- ing calendar year. (Prior fiscal years for the U.S. Government started on 1 July and continued through 30 June of the next year. ) NAVILCO will accept DRP requisitions for processing 1 month beyond the end of a fiscal year (until 31 October), to allow for in-transit time from the cus- tomer country. Paragraphs 3130 and 3131 cited the general restrictions and limitations which apply for requisitions submitted under DRP. The following paragraphs explain more fully some of these excep- tion categories not authorized for requisitioning under DRP. 3-17 3221 COMMERCIAL- TYPE ITEMS "Commercial-type items" are those not normally considered as "defense articles." Such things as lumber, plumbing supplies, office machines, brushes, paints, and similar common use, non-technical items which are normally available from established commercial sources in most customer countries, fall under this restricted category. A full listing of classes of commercial- type items is provided in Figure 3-1. It is not the intent of the Depart- ment of Defense to sell commercial-type items under the FMS program. Therefore, commercial-type items cannot be sold to FMS customers without prior approval of the U.S. Secretary of Defense (SECDEF) or his designated representative. Should required commercial-type items not be available from customer country resources, a request for their purchase through FMS can be made to the Director, Defense Security Assistance Agency via the Chief of Naval Opera- tions (OP-63), Washington, D.C. If approved, the customer can requisition the items under DRP using MILSTRIP Advice Code 3B. Use of the DOD-approvec code in card columns 65-66 on the DD For 1348M, or in block 22 on DD Form 1348, constitutes country certification of the non-availability of the item in-country and also denotes DOD approval for the sale. 3222 CLASSIFIED PUBLICATIONS AND MATERIAL Classified publications cannot be released to any fo ment or its representatives specific authority for such disclosure is granted by the Naval Operations . Chapter 6 detailed information for the the policies and procedures classified material requests and materia reign goverr unless release and Chief of provides customer or governing 3-18 3222 (Continued) Classified publications and material may be ordered under DRP, provided prior approval for their release to the re- questing government has been obtained from the Chief of Naval Operations. Such approval may be obtained by submitting a list of the required publications, individual components or repair parts to CNO, indicating the customer's desire to order these items under DRP. The major item or weapons system to which the components, repair parts or publi- cations apply should be indicated, and the reason cited concerning the intended use of the listed item. After review of the list by CNO, it will be returned to the customer, with a copy to NAVILCO, indicating those repair parts and publications items approved for release and which may be ordered via DRP. 3223 REQUESTS FOR WAIVER 3230 REQUISITION FORMAT All requisitions for approved classified items will be submitted to NAVILCO using Document Identifier A05, with the following statement in the Remarks Block: "Item classified; CNO letter (File Number) (Serial Number) (Date), authorized release of this item." If possible, to expedite pro- cessing by NAVILCO, a copy of the CNO authorizing letter also should be attached to the requisition. All requests made by the customer country to CNO for a waiver in the restrictions on authorized categories of material under DRP cases should include complete supporting justification and rationale. A statement as to whether or not in-country logistics support exists also is needed, where appropriate to the specific request. There are three types of requisi- tion forms authorized under MILSTRIP for use on DRP cases: 3-19 3230 (Continued) Mechanized Form , using DD Form 1348M in card form See paragraphs 2134 and 2221 for detailed descrip- tion of DD Form 1348M Manual Form , using DD Form 1348 in card form See paragraphs 2135 and 2221 for detailed descrip- tion of DD Form 1348 Manual Form , using DD Form 1348-6, Non-FSN Requisition (Manual ) See paragraphs 2136 and 2222 for detailed descrip- tion of DD Form 1348-6. 3240 DESCRIPTION OF MILSTRIP INFORMA- TION ELEMENTS Paragraphs 2251 through 2279 in Chapter 2 describe MILSTRIP information elements. 3250 METHOD OF SUBMISSION 3260 CUSTOMER FOLLOW-UP 3270 CHANGE OF PRIORITY See paragraphs 2130 through 2137 for detailed instructions on methods of submission and transmission of MILSTRIP requisitions to NAVILCO. See paragraphs 2161 and 2290 through 2295 for detailed instructions on follow-up action by NAVILCO and customer follow-up procedure. See paragraphs 2330 through 2332 for detailed instructions and procedure for changing the priority of a requisition. 3280 DRP BILLING PROCEDURES Complete information on U.S. Navy billing and collection procedures and reports for FMS transactions is fur- nished in Chapter 8 of the guide. Sec- tion B of Chapter 8 includes detailed procedures, descriptions and examples 3-20 3280 which apply to all Dependable Under- taking cases, and Type of Assistance (Continued) (T/A)4, and includes DRP cases. See Chapter 8 for detailed infor- mation on this important procedural area covering all aspects of DRP billing and collection procedures. 3-21/(3-22 blank) 3300 SECTION C--AREAS OF SPECIAL INTEREST 3310 AUTOMATIC DISTRIBUTION OF TECHNICAL MANUAL CHANGES UNDER DRP Paragraphs 2360 through 2365 pro- vide detailed instructions for requi- sitioning publications and changes. Automatic distribution of technical publication changes, revisions, amend- ments and supplements also can be ob- tained under DRP. Paragraphs 2363 and 2364 contain detailed information and instructions for requesting automatic distribution of publication changes and revisions. Once established, automatic distri- bution services provided under a DRP case in a given fiscal year will continue under the customer's DRP cases for fol- lowing years. DRP cases are only issued for 1 year. NAVILCO must be made aware of the specific DRP case to be charged and advised by the customer of the replacement case on a year-to-year basis . 3320 REFERRAL OF PRICE INCREASES TO CUSTOMERS: IMPORTANCE OF PROMPT RESPONSE See paragraphs 2363 and 2364 for additional information on automatic distribution of technical publication changes . A common difficulty encountered in processing requisitions requiring specific price increase authorization from the customer is the delay involved in making the referral and obtaining the customer decision to accept or reject the increase. To speed up the processing of these referrals, NAVILCO will normally trans- mit them to the customer by message which will include the date by which NAVILCO must receive a response from the customer. This response date depends on the expiration date of the commercial supplier's purchase price quotation. The response date will not be a standard number of days after the date of the NAVILCO price increase referral to the customer. It is important that customers 3-23 3320 (Continued) 3321 WAYS TO LIMIT THE NEED FOR PRICE INCREASE REFERRALS respond, preferably by message, as promptly as possible to NAVILCO price increase referrals . In any case, rep> must be received no later than the specified response date. If the price increase authorizat: n is not received on, or before, the specified response date, the requisite will be canceled. If the material is still required, the customer will havt to submit a new requisition for the canceled item. This almost always results in later delivery of material, and often involves an even larger pric increase than originally encountered. Even when the customer responds promptly to price increase authorizatin referrals from NAVILCO, there is alwa} some delay added to processing of the requisition. This delay can be mini- mized by eliminating the need for a price authorization referral. The fol lowing actions will limit the number c price increase referrals which will be required: By separate correspondence authorize NAVILCO to apply more liberal criteria than those specified in Figure 3-. For example: Instead of "100 percenter $100, whichever is grea?r an absolute value of $13 might be substituted. Instead of "80 percent t $200, whichever is grea^i an absolute value of $4) might be substituted. Instead of "60 percent : $500, whichever is greau an absolute value of $9) might be substituted. 3-24 3321 In considering the use of these actions, the customer should remem- ( Continued) ber that: Issues of standard stock from supplies on hand are made at the standard unit price, even if the estimated unit price shown on the requisition is much higher Purchases of either standard or non-standard material will be made at the lowest price which the U.S. supply system is able to obtain. Even if the estimated unit price in the requisition is higher, the customer will pay only the costs incurred by the U.S. Government. 3330 Section C of Chapter 2 covers other areas of special interest to the customer OTHER AREAS OF concerning FMS requisitioning. Paragraphs SPECIAL INTEREST 2310 through 2332 include a wide range of topics which also apply to DRP cases. A review of this portion of the guide by the reader is recommended. 3-25 REFERENCES FOR CHAPTER 3 Management List - Navy (ML-N) Naval Supply Systems Command (NAVSUP) Publication 4100 (NSN 0588 LP 411 1000) Military Assistance Program Address Directory (MAP AD) Department of Defense (DOD) Publication 5105. 38D (NSN 0^( LP 510 5430) MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command (NAVSUP) Publication 437 (NSN 0530 LP 170 0083) Uniform Material Movement and Issue Priority System (UMMIPS) Department of Defense Instruction (DODINST) 4410.6 Chief of Naval Operations Instruction (OPNAVINST) 4614.1 3-26 CHAPTER 4. COOPERATIVE LOGISTICS SUPPLY SUPPORT ARRANGEMENTS (CLSSA) CHAPTER 4. COOPERATIVE LOGISTICS SUPPLY SUPPORT ARRANGEMENTS (CLSSA) TABLE OF CONTENTS Page Number 4100 SECTION A— DESCRIPTION 4-1 4110 Purpose 4-1 4120 Authority for CLSSA 4-1 4130 In-country Requirements 4-2 4140 Equity List 4-2 4150 U.S. Government Augmentation 4-3 4160 Consumption/Drawdown 4-3 4200 SECTION B— PROCEDURES 4-5 4210 FMSO I 4-5 4220 FMSO II 4-5 4221 Storage Charges 4-6 4222 Military Standard Requisitioning and Issue Procedures (MILSTRIP) 4-6 4223 Uniform Material Movement and Issue Priority System (UMMIPS) 4-6 4224 Pricing 4-6 4225 Exceeding Equity 4-6 4226 Excessive Quantities 4-7 4230 Renegotiation of the FMSO I 4-7 4240 Termination of a CLSSA 4-8 REFERENCES FOR CHAPTER 4 4-9 CHAPTER 4. COOPERATIVE LOGISTICS SUPPLY SUPPORT ARRANGEMENTS (CLSSA) 4100 4110 PURPOSE 4120 AUTHORITY FOR CLSSA SECTION A— DESCRIPTION Cooperative Logistics Supply Support Arrangements (CLSSA) are normally the most effective means of providing for the replenishment of supply support associated with a weapon system pur- chased under Foreign Military Sales. An investment is made in the form of cash to support the necessary increase of on-hand stocks, and in the form of a dependable undertaking to support the establishment of pipeline stocks. The U.S. Government then agrees to provide support from U.S. Government stocks on an equal basis with comparable U.S. Forces assigned the same mission. CLSSA is limited to weapon systems in by U.S. forces. Support is limited to centrally managed and centrally stocked stock-numbered items. Ordnance, major end items, commercial consumable, classified items and non-standard items are not included under CLSSA arrange- ments. CLSSA is limited to peacetime support. A CLSSA consists of two types of FMS cases. A Foreign Military Sales Order I (FMSO I) and a Foreign Military Sales Order II (FMSO II). The FMSO I is the investment case. The FMSO II pays for material as it is drawn out of the system. Each case also includes requisite administrative and accessorial estimates. FMSO I cases are normally issued once and adjusted based upon actual customer demand. FMSO II cases are normally issued annually. 4-1 4130 IN- COUNTRY REQUIREMENTS 4140 EQUITY LIST A prerequisite for CLSSA is assur- ance from the prospective participant the adequate inventories already exist in the customer's supply system. Adequate is usually defined as a minimum of 12 months . These inventories are purchased under arrangements other than CLSSA. In most instances this requirement is accomplished through the initial sup- port package provided with the purchase of the weapon system. The reason for this requirement is to ensure that CLSSA is used only for replenishment of consumables and replace- ment of repairable components beyond repair. CLSSA is not intended for either initial support or augmentation of in-country stocks which may be required because of an increase in levels due to change of mission or maintenance philosophy or introduction of additional end items. These require- ments must be satisfied through FMS cases other than CLSSA or by a means exclusive of FMS. The basis of the FMSO I case is an equity list. The equity list is a financial computation of the prospective participant's estimated annual demand (EAD) for spare and repair parts. This 12-month dollar value is factored into 5/12 and 12/12 of the EAD. The former, 5/12 EAD, represents the estimated dollars required to increase U.S. Government on-hand inventories. The latter, 12/12 EAD, represents the estimated dollars required to support on-hand levels through continuous pur- chases of material. This value is the on-order value. NOTE: The 5/12 and 12/12 factors may vary depending upon the procure- ment lead time of the applicable weapon system. 4-2 4150 U.S. GOVERNMENT AUGMENTATION When the FMSO I case is signed and executed, U.S. Government inventory managers take actions to increase on- hand and on-order stocks supporting the CLSSA. These stocks will be an integral part of the U.S. Government supply system and will not be segregated or accounted for separately. The aug- mentation period varies according to the weapons system. An average period is 18 months. The FMSO II consumption case is not implemented until the given augmentation period has elapsed. 4160 CONSUMPTION/ DRAWDOWN When augmentation of U.S. inventories is complete, a FMSO II case is imple- mented. The participating customer may then begin requisitioning. This is done in much the same manner as other "pull" FMS cases. Demands against the FMSO II case are recurring demands. This means that they are included in U.S. Government inventory forecasts. Accordingly, U.S. inventory levels adjust in response to CLSSA demand. 4-3/(4-4 blank) 4200 4210 FMSO I 4220 FMSO II SECTION B— PROCEDURES Prospective CLSSA participants must initiate a request for a CLSSA with the Chief of Naval Operations. If CLSSA is approved, the appropriate U.S. Navy- inventory manager will be tasked to compute an equity list as described in paragraph 4140. These computations are the basis for preparing a DD 1513 Letter of Offer and Acceptance. The FMSO I includes an administrative surcharge of 5 percent of the on-hand value. The on-hand value and applicable adminis- trative surcharge will be billed on a "cash-with-order" basis. Acceptance of the letter of offer constitutes a "dependable undertaking" liability for the on-order value . As discussed in paragraph 4150, the FMSO II case is not implemented until the required augmentation period (x months) has elapsed. The FMSO II case is a separate DD 1513 Letter of Offer and Acceptance. The value of the FMSO II will be equal to the estimated annual demand on the equity list. The FMSO II case will be closed at the end of each year and a new case will be issued. The FMSO II is not limited to specific quantities of specific items; however, the participant must stay within the range of items applicable to the weapons system(s) for which the CLSSA was es- tablished. To reiterate a point previ- ously discussed, the FMSO II case is es- tablished for the purpose of replenishing expended consumables and replacing re- pairables beyond repair. FMSO II cases do not authorize augmentation of stocks, initial outfittings or return and ex- change of repairables. Estimated admin- istrative and applicable accessorial charges are also included in the case. 4-5 4221 STORAGE CHARGES 4222 MILITARY STANDARD REQUISITIONING AND ISSUE PROCEDURES (MILSTRIP) 4223 UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) 4224 PRICING An annual charge of 1.5 percent of the current on-hand value shown in the FMSO I is levied against each FMSO II. This charge is to recover the expense of storing on-hand inventories. FMSO II requisitions are prepared in accordance with paragraph 2250. An "R" will be entered in card column 44 indicating a recurring demand. Only materials identified by a National Stock Number (NSN) may be requisitioned. Supply and shipment status will be furnished in the same manner as other "pull" requisitions. Paragraph 2121 discusses Uniform Material Movement and Issue Priority System (UMMIPS) in detail. The priority assignment to CLSSA requisitions must accurately indicate the proper Urgency of Need Designator (UND) within the assigned Force Activity Designator (FAD). Abuse of the UMMIPS system may result in the suspension of CLSSA. Material issued under CLSSA is billed at the current U.S. Government standard price. 4225 EXCEEDING EQUITY Paragraph 4110 states that support for a CLSSA participant is provided on an equal basis with a comparable U.S. force assigned the same mission. This arrangement is limited by the amount of investment in U.S. inventory. In other words, whenever the value of demands against a FMSO II exceeds the estimated annual demand (EAD) on which the FMSO I is based, then the demands above EAD will be filled under normal FMS issue criteria, i.e., above the reorder point. 4-6 4226 EXCESSIVE QUANTITIES FMSO II requisitions for quantities in excess of maximum release quantities (MRQ) will be filled to provide the MRQ. The balances will be canceled unless advice code "2L" is used, indicating that the customer is aware that the MRQ is being exceeded. In that case, the MRQ will be filled from available stock and the balance filled from stock above the reorder point or backordered. 4230 RENEGOTIATION OF FMSO I An adjustment to the FMSO I invest- ment, on-hand and on-order values may be necessary when actual demands made by the customer under the corresponding FMSO II case exceed the estimated annual demand which was used to compute FMSO I investment. An adjustment in the FMSO I investment may also be necessary whenever the population of the weapon system supported by the CLSSA increases/decreases or whenever the weapon system is significantly up- dated to a new configuration. Adjust- ments are also necessary whenever the demand experienced is less than the estimate which was used to compute the FMSO I. Adjustments are made to the investment through a renegotiation of the FMSO I . This action is not normally necessary until at least 2 years of actual FMSO II material demands have been experienced. The renegotia- tion process will result in an amendment to the FMSO I case which will reflect the adjustment on-hand and on-order dollar values. When the renegotiation process determines that the customer is over invested in U.S. inventories, the customer may either be provided a cash refund, a pro rata share of USN stocks in long supply or a combination of both. Whenever the customer is under invested in U.S. inventories, the DD 1513-1 FMSO I amendment will require additional cash for the deficiency in on-hand investment and additional "dependable undertaking" authority 4-7 4230 (Continued) 4240 TERMINATION OF A CLSSA for the deficiency in on-order invest- ment. Each party to COOPLOG may terminate it by giving the other party a minimum of 6 months written notice. However, since CLSSAs are for peacetime support only, no advance notice of termination will be provided in the event of an outbreak of hostilities involving either party to the arrangement. Upon issuing or receiving notice of a request to terminate CLSSA support, the FMSO I case will be renegotiated to adjust the dollar level of invest- ment to the most recent dollar level of demand. The USN will then prepare and forward a termination register to the foreign customer. The register will list by line item the customer's pro rata share of all quantities on hand and on-order above the level of ser- vice requirements which are applicable to the weapon system(s). The customer will be given the opportunity to with- draw these stocks during the period between notification of termination and the termination date by submitting requisitions coded to show nonrecurring demand. On the termination date, the customer will be held liable for all remaining material on-hand and on-order that cannot be absorbed by the military services. The customer will be charged for any remaining on-order quantities and will have the option of liquidating this remaining investment by with- drawing the items or by requesting the USN to dispose of them in his behalf. For material that can be absorbed, the USN will refund the value of material on hand. No refund will be made on the administrative charge. The foreign customer will be provided with the proceeds of any disposal action less the administrative cost of the disposal. 4-8 REFERENCES FOR CHAPTER 4 Cooperative Logistics Supply Support Arrangements (CLSSA) Department of Defense Instruction (DODINST) 2000.8 Military Assistance and Sales Manual Department of Defense (DOD) Publication 5105. 38M Military Assistance Program Address Directory (MAPAD) Department of Defense (DOD) Publication 5105. 38D (NSN 0526 LP 510 5430) 4-9/(4-10 blank) CHAPTER 5. PROCESSING REPAIRABLES . CHAPTER 5. PROCESSING REPAIRABLES TABLE OF CONTENTS Page Number SECTION A--GENERAL 5-1 Description of Repairables 5-1 Scope of U.S. Navy Repairables Program 5-1 Purposes of the FMS Repairables Program 5-2 FMS Repair Services Not Limited to Items Covered by U.S. Navy Repair Programs 5-2 Master Repairable Item List (MRIL) 5-3 The Two Types of FMS Repairable Processing Procedures: "Repair/Exchange" and "Repair/Return" 5-3 Repair and Exchange Procedure 5-4 Return, Repair, and Reshipment Procedures 5-5 Summary of Section A 5-7 SECTION B— PROCEDURES 5-9 Requirement for an FMS Case for Repair Services 5-9 Customs Clearance of Repairables Returned to the United States 5-9 Repair/Exchange Procedures; General 5-10 Repair/Exchange; Steps Which the FMS Customer Should Follow 5-11 Preparation of the Turn-in Document, DD Form 1348-1 5-14 Document Identifier 5-15 Routing Identifier 5-15 Media and Status Code 5-15 Stock Number 5-15 Unit of Issue 5-15 Quantity 5-15 Document Number 5-15 Suffix Code 5-15 Supplementary Address 5-17 Fund Code, Signal Code, Distribution 5-17 Cognizance Symbol 5-19 Project Code 5-19 Priority 5-19 Page Number 5236 Spaces 60-70 5-19 5237 Space 71 5-19 5238 Space 72 5-19 5239 Space 73 5-19 5240 Unit Price 5-19 5241 Shipped From 5-21 5242 Shipped To 5-21 5243 Material Condition 5-21 5244 Remarks 5-21 5250 Repair/Return Procedures; General 5-23 5251 Steps in the Repair/Return Process 5-23 5252 Letter Request 5-24 5253 Item Number 5-24 5254 Description 5-24 5255 Quantity 5-26 5256 Condition 5-26 5257 Remarks 5-26 5258 Action by U.S. Supply System After Receipt of Repair/Return Request Letter 5-26 5259 Letter Forwarding Material for Repair/ Return 5-26 5260 Cancellation of Repair/Reship Transactions 5-27 5270 Summary 5-27 5300 SECTION C— AREAS OF SPECIAL INTEREST 5-31 5310 Costs of Repair Services 5-31 5311 Repair of Non-Standard Material 5-31 5312 Importance of the Freight Forwarder in the Repair Process 5-32 REFERENCES FOR CHAPTER 5 5-33 INDEX OF FIGURES Page Number 5-1 Sample Letter of Transmittal for FMS Replacement Repairable Requisition 5-12 5-2 DOD Single Line Item Release/Receipt Document, DD Form 1348-1 5-15 5-3 Sample Letter Format for Return, Repair and Reshipment Request 5-25 5-4 Sample Letter Format for Fowarding Return, Repair, and Reshipment Item(s) to a U.S. Designated Overhaul Point 5-28 5-5 Sample Letter Format for Canceling a Return, Repair, and Reshipment Transaction 5-29 CHAPTER 5. PROCESSING REPAIRABLES 5100 5110 DESCRIPTION OF REPAIRABLES 5111 SCOPE OF U.S. NAVY REPAIRABLES PROGRAM SECTION A— GENERAL Many of the items of supply fur- nished under the FMS program can normal- ly be repaired when they become un- serviceable. In such situations, it is often less expensive to repair the un- serviceable item than to discard it and order a new item. Items of this nature are called "repairables" (sometimes spelled "reparables" ) . One facet of the FMS Program is a procedure whereby the customer country may arrange to send unserviceable repairables to the United States for overhaul . To participate in such arrange- ments, it is necessary for the customer to establish an FMS case for repair services using the Offer and Acceptance , DD Form 1513. Such an FMS case may be either an "open-end" case or defined to specific items and quantities to be covered. In any case, a specific dollar amount must be cited, which may not be exceeded. Repair of unserviceable items is usually faster and less expensive than purchasing a new item. Therefore, the Navy has set up extensive repair programs for most of the items which the Navy uses and which can be repaired economically. The actual repair work is performed by many different U.S. Navy activities (such as Naval Air Rework Facilities, Naval Shipyards, the Naval Avionics Facility, etc.). Repair work on Navy items is also frequently performed by commercial firms under contract to the Navy. The scope of repair work performed under these established programs is classified as "depot level" repair, and includes the capability for complete overhaul (or "rework") of the item. 5-1 5112 PURPOSES OF THE FMS REPAIRABLES PROGRAM 5113 FMS REPAIR SERVICES NOT LIMITED TO ITEMS COVERED BY U.S. NAVY REPAIR PROGRAMS The purposes of the FMS Repairable Program and its advantages for FMS customers include: It provides the FMS customer with a means of obtaining repair services without the necessity of establishing such a capability in his own country. If the FMS customer decides to establish his own repair capability, the FMS Repairable Program provides a means of supplementing that capability when necessary, or a source of repair until the customer country's capability is es- tablished. The FMS Repairables Program permits integration of FMS repair requirements with U.S. Navy requirements through compatible procedures which further both economy and efficiency. Use of U.S. Navy repair capability by FMS customers is described in this chapter, and in greater detail in Naval Material Command Instruction 4900. 13B (NAVMATINST 4900. 13B), entitled Pro- cessing of Repairables . FMS customers should be aware that their use of these repair arrangements is not limited to those items for which the U.S. Navy has established depot- level repair programs. Repair of items not included in U.S. Navy repair pro- grams can be accomplished under "Repair Reship/Return" procedures described in paragraph 5117, below. Specific approva and instructions for return of items must be obtained from the applicable U.S. Navy inventory manager. 5-2 5114 MASTER REPAIR- ABLE ITEM LIST (MRIL) 5115 THE TWO TYPES OF FMS REPAIRABLE PROCESSING PROCEDURES : " REPA I R/EXCHANGE " AND "REPAIR/ RETURN" Repairable items used by the U.S. Navy and for which depot-level repair programs have been established are listed in the Master Repairable Item List (MRIL), Naval Supply Systems Command (NAVSUP) Publication 4107. The MRIL contains two sections: Part I - Listing Of Items . This section is in stock number (National Stock Number (NSN) or equivalent) sequence. Part II - Shipping Addresses . This section shows the addresses of "U.S. Navy collection points" as well as designated overhaul points (DOPs), in- cluding commercial contrac- tors, and other destinations to which unserviceable repair- able items shown in Part I should be shipped when they are being returned to the U.S. supply system. A more complete description of the MRIL is contained in the introduction to NAVSUP publication 4107, and in Chapter V of the Introduction to Federal Supply Catalogs and Related Publications NAVSUP Publication 4000. Under the FMS Program there are two separate procedures that may be used for processing unserviceable items which require repair. These two procedures are the Repair and Exchange procedure (usually referred to as "repair/ex- change"), and the Return, Repair, and Reshipment procedure (usually referred to as "repair/return" or "repair/re- ship"). Both procedures require that the unserviceable item be returned to the U.S. Navy. Under repair/exchange procedures, the FMS customer will be issued a ser- viceable item (either a new item or a repaired one) from stock on hand in the 5-3 5115 (Continued) 5116 REPAIR AND EXCHANGE PROCEDURE U.S. supply system, in exchange for the unserviceable item he returns . Under repair/reship procedures, the unservice- able item is repaired and returned to the FMS customer. Paragraphs 5116 and 5117, below, explain the procedures in greater detail. The repair and exchange procedure may be used only for unserviceable items which are listed in the MRIL . The un- serviceable item is returned to the U.S. destination (frequently the designated overhaul point, DOP) as specified in the MRIL, accompanied by a proper Military Standard Requisitioning and Issue Pro- cedure (MILSTRIP) turn-in document, DD Form 1348-1. The customer country for- wards three copies of the turn-in document for the unserviceable item, together with a MILSTRIP requisition, DD Form 1348M or DD Form 1348, for the replacement item to the U.S. Navy International Logistics Control Office (NAVILCO). NAVILCO then takes the following action: Establishes appropriate re- cords upon receipt of three copies of the turn-in document and the replacement requisi- tion Initiates action with the U.S. supply system to issue or procure an equivalent item and have it shipped to the customer Makes necessary financial en- tries to charge the customer for the replacement item at a reduced price, reflecting credit allowed to the cus- tomer for the unserviceable item which has been returned. Important characteristics of the repair/exchange process include: 5-4 5116 . The FMS customer receives an item equivalent (i.e., an item (Continued) having the same NSN) to the unserviceable item which is returned. The customer does not receive the identical item that was returned. The replacement item furnished will be a reworked item from ready-for-issue stock in the U.S. supply system, if avail- able; otherwise from new commercial procurement. Thus, the replacement item furnished to the FMS customer may be a previously used, newly over- hauled item, or it may be a new, previously unused item. However, the replacement item always will be fully satisfactory for its intended use. Prices charged to the FMS cus- tomer for replacement items furnished under the repair/ exchange procedure are from 40 percent to 80 percent less than the price of the item if it were requisitioned without an economically re- pairable unserviceable item being turned in. The par- ticular percentage reduction in price varies by category of material. A listing of the indicated percentage re- ductions for each category of material is shown in enclo- sure (7) of NAVMATINST 4900. 13B. 5117 The return, repair, and reshipment procedure may be used both for un- RETURN, REPAIR serviceable items listed in the MRIL AND RESHIPMENT and for items not listed in the MRIL PROCEDURES which the FMS customer wishes to have repaired. Inventory manager approval 5-5 5117 is required whenever the item is not listed in the MRIL. The FMS customer (Continued) forwards a letter to NAVILCO identifying the item involved and the repair work desired. In response, the customer is provided an estimate of the repair costs and instructions for shipment of the unserviceable item to a destination in the United States. If the estimate is acceptable: The FMS customer ships the unserviceable item to the U.S. destination designated in the shipment instructions . Repair of the unserviceable item is accomplished. The repaired item is reshipped to the FMS customer represen- tative (usually the freight forwarder ) . Actual repair costs are pro- vided to NAVILCO by the repair facility. NAVILCO bills the customer for the actual repair costs. Important characteristics of the repair/return procedure include: The procedure is not auto- matic (i.e., the FMS customer cannot return the unservice- able item until shipping in- structions are received from the U.S. supply system). The unserviceable item re- turned to the U.S. supply system is repaired and re- shipped to the customer. The customer does not receive an equivalent item in exchange; he receives the same item he returns to the U.S. supply system. 5-6 5117 . MILSTRIP requisitioning and turn-in procedures are not by (Continued) the FMS customer. Charges to the FMS customer for repair/return transactions are not related to the price of a replacement serviceable item. Rather they reflect the actual cost of repairing the unserviceable item turned in by the customer. 5118 This section of Chapter 5 has generally described the repairables SUMMARY OF processing procedures which FMS cus- SECTION A tomers may utilize. Section B provides detailed instructions for the FMS cus- tomer in using both repair/exchange and repair/return procedures . 5-7/(5-8 blank) 5200 5210 REQUIREMENT FOR AN FMS CASE FOR REPAIR SERVICES 5211 CUSTOMS CLEARANCE OF REPAIRABLES RETURNED TO THE UNITED STATES SECTION B--PROCEDURES In order for the FMS customer to utilize either repair/exchange or re- pair/return procedures, it is essential that an FMS case be established using the Offer and Acceptance , DD Form 1513. This case should specifically apply to services for the repair of repariable items. The wording of the DD Form 1513 may cover broad categories of repair services such as "Services for repair of shipboard components," or it may be more specific, such as "Services for repair of AN/SPS-44 Radar Components." Only cases specifically providing for "return and exchange" may be used for return and exchange transactions. Similarly, only cases specifically pro- viding for "return, repair and reship- ment" may be used for return and repair transactions. All items being returned to the United States, whether under repair/ exchange or repair/return procedures, must be cleared through customs upon arrival in the United States . Under Section 10.1. (a) of U.S. Customs Regulations, repairables of U.S. origin are entitled to duty free entry if they are accompanied by a certification, signed by the foreign representative responsible for the material being re- turned for repair. "I certify that the articles covered by this entry, for which free entry is claimed under item 800.00, Tariff schedules of the United States, are the growth, produce or manufacture of the United States, and have been returned to the United States without having been advanced in value or improved in condition by any process of manu- facture or other means, and that no drawback has been or will be claimed on such articles." 5-9 5211 (Continued) 5220 REPA I R/EXCHANGE PROCEDURES; GENERAL (NAME) (TITLE) (SERVICE) The certification may be made on the customs declaration form itself, or it may accompany the shipment as a separate document. If it is a sepa- rate document, it should include, as a minimum, the identification of ship/ aircraft, voyage/flight number, date of shipment, number of containers, bill of lading number, and description of the items being shipped. The U.S. Department of Treasury, Bureau of Customs has recommended use of Customs Form 7501 for declaring repairables returned to the U.S. Returned repairables may be con- signed to their freight forwarder by those FMS customers desiring to utilize the freight forwarder's services in clearing the shipment through U.S. Customs and transshipping it to the applicable U.S. repair activity. Use of repair/exchange procedures involves two separate transactions which are interdependent. These trans- actions are: Return ("turn-in") of the un- serviceable item to the U.S. destination specified in the MRIL. Requisitioning of a ready-for- issue replacement item from the U.S. supply system. The two separate transactions are linked by use of the same document number . This number is inserted in the "Document Number" section of both the MILSTRIP turn-in document (POD Single Line Item Release/Receipt Document , DD Form 1348-1) for the unserviceable item, 5-10 5220 (Continued) and the MILSTRIP requisition (DD Form 1348M or DD Form 1348) for the replace- ment item. In addition to use of the same document number, the separate turn-in and requisitioning transactions are also linked by the requirement that three copies of the turn-in document for the unserviceable item must accom- pany the requisition for the replacement item when the requisition is forwarded to NAVILCO. 5221 REPAIR/EXCHANGE STEPS WHICH THE FMS CUSTOMER SHOULD FOLLOW The steps in the repair/exchange procedure to be taken by the FMS customer are: Identify the FMS case that authorizes the repair/ex- change transaction. If there is no FMS case covering repair services, the customer country may request establishment of such a case through liaison with the office of the U.S. Chief of Naval Operations. This process is described in Chapter 1 . Prepare a letter of trans- mittal to NAVILCO for use in forwarding the requisition (for the replacement item) and copies of the turn-in document ( for the unservice- able item). An illustration of such a letter is shown in Figure 5-1. Prepare a MILSTRIP turn-in document, DD Form 1348-1, for the unserviceable item. An illustration of such a docu- ment is contained in Figure 5-2 following paragraph 5222. Paragraphs 5222 through 5243 give detailed instructions for filling out DD Form 1348-1. 5-11 FIGURE 5-1 Sample Letter of Transmittal for FMS Replacement Repairables Requisition From: Chief, Supply Bureau Republic of Latonia Navy Barlang, Latonia To: Commanding Officer U.S. Navy International Logistics Control Office Philadelphia, PA 19111 U.S.A. Sub j : FMS Repair/Exchange documents ; transmittal of FMS Case DN-LT-NCA-5 NAVMATINST 4900. 13_ FMS Requisition PLT0450280001 Turn-in document, DD Form 1348-1 PLT0450280001 (three copies) 1. Enclosure (1) is forwarded for supply action under the authority of reference (a) and in accordance with the provisions of reference (b) Equivalent unserviceable items are being returned separately under the documentation of enclosure (2) . Ref : (a) (b) Encl: (1) (2) Signature 5-12 5221 . Prepare a customs clearance certification as described in (Continued) paragraph 5211. Obtain sig- nature of the appropriate foreign representative on the customs clearance certifica- tion. Prepare a MILSTRIP requisi- tion, DD Form 1348M or DD Form 1348, for the replace- ment item. This requisition is prepared as described in Section B of Chapter 2. Be sure to: Use the same document number for both the req- uisition and turn-in document Always enter "5G" in the "Advice Code" section of the requisition (card columns 65 and 66 of DD Form 1348M, block 22 of DD Form 1348) . Forward the letter of trans- mittal, the requisition for the replacement item, and three copies of the turn-in document to NAVILCO by mail . Ship the unserviceable item to the destination shown for the item in the MRIL. (This destination should also be shown in the "Ship To" section, block B of the turn-in docu- ment, DD Form 1348-1.) The shipment should be accompanied by the turn- in document (DD Form 1348-1) and the signed customs clearance certifica- tion. 5-13 5222 The document used to turn in an unserviceable item for repair is POD PREPARATION OF Single Line Item Release/Receipt Docu- THE TURN-IN merit, DD Form 1348-1. Under MILSTRIP DOCUMENT DD procedures, this form can be used for FORM 1348-1 many purposes, one of which is to return material to the U.S. supply system. Figure 5-2 shows an example of how DD Form 1348-1 looks when filled out. DD Form 1348-1 should be filled out by typewriter. Paragraphs 5523 through 5244 describe in detail the entries which should be made in each block of DD Form 1348-1. 5-14 FIGURE 5-2 DOD Single Line Item Release/Receipt Document, DD Form 1348-1 j;|;^^PPfe^^ ti'. ..- — .To= pWTp^-TufiTTtPESTTiSJn TU77 pTETT pTOBTTCfl 1 — SwaWlWI mamnsgrn iy«i*tldN NOmMUTOT BiwrnrssrBirr maJkKx' [HOJtd UHfur|iUT i |6u*Nfmr O&uM To ■ BRmr MQB »' »n6 6*t* r35-ST7CSTIKHI kktMbb *n6 Mt WAJBH0UB6 lv **6 6*T[ tmsmmvwn Din; 1 tmam i**o m DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT DD FORM 1348-1 5-15/(5-16 blank) FIGURE 5-2(2) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT DD FORM 1348-1 5-17/(5-18 blank) 5231 SUPPLEMENTARY ADDRESS 5232 Supplementary Address, spaces 45 through 50 on DD Form 1348-1. These spaces are used to enter two elements of information: the Service Code and the FMS Case Identification. Service Code, space 45. Enter the one- letter designation for the military service in the customer country which is turning in the unserviceable item and requisitioning the replacement. Enter "P" in space 45 if the customer country Navy is originating the transaction. Enter "D" if the customer country Air Force is originating the transaction. Enter "B" if the customer country Army is originating the transaction. CAUTION: As is true for requisitions, all turn-in documents prepared under authority of a single FMS case must show the same service code in space 45. Spaces 46 and 47 should be left blank. FMS Case Identification , spaces 48 through 50. Enter the three-letter FMS Case Designator as shown in item 3 of the Offer and Acceptance, DD Form 1513, which authorizes repair of the unserviceable item. For example, item 3 of the DD Form 1513 might read: DN-LT-NCA-5 The proper entry in spaces 48 through 50 would be "NCA." Fund Code, Signal Code, and Distribution FUND CODE, SIGNAL CODE, Fund Code, spaces 52-53 on DD Form 1348-1 DISTRIBUTION Enter the Fund Code "48" in these spaces (52-53). The Signal Code, space 51, enter "L". Distribution space 54 on the DD Form 1348-1 is left blank. FIGURE 5-2(2) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 oaoagc-aaaasaasaaiasaisaiasasaaEisaasaaaassasaaasEECssaasESECEsaEECESECEDEEEEEEEs: knstmm tut«i«MC*o~t«Sm i(iWI»b«N4 6«(l ■sfeiTl u~t lull — CUM fftWnaflmi «Hnr 'JSjjl w t g itEM *o*£*a*U*t rvtfoHMwtftU MUwMhI F*GJ|[> IV ANt 6aT( FUST MSNKAflON *W»W« RoraramM JTIAnVOITaTiOn ChaMHaM TO i i/lawno. Awt. oi ncem MCtlviblYAN6 6*fi ' mmmmwwwvn ' wONATumWOATtl hiHcMtioO^UMtNTNOMtfl waJCWoOU IoCaTion DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT DD FORM 1348-1 5-17/(5-18 blank) FIGURE 5-2(3) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 f|-jjyHffip^ • ' < ■ '■■■■■• — ~^ isssTTsansurs *..<., ..'f.iTr7,j,i.'i •*M*&M ■:&*&, DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT DD FORM 1348-1 5-19/(5-20 blank) 5233 COGNIZANCE SYMBOL 5234 PROJECT CODE 5235 PRIORITY 5236 SPACES 62-70 5237 SPACE 71 5238 SPACE 72 5239 SPACE 73 5240 UNIT PRICE Cognizance Symbol, spaces 55 and 56 on DD Form 1348-1. Enter the two-character (number and letter) material cognizance symbol ("cog symbol") for the item being turned in. This information is shown in both the MRIL and the Management List - Navy (ML-N), NAVSUP publication 4100. Project Code, spaces 57 through 59 on DD Form 1348-1, should be left blank. Priority, spaces 60 and 61 on DD Form 1348-1. Enter the two-digit "Movement Priority Designator" as shown for the item in the "MPD" column of the MRIL. Spaces 62 through 70 on DD Form 1348-1 should be left blank. Space 71 on DD Form 1348-1. Enter the one-letter "Condition Code" which describes the unserviceable item being turned in. Usually, this entry will be "F," which signifies that the item is unserviceable but repairable. Other condition code entries are explained in Appendix 17 of the MILSTRIP/MILSTRAP Operating Pro- cedures Manual, NAVSUP publication 437. Space 72 on DD Form 1348-1 should be left blank. Space 73 on DD Form 1348-1. Enter the "Material Control Code" for the unserviceable item as shown in the "MCC" column of Part I of the MRIL Unit Price, spaces 74 through 80 on DD Form 1348-1, should be left blank. FIGURE 5-2(3) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 iUISinu'E 3M*[:ii«Oti&INM.»'il OutSU) (If'iGHI ... , « Vyf .:>'„;>. hJOMEkCLATUtf uiRrmn'T'CuANTiu ITEM NOMEKLATljtE r.'HCrftONUiNHRi TOtWWtl m 9 ;&nu.ntis' KCtrveo IT *r*DD*TE waKHOuBB Iv «^6 6**1 HlrttHt h an6 0*t( wajUh&jU IMaWn .CXNC AWI. OtMCtivfl SiGNAfuK (*ND D.ifl [ )i IKfiVltS DOCUmInT nuwMI DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT DD FORM 1348-1 5-19/(5-20 blank) FIGURE 5-2(4) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT DD FORM 1348-1 5-21/(5-22 blank) 5241 SHIPPED FROM 5242 SHIPPED TO 5243 MATERIAL CONDITION 5244 REMARKS Shipped From, b lock A on DD Form 1348-1 . Enter the name and address of the cus- tomer country activity which is shipping the un- serviceable item. Shipped To , block B on DD Form 1348-1 . Enter the name and address of the activity desig- nated to receive the item in the MRIL. To deter- mine this information, obtain the shipping code for the item from the "SHPG CODE" column in the MRIL and refer to Part II of the MRIL for an explanation of the code. Items for which the MRIL shows shipping code "XX" should be for- warded to the nearest Industrial Naval Air Station For example, to the Naval Air Station (NAS), Norfolk, Virginia, 23511, on the U.S. east coast, and NAS, Alameda, California, 94501, on the U.S west coast. Material Condition, block P on DD Form 1348-1. Enter the same one-letter condition code as shown in space 71 of the DD Form 1348.-1 Remarks, blocks AA through EE on DD Form 1348-1 . If Part II of the MRIL indicates that shipment of the unserviceable item should be made to a commercial contractor, the MRIL will also show a contract number under which the repair is to be accomplished. In these instances, show the contract number in the "Remarks" sec- tion of the DD Form 1348-1. Otherwise, these blocks may be left blank. FIGURE 5-2(4) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 BflnBaDrao3MEaMi3E333E332MSS33S3SOOCM323553:K32:32:3":3::::::!:::cECCEeEEa: MilmWtMvllMUHaul Nail I WAWMOUtt IOCATW cttm&tm-iAmtiMK |M(6IUnMA!I lutMU «*61>«K n« M KwUnIB -• HCEMO IY ANO DAT* i WARHOUKD I* UC 0AT( MUKIBIVaM.MI waKMOUJI IcYaTion I ttUGPOVlAnON CHMG4AHE TO t*Mx*i.**l&m*t>WUIWv*oMb — d.kf^H Wu-J.,' -...HI DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT DD FORM 1348-1 5-21/(5-22 blank) 5250 REPAIR/RETURN PROCEDURES ; GENERAL Return, repair, and reshipment pro- cedures are a sequential process in which an unserviceable item is returned to a repair activity in the United States. After the necessary repair work has been completed, the same item (now in serviceable condition) is reshipped to the FMS customer and he is charged for the actual cost of repair. Instead of originating both letter and MILSTRIP documentation as takes place with repair/exchange transactions, under repair/return procedures, the FMS cus- tomer originates two letters but no MILSTRIP documentation. 5251 STEPS IN THE REPAIR/RETURN PROCESS The steps which the FMS customer follows in utilizing the repair/return process are shown below. Identify the FMS case which is the authority for obtaining repair services. If no FMS case for repair services exists, arrangements for such a case should be made with the U.S. Chief of Naval Opera- tions . Prepare, and forward to NAV- ILCO, a letter identifying the item(s) to which repair ser- vices are applicable and out- lining the extent of repair desired. Paragraphs 5252 and 5257 provide additional details and a sample of the format for such a letter. After receiving authorization, estimated repair cost, and shipping instructions from the U.S. supply system, decide if the repair services are still desired. 5-23 5251 Continued) If repair services are desired, prepare a customs clearance certification (as described in paragraph 5211) and a letter of transmittal (as described in paragraph 5259). Ship the unserviceable item (accompanied by the letter of transmittal and customs clearance certification signed by the appropriate foreign representative) to the repair activity designated by the U.S. supply system's inven- tory manager. If it is decided that the repair services are not de- sired, prepare a letter to NAVILCO advising of the fact and requesting cancellation of the transaction. Para- graph 5260 provides addi- tional details and a sample format for such a letter. 5252 LETTER REQUEST 5253 ITEM NUMBER 5254 DESCRIPTION Figure 5-3 illustrates the format for a letter which the FMS customer would originate to initiate the repair/ return process. Paragraphs 5253 through 5257, below, describe the entry for each element of the columnar format in the sample letter. Enter in the "Item No." column a number, beginning with 1 and ascending in consecutive order, for each sepa- rately identified (i.e., each different NSN) item for which repair service is requested. Enter in the "Description" column the National Stock Number (NSN) of each item, the name (nomenclature) of the item and the serial number(s) (if applicable) of the item. If the item is non standard or has not yet been assigned an NSN, show the manufacturer's part number and the name of the manufacturer in this column. 5-24 FIGURE 5-3 Sample Letter Format for Return, Repair, and Reshipment Request From: (Insert name and address of the FMS customer representative originating the letter.) To: Commanding Officer U.S. Navy International Logistics Control Office Philadelphia, PA 19111 U.S.A. Subj : Return, Repair, and Reshipment of International Logistics Repairable Material 1. It is requested that arrangements be made for repair and reship- ment of the following items in accordance with NAVMATINST 4900. 13_. Item No . Description Quantity Condition Remarks (Entries in each of these columns are described in paragraphs 5253 through 5257 of Chapter 5.) 2. It is requested that estimated repair costs and specific instructions for the foregoing be provided to: (Insert name and complete address of the activity to receive shipping instructions.) Signature 5-25 5255 QUANTITY 5256 CONDITION 5257 REMARKS 5258 ACTION BY U.S. SUPPLY SYSTEM AFTER RECEIPT OF REPAIR/RETURN REQUEST LETTER 5259 LETTER FORWARDING MATERIAL FOR REPAIR/RETURN Enter the quantity and unit of issue of each item for which repair services are desired. For example, "6 EA" would indicate that the unit of issue is "each" and that repair of a quantity of six of the item is being requested. Briefly indicate the repairs re- quired for each item. Amplify the information given in the "Condition" column if necessary to make clear the precise extent of reapir required for each item. For example, information as to incorporation of field changes, modifications, etc., would be given in the "Remarks" column. After receipt of the letter from the FMS customer requesting repair of items under repair/return procedures, NAVILCO will establish necessary files and records. The FMS customer's letter will be forwarded to the U.S. inventory manager having responsibility for the item(s). In turn, the U.S. inventory manager will determine the estimated cost of the requested repairs, the activity which will accomplish repair, and the estimated time necessary to complete the repair. This information, together with shipping instructions, will be provided to the customer country representative designated in paragraph 2 of the repair/return request letter described in paragraphs 5252 through 5257, above. Upon receipt of the cost estimate and shipping instructions from the U.S. inventory manager, the FMS customer re- presentative must decide whether to proceed further with the transaction. If it is decided to continue, the FMS customer representative must then pre- pare a letter to accompany shipment 5-26 5259 (Continued) of the unserviceable material to the repair activity designated by the U.S. inventory manager. Figure 5-4 gives a sample of the format which should be used for such a letter. The FMS customer representative must be careful to: Ensure that both the unser- viceable item(s) to be re- paired and the forwarding letter are sent to the re- pair activity designated by the U.S. inventory manager Ensure that a copy of the forwarding letter is sent to both: The U.S. inventory manager who provided shipping instructions NAVILCO. 5260 CANCELLATION OF REPAIR/RE SHIP TRANSACTIONS If the FMS customer decides not to continue with the repair/return transaction after receiving the repair cost estimate, and shipping instruc- tions, from the U.S. inventory manager, he must notify NAVILCO. Figure 5-5 is a sample of a letter format which can be used for this purpose. In addition to sending the original of the letter NAVILCO, the FMS customer should also forward a copy of the letter to the U.S. inventory manager. 5270 SUMMARY Section B has described the details of both the repair/exchange and the repair/return procedures from the FMS customer's viewpoint. With this information, the FMS customer should be able to prepare the necessary documents to arrange repair of un- serviceable material using either pro- cedure. Section C reemphasizes some 5-27 FIGURE 5-4 Sample Letter Format for Forwarding Return, Repair, and Reshipment Item(s) to a U.S. Designated Overhaul Point From: (Insert name and address of the FMS customer representative effecting shipment of the unserviceable item(s).) To: (Insert name and address of the U.S. activity to which the U.S. inventory manager has directed the item(s) be shipped for repair. ) Subj : Return, Repair, and Reshipment of International Logistics Material Ref: (a) NAVMATINST 4900. 13_ (b) (Cite the reply from the U.S. inventory manager which provided shipping instructions, repair cost estimate etc.) 1. It is requested that the item(s) listed below and attached to this letter be repaired in accordance with references (a) and (b) . FMS case (insert FMS case designator) will be used to fund necessary repairs Description (Give a brief description of the item, including 1 NSN or manufacturer's part number, name (nomenclature) of the item, name of the manufacturer and serial number (s), if applicable) Quantity (Enter the quantity and unit of issue for each item being shipped. ) Remarks (Include any special instruc- tions or limi- tations. ) 2. Upon completion of repairs, reship the item(s) to the following address : (Insert the name and complete mailing address of the freight forwarder or other customer country representative designated to receive the repaired item(s).) cc : Signature NAVILCO (applicable U.S. inventory manager) 5-28 FIGURE 5-5 Sample Letter Format for Canceling a Return, Repair, and Reshipment Transaction From: (Insert name and address of the FMS customer representative originating the letter.) To: Commanding Officer U.S. Navy International Logistics Control Office Philadelphia, PA 19111 U.S.A. Subj : Cancellation of Return, Repair, and Reshipment Transaction; request for Ref: (a) (Cite the letter originated by the FMS customer requesting return, repair, and reshipment services.) (b) (Cite the reply from the U.S. inventory manager which provided shipping instructions, repair cost estimate, etc.) 1. This is to advise that a decision has been made not to proceed with the return, repair, and reshipment transaction requested by reference (a) and which was the subject of reference (b) . It is requested that this transaction be cancelled, cc : Signature (applicable U.S. inventory manager; the originator of reference (b) . ) 5-29 5270 of the points already mentioned and adds other information which should be (Continued) helpful for the FMS customer. 5-30 5300 5310 COSTS OF REPAIR SERVICES SECTION C — AREAS OF SPECIAL INTEREST Paragraphs 5116 and 5117 indicate that the costs of repair services are charged to FMS customers on the basis of: A reduced percentage of the price for a new item, if repair/exchange procedures are used, or The actual cost of the repair work performed, if repair/ reship procedures are used. In addition, customers are billed for the normal administrative and accessorial charges in the same manner as for FMS requisitioning transactions. Administrative charges are assessed at a fixed percentage of the price of the item (in repair/exchange transactions), or at a fixed percentage of the repair costs (in repair/return transactions). It is also necessary for the FMS customer to pay the costs of transpor- tation for returning the unserviceable item to the United States repair des- tination, and for shipment of the replacement or repaired item to the FMS customer. 5311 REPAIR OF NON- STANDARD MATERIAL Paragraphs 5116 and 5117 mention the important fact that repair/exchange procedures may be used only for items which are listed in the MRIL. Repair of non standard items (i.e., items which do not have an NSN) may be accomplished only under repair/return procedures. 5-31 5312 The Freight Forwarder is an im- portant link in any FMS supply trans- IMPORTANCE OF action. However, the Freight Forward- THE FREIGHT er's role in the repair process is FORWARDER IN especially crucial because: THE REPAIR PROCESS He is usually involved in the return of the unservice- able item to the United States as well as return shipment of a serviceable item to the FMS customer. The repair/reship process will not function effectively without prompt return of the unserviceable item to the U.S. supply system. Repair processing cannot start until the repairing activity has received the unserviceable item. The Freight Forwarder be- comes part of a "repair cycle." In a "repair cycle" situation, the FMS customer country usually must choose between having inoperative equipment while an item is being repaired, or investing in a larger stock of the item so that a replacement is available for installation to make the parent equipment operative while the unser- viceable item is being repaired. For these reasons, it is particu- larly important that the Freight For- warder establish accurate, speedy procedures for handling shipments of returned unserviceable items as well as outbound shipments of serviceable items . 5-32 REFERENCES FOR CHAPTER 5 Introduction to Federal Supply Catalogs and Related Pub- lications Naval Supply Systems Command (NAVSUP) Publication 4000 (NSN 0588 LP 411 2000) Management List - Navy (ML-N) Naval Supply Systems Command (NAVSUP) Publication 4100 (NSN 0588 LP 411 1000) Master Repairable Item List (MRIL) Naval Supply Systems Command (NAVSUP) Publication 4107 (NSN 0588 LP 410 2600) MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command (NAVSUP) Publication 437 (NSN 0530 LP 170 0083) Processing of Repairables Chief of Navy Material Instruction (NAVMATINST) 4900. 13B 5-33/(5-34 blank) CHAPTER 6. CLASSIFIED MATERIAL REQUESTS CHAPTER 6. CLASSIFIED MATERIAL REQUESTS TABLE OF CONTENTS Page Number 6100 SECTION A--GENERAL INFORMATION 6-1 6110 Description of "Classified Material" 6-1 6111 "Unauthorized Persons" 6-1 6112 Categories of Classified Matter; "Confidential," "Secret," "Top Secret" 6-2 6113 "For Official Use Only" 6-2 6114 "Unclassified" Material 6-2 6115 Identification of Classified Material 6-3 6116 Security Clearances; General 6-5 6117 Security Clearances; Foreign Personnel 6-7 6118 Physical Protection of Classified Matter by FMS Customers 6-7 6119 Authority to Release Classified Material 6-8 6120 Distribution of Release Authorization 6-8 6121 U.S. Supply System Activities Involved in Furnishing Classified Material 6-9 6200 SECTION B— CLASSIFIED MATERIAL REQUISITIONING PROCEDURES 6-11 6210 Confirming Release Authorization 6-11 6211 How to Obtain Release Authorization 6-11 6212 How to Prepare and Forward Requisitions for Classified Material 6-12 6300 SECTION C--AREAS OF SPECIAL INTEREST GENERAL 6-15 6310 Precautions Concerning Classified Material on "Push" Requisitions 6-15 6311 Shipment of Classified Material 6-15 6312 Summary 6-16 REFERENCES FOR CHAPTER 6 6-18 INDEX OF FIGURES Page Numbei 6-1 Illustration of "Security Classification Code" Column in Management List-Navy (ML-N) 6-4 6-2 Illustration of "Physical Security Code" Column in Navy Stock List of Publications and Forms 6-6 CHAPTER 6. CLASSIFIED MATERIAL REQUESTS 6100 SECTION A— GENERAL INFORMATION 6110 Many documents and items of material either contain elements of information, or have characteristics, which must be protected from disclosure to unauthorized persons. These documents and items of material are referred to as "classified material." (Documents in this category of material are some- times referred to as "classified infor- mation. " ) DESCRIPTION OF "CLASSIFIED MATERIAL" 6111 "UNAUTHORIZED PERSONS" Instances may arise when customer countries will receive classified ma- terial under the FMS Program. This chapter describes the special precau- tions which must be taken to protect classified material and the procedures for requisitioning classified material "Unauthorized persons" who must be denied access to, or knowledge of the contents of, classified material include any person who is not a citizen (national) of either: The United States, or The FMS customer country which is purchasing the material. More restrictively, "unauthorized persons" are all persons except those citizens of the U.S. or the FMS coun- try who: Have been granted a security clearance of a category equiva- lent to (or higher than) the particular item of classified material involved. (Security clearances are covered in paragraph 6116, below.) 6-1 6112 CATEGORIES OF CLASSIFIED MATTER; "CONFIDENTIAL," "SECRET," "TOP SECRET" Have a legitimate "need to know," i.e., a valid need to handle, have access to, or have knowledge of, the partic- ular item of classified materi: involved. U.S. Government classified material is divided into three categories, re- flecting progressively more stringent limitations on disclosure. These categories are: "Confidential" "Secret" "Top Secret." "Secret" and "Top Secret" material is rarely disclosed to foreign countries, although disclosure of "Secret" ma- terial occurs more often than disclo- sure of "Top Secret" material. Al- though its disclosure is carefully controlled, "Confidential" material is the category of classified material most frequently released to FMS cus- tomers . 6113 "FOR OFFICIAL USE ONLY" 6114 "UNCLASSIFIED" MATERIAL There are instances when FMS customers may receive documents marked "For Official Use Only." The term For Official Use Only" is not a security classification, but means that the contents of the document should be disclosed only to military officials or employees of the United States or the FMS customer country. All material classified as "Top Secret," "Secret," or "Confidential" is marked or labeled to show its classification category. Similarly, "For Official Use Only" documents will be so marked or labeled. All other material is considered "Unclassi- fied." "Unclassified" material may or may not be marked as such. It is not subject to the strict protection against disclosure required for classi- fied material. Nevertheless, reasonable discretion should be exercised in 6-2 6114 (Continued) 6115 IDENTIFICATION OF CLASSIFIED MATERIAL protecting unclassified matter against unauthorized disclosure. Classified items of standard stock (i.e., those items which have been assigned a National Stock Number or "NSN" ) can be identified as being classified material by reference to the: Management List-Navy (ML-N), Naval Supply System Command (NAVSUP) publication 4100, for standard stock items other than publications and forms , or Navy Stock List of Publications and Forms , NAVSUP publication 2002, for publications and forms . Both of these publications contain a column which indicates the classifica- tion of each item. In the ML-N, the column is headed "SEC," which signifies "Security/Pilferage Code," and will contain a single alphabetic character indicating classification. The character "U" indicates that the item is "Unclassified." The characters "A," "B, " "C," or "D" indicate that the item is classified "Confi- dential." The characters "E," "G, " "H," or "S" indicate that the item is classified "Secret." The characters "F," "K, " "L," or "T" indicate that the item is classified "Top Secret." Figure 6-1 illustrates the use of this column in the ML-N. 6-3 FIGURE 6-1 Illustration of "Security Classification Code" Column in the Management List-Navy (ML-N) • UNIT OF ISSUE - • QUANTITY PER UNIT PACKAGE • ACQUISITION ADVICE CODE • SOURCE OF SUPPLY CODE • NATIONAL ITEM IDENTIFICATION NUMBER > FEDERAL SUPPLY CLASS ■• SHELF LIFE • REPAIRABILITY CODE SECURITY CLASSIFICATION CODE . • COGNIZANCE SYMBOL MATERIAL MANAGEMENT CODE • • DEMILITARIZATION CODE FSC A Q A U C P UNIT PRICE R S E E P C D M NOMEN- L CLATURE -00-01 1-3999 -00-011-4115 4310-00-011-4116 4310-00-011-4249 5320-00-011-4518 SUPERSEDED BY DISCONTINUED W/O REPL S9C X 1 EA 7.20 S9C D 1 EA 10.00 S9I D 1 PC 1.50 9Z5305-0O-958-5467 9C 9G 9Z A PIN, PISTO A SPRING, VA A RIVET, TUB "IT IN THE "SEC" COLUMN INDICATES THAT THESE ITEMS ARE "UNCLASSIFIED." 6-4 6115 (Continued) In the Navy Stock List of Publi- cations and Forms , the column is headed "PS" which signifies "Physical/Security Code." This column will either con- tain no entry, or it will contain a one-character entry. If there is no entry (i.e., the column is blank), the publication or form is "Unclassified. " If the entry is the letter "B" or "C," or the number "1" or "2," the publication or form is classified "Confi- dential . " If the entry is the letter "S," or the number "4," the publication or form is classified "Secret." Figure 6-2 shows the use of this "PS" column in the Navy Stock List of Publications and Forms. 6116 SECURITY CLEARANCES ; GENERAL As indicated in paragraph 6111, access to classified material is limited to persons who have been granted the appropriate security clearance. For U.S. personnel, this would mean that a person granted "Top Secret" clearance may have access to "Top Secret, " "Secret," and "Confidential" classified material for which he has a valid "need to know." A person granted "Secret" clearance may have access to "Secret" and "Confidential" classified material* for which he has a valid "need to know." A person granted "Confidential" clearance may have access only to "Confidential" classified material for which he has a valid "need to know." 6-5 FIGURE 6-2 Illustration of "Physical Security Code" Column in Navy Stock List of Publications and Forms MEANING OF COLUMN HEADING ABBREVIATIONS • REQUISITION RESTRICTION CODE • PHYSICAL SECURITY CODE • UNIT OF ISSUE • MATERIAL CONTROL CODE • BASIC CHANGE CODE • REVISION DATE STOCK NUMBER PUBLICATION NUMBER TITLE/NOMENCLATURE REV. DATE B/C MCC UI PS RR 0205-LP-644-4301 0205-LP-64-M400 0205-LP-644-4401 0205-LP-644-5100 LST 762 LST 762 LST 762 LST 1084 GIB-VOL 3 CHG 1 07/00/67 C EA GIB-ELECTRONIC SYSTEMS VOL. 4 06/00/63 B EA GIB-VOL. 4 CHG 1 07/00/67 C EA GIB-HULL & MECHANICAL VOL. 1 04/00/63 B EA cr BLANK IN THE PHYSICAL SECURITY (PS) COLUMN MEANS THAT PUBLICATIONS ARE "UNCLASSIFIED." "C" IN THE PHYSICAL SECURITY (PS) COLUMN MEANS THAT PUBLICATIONS ARE "CONFIDENTIAL.' h 6-6 5117 security :learances ; FOREIGN PERSONNEL >118 physical protection of :lassified mat- ter BY FMS CUS- TOMERS Paragraph B9 of the "Conditions" section of the Offer and Acceptance , DD Form 1513, agreed to by the customer country and the U.S. Government, specifies that the purchaser: "...shall maintain a similar classification and employ all measures necessary to preserve such security, equivalent to those employed by the USG (Government) throughout the period during which the USG may maintain such classi- fication. The USG will notify the purchaser if the classification is changed. ..." Thus, customer country personnel who must have access to classified material furnished under the FMS Program are not required to possess security clear- ances issued by an agency of the U.S. Government. However, they must possess an equivalent clearance issued by their own country. Full information on the requirements for the various types of security clearance is contained in the Department of the Navy Information Security Program Regulation , Office of the Chief of Naval Operations Instruc- tion (OPNAVINST) 5510.1. Paragraph 6117 describes the security clearance restrictions which must be observed by FMS customer coun- tries in granting access to classified material furnished under the FMS Pro- gram. The conditions of paragraph B9 of the Offer and Acceptance , DD Form 1513, to which the FMS customer material furnished under the FMS Program be pro- vided a degree of physical protection against unauthorized disclosure which is equivalent to that provided by the U.S. Government. This refers to the types of stowage container, locks, guards, etc., which may be used 6-7 6118 (Continued) in varying combinations to prevent theft or compromise of classified material. These physical protection requirements are described specifically in the Department of the Navy Informati Security Program Regulation , OPNAVINST 5510.1, referred to in paragraph 6117, above . 6119 AUTHORITY TO RELEASE CLASS I' FIED MATERIAL Within the U.S. Navy, the Chief of Naval Operations (CNO) is responsi- ble for the disclosure or release of classified material to FMS customers. CNO has granted limited delegation of this release authority to the Systems Commands of the Naval Material Command. It is U.S. Navy policy that a complete documentary record be maintained for each shipment of an item of classified material. In addition, no shipment of classified material may be made to FMS customers without specific release authorization. 6120 DISTRIBUTION OF RELEASE AUTHORIZATION If items of classified material are specifically cited in the FMS case, then the Offer and Acceptance , DD Form 1513, serves as the release authoriza- tion. If the item is not specifically cited on the applicable DD Form 1513, then CNO or the cognizant Systems Com- mand must authorize release. Usually this authorization is in the form of a letter or naval message. Copies of this letter or message normally go to the: Customer country representati\ U.S. Military Assistance Advisory Group (MAAG), Military Group (MILGROUP), Military Mission, or other U.S. military representative in the customer country, if such a representative exists U.S. Navy International Logistics Control Office (NAVILCO) 6-8 6120 (Continued) 6121 U.S. SUPPLY SYSTEM ACTIVI- TIES INVOLVED IN FURNISHING CLASSIFIED MATERIAL Inventory managers and other supply activities in the U.S. supply system which will be involved in the issue and shipment of materials and associated publications, plans, etc. As already indicated, the CNO and cognizant Systems Commands of the Naval Material Command are participants in the process of furnishing classified material to customers under the FMS Program. In addition, other U.S. supply system activities are participants in the process in much the same manner as they would be for transactions involv- ing unclassified material. Usually there will be training manuals, technical publications, and other documents associated with classi- fied equipment or parts. Frequently, these documents are also classified and must be provided protection equiva- lent to that provided for the equip- ment or parts. There is no single source of these classified documents within the U.S. supply system. They may be furnished by the Navy Publications and Forms Center, by a Systems Command or other headquarters organization, by the Naval Air Technical Services Facil- ity, by a commercial contractor, or by an office of the U.S. Army or U.S. Air Force. In summary, the FMS customer should realize that there is no separate U.S. supply system for pro- viding classified material. It is the same system which furnishes un- classified material, but with the added features, transactions, and documentation necessary to ensure ade- quate protection and recording of classified material shipments. 6-9/(6-10 blank) 6200 6210 CONFIRMING RELEASE AUTHORIZATION 6211 HOW TO OBTAIN RELEASE AUTHORIZATION SECTION B--CLASSIFIED MATERIAL REQUISITIONING PROCEDURES As the first step in requisition- ing classified material, the customer should confirm that the proper release authorization, as described in para- graphs 6119 and 6120, has been obtained from the U.S. CNO or Systems Command. When possible, the customer representa- tive originating the requisition should obtain a copy of the release letter or message and include the copy when for- warding the requisition to NAVILCO. If release authorization has not been granted, it is necessary for the customer to request this authority from the U.S. CNO. This should be done by official letter addressed to: Chief of Naval Operations (OP-63) Department of the Navy Washington, D.C. 23050 The letter should identify the parent equipment or system to which the item of classified material being requisi- tioned pertains. Include the FMS case designation under which the parent equipment or system was supplied. Also describe the reason why the item of classified material is being ordered and the use to which the item will be put. Be sure to include this informa- tion even though it may seem to be self-evident from the nature of the item being ordered. For example, assume that the item being ordered is a set of classified operating instructions for equipment provided under an FMS case. The cus- tomer's letter to CNO requesting re- lease authorization should specify: That release authorization is requested for the operat- ing instructions. 6-11 6211 . The name, model, etc., of the equipment to which the in- ( Continued) structions apply. The FMS case under which the equipment was furnished to the customer country. The reason why the operating instructions are needed and the use which will be made of the instructions. For example, "Operating Instruc- tions are required for use to train equipment mainte- nance personnel. No copies of operating instructions have yet been provided." 6212 Once the release authorization has been obtained, the MILSTRIP requisition HOW TO PREPARE may be prepared using either DD Form AND FORWARD 1348M or DD Form 1348. The requisition REQUISITIONS should: FOR CLASSIFIED MATERIAL Show the characters "A05" in the "Document Identifier" section, card columns 1 through 3 of DD Form 1348M, block 1 of DD Form 1348. Include a statement, in the "Remarks" sections (blocks L through V) appropriately identifying the release authorization. For example, "Item classified; CNO letter serial number _, dated _, authorizes release of this item. " or "Item classified; this item is line number of FMS case (fill in the case designator ) which constitutes release authorization." 6-12 6212 . Be forwarded to NAVILCO by mail, accompanied by a copy (Continued) of the release authorization letter, if it is available. NOTE: If the release authorization is the FMS case Offer and Accep - tance , DD Form 1513, a copy of the DD Form 1513 need not be sent to NAVILCO. Similarily, if a copy of the release authorization let- ter or message is not available, it cannot accompany the requisi- tion. However, information in the "Remarks" section of the req- uisition must identify the spe- cific release authorization. This is necessary, whether or not a copy of the release autho- rization accompanies the requisi- tion. If there is no release authorization identification in the "Remarks" section, NAVILCO must reject any requisition for classified matter and return it to the originator. 6-13/(6-14 blank) 6300 GENERAL 6310 PRECAUTIONS CONCERNING CLASSIFIED MATERIAL ON "PUSH" REQUISITIONS 6311 SHIPMENT OF CLASSIFIED MATERIAL SECTION C — AREAS OF SPECIAL INTEREST This section of Chapter 6 describes or emphasizes certain aspects of the requisitioning and supply process for classified material which differ from that for unclassified material. If a customer country is purchasing a complex weapon system under the FMS Program, it is likely that there will be significant quantities of classified material involved. It is also likely that much of this classified material will be furnished under "push" requisi- tions which are not originated by the customer country. It is important that adequate arrangements be made to receive and safeguard these classified shipments . The preferred consignee for classi- fied material is the customer country's freight forwarder, if the freight for- warder has been granted the necessary security clearance to handle classified material. If the freight forwarder has not been granted the necessary clearance, shipment is normally made to the customer country's attache or embassy in the United States. If the customer country has re- quested that shipment not be made to its attache, or embassy, and if the country's freight forwarder is not cleared to handle classified matter, classified publications and documents will be shipped to a U.S. military representative (MAAG, MILGROUP, Mission, or Attache), if one exists in the cus- tomer country. However, this means of delivery can be used only for publi- cations and documents because packages must be small enough to be handled by the U.S. armed forces postal system or diplomatic pouch. Also, use of this means of delivery is strongly discouraged 6-15 because of the handling burden it places on the postal or diplomatic mail system. For items of classified material other than publications and documents (i.e, items too large for the postal or diplomatic mail system), shipment will be made to the Naval Supply Center, Norfolk, Virginia, or the Naval Supply Center, Oakland, California, in instances when the customer's freight forwarder is not cleared to receive classified material. The shipment will be held at NSC Norfolk or NSC Oakland. NAVILCO will communicate with the customer's representative to make proper arrange- ments for delivery and onward shipment. 6312 This chapter has described the special precautions and procedures SUMMARY associated with the furnishing of classified material to FMS customers. It has: . Defined the types of classi- fied material which the FMS customer may encounter . Summarized the procedures for preventing access to classified material by un- authorized persons . Emphasized the need for ob- taining a specific release authorization before initiat- ing a requisition for classi- fied material . Provided instructions for preparation of requisitions for classified material by the FMS customer . Stressed the importance of prior preparations to receive classified material furnished under "push" requisitions 6-16 6312 • Outlined the shipping arrange- ments for classified material (Continued) 6-17 REFERENCES FOR CHAPTER 6 Department of the Navy Information Security Program Regulation Chief of Naval Operations Instruction (OPNAVINST) 5510.1 Management List - Navy (ML-N) Naval Supply Systems Command (NAVSUP) Publication 4100 (NSN 0588 LP 411 1000) Navy Stock List of Publications and Forms Naval Supply Systems Command (NAVSUP) Publication 2002 (NSN 0535 LP 004 0100) 6-18 CHAPTER 7. DISCREPANCY REPORTING SYSTEM CHAPTER 7. DISCREPANCY REPORTING SYSTEM TABLE O F CONTENTS Page Number 7100 7110 7111 7112 SECTION A— DESCRIPTION Introduction; Types of Discrepancies Causes of Discrepancies Establishing Responsibility 7-1 7-1 7-3 7-4 7200 7201 7202 7203 7210 7211 7212 7213 7214 7215 7216 7217 7218 7219 7220 7221 7222 7223 7224 7225 7226 7227 7228 7229 7230 7231 7232 SECTION B--PROCEDURES 7-7 Limitations on Submitting Reports of Item Discrepancy 7-7 Determining if a Discrepancy Is Responsibility of the U.S. Government 7-7 Steps in Determining When a ROID Should Be Submitted 7-8 Preparation of Report of Item Discrepancy Standard Form 364 7-9 Date of Preparation 7-11 Report Number 7-11 To 7-13 From 7-13 Shipper's Name 7-13 Date of Invoice 7-13 Invoice Number 7-14 Shipment Number 7-14 GBL, Manifest, Waybill, TCN, etc. 7-14 Contract/Document Number 7-14 NSN/Part Number and Nomenclature 7-15 Unit of Issue 7-15 Quantity Shipped/Billed 7-15 Quantity Received 7-16 Discrepancy 7-16 Quantity (a) 7-16 Unit Price (b) 7-16 Total Cost (c) 7-17 CodeMd) 7-17 Action 2 Code 7-18 Remarks 7-18 Blocks 16 and 16A 7-18 7233 Blocks 17 Through 19 7-18 7234 Block 20 7-19 7235 Remainder of Standard Form 364 7-19 7236 Timing of ROID Preparation and Submission 7-19 7237 Documents Which Should Accompany the ROID 7-20 7238 Disposition of Discrepant Material 7-21 7240 NAVILCO Acknowledgement of ROIDs 7-21 7250 Reports to the Customer of Action Taken on ROIDs 7-21 7251 Monthly Reply to Customer Requests for Adjustment 7-21 7252 Heading 7-22 7253 D/I 7-25 7254 R/I 7-25 7255 EIA 7-25 7256 Stock/Part NR 7-25 7257 U/M 7-25 7258 Quantity 7-25 7259 Document Number 7-26 7260 SUPP/ADD 7-26 7261 M/S 7-26 7262 ARC 7-26 7263 Statement Number 7-26 7264 ROID SER NR 7-26 7265 U/P 7-26 7266 ADJ $ VAL 7-30 7267 Case Totals 7-30 7300 SECTION C--AREAS OF SPECIAL INTEREST 7-31 7301 Explanation of "Within One Year of Shipment or Billing" 7-31 7302 Consolidation Shipments, A Common Cause of Invalid ROIDs 7-32 7303 Return of Discrepant Material to the U.S. 7-33 7304 ROID Fol low-Up 7-33 7305 Importance of Complete Documentation 7-34 REFERENCES FOR CHAPTER 7 7-35 INDEX OF FIGURES Page Number 7-1 Decision Flow Diagram for ROID Submission 7-10 7-2 Sample Report of Item Discrepancy Standard Form 364 7-12 7-3 Format of the Monthly Reply to Customer Requests for Adjustments Report 7-23 7-4 Adjustment Reply Codes 7-27 CHAPTER 7. DISCREPANCY REPORTING SYSTEM 7100 SECTION A—DESCRIPTION 7110 Despite strenuous effort, the U.S. supply system does not always achieve INTRODUCTION; its objective of providing its customers TYPES OF (either U.S. or FMS ) precisely what they DISCREPANCIES order and having it reach them in good condition. When such a situation exists, it is called a discrepancy. There are two basic types of dis- crepancies encountered by the customer in FMS transactions: A discrepancy in shipment A discrepancy in billing. Shipment discrepancies fall into two categories : Carrier discrepancies are damages to, or shortages in the quantity of, packaged or loose freight which occur in transit. These will normally be reflected as a difference in the quantity or condition of material received from the description as shown on the bill of lading or freight bill. Shipper discrepancies are those in which there is no apparent difference between the shipment as it is received and the description of the shipment (quantity and con- dition) as shown on the bill of lading or freight bill. Rather, there may be a shortage or excess quantity due to incorrect count, there may be damage prior to ship- ment, or the customer may receive an incorrect item or a substitute item which is not interchangeable with the item ordered. 7-1 7110 Billing discrepancies are those in which material is received as ordered (Continued) (and with proper accompanying documenta- tion, ) but is incorrectly reflected, omitted, or duplicated in either: FMS Delivery Listings Statements of FMS transactions (These documents are described in detail in Chapter 8 . ) Examples of some typical discrep- ancies include: Material shortage (i.e., only part of the quantity ordered is received) Missing material (i.e., none of the material ordered is received) Material received in damaged condition Wrong material received; neither the material ordered, nor a usable substitute Too much material received (i.e., more than was ordered) Material received without matching documentation Material received without any documentation Duplicate shipment (i.e., material applicable to a single requisition received twice) Duplicate billing (i.e., being charged twice for the same item) . Except for the duplicate billing example, all of the discrepancies cited above are discrepancies in shipment. 7-2 7111 In most instances, the reasons for a discrepancy can be classified under one CAUSES OF of the three causes: DISCRIPANCIES Misunderstanding Mishandling Mistake. Misunderstanding can cause a discrepancy two ways. The first is when the FMS customer's requisition or delivery instructions are not clear and are misinterpreted by the U.S. supply system. The result is that the custo- mer does not get the material he thought he had ordered, or he receives it in a different manner or place, or at a dif- ferent time, than he expected. The second way in which misunderstanding causes an apparent discrepancy occurs when there really is no discrepancy, but the information available to the FMS customer makes it appear, initially, that a discrepancy exists. Typical examples of this type of misunderstand- ing are: The FMS Delivery Listing provided to the customer by the Security Assistance Accounting Center (SAAC) may show that the material for a requisition has been shipped. Months later, if the customer has not received the item, it is natural to assume that a discrepancy has occurred. Frequently, however, investiga- tion reveals that the material was shipped by the U.S. supply system but has not been for- warded by the FMS customer's freight forwarder. The FMS customer may compare the quantity on the original requisition with the lesser quantity received and conclude that a shortage - and thus a discrepancy - exists. How- ever, more careful review of status provided by NAVILCO and 7-3 7111 (Continued) the information provided by the applicable shipping docu- mentation may show that the material received is only a partial shipment, with the remainder to follow at a later date. Visual inspection of a ship- ping container may reveal no evidence of documentation, a situation which would be a discrepancy. However, a late] receipt from the freight for- warder includes another pack- age from the original ship- ment. This second package, which had become separated from the first package during freight forwarder processing, bears the documentation for the entire shipment. Mishandling discrepancies are when material is received in damaged condi- tion due to improper handling in transil Mistake , or human error, at some point in the supply process is, by far, the most prevalent cause of discrepan- cies. Furthermore, discrepancies causec by mistake can range across the entire spectrum from material shortage or damage to discrepancies in documentatioi to misdirected shipments. 7112 ESTABLISHING RESPONSIBILITY The U.S. Government takes correc- tive action or provides recompense to FMS customers for discrepancies that art determined to be the responsibility of the U.S. Government. A discrepancy that occurs after title to the material passes to the FMS customer is not a discrepancy for which the U.S. Govern- ment is responsible. The major excep- tion to this general rule is discrepan- cies in billing; these are U.S. Govern- ment responsibility and will normally occur after title has passed to the FMS customer. 7-4 7112 The three key steps which the FMS customer should take in processing (Continued) potential discrepancies are: Investigate thoroughly to ensure that a discrepancy does, in fact, exist. Usually this will involve careful checking with the freight for- warder as well as at various receiving destinations with- in the FMS customer country. Once it has been established that a true discrepancy does exist, the next step is to: Investigate to determine whether the discrepancy is the responsibility of the U.S. Government. Often, the investigation performed to determine if the suspected discrepancy is a true dis- crepancy will also indicate whether responsibility is that of the U.S. Government. If the customer decides that the responsibility should rest with the U.S. Government, the next step is to: Prepare, and forward to NAVILCO, a Report of Item Discrepancy (ROID), Standard Form 364. Detailed instruc- tions for completing this form are contained in Section B of this chapter. ROIDS will be forwarded by the FMS customer to service-designated activities for processing. The activity designated by the U.S. Navy is NAVILCO, Philadel- phia, Pennsylvania. DOD activities will provide adjustments as appropriate for ROID for credit thru NAVILCO. SAAC will in turn process the necessary adjust- ments in the purchaser ' s account and prepare the listing which identifies the credit document and date processed to the account. SAAC will process the response to the customer with his quarterly billing statement. 7-5 7112 The importance of thorough inves- tigation prior to submitting a ROID can- ( Continued) not be overemphasized. Such an investi- gation does more than ensure that re- sponsibility can be properly assigned to either the FMS customer, the freight forwarder, the carrier, or the U.S. Government. It also provides important information which must be included when a ROID is submitted, in order to permit processing and remedial action by the U.S. supply system. 7-6 7200 7201 LIMITATIONS ON SUBMITTING REPORTS OF ITEM DISCREPANCY SECTION B--PROCEDURES If an FMS customer has determined that a true discrepancy exists and it appears that the discrepancy is the responsibility of the U.S. Government, a Report of Item Discrepancy (ROID) , Standard Form 364, should be prepared and submitted to NAVILCO. The ROID document, Standard Form 364, should be used to report discrepancies of any type, whether material discrepancies (e.g., shortage, damage, wrong material), documentation discrepancies (e.g., missing documents, documents which do not match material), or billing dis- crepancies (e.g., duplicate charges, incorrect price). However, ROIDs may not be submitted for discrepancies which: Are for amounts less than $100 (unless the discrepancy in- volves defective material or non-receipt of material) Will be received by NAVILCO more than one year after the date when material was shipped to the FMS customer, or one year after the material has been reported in the FMS Deliv - ery Listing portion of a Foreign Military Sales Billing Statement , DD Form 645, which- ever is later. 7202 DETERMINING IF A DISCREPANCY IS RESPONSIBILITY OF THE U.S. GOVERNMENT To assist in determining if a valid discrepancy is the responsibility of the U.S. Government, it is usually helpful to determine if the discrepancy is a billing discrepancy or a shipment discrepancy (as described in paragraph 7110). If it is a billing discrepancy, a ROID should be submitted to SAAC. If it is a shipment discrepancy, it is necessary to determine whether it is a 7-7 7202 (Continued) shipper discrepancy or a carrier dis- crepancy . (Both of these terms are defined in paragraph 7110.) If it is a shipper discrepancy, U.S. Government responsibility is probable and a ROID should be submitted to NAVILCO. If the discrepancy is a carrier discrepancy, responsibility normally does not rest with the U.S. Government. This is because title to the material usually passes to the FMS customer when material is turned over to a carrier at the source of supply. In instances of . carrier discrepancy when title of the material has passed to the FMS customer country, the FMS customer representativ< or freight forwarder, should initiate a claim for reimbursement against the delivering carrier. 7203 STEPS IN DETER- MINING WHEN A ROID SHOULD BE SUBMITTED To determine whether a suspected discrepancy sould become the subject of a ROID submitted to NAVILCO, a step -by- step process is recommended as shown below. Determine if the suspected discrepancy is, in fact, a valid discrepancy. Determine if the money value of the discrepancy is $100 or more (unless discrepancy in- volves defective material or non-receipt of material). Ensure that the discrepancy is not too old to be accepted by NAVILCO (i.e., less than one year from date of shipment or billing, whichever is later). Determine if the discrepancy is a billing (financial) dis- crepancy or a shipment dis- crepancy. (Billing discrepant ROIDs will be submitted to SAAC. ) 7-8 7203 (Continued) If it is a shipment discrep- ancy, determine whether it is a shipper or a carrier dis- crepancy. (Shipper discrep- ancy ROIDs will be submitted to NAVILCO. ) If a carrier discrepancy is suspected, claims should immediately be filed directly to the carrier as his liability is terminated after nine months from the date of ship- ment. These steps are shown in a deci- sion flow diagram, Figure 7-1. 7210 PREPARATION OF REPORT OF ITEM DISCREPANCY , STANDARD FORM 364 The Report of Item Discrepancy (ROID) , Standard Form 364, was originally designed for use by U.S. Government activities and agencies. It has also been adopted for use by FMS customers in reporting discrepancies under the FMS program which appear to be the responsi- bility of the U.S. Government. Because the form was designed primarily for U.S. use, there are portions of the form which are not applicable to FMS customers . In addition, the ROID form was de- signed for multi-purpose use by the various offices or organizations involved in processing reports of discrepancy. For this reason the form is printed on both sides. It is important that dis- crepancy reports submitted by FMS cus- tomers use Standard Form 364 which has either: Been supplied from U.S. Govern- ment sources, or If reproduced by the FMS country, is an exact duplicate of U.S. -supplied Standard Form 364, including printing on the reverse. 7-9 FIGURE 7-1 Decision Flow Diagram for ROID Submission DOES INVESTIGATION OF SUSPECTED DISCREPANCY SHOW IT TO BE A VALID DISCREPANCY? NO- ■► DISCONTINUE PROCESSING FOR ROID SUBMISSION YES L \ NO IS THE MONEY VALUE $100 OR MORE? IS THE DISCREPANCY LESS THAN ONE YEAR OLD? (NOTE 2) NO YES i IS THE DISCREPANCY A SHIPMENT DISCREPANCY? H I NO IS THE DISCREPANCY A FINANCIAL OR BILLING DISCREPANCY? YES CARRIER DISCREPANCY IS THE DISCREPANCY A SHIPPER DISCREPANCY OR CARRIER DISCREPANCY? YES SHIPPER DISCREPANCY i DISCONTINUE PROCESSING FOR ROID SUBMISSION; INITIATE CLAIM, AS APPROPRIATE, AGAINST DELIVERING CARRIER T PREPARE REPORT OF ITEM DISCREPANCY (ROID). STANDARD FORM 364, AND SUBMIT TO NAVILCO NOTE: 1. IT IS IMPORTANT TO REMEMBER THAT CLAIMS MUST BE SUBMITTED TO THE CARRIER WITHIN NINE MONTHS FROM THE DATE OF SHIPMENT. THEREFORE, WHENEVER A CARRIER DISCREPANCY IS SUSPECTED, FILE A CLAIM IMMEDIATELY WITH THE CARRIER. 2. THE $100 OR GREATER MONEY VALUE LIMITATION APPLIES ONLY ON ROID SUBMISSIONS COVERIN SHORTAGES OR MATERIAL DAMAGED IN SHIPMENT. THE $100 LIMITATION DOES NOT APPLY TO THE RECEIPT OF DEFECTIVE MATERIAL. 7-10 7210 (Continued) 7211 DATE OF PREPARATION Figure 7-2 is an illustration of the ROID, Standard Form 364. Each block of the form is numbered and titled. Paragraphs 7211 through 7235 identify each block in which the FMS customer should make an entry and de- scribe the entry which should be made. More complete instructions may be found in the directive "Reporting and Processing of Discrepancy Reports against Foreign Military Sales Ship- ments," Defense Supply Agency (DSA) Regulation 4140.60, which was distrib- uted to the U.S. Navy by Naval Supply Systems Command (NAVSUP) Instruc- tion 4920.9 (series). Block 1, "DATE OF PREPARATION," should show the date when the report is prepared. The proper format for this entry is in "year-month-day" sequence, using only the last two digits of the year number. For example, the proper "Date of Preparation" entry for a ROID prepared on the third day of June 1978 would be: 78 JUNE 03 Similarly, November 10, 1978, would be entered as : 78 NOV 10. 7212 REPORT NUMBER Block 2, "REPORT NUMBER," should show the two-letter country code applicable to the FMS customer, and the three-letter FMS transaction identifier. This information may be obtained from Item 3, the "Case Designator" section of the Offer and Acceptance (DD Form 1513), of the FMS case applicable to the material on which the ROID is being submitted. For example, if Item 3, the "Case Identifier," of the applicable DD 1513 reads: 7-11 FIGURE 7-2 Sample Report of Item Discrepancy Standard Form 364 REPORT OF ITEM DISCREPANCY (ROID) 1. DATE OP PREPARATION 79 May 21 2. KETOtTNUMKt LT-NCA-0001 3. TO (Name and address, include ZIP Code) Commanding Officer U.S. Navy International Logistics Control Office Philadelphia, PA 19111 4. FROM (Name and addrett, include ZIP Code) Chief, Supply Bureau Republic of Latonia Navy Barland, Latonia 5. SHIPPER'S NAME NSC Norfolk 5A. DATE OF INVOICE 12/1/78 58. INVOICE NUMBER 6. SHIPMENT NUMBER 2 of 3 7. GBL MANIFEST, WAYBILL TCN. ETC 8- CONTRACT/DOCUMENT NUMBER Reqn PLT 044428009 FSN/PART NUMBER AND NOMENCLATURE 10. UNIT OP ISSUE QUANTITY SHIPPED/ BILLED QUANTITY RECEIVED DISCREPANCY QUAN- TITY (o) UNIT PRICE ft) TOTAL COST (c) CODE («fl ll ACTION^ CODE 1005 00 1755 918 EA 2A 10 14 $22.00 $308.00 SI IB 1& REMARKS (Continue on separate sheet of paper if necessary) Quantity of 10 received being retained for use. Shipment of Balance (14 ea.) required to complete Requisition Quantity ordered is requested. ^ DISCREPANCY CODES CONDmON CI— Malarial received which Is defective or in con- dition other ihon that Indicated] on releaic /re- ceipt document. DOCUMENTATION Dl —Supply documentation not received D2— Supply documentation Illegible or mutilated D3— Supply documentation incomplete. Improper or without authority (Only token receipt cannot be properly processed) MISDIRECTED Ml— Material addressed to wrong activity OVERAGE/DUPLICATE SHIPMENTS Ol — Quantity received In excess of quantity en receipt document 02— Quantity received Is excess of quantity re- quested (Other than unit of issue pack) 03— Quantity received duplicates shipment SHORTAGE SI —Quantity received less than quantity on receipt documert S2— Quantity received less than quantity requested (Other l.'ian unit of issue pack) S3— Non-receipt of parcel post shipments ITEM TECHNICAL DATA MARKINGS (i.e„ Name Plates, Log Books. Operating Handbooks, Special Instructions, etc.) T1 —Missing T2 -Illegible or mutilated T3 —Precautionary operational markings missing T4 —Inspection data missing or Incomplete T5— Serviceability operating data missing or incomplete T6— Warranty data missing WRONG ITEM (Identify requested item as a separate entry in Item 9 above) W1 —Incorrect Item received W2— Unacceptable substitute OTHER DISCREPANCIES Z 1 —See remarks -^ACTION CODES 1A— Disposition instructions requested (See reverse) 1 B —Material being retained (See re' marks) 1 C— Supporting supply documentation requested 1 D— Materiel still required expedite ship- ment 1 E— Ideal purchase material to be re- tjrned a* supplier's expense unless disposition Instructions to the con* trary are received within 15 days (See reverse) 1 F— Replacement shipment requested 1Z— Other action requested (See re- marks) 16. TYPED OR PRINTED NAME AND TITLE OF PREPARING OFFICIAL W. T. Dooratino, Captain, LN 16A. SIGNATURE 6i^yr<0^t^7^ Ge^r juj 17. FUNDING AND ACCOUNTING DATA 18. VOUCHEP NUMBER 19. SIGNATURE OF APPROVING OFFICIAL 20. DISTRIBUTION OF COPIES STANDARD FORM 364 JUNE 197 PRESCRIBED BY GSA FPMR -101-26.307 364-10 7-12 7212 (Continued) 7213 TO 7214 FROM 7215 SHIPPER'S NAME 7216 DATE OF INVOICE LT-P-NCA the proper entry in the "REPORT NUMBER" block would be "LT-NCA." In addition, the "REPORT NUMBER" block should also be used by the customer to enter a 4-digit serial number (in a series from 0001-9999) to identify the individual ROID submission. The use of this serial number is shown in Figure 7-2. Block 3, "TO," should show the name and address to whom the ROID is being submitted. Enter: Commanding Officer U.S. Navy International Logistics Control Office Philadelphia, Pennsylvania 19111 Block 4, "FROM," should show the full name and address of the FMS cus- tomer representative preparing the ROID. Block 5a, "SHIPPER'S NAME," is used only if shipment of the material was made by a commercial source (contractor or vendor). No entry is made in this block if the shipment was made by a U.S. Government activity. If the ship- ment was made from a commercial source, enter the name (and address, if avail- able) of the commercial source. Block 5b, "DATE OF INVOICE," is used only if shipment of the material was made by a commercial source. If the shipment was made from a commercial source, enter the date shown on the invoice (bill, sales slip, shipping document, etc.) prepared by the com- mercial source. 7-13 7217 INVOICE NUMBER 7218 SHIPMENT NUMBER Block 5c, "INVOICE NUMBER," is used only if shipment of the material was made by a commercial source. If the shipment was made from a commercial source, enter the number shown on the invoice (bill, sales slip, shipping document, etc.) prepared by the com- mercial source. Information for entries in blocks 5A and 5B (if entries are made) will come from the same document . Block 6, "SHIPMENT NUMBER," should show the number of the shipment in which the discrepancy was found, if more than one shipment was made under the requi- sition, contract, or purchase order appl cable to this transaction. 7219 GBL, MANIFEST, WAYBILL, TCN, ETC. 7220 CONTRACT/ DOCUMENT NUMBER Block 7, "GBL, MANIFEST, WAYBILL, TCN, ETC.," should show the type of transportation document applicable to the shipment, and the identifying number assigned to that document. Types of transportation documents include: Commercial Bill of Lading (CBL) Manifest Waybill Transportation Control and Movement Document (TCMB) Government Bill of Lading ( GBL ) . Block 8, "CONTRACT/DOCUMENT NUMBER, should show the requisition number for shipments made by U.S. military activi- ties or the U.S. General Services Admin- istration (GSA). If the shipment was made from a commercial source (con- tractor or vendor) the contract or pur- chase order number should also be shown (if known) in addition to the requisitio number . 7-14 7221 NSN/PART NUMBER AND NOMENCLATURE Block 9, "NSN/PART NUMBER AND NOMENCLATURE," is used to identify the specific item which is the subject of the ROID. The National Stock Number (NSN) or Federal Stock Number (FSN) should be shown if the item is standard stock. If the item is non- standard, the manufacturer's part num- ber should be shown. The name (nomen- clature) of the item should also be shown. In situations where the item received is different from the item shown on the shipping document, or is different from the item ordered, show the number and nomenclature for both items in this space, making a separate entry for each. For example: "Item received: 1005 00 1752 087, LEVER LATCH LOCKING ARM Item ordered: 1005 00 1755 918, EJECTOR CATCH RELEASE LEVER" 7222 UNIT OF ISSUE Block 10, "UNIT OF ISSUE," should contain the Unit of Issue shown on the shipping document for the item entered in block 9. If more than one item is shown in block 9, enter the Unit of Issue for each. 7223 QUANTITY SHIPPED/BILLED Block 11, "QUANTITY SHIPPED/BILLED," should show the quantity (i.e., the number of Units of Issue) shown on the shipping document . In instances where a shortage or excess exists, this quantity will be different from the quantity actually received. In certain situations described in paragraph 7229, below, the material condition code shown on the shipping document will also be entered in block 11. 7-15 7224 QUANTITY RECEIVED Block 12, "QUANTITY RECEIVED" should show the quantity of the item actually received. This is irrespective of the quantity shown on the shipping documents and entered in block 11. The entries in block 11 and block 12 may be the same, but they need not be. In cerain situations described in paragraph 7229, below, the material condition code applicable to material received will also be entered in block 12 . 7225 DISCREPANCY 7226 QUANTITY (a) 7227 UNIT PRICE (b) Block 13, "DISCREPANCY," is divided into four subsections, each of which is described in detail in paragraphs 7226 through 7229. Entries in these four subsections all are applicable only to that portion of the material received (or missing) which is discrepant. For example if a quantity of 9 of an item is received, of which 3 are damaged, entries in the subsections of block 13 would apply only to the 3 damaged units. If a quantity of 10 of an item were ordered but only 6 received, entries in the subsections of block 13 would apply only to the shortage of 4 units. Block 13(a), "QUANTITY (a)," should show the total quantity (i.e., the number of units of issue) for which a discrepancy is being reported. For example, if the discrepancy is a short- age or an excess, the entry will be the difference between the "Quantity Shipped/Billed" (block 11) and the "Quantity Received" (block 12). If the discrepancy is damage, the entry in block 13(a) will be only the number of units which are damaged. Block 13(b), "UNIT PRICE (b)," should show the Unit Price of material as indicated on the bill, invoice, or shipping document. 7-16 7228 TOTAL COST (c) 7229 CODE (d) Block 13(c), "TOTAL COST (c)," is the result of multiplying the entry in block 13(a) ("Quantity") by the entry in block 13(b) ("Unit Price"). This entry represents the total money value of the discrepancy being reported. Block 13(d), "CODE 1 (d)," requires an entry drawn from the table of Dis- crepancy Codes shown in the lower por- tion of the front of Standard Form 364. Although unusual, it is possible that more than one discrepancy code could be applicable. If the discrepancy is not properly described by any of the codes shown, enter "Zl" in block 13(d) and describe the discrepancy in the "Re- marks" section, block 15. If discrepancy code "C-l" is applicable, other entries should also be made as follows: Enter the "material condition code" of the item when shipped (i.e., as shown on the ship- ping document) in block 11 ( "Quantity Shipped/Billed" ) . A listing of material condi- tion codes is provided in paragraph C, Appendix 17, of the MILSTRIP/MILSTRAP Operat- ing Procedures Manual , Naval Supply Systems Command (NAV- SUP) Publication 437. Enter the "material condition code" of the item when received in block 12. If material is received in more than one condition code (e.g., some damaged, some undamaged), make separate entries in block 12 showing the quantity to which each condition code is appli- cable. 7-17 7229 (Continued) If a quality or shelf-life (i.e., age of material re- ceived) discrepancy is involved, enter the following informa- tion in block 15 ("Remarks"): Manufacturer's name Contract/Purchase Order Number (if not already shown in block 8) Date of manufacture, pac or expiration of shelf- life 7230 ACTION' CODE 7231 REMARKS 7232 BLOCKS 16 AND 16A 7233 BLOCKS 17 THROUGH 19 Lot/batch number Location of material Nature of complaint (i.e, why material is unsatis- factory) . Block 14, "ACTION 2 CODE," requires an entry drawn from the table of Action Codes shown in the lower portion of the front of Standard Form 364. Do not use Action Code ID, IE, or IF. If the action desired is not among those liste in the table, enter "1Z" in block 14 and explain the action requested in the "Remarks" section, block 15. Block 15, "REMARKS," is to be used for inclusion of any supplemental in- formation to explain the discrepancy, or action requested, more fully. Blocks 16 and 16A are used to show the name, title, and signature of the official submitting the ROID. Blocks 17 through 19 do not re- quire an entry by the FMS customer re- presentative preparing the ROID. 7-18 7234 Block 20, "Distribution of Copies," may be used by the FMS customer repre- BLOCK 20 sentative preparing the ROID, if de- sired, to show to whom copies of the ROID are sent. 7235 There is no requirement for entries by the FMS customer country in remain- REMAINDER OF ing sections (the reverse) of the ROID, STANDARD FORM Standard Form 364. 364 7236 The timing of ROID preparation and submission is important to the FMS TIMING OF ROID customer. It is important that prepara- PREPARATION AND tion and submission not be delayed too SUBMISSION long, because ROIDs received at NAVILCO more than one year after the shipment date or billing date (whichever is later) will be rejected. Six suggested guidelines which may be used in preparing and submitting ROIDS are: Prepare a ROID as soon as it is clearly established that a discrepancy which is the responsibility of the U.S. Government exists. "Receipt of shipping" status indicates that the material has been released, normally to the freight forwarder. A thorough investigation should be conducted prior to submitting a ROID. Materials may well be frus- trated at any point in transit: carriers, freight forwarder, port of entry, etc. Additionally, upon receipt of shipping status sufficient time should be allotted for physical receipt of the material prior to submitting a ROID. Forward ROIDs to NAVILCO as soon as possible after they have been prepared. 7-19 7236 . If the ROID involves a poten - tial carrier discrepancy in (Continued) which there may be a question as to whether the FMS customer or the U.S. Government owned the material at the time the discrepancy occurred, immedi- ately file a claim against the carrier and then submit a ROIE to NAVILCO within six months of the shipment date . (This is to protect the FMS customer's right to initiate a claim against the delivering carrier if it is determined that ownership of the material did not rest with the U.S. Govern- ment at the time the discrep- ancy occurred. ) . . Forward the original and six copies of each ROID to NAVIL- CO. Forward ROIDS to NAVILCO by air mail to minimize transit time. 7237 In order to ease the processing of ROIDs submitted by FMS customers and to DOCUMENTS WHICH permit their rapid and definitive reso- SHOULD ACCOMPANY lution, it is important that copies of THE ROID pertinent documents be forwarded to NAVILCO with the ROID. Examples of "pertinent documents" for various types of ROIDS are provided below. Shipping documents for ROIDs involving shortage or excess shipment, receipt of material in damaged condition, or receipt of wrong material. Requisition for ROIDs in- volving receipt of wrong material . 7-20 7237 (Continued) 7238 DISPOSITION OF DISCREPANT MATERIAL 7240 NAVILCO ACKNOWLEDGEMENT OF ROIDs 7250 REPORTS TO THE CUSTOMER OF ACTION TAKEN ON ROIDs 7251 MONTHLY REPLY TO CUSTOMER REQUESTS FOR ADJUSTMENT Photographs of material as received for ROIDs involving damaged or mislabeled material As a general rule, FMS customers should retain material which they have received and which is the subject of a ROID until disposition instructions are generally provided by NAVILCO (or by other competent authority in the U.S. supply system). If it is not practical to hold discrepant material until disposition instructions are received because of the condition or characteristics of the material, the "Remarks" section (block 15) of the ROID should be used to explain action which will be taken. For example: "Containers are leaking and creating fire hazard; broken containers will be destroyed." When a ROID is received from an FMS customer at NAVILCO, it is recorded. Before any other processing takes place, a copy of the ROID is annotated and returned to the FMS customer notifying that the ROID has been received. Resolution of discrepancies reported on ROIDs normally requires a minimum of 120 days after receipt of the ROID by NAVILCO. Thus, it is unlikely that the FMS customer will receive any report of the action taken with respect to a ROID until at least three months after he has received NAVILCO acknowledgement of the ROID. When action with respect to a ROID has been completed, it will be reported to the FMS customer as part of the Reply to Customer Requests for Adjust - ment . This report (which is also described in paragraph 9130 of Chapter 9) is forwarded monthly to the FMS 7-21 7251 (Continued) customer. The report is a machine listing that identifies the ROID, the document number of the transaction to which the ROID applies, the action taken by the U.S. Department of Defense to resolve the ROID, and other perti- nent information. A separate listing is provided for each FMS case under which action on a ROID has been com- pleted. In addition, a copy of each processed ROID included in the listing accompanies the report. If the FMS customer utilizes mechanized procedures, an Adjustment Request Reply card (MIL- STRIP Document Identifer "FKG") is also provided for each ROID included in the listing. Figure 7-3 illustrates the monthly Reply to Customer Requests for Adjust - ment . Paragraphs 7252 through 7267 identify and describe the various entries on the report. 7252 HEADING The Heading of the Reply to Cus - tomer Requests for Adjustment report shows : The title of the report The name of the FMS customer country ("LATONIA" in Figure 7-3) The 2 -letter FMS country code ("LT" for the Republic of Latonia in Figure 7-3 ) The 3-letter case designator portion of the FMS case identifier ("LAJ" from Case LT-P-LAJ in Figure 7-3) The date on which the report was prepared (27 March 1975, 75 MAR 27) in Figure 7-3. 7-22 FIGURE 7-3 Format of the Monthly Reply to Customer Requests for Adjustments Report I ADJUSTMENTS DATE PREPARED 75 MAR 27 STATEMENT ROID ADJ $ M/S ARC NUMBER SER NR U/P VAL CA 750E 7712 $5- DO $50-00 DEBIT $ VALUE S7A.M5 7-23/(7-24 blank) REPLY LISTING TO CUSTOMER REQUESTS FOR ADJUSTMENTS FIGURE 7-3 Format of the Monthly Reply to Customer Requests for Adjustments Report LATONIA LT CASE LAJ DATE PREPARED 75 MAR E7 D/I R/I EIA STOCK/PART NR U/M QUANTITY DOCUMENT NUMBER STATEMENT ROID ADJ t SUPP/ADD M/S ARC NUMBER SER NR U/P VAL FKG STG A SnGGD^EllOiWflia EA DDD1D PLTCmmaflmb3fl PASULA J CA 7SDE 771E $5. DO $50-00 CASE TOTALS DDD17 CREDIT $ VALUE SE53.10 DEBIT * VALUE *7fi.M5 7-23/(7-24 blank) 7253 D/I 7254 R/I 7255 EIA 7256 STOCK/PART NR 7257 U/M 7258 QUANTITY "D/I" is the abbreviation for "Document Identifier." The entry in this column always contains the letters "FKG." FKG is the Document Identifier for an Adjustment Request Reply Card. "R/I" is the abbreviation for "Routing Identifier." Entries in this column show the MILSTRIP Routing Identifier of the activity which shipped the material to the FMS cus- tomer. A list of Routing Identifiers is contained in Appendix 10 of NAVSUP publication 437. "EIA" is the abbreviation for "Estimated, Incremental or Actual." The letter "E," "I," or "A" appears in the entry. This indicates the nature of the original charge for which the customer has requested adjustment. "E" indicates that the charge was estimated. "I" indicates that the charge was incremental . "A" indicates that the charge reflected actual costs to the customer. "STOCK/PART NR" is the abbrevia- tion for "Stock Number or Part Number." The entry in this column shows the stock number (NSN) or manufacturer's part number of the item for which the adjustment was requested. In instances when such a number is unknown or not applicable, the name or abbreviated description of the item will usually appear in this column. "U/M" is the abbreviation for "Unit of Measure." The MILSTRIP Unit of Issue abbreviation applicable to the item appears in this column. This entry shows the quantity (i.e., the number of Units of Issue) of the item reported as being discrep- ant or requiring adjustment. 7-25 7259 DOCUMENT NUMBER 7260 SUPP/ADD 7261 M/S 7262 ARC 7263 STATEMENT NUMBER 7264 ROID SER NR 7265 U/P This entry shows the MILSTRIP Document Number (requisition number) under which the discrepant item was delivered to the FMS customer. The "SUPP/ADD" entry contains the same information as shown in the Supple mentary Address portion (card columns 4 through 50) of the original requisition This information consists of the "Option Freight Forwarder Code" and the "FMS Ca;; Identification" described in paragraphs 2269 and 2270 of Chapter 2. "M/S" is the abbreviation for "Mode of Shipment." The entry in this column identifies the mode of shipment which was used to deliver the material to the customer. MILSTRIP "Mode of Shipment Codes," shown in Figure 2-23 in Chapter 2, are used for this purpose "ARC" is the abbreviation for "Adjustment Reply Code." This is a 2-character code used to indicate the nature of the action being taken on the FMS customer's ROID. A listing of these codes and their meaning is provided in Figure 7-4. The entry in the "STATEMENT NUM- BER" column is the number of the monthly statement of FMS Transactions in which the adjustment action is being re- flected. If it is determined that no adjustment is warranted in response to the FMS customer's request, this column will be left blank. This entry shows the "ROID Serial Number" assigned by the FMS customer as described in paragraph 7212, above. This entry shows the Unit Price of the discrepant item as indicated in NAVILCO's records. 7-26 FIGURE 7-4 Adjustment Reply Codes ADJUSTMENT REPLY CODES INDICATING DENIAL OF THE REQUEST CODE MEANING A A Duplicate billing and/or shipment resulted from receipt of duplicate requisition and duplicate supply action. AB Bill reflected correct unit or extended price of material shipped. When used in connection with an accessorial charge request, bills reflect correct rate and extended amount. AC Billing was accomplished as specified in the requisition. AD Non-reimbursable issue not authorized. Requisition did not show that item was considered non-reimbursable (not applicable to GSA or civilian agencies). AE Supplier adjusted unit pack since requisition did not prohibit this action, or, shipment made in accordance with instructions in requisitions. AF Authorized substitute in latest supply manual. Requisition did not prohibit substitution. AG Claim less than $100. Loss or gain to be absorbed by customer (not applicable to GSA or civilian agencies). AH Request cannot be granted due to age of billing and non-avail- ability of records. AI Local records indicate prior reversal of duplicate credit or charge in bill number cited in cc 54-58. AJ Credit was granted as a result of FAE/FTE or GAE/GTE request and was processed in accordance with billing instructions cited. AK Request for $10 or less per line item not arising from transportation- type of shipping-type item discrepancies. Loss or gain to be absorbed by customer. (Applicable to other than DOD/GSA activities.) A I. No adjustments are considered for requests of $10 or less for shipping-type (item) discrepancies, including lost/damaged parcel post shipments or deficient material. Loss or gain to be absorbed by customer. (Applicable to other than DOD/GSA activities.) AM No adjustments arc considered for $1 5 or less on a single Bill of Lading for transportation-type discrepancies. Loss or gain to be absorbed by customer. (Applicable to other than DOD/GSA activities.) AN No adjustments are considered for $25 or less. Loss or gain to be absorbed by customer. 7-27 FIGURE 7-4(2) Adjustment Reply Codes ADJUSTMENT REPLY CODES INDICATING GRANTING OF THE REQUEST AND PROVIDING MATERIAL DISPOSITION ADVICE CODE MEANING BA BB Material to be disposed of locally. Material to be returned to activity designated in cc 4-6. ADJUSTMENT REPLY CODES NOT REQUIRING SUPPLY ACTION OR CHANGE TO THE INTERIM STATEMENT CODE MEANING DA DB DC DD DF DG DH Dl DJ Request was previously processed and credit was granted on bill number entered in cc 54-58. Request was previously processed and credit was not granted. No billing action will be taken as material was issued on a non- reimbursable basis. (Not applicable to GSA.) Billing previously prepared under bill number in cc 54-58. Unable to render bill since this office has not record of cited requisition/bill number. Complete duplicate or corrected billing will be furnished. Bill for cited requisition will be rendered to subsequent billing cycle. Letter of explanation follows (billing office, when feasible, will enclose FAR/FAS or GAR/GAS or facsimile with letter). No record of a previous FAE or GAE. Your FAF or GAF converted to an FAE or GAE. 7-28 FIGURE 7-4(3) Adjustment Reply Codes ADJUSTMENT REPLY CODES INDICATING REQUIREMENT FOR ADDITIONAL DATA FROM THE FMS CUSTOMER CODE MEANING EA No record of previous FAE/GAE. Advice Code in cc 59-61 is not valid. Resubmit an FAE/GAE citing valid Advice Code. EB Document Number (30-43), excluding Advice Code 041, is incomplete/incorrect; FAE/FAF/GAE/GAF, excluding Advice Codes 019 and 041, contains Signal Code (cc 51) B or K and Supplementary Address (cc 45-50) is incomplete; FAE/FAF contains Advice Code 041 and DODAAD Code (cc 30-35) is incomplete. Review and resubmit. EC Bill Number in cc 54-58 is missing/incorrect. Bill Number in 74-80 is missing/incorrect and Advice Code is 01 1 or 031. ED Advice Code not valid in cc 59-61. EE NSN (cc 8-22) does not agree with Detail Material Billing Card and Advice Code is not 019, 022, 034, or 041. Review and resubmit. EF Records do not indicate duplicate shipment and/or billing or bill number cited. If duplication occurred on another bill, resubmit by letter citing both bill numbers. EG Data included in cc 23-24 and cc 74-80. which should be blank. Review and resubmit. EH Request submitted under Advice Code 022; however, NSN (cc 8-22) agrees with Detail Material Billing Card NSN. Review and resubmit. El Claim must be supported by appropriate documentation. EJ Claim must be supported by confirmation of cancellation. EK This office has no record of transaction. Review and resubmit to proper office, if appropriate. ER Signal Code (cc 5 1 ) is invalid. Review and resubmit (excludes Advice Codes 019 and 041.) ES This office has no record of receiving an original or copy of a discrepancy report. Review and resubmit an FAE with a copy of discrepancy report to this Accounting and Finance Office, if appropriate. 7-29 7266 "ADJ $ VAL" is the abbreviation for "Adjustment Dollar Value." The ADJ $ VAL entry in this column is the amount of the adjustment being made by the U.S. Navy. If the customer is being credited the letters "CR" will appear immedi- ately to the right of the amount. 7267 On the bottom line of the last page of the listing for each included CASE TOTALS in the Reply Listing to Customer Requests for Adjustments , there are three entries to the right of the "Case Totals" entry. These entries are: "COUNT," which shows the total number of "FKG" entries included on the listing for this case "CREDIT $ VALUE," which shows the total dollar value of credits granted to the customer under the applicable FMS case as a result of ad- justment actions listed in this report "DEBIT $ VALUE," which shows the total dollar value of charges (if any) against the applicable FMS case as a result of adjustment actions listed in this report. 7-30 7300 7301 EXPLANATION OF "WITHIN ONE YEAR OF SHIPMENT OR BILLING" SECTION C — AREAS OF SPECIAL INTEREST Paragraph 7201 states that ROIDs will not be accepted if they are re- ceived by NAVILCO "more than one year after the date when title of the material was transferred to the FMS customer, or one year after the material has been reported in a FMS Delivery Listing , whichever is later." Para- graphs 7203 and 7236 use the wording "date of shipment or billing, which- ever is later" and "date of shipment or inclusion in an FMS Delivery Listing . The vast majority of FMS shipments are made by methods which involve a transfer of material ownership, or title, from the U.S. Government to the FMS customer country at the time the material is shipped from the source of supply. Therefore, the "date of ship- ment" is usually the "date of title transfer" and the two wordings are used interchangeably. "Date of shipment" (or "shipping date") is used more frequently, because it is shorter. However, in those instances when the date of shipment and date of title transfer are not the same, the date of title transfer is the proper date which should be used in calculating the one- year period. Similarly, the phrases "date of billing" and "date material has been reported on a FMS Delivery Listing " mean the same things and are used interchangeably. In calculating the time limit within which ROIDs must be submitted, the FMS customer should determine whether the date of title transfer ("shipping date" or "date of shipment") or the billing date ("date of billing" or "date material is reported on a FMS Delivery Listing " ) is later. To whichever date is later, one year should be added. The result is the date by which NAVILCO must receive the ROID for it to be considered. 7-31 7302 CONSOLIDATED SHIPMENTS, A COMMON CAUSE OF INVALID ROIDs Paragraphs 7111 and 7112 stress the importance of thorough investigation to ensure that a suspected discrepancy is a true discrepancy before preparing and submitting a ROID. A common cause of invalid ROIDs stems from the shipment consolidated practices that are fol- lowed by the U.S. supply system. FMS customers will frequently receive consolidated shipments in which several items, each applicable to a separate requisition, are shipped to the customer in a single container. Frequently the external markings on the container and bill of lading (manifest, waybill, etc. ) will show only one of the many requisition numbers applicable to material inside the container. This number is called the "lead document number." The FMS customer's freight for- warder is often not permitted to open containers. In such a situation, the freight forwarder will record only the lead document number for a consoli- dated shipment, and only one item will be reported as having been shipped. Unless the container is opened promptly upon receipt in the FMS customer country the entire shipment may continue to be processed as if it contained only the item represented by the lead docu- ment number. Until the container is opened and its contents checked, the FMS customer will not realize that many items, applicable to many requisitions, have been received. When the items, other than that represented by the lead document, appear on the monthly statement of FMS Trans - actions , the FMS customer is likely to prepare and submit a ROID in the mistaken belief that material has not been received. The customer is handi- capped by the delay in gaining use of the material until the confusion is 7-32 7302 (Continued) 7303 RETURN OF DISCREPANT MATERIAL TO THE U.S. 7304 ROID FOLLOW-UP resolved, and by the needless effort of preparing and processing the ROID. Similarly, the U.S. supply system also expends needless effort in investigating the ROID to resolve the confusion. To avoid these delays and un- necessary work, FMS customers are urged to open containers and check their contents promptly after material arrives in the customer country. In some discrepancy situations (e.g., too much material shipped, wrong material shipped), the FMS cus- tomer will be directed to return dis- crepant material to a U.S. activity, and will be advised that credit is to be granted for the material. Shipment of the material to be re- turned should be made promptly, and NAVILCO should be provided with a copy of the shipping documents. The FMS customer will not be granted credit until NAVILCO receives copies of the shipping document confirming return of the discrepant material. In most instances, NAVILCO does not have sufficient information in its files to resolve ROIDs. This means that the necessary data must be obtained from other organizations in the U.S. supply system. This is a time-consuming process. Therefore, FMS customers should refrain from ROID follow-up until at least 120 days after receipt of NAVILCO acknowledgement that the original ROID has been received . If follow-up is initiated, it should be by letter. Do not prepare and submit a duplicate ROID or use another ROID to follow-up on the first. Also, since ROIDs are not MILSTRIP trans- actions, do not prepare a MILSTRIP follow-up for a ROID. 7-33 7305 Paragraph 7237 states that copies of pertinent documents should accompany IMPORTANCE OF ROIDs which are submitted to NAVILCO. COMPLETE The importance of careful preparation DOCUMENTATION and providing complete data to enable processing of the ROID by NAVILCO can- not be overemphasized. Be sure that: All available information is entered on the ROID (Stan- dard Form 364) . The ROID is signed. Each ROID is applicable to only one discrepant trans- action. 7-34 REFERENCES FOR CHAPTER 7 MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command (NAVSUP) Publication 437 (NSN 0530 LP 170 0083) Reporting and Processing of Discrepancy Reports Against Foreign Military Sales Shipments Defense Supply Agency (DSA) Regulation 4140.60 Naval Supply Systems Command Instruction (NAVSUPINST) 4920.9 7-35/(7-36 blank) CHAPTER 8. FINANCIAL OPERATIONS CHAPTER 8. FINANCIAL OPERATIONS TABLE F CONTENTS Page Number 8100 SECTION A- -INTRODUCTION 8-1 8110 8120 8121 8122 8130 8131 8132 8133 8134 8135 Introduction NAVCOMPT NAVILCO SAAC Price of Material or Services Administrative Costs Accessorial Costs Asset Use Costs Non-Recurring Costs Other Costs 8-1 8-1 8-1 8-2 8-2 8-2 8-4 8-6 8-6 8-6 8200 SECTION B--TERMS OF SALE AND BILLING AND COLLECTION PROCEDURES 8-7 8210 8211 8212 8213 8214 8215 8220 8221 8222 8223 8224 8225 8230 8231 8232 8233 8234 Terms of Sale Terms of Sale; Cash Terms of Sale; Credit DOD Direct Credit Agreements U.S. Government Guaranteed Loans Cooperative Logistics Supply Support Arrangements Billing and Collection Procedures: Introduction DD Form 1513; Financial Annex Financial Annex; Payment Schedule Payment Schedule Revisions FMSO-II and Repair Part Replenishment Cases Billing and Collecting DD Form 645; FMS Billing Statement DD Form 645; Heading and Blocks 1 Through 5 DD Form 645; DD Form 645; DD Form 645; Column 6 Column 7 Column 8 8-7 8-7 8-10 8-10 8-11 8-11 8-12 8-12 8-12 8-14 8-14 8-14 8-15 8-16 8-21 8-22 8-22 Page Number 8235 8236 8237 8238 8239 8240 8241 8242 8243 8244 8245 8250 8260 8270 8271 8272 8273 8274 8275 8276 8277 8278 8279 8280 8281 8282 8283 8284 DD Form 645; DD Form 645; DD Form 645; Line Entries DD Form 645; Entry DD Form 645 DD Form 645 DD Form 645 DD Form 645 DD Form 645 DD Form 645 DD Form 645 Column 9 Column 10 Administrative/Accessorial Progress Payments Line Case Total Entry Column 11 Column 12 Column 13 Column 14 Bill Total Entry Review Process Portion The Final Statement of FMS Transactions Collection Procedures FMS Delivery Listing, General FMS Delivery Listing, Heading FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, or Amount" FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, FMS Delivery Listing, "DOC I/D" "SHP DPT" "ENA" "Stock Number" "U/M" and "Quantity "Document Number" "SUP ADDR" "M/S" "ARC" "STMT NR" "DATE SHIP" "UNIT PRICE" "Extended Value" 8-23 8-23 8-24 8-24 8-25 8-25 8-26 8-26 8-26 8-26 8-27 8-27 8-31 8-32 8-32 8-33 8-34 8-34 8-34 8-34 8-34 8-35 8-35 8-35 8-35 8-35 8-35 8-35 8300 SECTION C--AREAS OF SPECIAL INTEREST 8310 Case Closure 8311 Reopening of Closed Cases 8320 Price Increase Controls, General 8330 Summary 8-37 8-37 8-37 8-38 8-38 INDEX OF FIGURES Page Number Terms of Sale/Type of Assistance (T/A) Combinations 8-8 Illustration of a Financial Annex With Payment Schedule 8-13 FMS Billing Statement, DD Form 645 8-17 FMS Delivery Listing 8-19 Final FMS Billing Statement, DD Form 645 8-29 CHAPTER 8. FINANCIAL OPERATIONS 8100 8110 INTRODUCTION SECTION A — INTRODUCTION FMS financial operations are related to nearly all topics discussed in other chapters of this manual. An understanding of the financial processes and procedures requires some familiarity with the following areas : FMS pricing "Terms of Sale" used in FMS cases Billing and collection procedures. This chapter will provide the FMS cus- tomer with necessary information on these topics . The Arms Export Control Act of 1976 requires that the U.S. military services recover the full costs of material and services furnished under the FMS program. Additionally, it stipulates that the U.S. Government will not "make a profit" from the FMS program. The pricing of items sup- plied, as well as surcharges which may be applied, reflect this requirement. 8120 NAVCOMPT 8121 NAVILCO In addition to responsibilities involv- ing funds distribution, accounting, control and reporting to agencies within the U.S. Government, NAVCOMPT provides policy and procedural guidance to U.S. Navy activities involved in the FMS process. NAVILCO is designated as the financial administrator for Navy-sponsored FMS programs Upon receipt of authority from SAAC, via NAVCOMPT, NAVILCO provides for the distribu- tion of funds to United States Government activities participating in Navy-sponsored FMS programs. NAVILCO operates an account- ing system used to control the obligations and expenditures incurred by activities participating in Navy-sponsored FMS programs. NAVILCO, via NAVCOMPT, is the central point of contact between the Navy and SAAC for detailed financial matters. 1-1 8122 SAAC As previously indicated, SAAC, under the direction and supervision of DSAA is responsible for all aspects of financial matters between the FMS customer country and the U.S. Department of Defense. SAAC handles billing and collection procedures with customer countries, reimbursement to U.S. Government appropriations, financial monitoring, and status reporting and account- ing both during the life of the case and at the time of final case closure. 8130 PRICE OF MATERIAL OR SERVICES 8131 ADMINISTRA- TIVE COSTS The price of material sold from U.S. Government stock to a foreign country is normally the replacement cost to the U.S. Department of Defense. This cost will re- flect the unit price charged by the supply system for issues made to U.S. Government activities. If, however, the item is to be replaced by purchase within one year, and the anticipated purchase price is higher than the current issue price, the customer country will be charged the anticipated purchase price. The price of items of material procured for FMS customers is the full cost charged to the U.S. Government by the supplier. In addition to the unit cost itself, additional associated costs are reflected in the material/service pricing. These can include the costs for services performed by U.S. Department of Defense personnel and the costs asssociated with the use of U.S. Government-owned facilities. An administrative charge is added to all FMS cases to recover U.S. Government costs associated with the execution and management of the FMS program. Categories of these costs include, but are not limited to, the following: Sales negotiations Price and availability preparation Case implementation 8-2 8131 . Routine procurement/contract administration (Continued) Processing Reports of Item Discrep- ancy (ROID) for overage, shortage, damage item deficiency and dupli- cate billing Program control Training case administration at command headquarters level. Administrative costs are normally assessed as a fixed percentage of the unit price of an item. The following are the currently prescribed administrative charge percentages : Supply Support Arrangements - 5 percent of the on-hand portion of the FMSO I case, including any amendments which increase the on- hand portion's value. No surcharge is applied to the FMSO I on order portion of inventory. A 3 percent charge is made on requisitions processed under FMSO II cases. Non-standard articles - 5 percent of the basic sales price. Other FMS orders - dependent upon date of case implementation by the U. S. Navy, as follows: 29 January, 1970 to 9 March, 1977: 2 percent or actual expense 10 March, 1977 to 30 September 1977: 2 percent 1 October, 1977 to present: 3 percent (Amendments to cases implemented prior to 1 October 1977 will be as- sessed a 2 percent charge). 8-3 8132 Accessorial costs represent expenses which have been incurred by the U.S. Govern- ACCESSORIAL ment in the issue, sale and/or transfer of COSTS materials which are not included in the unit price of the material nor are these expenses recovered by the administrative change. Accessorial costs are generally identified in three categories: Packing, Crating and Handling (PCH) Costs . The costs incurred in DOD facilities for labor, materials, or services in picking up requisi- tioned articles from storage or distribution points and processing necessary material release confir- mation documents. These costs are incurred on all articles sold from stock to FMS customers. Transportation Costs . The cost of DOD-provided or -financed inland transportation (land, air, inland and coastwise waterways) in the United States and outside the United States, and overseas trans- portation by vessel or air; in- cludes parcel post via surface or air. Note : Normally transportation of FMS material will be on commercial collect bill of lading to a cus- tomer country's freight forwarder. Port Loading and Unloading Costs . The cost of DOD-provided or -fi- nanced labor, materials or services for loading, unloading and handling at the ports of embarkation and debarkation. The transportation charges for the use of the DOD transportation system identified below include applicable loading and unloading costs. The rates accessed to an FMS customer are identified as follows: 8-4 TYPE OF COST EXPLANATION PERCENTAGE Packing Crating Handling Transportation Parcel Post *Delivery Terms Code (5) ^Delivery Terms Code (6) ^Delivery Terms Code (6) *Delivery Terms Code (7) Preparation of material with a unit price of $50,000 or less Preparation of material with a unit price greater than $50,000 First $50,000 Remaining $ (Includes port loading and handling where applicable) Shipment from point of origin to a continental United States destination including shipments to freight forwarders Shipment from point of origin to a U.S port of exit or to a freight forwarder in the U.S. Shipment from point of origin (includ- ing ocean transportation) to an over- seas port of discharge in Europe, Latin America, and the Mediterranean Shipment from point of origin (includ- ing ocean transportation) to all other overseas ports of discharge Shipment from point of origin (includ- ing ocean transportation) to a speci- fied overseas inland destination in Europe, Latin America, and the Mediterranean 3.5% 3.5% 1% 3.75% 10. 25^ 12.25% 14.25% *De livery Terms Code (7) Shipment from point of origin (includ- ing ocean transportation) to a speci- fied overseas inland destination in all other countries 16.25% ^Delivery Terms Code (8) Shipment from point of origin to and including unloading, handling and storage aboard vessel at U.S. port of exit 8-5 8132 (Continued) TYPE OF COST ^Delivery Terms Code (9) ^Delivery Terms Code (9) EXPLANATION PERCENTAGE Shipment from point of origin to and 11.25% including vessel discharge at an over- seas port in Europe, Latin America, and the Mediterranean Shipment from point of origin to and 13.25% including vessel discharge at all other overseas ports Additional information on delivery terms codes is available in Chapter 2, paragraph 2262. 8133 ASSET USE COSTS 8134 NON-RECURRING 8135 OTHER COSTS Asset use charges reflect costs for the use of U.S. Government plant and production and production equipment. The charges are applied as a percentage of the direct costs being billed. In the case of training, the percentage is applied to the entire course cost. Normally, asset use costs are 1 per- cent of the material base price for articles sold from DOD inventories and 4 percent of the direct cost for all other cases involving the use of DOD facilities. FMSO II material issues are considered sales from DOD inven- tories and are assessed at 1 percent. Non-recurring production costs and research and development costs are charged in instances where the same items are used by both the U.S. Government and the FMS customer. Costs of this nature are allocated proportionately to the U.S. Government and the FMS customer. Costs not specifically identified in paragraphs 8130 through 8134 but which are directly related in the provision of FMS material or services are proper charges to the FMS customer. 8-6 8200 SECTION B— TERMS OF SALE AND BILLING AND COLLECTION PROCEDURES 8210 TERMS OF SALE 8211 TERM OF SALE; CASH FMS cases can be financed under two "Terms of Sale": cash or credit . On an LOA a "Term of Sale" will be accompanied by a "Type of Assistance" code. This combina- tion provides the following information con- cerning the sale: The time of payment The source of supply (DOD stocks or procurement) The type of financing (cash or credit) . Several such combinations may be used on FMS case. This flexibility is provided to permit adapting each FMS case to the situation involved. For example, it may be desirable to provide for more than one sup- ply source and payment arrangement because of the number and types of articles or ser- vices being provided under the FMS case. Figure 8-1 provides a description of these combinations. This information is reflected in Block 27 of DD Form 1513 (Figure 1-4). Under this Term of Sale, the customer country either pays cash in full with the LOA acceptance or makes an initial deposit with LOA acceptance. The Security Assistance Accounting Center (SAAC) must be in receipt of the initial deposit (or full value in cases of cash with acceptance) before a case can be implemented. As described in Chapter 1, the FMS pro- cess involves many organizations. For this reason, some delay can be expected between the point of LOA signature by the customer country and the point of actual implementa- tion by the appropriate Case Administering Office (CAO). SAAC, as an example, must 8-7 FIGURE 8-1 Terms of Sale/Type of Assistance Combinations (T/A) TERMS OF SALE/TYPE OF ASSISTANCE COMBINATIONS TERMS OF SALE TYPE OF ASSISTANCE DEFINITION 1. "Cash with Acceptance" Code 3 Advance cash payment for articles from DOD stocks, and for DOD services the performance of which is to begin within 3 months after acceptance of the offer. 2. "Payment Prior to Commence- ment of Performance" Code 3 Advance cash payment for DOD services the performance of which is to begin no later than 3 months after acceptance of offer. 3. "$ Initial Deposit; Balance Prior to Commencement of Performance" Code 3 Combination of above. 4. "$ Initial Deposit; Balance as Billed" Code 4 Cash sale from source of supply not yet determined at time of offer. 5. "Cash with Acceptance" Code 5 Advance cash payment for articles and services from DOD procurement to be delivered/begun to be performed within 3 months after acceptance of offer. 6. "Dependable Undertaking" Code 5 Advance cash payment for articles and service from DOD procurement to be delivered/begun to be performed no later than 3 months after acceptance of offer. 7. "$ Initial Deposit; Balance on Dependable Under- taking" Code 5 Combination of the above. 8. "Payment on Delivery" Code 6 Cash payment on delivery of articles from DOD stocks. 8-8 FIGURE 8-1(2) Terms of Sale/Type of Assistance (T/A) Combinations TERMS OF SALE/TYPE OF ASSISTANCE COMBINATIONS TERMS OF SALE TYPE OF ASSISTANCE DEFINITION 9. "Payment on Commencement of Code 6 Cash payment on commencement of perfor- Performance" mance of DOD services. 10. "Payment on Delivery/Commence- ment of Performance " Code 6 Combination of the above. 11. "Dependable Undertaking with Code 7 Cash payment 120 days after delivery/ 120-Day Payment" commencement of performance of articles and services from DOD procurement. 12. "Payment 120 Days After Code 8 Cash payment 120 days after delivery of Delivery" articles from DOD stocks. 13. "Payment 120 Days After Code 8 Cash payment 120 days after commence- Commencement of Performance" ment of performance of DOD services. 14. "Payment 120 Days After Delivery/Commencement of Performance" Code 8 Combination of the above. L, "$ Initial Deposit; Code U Foreign Military Sales Order (FMSG) Balance as Billed" No. 1. 16. "$ Initial Deposit; Code V Foreign Military Sales Order (FMSO) Balance as Billed" No. 2. 17. "Credit Agreement (insert Code Z Sale of Articles or services from DOD purchaser) (insert 3-digit stocks or procurement, financed entirely credit agreement) dated or in part by DOD direct or guaranteed (insert date) " FMS credit. 8-9 8211 (Continued) 8212 TERM OF SALE; CREDIT 8213 DOD DIRECT CREDIT AGREEMENTS first verify that all financial and proce- dural requirements have been met. Then of- ficial "Obligational Authority" (authority for a CAO to initiate orders) must be pro- cessed through several U.S. Government agen- cies before the CAO receives authority from NAVILCO to implement the case. When the customer country pays an ini- tial deposit, SAAC will bill the unpaid portion of the case. This center provides the customer with a single source to which payments are made and to which queries con- cerning these payments can be made . Credit Sales can be arranged under two programs: DOD Direct Credit Agreements or U.S.G. Guaranteed Loans . Credit cases are administered by the Defense Security Assis- tance Agency (DSAA). Customer payments of principal and interest, for items received under credit sales, are based upon the terms of individual credit agreements . Under a DOD Direct Credit Agreement, the customer country negotiates with DSAA to determine the defense articles and ser- vices to be furnished, the credit limits, and terms of repayments and interest charges. Credit arrangements can be made at any time. Individual FMS cases can be financed partly in cash and partly on credit. The customer must insure that the value of orders placed under such financing does not exceed the amount of available credit. DSAA will moni- tor orders placed and, as required, inform the customer when the credit is fully uti- lized. The customer will receive periodic billings from DSAA through SAAC for principal and interest repayment based upon the terms of the credit agreement (cited on the Letter of Offer) and the completed promissory notes previously submitted by the customer country. Installment payments of principal and inter- est must be made directly to DSAA. 8-10 8214 USG GUARANTEED LOANS When credit agreements stipulate that all or part of the credit financing is to be provided to a customer country from pri- vate commercial sources, the U.S. Government has authority to provide a guaranty to the Federal Financing Bank (FFB) for loans ex- tended to finance FMS agreements and commer- cial military sales. This procedure is de- signed to assist both the purchasing country and the supply source in reaching mutually acceptable business arrangements and is sometimes referred to as a Military Sales Guaranty. Guaranty financing requires an agreement between the commercial financing source and the customer country, which out- lines terms of repayment of the loan, inter- est notes, documentation required, etc. A major difference between direct DOD Credit Agreements and U.S.G. Guaranteed loans is the way in which the interest rate is deter- mined and applied. The billing process is identical to that under Direct Credit Agree- ments. Upon receipt of billings, the purchas- ing country is responsible for furnishing required documentation to the commercial source involved. Payments to satisfy bill- ings are made directly to the Federal Re- serve Bank of New York (FFB account) and subsequently transferred to the Security Assistance and Accounting Center (SAAC). 8215 COOPERATIVE LOGISTICS SUPPLY SUPPORT ARRANGEMENTS The financial arrangements associated with Cooperative Logistics Supply Support Arrangements require special explanation. (Refer to Chapter 4.) The FMSO I case re- quires the customer to provide an initial deposit equal to the amount of estimated "on-hand equity." Under the FMSO I a cus- tomer also agrees to a responsibility for the value of the on-order requirement. This requirement is funded by dependable under- taking. Normally, FMSO II billings provide the cash necessary to finance contract de- liveries of stocks on order. However, under conditions of renegotiation or termination the customer may be assessed a billing repre- senting on-order requirements which will not be supported by subsequent demands . As stated in Paragraph 8131, the FMSO I also includes a 5 percent administrative charge. 8-11 8215 (Continued) The FMSO II case requires an initial deposit equal to the estimated value of deliveries within the first three months. Thereafter, billings are based upon antici- pated requirements within the succeeding three-month period. The FMSO II case in- cludes estimates for accessorial charges and a 3 percent administrative charge. Additionally, the FMSO II includes a storage charge equal to a 1.5 percent of the current FMSO I on-hand value. 8220 BILLING AND COLLECTION PROCEDURES ; INTRODUCTION As previously mentioned, SAAC provides a central point of contact for the customer country for all billing and collection mat- ters. All U.S. agencies involved in the FMS process provide logistics and financial information to SAAC via NAVILCO and NAVCOMPT. 8221 DD FORM 1513 FINANCIAL ANNEX 8222 FINANCIAL ANNEX; PAYMENT SCHEDULE All DD Forms 1513 contain Financial Annexes. The purpose of the annex is to provide a clear understanding between the customer country and the USG as to the rate and timing of the payments to be made and to amplify the "Terms" of the DD Form 1513. The annex thus provides budgetary planning data for the customer country. Figure 8-2 depicts a typical Financial Annex. Except for FMSO II and repair part replenishment cases, all financial annexes contain a payment schedule. Payment sched- ules project quarterly deposits due as of the 15th day of the last month of each cal- endar quarter — this date is normally the same as the due date of the quarterly billing statement. Each deposit amount should be sufficient to cover all costs and contingen- cies anticipated to be incurred on the pur- chaser's behalf during the quarter immedi- ately following the schedule payment. More specifically, a March 15 deposit requirement should provide for incremental payment of material, progress payments, services, ad- ministrative charges, accessorial charges, holdback, R&D, and any other applicable con- tingency or add-on costs through June 30. 1-12 FIGURE 8-2 Illustration of a Financial Annex With Payment Schedule SUPPLEMENTARY FINANCIAL TERMS AND CONDITIONS PROCUREMENT FOR CASH SALES ( DEPENDABLE UNDERTAKINGS) This transaction is financed under dependable undertaking terms of sale pursuant to Section 22 (a) of the Arms Export Control Act and pre- decessor legislation. This document supplements the obligation of the Purchaser under paragraph B.3.c. of Annex A of the Letter of Offer and Acceptance (DD Form 1513) . The Purchaser agrees to pay to the USG such amounts at such times as may be required by the U.S. Government (including any initial deposit set forth under "Terms") in order to meet payments required by contracts under which items are being processed. Quarterly billings for amounts due under this agreement will be for- warded by the Security Assistance Accounting Center (SAAC) , and payments (in U.S. dollars) will be forwarded to that organization in time to meet prescribed due dates. The Statement of Foreign Military Sales Trans- actions, DD Form 645, will serve as a statement of account and as a billing statement Attachment 1 will be an "FMS Delivery Listing". Killings will be forwarded by the SAAC not later than 45 days before such payments are due. Requests for duplicate billings, accessorial and administrative adjustments should be submitted to SAAC. Requests for supply adjustments are made to NAVILCO. In the event full payment is not made by the prescribed due date, interest shall be charged as outlined in General Conditions, paragraph B.3.g. of Annex A of the Letter of Offer (DD Form 1513). To assist the Purchaser in developing fiscal plans and annual budgets, the U.S. Government provides its best estimate of anticipated costs of this case in the following payments schedule: Case LT-P-LAT ESTIMATED PAYMENT SCHEDULE Payment Date Initial Deposit Amount 30 Jun 80 $18,329 30 Sep 80 13,492 31 Dec 80 73,316 It is emphasized that the initial deposit of $ 18,329 m ust accompany the purchaser's Letter of Acceptance as an integral part of acceptance. The above estimated payments schedule is provided for the convenience of the purchaser-it is neither binding on the U.S. Government nor will it be used as the basis for requesting payments from the purchaser. The purchaser will be required to make payments in accordance with quarterly billings, DD Form 645, issued by the SAAC. In the event the actual cash requirements differ materially from the Estimated Payments Schedule, the United States will use its best efforts to provide a revised payments schedule (DD Form 1513-2) at least 45 days prior to the next payment due date. It is understood that the values reflected on the Letter of Offer and Acceptance are estimates, and the final amount to be charged for items or services furnished will be equal to the final total cost to the United States. When final deliveries are made, and all costs are known, the SAAC will provide a "Final Statement of Account" which will indicate final costs of the case. Should this amount be more than funds collected, a final billing (immedately due and payable) will be concurrently provided. Should the amount be less than funds collected, such funds will be refunded upon subsequent request, or otherwise disposed of at the option of the purchaser, unless payments are overdue against other Foreign Military Sales cases, 8-13 8222 (Continued) 8223 PAYMENT SCHEDULE REVISIONS If initial deposits are required upon ac- ceptance of a sales agreement; the amount of initial deposits includes all costs and contingencies (e.g., contract holdback, potential termination liability) anticipated to be incurred until the first billing state- ment can be rendered and monies collected. Revisions to a payment schedule are made when: Price increases or decreases re- sult in substantive changes to the rates of payment shown on the existing Financial Annex Actual cash expenditures experi- enced by the U.S. Navy for FMS transactions exceed the cash flow received from the customer country in accordance with the existing payment schedule A formal amendment (DD Form 1513-1) is made which adjusts the case total value. 8224 FMSO II AND REPAIR PART REPLENISHMENT CASES 8225 BILLING AND COLLECTING Except for formal amendments, the DD Form 1513-2, Notice of Modification, is used to advise the customer country of revisions to the payment schedule. Replenishment cases are not conducive to payment schedules because of the incon- sistent pattern of demands against these types of cases. Therefore, in lieu of a payment schedule, payments are based directly upon active demands against the case. Upon receipt of a signed, accepted DD Form 1513, SAAC verifies that the required initial deposit has been remitted. The FMS case may then be implemented by the sponsor- ing U.S. service (Navy). (The FMS customer is notified by message that a "Pull" case has been implemented and that requisitions may be submitted to NAVILCO. ) Thereafter, quarterly, the case will be included in a Foreign Militar y Sales Billing Statement, DD Form 645 , which is prepared by SAAC. 8-14 8225 (Continued) The DD Form 645 will include a set of en- tries for each active FMS case . The DD Form 645 identifies the forecasted funding requirements for the succeeding 90-day pe- riod. In conjunction with this forecast, the billing statement identifies the cumula- tive current financial requirements including the 90-day forecast, and the amount of pay- ments received. The amount due and payable is equal to the cumulative financial require- ments, including the succeeding 90-day fore- cast, minus the total amount of payments received. Upon receipt of the DD Form 645, the customer should forward a check, payable to the Treasurer of the United States. The applicable FMS case should be clearly iden- tified on each check. The checks should arrive at SAAC no later than the due date shown in the heading of the statement. 8230 DD FORM 645, FMS BILLING STATEMENT Upon receipt of payment, SAAC deposits the funds and records the collection, credit- ing the customer's account. All payments received and deposited are reflected in the next billing statement. This process of reporting, billing, and collecting from the FMS customer con- tinues for each FMS case until all deliveries under the case have been completed, all financial charges have been reflected in billing statements, and final payment has been received by SAAC from the FMS customer. When all of this has taken place a separate, final statement is sent by SAAC, and the case is considered complete and closed. Paragraph 8225 provides a general over- view of the FMS billing and collection cycle, including a brief description of the FMS Billing Statement , DD Form 645. The billing statement serves as a billing document (re- quest for payment from the FMS customer); its contents are described in the following paragraphs . 8-15 8230 (Continued) 8231 DD FORM 645 HEADING AND BLOCKS 1 THROUGH 5 The DD Form 645 contains summary sec- tions for each open FMS case. There is a separate line entry for each record serial number (RSN) item which indicates current and projected delivery and financial information. There are separate line entries for administrative fees chargeable to the case and accessorial costs chargeable to the case. Another separate line entry indicates the cumulative value of progress payments chargeable to the case. The "case total" line entry is a total of all of the above figures. A final "bill total" line entry at the end of the statement summarizes each of the categories of financial information cited above for all FMS cases reported. In addi- tion, there is a section containing explana- tory notes, payment instructions, and the signatures of those U.S. officials who have reviewed and authenticated the statement. The FMS Billing Statement includes, as a separate attachment, an FMS Delivery Listing for each FMS case shown on DD Form 645. The listing gives detailed information for each delivery made against the case during the quarter for which the report is submit- ted. Figure 8-3 shows an example of the FMS Billing Statement . Paragraphs 8231 through 8270 explain report entries for the DD Form 645 in greater detail . Figure 8-4 shows an example of the FMS Delivery Listing . Paragraphs 8270 through 8283 explain delivery listing entries in greater detail. The heading of the Foreign Military Sales Billing Statement , DD Form 645, shows the title of the form. In the right-hand section of the heading is an indication of which U.S. Military department has cognizance of the FMS case for which the report is sub- mitted. Statements forwarded to FMS cus- tomers from SAAC always show the word "Navy" immediately following the words "Department of Defense" for cases which are administered by the U.S. Navy. 8-16 FIGURE 8-3 FMS Billing Statement DD Form 645 UNITED STATES OF AMERICA DEPARTMENT OF DEFENSE/NAVY IE' NUMBER: -3 PE FOR PERIOD ENDED: 79 MAR 31 5. DATE PREPARED: 79 APR 13 FINANCIAL STATUS AVE iSTS 4 OCESS 11. FORECASTED REQUIREMENTS (NOTE A) 12. TOTAL FINANCIAL REQUIREMENTS 13. CUMULATIVE PAYMENTS RECEIVED 14. AMOUNT DUE AND PAYABLE 76.50 ?6.43 11.53 3.97 15.86 4.29 10.79 15,840.00 1,276,080.08 67,094.29 10,973,360.87 57,846.00 ,782,450.93 9,248.29 2,190,909.94 EXPLANATORY NOTES I TERMS OF THE U.S. PUBLIC LAM, THE ARMS EXPORT CONTROL ACT, REQUIRE THE Mir OF DEFENSE TO COLLECT PAYMENTS FROM FOREIGN PURCHASERS IN ADVANCE OF THE TIME OUNCURS COSTS ON THE PURCHASER'S BEHALF. THEREFORE, THIS BILLING STATEMENT PAYMENT OF MONIES THAT ARE ANTICIPATED TO BE EXPENDED BETWEEN THE TIME THIS GTATEMENT IS PAID AND THE FOLLOWING BILLING STATEMENT IS PAID. SiSES CLOSED DURING THE CURRENT PERIOD. PAYMENT INSTRUCTIONS Nr IS DUE, YOUR CHECK IN U.S. DOLLARS, MADE PAYABLE TO THE TREASURER OF THE UNITED SHLD BE FORWARDED DIRECTLY TO: DISTANCE ACCOUNTING CENTER E XOUNTING AND FINANCE CENTER CC 80279 USA 8-17/(8-18 blank) FIGURE 8-3 FMS Billing Statement DD Form 645 UNITED STATES OF AMERICA FOREIGN MILITARY SALES BILLING STATEMENT DEPARTMENT OF DEFENSE/NAVY 1. TO: LAT onIA 2. THIS IS A BILLING STATEMENT 3. STATEMENT NUMBER: 4. FOR PERIOD ENDED: 5. DATE PREPARED: BASED ON CASH REQUIREMENTS. 79-03 PE 79 MAR 31 79 APR 13 NAVY PAYMENT IS DUE BY: 79 JUN 15 CASE IDENTIFICATION AND DELIVERY STATUS FINANCIAL STATUS 6. 7. 8. 9. 10. 11. 12. 13. 14. CASE TOTAL VALUE CUMULATIVE CURRENT PERIOD CUMULATIVE FORECASTED TOTAL FINANCIAL CUMULATIVE AMOUNT DUE 4 RSN OROERED DELIVERY COSTS END PRIOR PERIOD DELIVERY COSTS (ATTACHMENT 1) DELIVERY COSTS & WORK IN PROCESS REQUIREMENTS (NOTE A) REQUIREMENTS PAYMENTS RECEIVED AND PAYABLE LAT 4R1 54,442.00 AN/BOQ 21 22,009.00 3,567.50 25,576.50 4R2 14,400.00 SPARE PARTS 2,076.43 2,076.43 L6A 2,065.00 ADMINISTRATIVE 674.50 FEE 107.03 781.53 L0O 2,409.00 ACCESORIAL COS! 480.19 S 133.78 613.97 P/P PROGRESS PAYME1 TS 22,205.86 CASE TOTAL 73,316.00 25,240.12 3,808.31 51,254.29 15,840.00 67,094.29 57,846.00 9,248.29 BILL TOTAL 12.576.833.90 5.976.280.29 1,687,000.50 9,697,280.79 1,276,080.08 10,973,360.87 8,782,450.93 2,190,909.94 REVIEW PROCESS EXPLANATORY NOTES SIGNATURE NOTE A: THE TERMS OF THE U.S. PUBLIC LAW, THE ARMS EXPORT CONTROL ACT, REQUIRE THE DEPARTMENT OF DEFENSE TO COLLECT PAYMENTS FROM FOREIGN PURCHASERS IN ADVANCE OF THE TIME ANALYST: THAT DOD INCURS COSTS ON THE PURCHASER'S BEHALF. THEREFORE, THIS BILLING STATEMENT nrmicCTC n« vuriiT ap uniirrr tm at a n r- lliTT/*TniTFi\ ~m r\ r* rvynrnrirn nrxrirrii vnr Trur yiito REQUESTS PAYMENT Or MONIES THAT ARE ANTICIPATED TO BE EXPENDED BETWEEN THE TIME THIS QUAL] BRANCH CHIEF: BILLING STATEMEt * DENOTES CASES CI «■ IS PAID AND THE FOLLOWING BILLING STATEMENT IS PAID. [TY ASSURANCE: -OS ED DURING THE CURRENT PERIOD. AUTHENTICATION PAYMENT INSTRUCTIONS SIGNATURE IF A PAYMENT IS DUE, YOUR CHECK IN U.S. DOLLARS, MADE PAYABLE TO THE TREASURER OF THE UNITED STATES, SHOULD BE FORWARDED DIRECTLY TO: SECURITY ASSISTANCE ACCOUNTING CENTER C.K. Unger, CPA AIR FORCE ACCOUNTING AND FINANCE CENTER DIRECTOR, SAAC DENVER, CO, 80279 USA DD FORM 645 (JUN 78) PREVIOUS EDITIONS ARE OBSOLETE 8-17/(8-18 blank) FIGURE 8-4 FMS Delivery Listing [STING PERIOD ENDING 79 MAR 31 DATE PREPARED 79 MAR 13 79-03 PE RSN : 4R1 T ACTG B DATE UNIT EXTENDED DATE C DSC SHIP PRICE VALUE 7901 D 54 9120 10.00 100.00 7903 A 54 9012 139.30 3,482.50 7903 A 54 9012 9.54 95.40 7901 D 54 9015 22.08 110.40CR 3,677.90 110.40CR FACTORS 3.00 3.00 3.75 3.75 3.75 3,567.50 110.34 3.31CR 134.17 3.75 4.14CR 240.81 $3,808.31 8-19/(8-20 blank) FIGURE 8-4 FMS Delivery Listing U.S.DEPT/AGENCY: Navy COUNTRY: Latonia SERVICE: Navy DOC ID FKA FKA FKA FKB FKA FKB FKC FKD FKE FKF SHIP DEPOT S9G NNZ NNE S9G E N A STOCK UNIT QUAN NUMBER MEAS SHIP 519004721104V810 EA 00010 5960002805585 EA 00025 5961008824988 EA 00010 4190004721104V810 EA MATERIEL/SERVICE TRANSACTIONS MATERIEL/SERVICE TRANSACTIONS ADJUSTMENTS NET TOTAL FOR ABOVE TRANSACTIONS ADMINISTRATIVE COSTS ADMINISTRATIVE COST ADJUSTMENTS ACCESSORIAL COSTS LID PARCEL POST LIA CONUS ACCESSORIAL COST ADJUSTMENTS LID PARCEL POST NET TOTAL ACCESSORIAL/ADMINISTRATIVE COSTS NET TOTAL OF ALL TRANSACTIONS TOTAL CC SUMMARY OF ACCESSORIAL & ADMINISTRATIVE COSTS LID LIA LGA DOCUMENT NUMBERS PLT0482841638 PLTO4481820064 PLTO4481884036 0005CR PLT04482841538 $3,677.90 110.40CR 3,577.90 100.00 110.40CR 103.03 3.75 107.03 FMS DELIVERY LISTING S F X STATEMENT NR: CASE NR: LAT 79-03 PE RSN: 4R1 SUPP ADDR T M ACTG B S ARC DATE C DAZLAT DAZLAT DAZLAT DAZLAT CA CA 7901 7903 7903 7901 DSC 54 54 54 54 % FACTORS 3.00 3.00 3.75 3.75 3.75 PERIOD ENDING 79 MAR 31 DATE PREPARED 79 MAR 13 DATE UNIT EXTENDED SHIP PRICE VALUE 9120 10.00 100.00 9012 139.30 3,482.50 9012 9.54 95.40 9015 22.08 110.40CR 3 ,677.90 110.40CR 3 ,567.50 110.34 3 . 31CR 134.17 3.75 4.14CR 240.81 $3 ,808.31 8-19/(8-20 blank) 8231 (Continued) DD FORM 645 COLUMN 6 Block 1 of DD Form 645 shows the name of the FMS customer country and the military service within the customer country to which the cases included in the statement apply. The words "Latonia-Navy" in Figure 8-3 indi- cate that the FMS cases being reported in the statement are for material or services destined for the Latonian Navy. Block 2 of DD Form 645 shows the date (year-month-day sequence) when payment is due to be received by SAAC. For example, if payment is due by 15 May 1979, the entry in this block would show "79 May 15." Block 3 of DD Form 645 contains a "State- ment Number" consisting of the last two dig- its of the calendar year, two digits indicat- ing the month of the year to which the state- ment applies, and two alphas indentifying the customer country's paying office appli- cable to the cases for which a report is being submitted. For example, a report for the quarter ending in March 1979 (the third month of 1979) would show the statement number "79-03-PE." The "-PE" indicates which office of the customer country will make payment. Block 4 of DD Form 645 shows the date for the end of the quarter to which the report applies. "Year-month-day" sequence is used. For example, the statement for March 1979 would contain the entry "79 Mar 31" in block 4. Block 5 of DD Form 645 shows the date on which the report is prepared. For ex- ample, if the statement for March 1979 is prepared on 15 April 1979, the entry in block 5 will be "79 Apr 15." Column 6 , "Case S RSN," shows the three-letter case designator code of the case identifier for the FMS case to which entries on the lines immediately below apply. Lines immediately below the line showing the case designator contain entries for in- dividual Record Serial Numbers (RSNs) in the case. The RSN is a three-position code 8-21 8232 (Continued) 8233 DD FORM 645 COLUMN 7 8234 DD FORM 645 COLUMN 8 which identifies either one or a multiple of line items applicable to the DD 1513 Letter of Acceptance. The sum total of all RSNs for a given case equals the value of the case. If a case has been closed during the period for which a report is being submitted i U a ? t ^ 1Sk . si ? n <*> a PP e ^s and I separate Final FMS Billing Statement D D Form 645 is furnished as described in paragraph 8250. . , Additionally, this column contains identification of several other costs re- lated to the case: L6A - Administrative fees as re- flected in block 23 of the DD Form 1513. LOO - Accessorial costs as re- flected in blocks 22 and 25 of the DD Form 1513. P/P - Progress payments as reported to SAAC. These represent incre- mental payments to contractors for progressive completion of con- tractual requirements. Column 7 , "Total Value Ordered," shows rne total dollar value authorized for each RSN identified in column 6. This value reflects the amount shown on the DD Form 1513 increased or decreased by amendments which may have been made to the case No value is shown in this column for progress payments. * * Column 8 , "Cumulative Delivery Costs End Prior Period, » indicates the total cumulative dollar value of items applicable ™* RSN delivered (items shipped) to the FMS customer as of the end of the prior statement period. No value is shown in this column for progress payments. 8-22 8235 DD FORM 645 COLUMN 9 Column 9 , "Current Period Delivery Costs" (Attachment 1), shows the total dol- lar value of items applicable to the RSN delivered to the FMS customer during the statement period. The value shown in this entry is supported in detail by the FMS Delivery Listings which accompany the billing statement. (The FMS Delivery Listing is described in paragraphs 8270 through 8283.) This column can include the value of any billing adjustments reported as of the SAAC cutoff date for the report. 8236 DD FORM 645 COLUMN 10 Column 10 , "Cumulative Delivery Costs and Work in Process," shows the total cumu- lative dollar value charged to the FMS cus- tomer's account (deliveries plus expenditures for work in process) made with respect to the RSN. Examples of charges (in addition to those for delivered items) which might be included in this entry are: Research and development or similar non-recurring costs. Expenditures made by the U.S. Government for constructive de- livery of material or services. These could include progress pay- ments and that portion of such payments "held back" by the USG pending satisfactory contract completion. Charges for use of U.S. Government- owned capital assets involved in furnishing materials or sources to the FMS customer. An estimate of potential termina- tion liability includes all accrued direct and indirect costs and pro- fits of prime and subcontracts not covered by progress payments or holdback plus penalty contract cancellation charges for which Department of Defense would be liable. Potential termination liability charges do not include increased unit prices to other ongoing programs resulting from reduction in procurement quantity. 8-23 8236 (Continued) 8237 DD FORM 645 ADMIN./ ACCESSORIAL LINE ENTRIES 8238 DD FORM 645 PROGRESS PAYMENTS LINE ENTRY u 4-u Th ? t ? tal of column 10 entries includes both actual and planned performance. The ?S I ?£ c ° lumn 8 P lus ^ will equal column M f ^ tlme ° f ca ^e closure. For materia] RSNs column 8 plus 9 will equal the corres- ponding column 10 entry throughout the life of the case. For material RSNs column 10 will equal the cumulative actual deliveries tor that material line. The remaining fi- nancial requirements will be accummulated and identified in column 10 to progress payment RSN. The progress payments RSN will never reflect an entry in columns 8 and 9. For each case for which a report is being submitted in the FMSBniingstatement there is a separate line with entries in columns 6 through 10 showing the total Administr ative Fees which are chargeable to the entire case. Similarly, there is also a separate line with entries in columns 6 through 10 showing the total Access orial Costs which are chargeable to the case — (Administrative fees and accessorial costs are defined in paragraphs 8131 and 8132.) The DD Form 645 will include an RSN identified as »PP» Progress Payments. Pro- gress Payments refer to payments made to contractors for work performed towards the completion of a task (usually a major equip- ment). This DD 645 line item also includes any other work in process financial require- ments, contract holdback, termination lia- bility and other authorized financial re- quirements which are not directly identified to a delivery of material or completion of a service. This line item may continue to indicate a dollar amount until the case is closed. The progress payment RSN is contin- ually reconciled to deliveries and completed services such that when the requirements of a case are completed, financial requirements are directly attributable to a delivery or completed service and the line indicates a zero balance. 8-24 239 D FORM 645 ASE TOTAL NTRY For each case reported in the FMS Bill - ing Statement , the last line applicable to the case contains "Case Total" entries in columns 6 through 14. Entries in columns 6 through 10 are the sums of the individual lines above. Entries for columns 11 through 14 are "Total" lines. 240 •D FORM 645 IOLUMN 11 United States law, specifically the Arms Export Control Act, requires that funds or cash be on deposit with the U.S. Treasury- prior to the Department of Defense incurring expenditures. Note A of the DD Form 645 clearly states this requirement. Column 11 on the DD Form 645 "Forecasted Requirements," identifies the amount of anticipated finan- cial requirements for the FMS case during the succeeding calendar quarter following the payment due date of the billing state- ment. This value is generally based upon the financial annex payment schedule; how- ever, it may be adjusted depending upon the actual performance of the case. As discussed in paragraph 8223, the value identified in Column 11 for FMSO II and other spare and repair part cases is derived from actual demands against the case. The amount indi- cated is a composite of all financial re- quirements including: Material or services expected to be delivered during the forthcoming period. This projection is based on "Required Delivery Dates" or "Forecasted Delivery Dates" appli- cable to the requisitions for the material or services. Bills for progress payments ex- pected from suppliers during the forthcoming quarter. This pro- jection is based on the payment provisions of the contracts under which items are being supplied and actual supplier performance toward completion of the contracts. Additional financial requirements. These could include such items as administrative and accessorial charges, asset use charges, and research and development costs . 8-25 8241 DD FORM 645 COLUMN 12 8242 DD FORM 645 COLUMN 13 8243 DD FORM 645 COLUMN 14 8244 DD FORM 645 BILL TOTAL ENTRY Column 12 , "Total Financial Require- ments," is the sum of the entries in column 10 ("Cumulative Delivery Costs & Work in Process") and column 11 (Forecasted Require- ments") for each FMS case reported on the billing statement. This entry represents the total cumula- tive amount of financial requirements through the succeeding quarter. The dollar amount indicated is the cumulative amount which the customer is required to have paid to the U.S. Government as of the date specified in block 2 of the DD Form 645 . Column 13 , "Cumulative Payments Re- ceived," shows the total cumulative dollar value of payments applicable to the case which have been received by the U.S. Govern- ment as of the end of the quarter for which the report is being submitted. Column 14 , "Amount Due and Payable," shows the total dollar amount, applicable to the FMS case, that is currently due the U.S. Government and remains unpaid by the FMS customer country. This amount is equal to the difference between the amount shown in column 13 ("Cumulative Payments Received") and the amount shown in column 12 ( "Total Financial Requirements"). The customer should forward this payment so that it reaches SAAC no later than the due date shown in block 2 of DD Form 645. Payment of this amount com- pletes fulfillment of the current payment requirements applicable to the case. The last line entered on the FMS Billing Statement contains entries in all columns. The entries in each column on this line are the sums of previous entries in each "Case Total" line appearing on all pages of the FMS Billing Statement . This line provides an overall financial summary of the total FMS program administrated for the customer country by the U.S. Navy. 8-26 8245 DD FORM 645 REVIEW PROCESS PORTION The "Review Process" section in the lower left-hand portion of DD Form 645 con- tains the signatures of the U.S. personnel at SAAC who have prepared and checked the data contained in the statement. The "Au- thentication" section contains the signature of the U.S. official certifying to the FMS customer that the information contained in the report is official and that payment is requested. The "Explanatory Notes" section in the lower right-hand portion of DD Form 645 explains the meaning of "Note A" and the "*" symbol. The "Payment Instructions" section identifies the mailing address of SAAC. This is the address to which the pay- ment required (as shown in column 14), should be sent. 8250 THE FINAL STATEMENT OF FMS TRANSACTIONS When an FMS case is closed , the billing statement covering the quarter in which closure is accomplished shows an asterisk sign (*) preceding the three-letter case designator code in column 6 of the DD Form 645. In addition, a separate DD Form 645, annotated as a "Final Statement of Account" and applicable only to cases closed during the quarter for which the report is sub- mitted, is furnished with the billing state- ment. Figure 8-5 depicts Final Statement of Account. Points to be noted concerning the final statement include the following: Entries for a closed case are the same on the quarterly billing statement as entries for that case on the final statement. Column 9 of both the interim and final statements may or may not contain an entry for the quarter in which a final statement is rendered. The sum of the values in columns 8 and 9 equals the value shown in column 10. 8-27/(8-28 blank) FIGURE 8-5 Final FMS Billing Statement DD Form 64 5 UNITED STATES OF AMERICA DEPARTMENT OF DEFENSE/Navy 4. FOR PERIOD ENDED: 79 MAR 31 5. DATE PREPARED: 79 APR 13 FINANCIAL STATUS .. FORECASTED REQUIREMENTS (NOTE A) 12. TOTAL FINANCIAL REQUIREMENTS 73,316.00 13. CUMULATIVE PAYMENTS RECEIVED 73,316.00 14. AMOUNT DUE AND PAYABLE EXPLANATORY NOTES )F THE U.S. PUBLIC LAM, THE ARMS EXPORT CONTROL ACT, REQUIRE THE -NSE TO COLLECT PAYMENTS FROM FOREIGN PURCHASERS IN ADVANCE OF THE TIME )STS ON THE PURCHASER'S BEHALF. THEREFORE, THIS BILLING STATEMENT )F MONIES THAT ARE ANTICIPATED TO BE EXPENDED BETWEEN THE TIME THIS IS PAID AND THE FOLLOWING BILLING STATEMENT IS PAID. >ED DURING THE CURRENT PERIOD. PAYMENT INSTRUCTIONS i YOUR CHECK IN U.S. DOLLARS, MADE PAYABLE TO THE TREASURER OF THE UNITED JRWARDEO DIRECTLY TO: ACCOUNTING CENTER » AND FINANCE CENTER USA ws t 5, 8-29/(8-30 blank) FIGURE 8-5 Final FMS Billing Statement DD Form 64 5 FOREIGN MILITARY SALES BILLING STATEMENT 1. TO: LATONIA NAVY THIS IS A FINAL STATEMENT OF ACCOUNT CASE IDENTIFICATION AND DELIVERY STATUS 6. CASE 4 RSN 7. TOTAL VALUE ORDERED 8. CUMULATIVE DELIVERY COSTS END PRIOR PERIOD CURRENT PERIOD DELIVERY COSTS (ATTACHMENT I) UNITED STATES OF AMERICA DEPARTMENT OF DEFENSE/Navy 3. STATEMENT NUMBER: 79-03 PE 4. FOR PERIOD ENDED: 79 MAR 31 5. DATE PREPARED: 79 APR 13 FINANCIAL STATUS 10. CUMULATIVE DELIVERY COSTS & WORK IN PROCESS 11. FORECASTED REQUIREMENTS (NOTE A) 12. TOTAL FINANCIAL REQUIREMENTS 13. CUMULATIVE PAYMENTS RECEIVED 14. AMOUNT DUE AND PAYABLE 'LAT 4R1 4R2 L6A L0O CASE TOTAL 54,442.00 AN/BOQ 21 14,400.00 SPARE PARTS 2,065.00 ADMINISTRATIVE 2,409.00 ACCESSORIAL COSlTS ?EE 73,316.00 54,442.00 13,398.00 2,032.80 2,255.81 72,128.61 1,002.00 32.20 153.19 1,187.39 54,442.00 14,400.00 2,065.00 2,409.00 73,316.00 73,316.00 73,316.00 REVIEW PROCESS EXPLANATORY NOTES SIGNATURE ANALYST: BRANCH CHIEF: QUALITY ASSURANCE: NOTE A: THE TERMS OF THE U.S. PUBLIC LAW, THE ARMS EXPORT CONTROL ACT, REQUIRE THE DEPARTMENT OF DEFENSE TO COLLECT PAYMENTS FROM FOREIGN PURCHASERS IN ADVANCE OF THE TIME THAT DOD INCURS COSTS ON THE PURCHASER'S BEHALF. THEREFORE, THIS BILLING STATEMENT REQUESTS PAYMENT OF MONIES THAT ARE ANTICIPATED TO BE EXPENDED BETWEEN THE TIME THIS BILLING STATEMENT IS PAID ANO THE FOLLOWING BILLING STATEMENT IS PAID. * DENOTES CASES CLOSED DURING THE CURRENT PERIOD. AUTHENTICATION PAYMENT INSTRUCTIONS SIGNATURE C.K. Unger, CPA DIRECTOR, SAAC IF A PAYMENT IS DUE, YOUR CHECK IN U.S. DOLLARS, MADE PAYABLE TO THE TREASURER OF THE UNITED STATES, SHOULD BE FORWARDEO DIRECTLY TO: SECURITY ASSISTANCE ACCOUNTING CENTER AIR FORCE ACCOUNTING AND FINANCE CENTER DENVER, CO, 80279 USA DD FORM 645 (JUN 78) PREVIOUS EDITIONS ARE OBSOLETE 8-29/(8-30 blank) 8250 • There is no value shown in column 11 of the final statement. (Continued) Entries in columns 7, 10, 12 and 13 of the final statement are equal . Closed cases which have been annotated with an asterisk sign (*) on an FMS Billing Statement , DD Form 645, and for which a final statement has been provided, are not reported on future FMS Billing Statements . 8260 The description of the billing statement contained in paragraphs 8230 through 8245 shows COLLECTION how the FMS Billing Statement tells the FMS PROCEDURES customer the following information: How much is owed to the U.S. Gov - ernment in order to fulfill current financial obligations under each case and for the entire FMS program administered by the U.S. Navy (column 14 of DD Form 645 described in paragraph 8151) The date by which payment should be received at SAAC in fulfillment of these obligations (block 2 of DD Form 645 described in paragraph 8231) The mailing address to which the payment should be sent (the "Payment Instructions" section of DD Form 645, described in paragraph 8227). Paragraph Bl of the "Conditions" on the reverse of the letter of Offer and Acceptance , DD Form 1513, (to which the FMS customer and the U.S. Government agree when a case is established), specifies that payment will be made in U.S. dollars, payable to the "Treasurer of the United States." Normally, payment is made by means of a dollar check forwarded to SAAC by mail. 1-31 8260 (Continued) It is important that the payment docu- ment identify the FMS case to which the payment is to be applied. If the FMS cus- tomer wishes to send a single check in payment for more than one case, instructions must accompany the payment. These must indicate clearly to which cases the customer wishes the payment to apply, and how much of the total amount forwarded is to apply to each case. 8270 FMS DELIVERY LISTING, GENERAL 8271 FMS DELIVERY LISTING HEADING As soon as the payment is received at SAAC, it is recorded and the FMS customer's account for the applicable case(s) is cred- ited. The payment is then deposited with the U.S. Treasury and the collection process is complete. The payment becomes a part of the "Cumulative Payments Received" entry for the case reported in column 13 of the next FMS Billing Statement , DD Form 645. Attachment 1 to the FMS Billing State - ment is the FMS Delivery Listing . This is a separate machine listing for each FMS case which reflects an entry in column 9 of the FMS Billing Statement , DD Form 645. The FMS Delivery Listing provides the detailed information for each delivery transaction that forms a part of the total value of deliveries shown for the case in column 9 ("Current Period Delivery Costs - Attach- ment 1") of the DD Form 645. Figure 8-4 is a sample of an FMS Delivery Listing . The uppermost line of the FMS Delivery Listing heading shows : The U.S. Department/Agency managing the case (i.e., U.S. Navy) The title of the listing The ending date of the reported period. The second line shows: The customer country The applicable FMS Billing State- ment number 8-32 8271 (Continued) 8272 FMS DELIVERY LISTING, "DOC I/D" The date on which the listing was prepared. The third line shows : The customer country's military service/organization responsible for the case. The three-character case designator. The specific Record Serial Number (RSN) to which the listing applies. The date on which the FMS Delivery Listing was prepared. (This will be the same date shown in block 5, the "Date Prepared" section of DD Form 645. ) Entries in the "DOC I/D" column of the FMS Delivery Listing identify the document, or type of transaction, reported on that line. Document identifier codes and their meanings are shown below. FKA: Material shipments and charges FKB: Adjustments to material charges which were itemized on an earlier FMS Delivery Listing FKC: Administrative charges FKD: Adjustments to administrative charges which were included on an earlier FMS Delivery Listing FKE: Accessorial charges FKF: Adjustments to accessorial charges which were included on an earlier FMS Delivery Listing . 8-33 8273 FMS DELIVERY LISTING, "SHP DPT" 8274 FMS DELIVERY LISTING, "ENA" The abbreviation "SHP DPT" stands for "Shipping Depot." The entry in this column shows the U.S. Military Standard Requisition- ing and Issue Procedure (MILSTRIP) Routing Identifier of the activity which shipped the item. A complete listing of these routing identifiers (R/Is) is contained in Appendix 10 of the MILSTRIP/MILSTRAP Operating Pro - cedures Manual , Naval Supply Systems Command (NAVSUP) Publication 437. In the event that shipment was made by a commercial contractor, the entry in this columi is the MILSTRIP R/I of the activity which aware c the contract to the supplier. "ENA" is the abbreviation for "Estimated, Incremental, or Actual." The letter "E," "N, " or "A" appears in the entry for this column and indicates the nature of the charge shown in the "Extended Value" column. "E" indicates that the charge is estimated. "N" indicates that the charge is incremental. "A" indicates that the charge reflects ac- tual costs to the customer. 8275 FMS DELIVERY LISTING, STOCK NUMBER Entry in this column will identify the material or service to a National Stock Number, training course number, publication number, phrase "service," etc. 8276 FMS DELIVERY LISTING, "U/M" AND "QUANTITY OR AMOUNT" 8277 FMS DELIVERY LISTING, "DOCUMENT NUMBER" "U/M" is an abbreviation which stands for "unit of measure." Entries in these two columns indicate the unit of measure, or unit of issue, of the material and the quan- tity of amount (i.e., the number of units of measure) involved in the transaction being reported on that line of the FMS Delivery Listing . Entries in the "Document Number" column identify the requisition to which the ship- ment applies. Paragraphs 2260 through 2264 of Chapter 2 describe the composition of a document number. The symbol "XX" refers to expentidures made for work or services per- formed in lieu of material deliveries. 8-34 8278 FMS DELIVERY LISTING, "SUP ADDR" 8279 FMS DELIVERY LISTING, "M/S" 8280 FMS DELIVERY LISTING, "ARC" 8281 FMS DELIVERY LISTING, "STMT NR" 8282 FMS DELIVERY LISTING, "DATE SHIP" "SUP ADDR" is an abbreviation for "sup- plementary address." Entries in this column contain the same supplementary address as shown on the original requisition. Composi- tion of the supplementary address is de- scribed in detail in paragraphs 2267 through 2269 of Chapter 2. "M/S" is the abbreviation of "mode of shipment." Entries in this column contain the MILSTRIP code indicating the method by which material was shipped. A listing of these codes and their meanings is provided in Figure 2-23 in Chapter 2. "ARC" is the abbreviation for "adjust- ment reply code." An entry appears in this column only if the line item on the listing is a result of a request initiated by the FMS customer. Figure 7-4, in Chapter 7, pro- vides a listing of Adjustment Reply Codes and their meanings. Entries in "STMT NR" (Statement Number) column contain the first four digits of the number shown in block 3, "Statement Number," in the heading of the FMS Billing Statement , DD Form 645. This entry is described in paragraph 8231. Entries in the "DATE SHIP" column show the date on which material was shipped. Entries in this column are in "Julian Date" format as explained in paragraph 2263. 8283 FMS DELIVERY LISTING, "UNIT PRICE" Entries in the "UNIT PRICE" column show the price charged the FMS customer for each Unit of Issue (or unit of measure) of ma- terial furnished. This price is in U.S. dollars and cents. 8284 FMS DELIVERY LISTING, "EXTENDED VALUE" Entries in the "EXTENDED VALUE" column show the total money value of the transac- tion represented by the line item. 8-35/(8-36 blank) 8300 8310 CASE CLOSURE 8311 REOPENING OF CLOSED CASES SECTION C — AREAS OF SPECIAL INTEREST FMS cases are "closed" after the following criteria are met: All new procurement action is ceased. All deliveries are complete. All charges have been billed to the FMS customer. Payment has been received from the customer for the total amount of charges billed. SAAC assures that the total case value equals or exceeds final delivery value. All work and services have been completed. When a case is closed, it is annotated with an asterisk sign (*) in column 6 ("Case & RSN" ) of the next Foreign Military Sales Billing Statement as described in paragraph 8232. Any excess funds (credits) which may exist at the time of case closure are trans- ferred to the customer. A separate, final FMS Billing Statement , DD Form 645, is then provided as depicted in Figure 8-5. In some instances, it is necessary to reopen previously closed cases. This usually happens because unforeseen financial charges or credits (sometimes caused by resolution of ROIDs submitted by the customer) must be accommodated. In some instances, such finan- cial charges or credits may be accommodated through special financial arrangements with the customer country. When it is determined that use of such arrangements would be un- desirable or inappropriate, the reopening of a previously closed case can be effected by NAVILCO, which processes the finished adjustment to SAAC. 8-37 8320 PRICE INCREASE CONTROLS , GENERAL The values stated in the Letter of Offer and Acceptance , DD Form 1513, which is agreed to by the FMS customer country and the U.S. Government, are estimated costs, not fixed delivery prices. However, there number of ways in which the FMS customer is protected from unreasonable price increases. These include: 8330 SUMMARY All purchase contracts made by the U.S. Government with commercial suppliers require that the supplier charge no more than the lowest price for which the item is sold to any other customer under equiv- alent circumstances. Items issued from U.S. stocks on hand are charged to the FMS cus- tomer at no more than their total replacement cost to the U.S. Gov- ernment, plus appropriate acces- sorial charges. When the aggregate price of items being supplied reaches a value equal to case value, new supply action will be suspended until funding authorization is increased. Suspen- sion of new supply action may occur at a value less than 100 percent of case value depending upon the type of case. The cus- tomer will be notified of this condition on "Pull" cases. This chapter has described: The elements of FMS pricing The different types of financing arrangements for FMS cases The billing and collection proced- ures in FMS The NAVCOMPT, NAVILCO and SAAC roles The contents and purposes of the FMS Billing Statement and Associ- ated Delivery Listing 8-38 8330 . Special areas of interest such as: (Continued) - Case closure Price increase controls. All of these subjects affect financial operations under the FMS program. Many also influence other aspects of the program dis- cussed in detail in other chapters. Where this condition applies, reference to the pertinent portions of other chapters is provided. With the above-noted information, the reader should now have a broad under- standing of financial operations, and the ability to better understand and use finan- cial reports provided by SAAC. 8-39/(8-40 blank) CHAPTER 9. REPORTS CHAPTER 9. REPORTS TABLE OF CONTENTS Page Number SECTION A— OVERVIEW 9-1 Categories of FMS Reports: Supply, Financial, and Discrepancy Action 9-1 Supply Reports; Supply Status Card 9-1 Supply Reports; FMS Quarterly Requisi- tion Report 9-2 Financial Reports; The Foreign Military Sales Billing Statement, DD Form 645 9-2 The Quarterly FMS Billing Statement, DD Form 645 9-3 FMS Delivery Listing 9-3 Discrepancy Action Reports; Reply to Customer Requests for Adjustment 9-3 Distribution of Reports 9-4 The Principle of Confidentiality 9-4 Summary 9-5 SECTION B--DETAILED DESCRIPTION 9-7 The FMS Quarterly Requisition Report 9-7 Heading and First Line Entry 9-8 Country 9-11 Customer Service Designator 9-11 Case 9-11 "As Of" and "Preparing Activity" 9-11 Document Number 9-11 NATL Stock NR (NSN) 9-11 Item Name 9-12 UI 9-13 QUANT 9-13 DC 9-13 PRJ CDE 9-13 PR 9-13 ESD 9-13 ST CD 9-14 DATE STAT 9-14 RIC 9-14 MD 9-15 SHIP-SER NR or CONT/WRK Order 9-15 Page Number 9230 UNIT PR 9-16 9231 EXTENDED PR 9-16 9232 Totals Case 9-16 9233 "Summary Totals CSD" and "Summary Totals Country" 9-16 9300 SECTION C — AREAS OF SPECIAL INTEREST 9-19 9310 Use of Reports Described in This Chapter; Supply Status Cards 9-19 9311 Use of Reports; the FMS Quarterly Requisition Report 9-19 9312 Use of Reports; Monthly Reply to Customer Requests for Adjustment 9-20 9313 Use of Reports; the FMS Billing Statement 9-20 9320 Importance of Prompt Review 9-20 9330 Customer Requirements for Reports 9-21 9340 Summary of Chapter 9 9-22 REFERENCE FOR CHAPTER 9 9-24 INDEX OF FIGURES Page Number )-l FMS Quarterly Requisition Report 9-9 CHAPTER 9 REPORTS 9100 9110 CATEGORIES OF FMS REPORTS: SUPPLY, FINAN- CIAL, AND DIS- CREPANCY ACTION 9111 SUPPLY REPORTS; SUPPLY STATUS CARD SECTION A— OVERVIEW The recurring reports provided by the U.S. Navy International Logistics Control Office (NAVILCO) and by the Security Assistance Accounting Center (SAAC) to FMS customers have been de- scribed in other chapters of this guide. FMS customer reports fall into three broad categories : Supply Management Reports Financial Management Reports Discrepancy Action Reports. This chapter provides a convenient summary of the reports available to FMS customers, their intended distribu- tion, a detailed description of each, and how FMS customers can make the best use of these reports. Within the Supply Management cate- gory, two types of reports are furnished These are: Supply Status Card . This report furnishes Military Standard Requisitioning and Issue Procedure (MILSTRIP) status information to the customer on DD Form 1348M, with Document Identifier AE2, as described in paragraphs 2280 to 2287 in Chapter 2. Each status report applies to a single MILSTRIP requisi- tion. Status report cards are not made on a fixed schedule . Rather, they are provided to the customer as changes occur in requisition status or when a status request has been initiated by the customer. They are also produced when the customer initiates a re- quest for requisition infor- mation or changes data in a requisition. 9-1 9112 SUPPLY REPORTS FMS QUARTERLY REQUISITION REPORT The Foreign Military Sales Quarterly Requisition Reports , This report is described m paragraph 2181 in Chapter 2. The report is prepared by NAVILCO every 3 months, ap- proximately 30 days after the end of each calendar quar- ter. It provides for each FMS case a listing of all requisitions, by case and document number, received by NAVILCO but for which ship- ment to the customer has not been made. Requisitions for which shipment has been made or cancellation action has been taken since the last previous FMS Quarterly Requi - sition Report (i.e., those shipped during the preceding 3 months) are also shown. Shipments made and reported on a previous quarterly requi- sition report are not listed in the following quarterly report. Requisitions will be reported on each cycle of the report until the material is shipped or the requisition is can- celed. Then the requisition will ap- pear one time on the report, for the quarter in which the item was shipped or canceled. 9120 FINANCIAL REPORTS; THE FOREIGN MILITARY SALES BILLING STATEMENT, DD FORM 645 In the Financial Management cate- gory there is one basic report furnished to FMS customers. This report is the Foreign Military Sales Billing State - ment , DD Form 645. It is issued as a billing statement . The DD Form 645 report is described in paragraphs 8230 through 8245 and in Figure 8-4 in Chapter 8 . 9-2 9121 THE QUARTERLY FMS BILLING STATEMENT, DD FORM 645 9122 FMS DELIVERY LISTING 9130 DISCREPANCY ACTION REPORTS; REPLY TO CUSTOMER REQUESTS FOR ADJUSTMENT The FMS Billing Statement , DD Form 645, is generally issued every 3 months. The FMS Billing Statement is a request for payment. In addition, the billing statement provides : A forecast of expenditures during the next 3 -month period A statement of payments re- ceived from the FMS customer A statement of the payment due (if any) from the FMS customer. The last line entered on the DD Form 645 is total sum of each of the columns of information provided above it in the report. This line entry represents the total value for all the open FMS cases, by Customer Service Designator (CSD). The FMS customer should treat the FMS Billing Statement , DD Form 645, as a request for payment and should remit payment to SAAC in the amount shown as being due. An attachment to the DD Form 645 is the FMS Delivery Listing . It pro- vides detailed delivery information for each RSN entry on the DD Form 645 which it supports. Figure 8-5 illustrates the FMS Delivery Listing . The single report in the "Discrep- ancy Action Report" category is the monthly Reply to Customer Requests for Adjustments . This report is described in paragraphs 7252 through 7267 in Chapter 7. It summarizes all processed Reports of Item Discrepancy (ROIDs), SF 364, for material or billing adjust- ments received from the FMS customer for which SAAC has recorded action pro- cessed during the reporting month. The monthly Reply to Customer Requests for Adjustment listing accompanies the FMS Quarterly Billing Statement . It also includes a copy of each processed ROID, 9-3 9130 (Continued) 9140 DISTRIBUTION OF REPORTS 9150 THE PRINCIPLE OF CONFIDENTIALITY SF 364, included in the listing. In addition, if the customer country uses mechanized procedures, Adjustment Re- quest Reply Cards (Document Identifier "FKG" ) also will accompany the listing. At the beginning of a country's FMS program, the customer country des- ignates to whom each of the reports described above should be sent. Fre- quently, the different reports will go to different addressees. For example, the FMS customer may wish to have: Status information go to the attache in Washington, D.C. Quarterly Requisition Reports go to the country's Navy sup- ply headquarters FMS Billing Statements go to the attache . The listing above is illustrative only. It is not intended to imply a recommended recipient for the reports. Each customer should decide which part of his organizational structure can most effectively act on the information in each of the reports. These are the offices which should be designated to receive the reports. If experience shows that a change in the distribution of a report should be made, it can be done by a letter request for change to NAVILCO or to SAAC, whichever office prepares the report involved. Reports furnished to FMS customers are "UNCLASSIFIED," as defined in para- graph 6114, Chapter 6. Nevertheless, the U.S. Navy and SAAC follow the prin- ciple of confidentiality and do not disclose details concerning a customer country's FMS program to other countries. This principle is followed with respect to the reports described in this chapter, as well as all other FMS program data. 9-4 9160 Section A has briefly described the reports which are provided to FMS SUMMARY customers by SAAC and the U.S. Navy (from NAVILCO). Section B of this chapter describes the FMS Quarterly Requisition Report in greater detail. 9-5/(9-6 blank) 9200 9210 THE FMS QUARTERLY REQUISITION REPORT SECTION B — DETAILED DESCRIPTION This section gives a detailed description and an illustration for one of the reports covered in Section A, the FMS Quarterly Requisition Report . The other reports discussed in Section A are described in detail else- where in the guide. These reports in- clude the following: Supply Status Card Report : Chapter 2, paragraph 2150, and paragraphs 2280 through 2287 Foreign Military Sales Billing Statement : Chapter 8, para- graphs 8230 through 8245 Reply to Customer Requests for Adjustment : Chapter 7, paragraph 7251 through 7267. The FMS Quarterly Requisition Re - port is prepared by NAVILCO and distri- buted during the last half of the month following the end of each calendar quar- ter. Reports are distributed in April, July, October, and January for the 3- month periods ending 31 March, 30 June, 30 September, and 31 December, respec- tively. The Quarterly Requisition Re - port is a listing which groups entries (lines) together for each separate FMS case. Entries for a single FMS case may require more than one page of the report However, each page contains entries for only one FMS case. There is an entry (line) in the report for the following types of requisitions: Requisitions which have been received by NAVILCO, but for which no information indicat- ing shipment of material has been received. These "open," or "outstanding," requisitions 9-7 9210 (Continued) 9211 HEADING AND FIRST LINE ENTRY continue to be listed on suc- cessive reports until shipment information is indicated (or the requisition is canceled). Requisitions which have been canceled since the last pre- vious report. Requisitions for which ship- ment information has been re- corded since the last previ- ous report. The date of ship- ment and transportation infor- mation is included for requi- sitions in this category. Requisitions which have been can- celed, or for which shipment informa- tion has been recorded, normally do net appear on reports after the one in which the cancellation or shipment is reported. An exception to this is when shipment of a partial quantity occurs. In these instances, each shipment made is re- ported. The requisition continues to be shown on the FMS Quarterly Requisi - tion Report until the last shipment is made and the total quantity ordered has been reported. Figure 9-1 shows an example of the format for the FMS Quarterly Requi - sition Report . Paragraphs 9211 through 9232 explain report entries in detail. The heading shows the title of the report. The first line entry on each page identifies the FMS customer country, the military service within the customer country to which the case applies, the three-letter case designator, the date the report was prepared, and the activ- ity (NAVILCO) which prepared the report. 9-8 FIGURE 9-1 FMS Quarterly Requisition Report REPORT PARING ACTIVITY: NAVILCO (ATE M SHIP SER-NR OR EXTENDED TAT RIC D CONT WRK ORDER UNIT PR PR 115 N24 WR-5-03^6 1 ,000.00 1 ,000.00 166 P79 G 32470002 7.10 142.00 255 N35 N10475C8002 72.00 4,680.00 ***SH I PPED REQU I S I T I ONS******* COUNT DOLLAR VALUE 142.00 ***SHIPPED REQUISITIONS******** COUNT DOLLAR VALUE 1 142.00 ***SHIPPED REQUISITIONS******** COUNT DOLLAR VALUE 1 142.00 FIGURE 9-1 FMS Quarterly Requisition Report COUNTRY: LATONIA DOCUMENT NUMBER PLT54473530002 PLT04470470912 PLT04482470004 UNCLASSIFIED AH 24 77220 0104 43 FMS QUARTERLY REQUISITION REPORT CSD: NAVY CASE: BFG AS OF 30 SEP 1 978 PREPARING ACTIVITY: NAVILCO PRJ ST DATE M SHIP SIR-MR OR EXTENDED NATL STOCK NR ITEM NAME Ul QUANT DC CDE PR ESD CD STAT RIC D CONT WRK ORDER UNIT PR PR ENG. SERVICES SR F2H P35 \k 8365 BV 8115 N24 WR-5-0346 1 ,000.00 1,000.00 13509755120 LKR HNDL EA 00020 F2H 09 BV 8166 P79 G 32470002 7.10 142.00 1350009215509 PIVOT EA 00065 F1A 14 9020 8255 N35 N10475C8002 72.00 4,680.00 CSD: SUMMARY TOTALS COUNTRY *****QPEN REQU I S I T I ONS*** TOTALS CASE: COUNT 2 DOLLAR VALUE 5,822.00 ft&*ft*QPEN REQUISITIONS*** SUMMARY TOTALS : COUNT DOLLAR VALUE 2 5,822.00 *****OPEN REQUISITIONS*** COUNT DOLLAR VALUE 2 5,822.00 ***CANCELLED REQUISITIONS**** COUNT DOLLAR VALUE ***CANCELLED REQUISITIONS**** COUNT DOLLAR VALUE ***CANCELLED REQUISITIONS**** COUNT DOLLAR VALUE SH I PPED REQU I S I T I ONS******* COUNT 1 DOLLAR VALUE 142.00 ***SH I PPED REQU I S I T I ONS******** COUNT DOLLAR VALUE 1 142.00 ***SH I PPED REQU I S I T I ONS******** COUNT DOLLAR VALUE 1 142.00 9212 COUNTRY 9213 CUSTOMER SERVICE DESIGNATOR 9214 CASE The "Country" entry in the first line shows the name of the FMS customer country. In the illustration, Figure 9-1, the customer country is the Republic of Latonia, which is shown as "Latonia" on the FMS Quarterly Requisition Report . This "Customer Service Designator" entry in the first line identifies the military service of the FMS customer country to which the report applies. In the illustration, the report applies to the Latonian Navy. The "Case" entry identifies the FMS case which is the authority for the requisition. The three-character case designator portion of the case identi- fier is used for this purpose. In the illustration the letters "BFG" identify a Republic of Latonia FMS case whose full case designator would be: LT-P-BFG 9215 "AS OF" AND "PREPARING ACTIVITY" The other two entries on the first line show: The date on which the report was prepared following the words "as of" 9216 DOCUMENT NUMBER 9217 NATL STOCK NR (NSN) The name of the U.S. Navy ac- tivity, NAVILCO, which pre- pared the report. The "Document Number" column iden- tifies the requisition on which material or services were ordered. A full de- scription of the composition of a docu- ment number is given in paragraphs 2260 through 2264 of Chapter 2. The "NATL Stock NR" column contains the National Stock Number (NSN — 15 digits) or the Federal Stock Number (FSN — 11 digits) of the item requisi- tioned. The first 13 digits of an NSN identify the particular item. The 14th 9-11 9217 (Continued) and 15th positions indicate a special material identification code (SMIC) which is perpetuated throughout the requisition process. In October 1974, the U.S. stock number- ing system was converted from the 11- digit FSN to the 13-digit NSN. However, since subsidiary records are being con- verted gradually, 11-digit FSNs may con- tinue to appear in the FMS Quarterly Requisition Report until conversion is complete. The stock number shown in the report may differ from that shown in the original requisition for one of three reasons : Conversion from FSN to NSN format 9218 ITEM NAME Change in the stock number assigned to the item ordered Furnishing of an acceptable substitute (with a different stock number) for the item originally ordered. If the item requisitioned is non- standard material, the manufacturer's part number, or other identifying num- ber, is shown in the "Stock Number" column. If services, rather than ma- terial, have been requisitioned, a brief 1- or 2-word description can appear in the "Stock Number" column. The "Item Name" column does not always contain an entry. If an entry does appear in this column, it is the name, or "nomenclature," of the item being reported. In many instances, this name is abbreviated because of the limited space available on the report page. 9-12 9219 UI 9220 QUANT 9221 DC 9222 PRJ CDE 9223 PR 9224 ESD The "UI" column shows the Unit of Issue applicable to the item requisi- tioned. If the requisition is for ser- vices, the letters "SR" appear in the "UI" column as shown in the illustra- tion (first line). The "QUANT" column shows the quan- tity of the item which has been requi- sitioned. If the requisition is for services, zeros are shown in the "QUANT" column. Entries in the "DC" column contain the letter "F", followed by the two- character Navy material cognizance sym- bol for the item being reported. Para- graph 1150, Chapter 1, explains Navy material cognizance symbols in detail. Entries in the "PRJ CDE" column show the Project Code if one has been assigned to the order by NAVILCO. Entries in the "PR" column show the Uniform Material Movement and Issue Priority System (UMMIPS) issue priority designator which is assigned to the re- quisition. UMMIPS issue priority desig- nators are explained in detail in para- graphs 2121 through 2126 of Chapter 2. The "ESD" column shows the Esti- mated Shipping Date. This forecast is based on UMMIPS standards or on pro- curement lead time information, if available. The date is shown in four- digit, "Julian Date" format. In the Julian format, the left-hand digit is the last digit in the number of the calendar year (i.e., 8 signifies 1978, 9 signifies 1979). The other three digits show the day of the year. Thus, the illustration shows forecast delivery dates of 8365, 9239, and 9020. These stand, respectively, for: The 365th day of 1978, or 31 December 1978 9-13 9224 (Continued) 9225 ST CD 9226 DATE STAT 9227 RIC The 239th day of 1979, or 27 August 1979 The 20th day of 1979, or 20 January 1979. The "ST CD" column provides the MILSTRIP Status Code which indicates the latest supply action taken with re- spect to the requisition. Figure 2-22 provides a listing of the most fre- quently used Status Codes and their meaning. Status Code "BV" used in the illustration indicates that material is being procured for direct shipment from the source of supply. If NAVILCO has no status information, the "SC" column will be left blank. The "DATE STAT" column contains a four-digit, "Julian Date" entry. If the item has been shipped, the Julian Date shown in this entry is the date of shipment. If the item has not yet been shipped, the Julian Date shown in this entry is the date of the latest status as shown in the "ST CD" column. If the "ST CD" column is blank, the Julian Date shown in the "DATE STAT" column is the date the requisition was recorded at NAVILCO. The "RIC" column contains the MILSTRIP Routing Identifier for the U.S. supply system activity which is processing the requisition for supply action. A complete list of these rout- ing identifiers is provided in Appendix 10 of the MILSTRIP/MILSTRAP Operation Procedures Manual , Naval Supply Systems Command (NAVSUP) Publication 437. The routing identifier "N24" shown in the illustration indicates the Naval Sea Systems Command. "P79" indicates the Naval Oceanographic Office. "N35" is the routing identifier for the Ships 9-14 9227 (Continued) 9228 MD 9229 SHIP-SER NR OR CONT/WRK ORDER Parts Control Center, the activity which initiated the contract shown in the "SHIP-SER NR OR CONT/WRK ORDER" column. If the item has been shipped, the mode of shipment used is indicated by a one-character mode of shipment code entry in the "MD" column. Entries in this column indicate the identifying number of the shipping document if the item has been shipped. The following are examples of shipping documents which might be applicable: Commercial Bill of Lading (CBL) Transportation Control/Move- ment Document (TCMD — sometimes abbreviated "TCN" for "Trans- portation Control Number" ) Waybill Manifest. If shipment was made by parcel post, the letters "pp" appear in the "SHIP-SER" column. If it is an insured shipment, the entry in the "SHIP-SER" column contains the letter "I", followed by the serial number applicable to the insured shipment. If shipment was made by certified mail, the "SHIP-SER" entry contains the letter "C", followed by the serial number applicable to the certi- fied mail shipment. If the shipment was made by registered mail, the "SHIP-SER" entry contains the letter "R" followed by the applicable serial number. If material has not been shipped, an entry appears in this column only if a con- tract, work request, or purchase order has been issued to perform the services or provide the material specified in the requisition. In such instances, the entry in the "SHIP-SER NR OR CONT/WRK ORDER" column is the identifying number of the applicable contract, work re- quest, or purchase order. 9-15 9230 UNIT PR 9231 EXTENDED PR 9232 TOTALS CASE 9233 "SUMMARY TOTALS CSD" AND "SUMMARY TOTALS COUNTRY" The entry in the "UNIT PR" column shows the Unit Price of each Unit of Issue of the item being supplied. The abbreviation "EXTENDED PR" stands for Extended Price . The entry in this column shows the total dollar value (i.e., unit price multiplied by quantity requested) of material being supplied under the requisition. NOTE : The value shown in the "EXTENDED PR" column may differ from the value at which the requisition is ultimately billed to the FMS customer. If a difference oc- curs, it can be caused by such factors as unit price changes, or the need to issue a minimum quantity or pack shipment. On the last page of the FMS Quar - terly Requisition Report applicable to each case, there are three special sets of entries for "Open Requisitions," "Canceled Requisitions," and "Shipped Requisitions." The total number of requisitions and the total dollar value of requisitions in each category are shown under these captions. As indicated in paragraph 9210, entries in the FMS Quarterly Requisition Report are grouped by FMS case. Simi- larly, all pages of the FMS Quarterly Requisition Report applicable to cases for one military service in the customer country are grouped together. On the last page of the report, summary totals are shown for all "Open Requisitions," "Canceled Requisitions," and "Shipped Requisitions" for all FMS cases adminis- tered by NAVILCO for the particular military service in the FMS customer country. Summary totals are also listed at the end of the report, showing the total number and dollar value of Open 9-16 9233 Requisitions, Canceled Requisitions, and Shipped Requisitions applicable (Continued) to all the FMS cases administered by NAVILCO for all the military services of the customer country. 9-17/(9-18 blank) 9300 9310 USE OF REPORTS DESCRIBED IN THIS CHAPTER; SUPPLY STATUS CARDS 9311 USE OF REPORTS; THE FMS QUARTERLY REQUISITION REPORT SECTION C--AREAS OF SPECIAL INTEREST The reports described in this chapter provide information useful to the FMS customer. The Supply Status Card provides specific data for indi- vidual requisitions. If the FMS cus- tomer keeps all the status cards, they will provide a historical record of the progress of the requisition from its initiation until material is delivered. The FMS Quarterly Requisition Report provides a single source of current information on all requisitions which have been received by NAVILCO, but for which shipment has not taken place, or for which shipment or cancel- lation action has taken place during the preceding 3 months. However, un- like status cards which (if they are retained) can provide a total histori- cal record for a single requisition, the FMS Quarterly Report shows only the latest status information which has been recorded for all the requisitions ap- plicable to the case. Also, requisi- tions are deleted from the FMS Quarterly Requisition Report after material has been shipped. Therefore, the report does not provide information as to whether charges have been recorded against the customer's account, or whether payment has been received. Examples of how the FMS Quarterly Requisition Report may be used are pro- vided below: Assume that a requisition has been submitted to NAVILCO and no acknowledgement status card is received. If the requisi- tion appears on the next FMS Quarterly Requisition Report , this confirms that NAVILCO has received and recorded the requisition. There is no need for the customer to follow up with NAVILCO to confirm re- ceipt of the requisition. 9-19 9311 (Continued) 9312 USE OF REPORTS; MONTHLY REPLY TO CUSTOMER REQUESTS FOR ADJUSTMENT 9313 USE OF REPORTS; THE FMS BILLING STATEMENT 9320 IMPORTANCE OF PROMPT REVIEW Shipping information provided in the report can help the FMS customer plan for receipt of material. It can be used to trace missing shipments or monitor freight forwarder per- formance . All status information for requisitions under a given FMS case is displayed in the same place in the report. This makes it easier to re- view the progress of groups of requisitions which may af- fect support of systems or equipment. The monthly Reply to Customer Requests for Adjustment provides a single source of all available infor- mation on action taken with respect to a ROID request. The report identifies the ROID, the document number of the transaction to which the ROID applies, the action taken by the U.S. Navy to resolve the ROID, and other pertinent information. A separate listing is provided for each FMS case under which action on a ROID has been completed. In addition, a copy of each processed ROID included in the listing accompanies the report. The FMS Billing Statement provides the FMS customer with a full picture of the financial status of each FMS case established with the U.S. Navy. It also provides summary information concerning the overall financial status of the customer's total FMS program with the U.S. Navy. The importance of choosing the proper FMS customer representative to receive each report was emphasized in paragraph 9140. It is equally impor- tant that reports be reviewed promptly 9-20 9320 (Continued) 9330 CUSTOMER REQUIRE- MENTS FOR REPORTS after their receipt by the FMS customer representative. These reports provide the FMS customer with status information on all his open FMS requisitions. They provide a clear picture of the supply system actions and allow a reconcilia- tion of the customer's records with NAVILCO's. Using this technique, errors and discrepancies can be quickly iden- tified and corrected before they become significant problems. Information contained in each of the reports discussed in this chapter is constantly changing. This does not mean that there will be a change in every item reported on in each of the reports. It does mean that there will be some change in status of some of the items reported on. Thus, to some de- gree, the data provided in the report are already out of date (i.e., the data may not reflect the current status of some items) by the time the report is received. Delay in review of the re- port, and in taking whatever action is dictated by that review, only increases the possibility that the action may be too late, or inappropriate, because of recent changes in item status not yet reported. FMS customers are provided with a single copy of each of the reports de- cribed in this chapter. Distribution is effected as directed by the FMS cus- tomer. If additional copies of a re- port are required, either on a one-time or a continuing basis, a letter request should be forwarded to NAVILCO or SAAC, where appropriate. The request should specify what report is desired, how many copies are needed, and the addressee(s) to whom the addi- tional report(s) should be sent. How- ever, FMS customers should be aware that NAVILCO workload may delay, or in some 9-21 9330 (Continued) cases preclude, compliance with the re- quest. In addition, FMS customers are normally charged for any additional costs incurred by NAVILCO in providing the extra copies of the report. Similarly, if FMS customers re- quire specialized types of reports which are not normally provided under the FMS program, a letter request should be forwarded to NAVSUP. This request should specify the following particulars: 9340 SUMMARY OF CHAPTER 9 Precisely what information is desired in the report Whether the report is to be a one-time or continuing re- quirement Frequency of the report and desired period of coverage Number of copies needed Mailing addresses of officials who are to receive the report. NAVILCO will determine whether the re- quest can be accommodated and the costs involved, and will obtain permission from higher authority to provide the report. This information, including the case to be charged, will be referred to the FMS customer for a decision and, if the decision is affirmative, amend- ment of the FMS case may be necessary. This chapter has described and illustrated the supply, financial, and discrepancy action reports provided to FMS customers by NAVILCO and SAAC. (Other similar reports are described in detail in Chapters 2, 7, and 8). Suggestions concerning the use of the reports were provided, and the proce- dures to be followed by FMS customers desiring additional supply reports or 9-22 9340 specialized supply reports were outlined. The importance of all these reports to (Continued) the FMS customer in ensuring orderly implementation of the FMS programs is emphasized. Familiarity with the con- tents of each report, and prompt review of each by the appropriate FMS customer representative will assist the FMS cus- tomer to monitor the customer country's entire FMS program. 9-23 REFERENCE FOR CHAPTER 9 MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command Publication 437 (NSN 0530 LP 170 0083) 9-24 CHAPTER 10. FREIGHT FORWARDER GUIDANCE CHAPTER 10. FREIGHT FORWARDER GUIDANCE TABLE O F CONTENTS Page Number SECTION A--DESCRIPTION Introduction Methodology FMS Material Movement Overview NAVILCO Input of Requisitions Inventory Manager Action Source of Supply Action Transfer of Depot/Contractor Title to FMS Customer Discrepancies 10-1 10-1 10-2 10-2 10-2 10-5 10-5 10-6 10-7 SECTION B--PROCEDURES 10-9 Freight Forwarder Receipt of Material Notice of Availability DD Form 1348-1 Accompanying the DD Form 1348-5 Freight Forwarder Replies to NOA NOA Without Export Release Requirement Delay Notice of Availability NOA Export Release Required Freight Forwarder Rejection of Shipment Shipments from Government Sources Shipments from Private Contractors Transportation Priorities 10-9 10-9 10-13 10-13 10-13 10-14 10-14 10-15 10-15 10-16 10-21 SECTION C--AREAS OF SPECIAL INTEREST 10-27 General Repairables Processing Publications Classified Material Security/Pilferage Codes Screening for Classified Material 10-27 10-27 10-28 10-30 10-31 10-33 Page Number 10340 What to Include in the Freight Forwarder Contract 10-33 10341 Statement of Work 10-33 10350 How to Obtain a Freight Forwarder Security Clearance 10-42 10360 How to Evaluate a Freight Forwarder's Performance 10-45 10370 Summary 10-47 REFERENCES FOR CHAPTER 10 10-49 INDEX OF FIGURES Page Number 10-1 Flow of FMS Material to the Customer 10-3 10-2 Notice of Material Availability, DD Form 1348-5 10-11 10-3 DOD Single Line Item Release/Receipt Document, DD Form 1348-1 10-17 10-4 Material Inspection and Receiving Report, DD Form 250 10-23 10-5 DD Form 1348-1 for Return of Repairable Item to Designated Overhaul Point in U.S. 10-29 10-6 DD Form 1348-1 for Shipment of Classified Material 10-32 CHAPTER 10. FREIGHT FORWARDER GUIDANCE 10100 10110 INTRODUCTION SECTION A— DESCRIPTION Freight forwarder companies occupy a key role in the delivery of Foreign Military Sales (FMS) material to over- seas customers. These companies nor- mally, as a minimum, receive, consoli- date, and stage material within the U.S. and arrange for its onward ship- ment to the customer country. The freight forwarder is not the carrier (i.e., rail, truck or shipping company). Freight forwarders are private firms who serve as contractual agents of the foreign country. Because the freight forwarder is under contract to a for- eign government, the specific functions he performs may differ somewhat from those noted above. The freight for- warders may perform a greater or lesser range of functions depending upon the agreement with their respective cus- tomer country. A major goal of this chapter is to provide information to FMS customer countries about how their material is handled in the U.S. system . Knowledge of these procedures should assist the country both in selecting a qualified freight forwarder, and in subsequently evaluating the freight forwarder's performance. It is important to note that the freight forwarder, as an agent of a foreign country, is not a part of or under the direction of any element of the U.S. Navy Supply System. However, because most FMS material will be shipped to the freight forwarder utilizing U.S. supply system procedures, it is important that FMS customers make sure that their freight forwarder understands the U.S. material shipment system. Knowledge of these procedures should allow the freight forwarder to effectively interface the U.S. Government procedures with his own 10-1 10110 (Continued) 10120 METHODOLOGY 10130 FMS MATERIAL MOVEMENT OVERVIEW 10131 NAVILCO INPUT OF REQUISITIONS operation. In this respect, a copy of Chapter 10 should be made available to the foreign government's designated freight forwarder. The methodology to accomplish these goals is to first describe the material movement process and define the roles of U.S. Government activities and private manufacturers. Next, a detailed description of the forms and procedures used in the movement of FMS material to the freight forwarder is given. The chapter concludes with a section describing unusual or excep- tional situations such as the movement of classified and repairable material. Throughout the chapter situations are presented that have previously caused problems for freight forwarders . The process of rendering logistic support to an FMS customer begins with the establishment of an official For- eign Military Sales agreement between the U.S. Government and the customer country. The flow of FMS material shipments to the foreign customer is shown in Figure 10-1. The process is initiated by the submission of "pull" or "push" requisitions into the U.S. system. ("Pull" requisitions are originated by the FMS customer and are requests to draw material from the U.S. system. "Push" requisitions are prepared by a U.S. agency or office on behalf of the FMS customer. ) The material provided in response to both types of requisition is generally shipped to the customer via the freight forwarder. Requisitions from the customers are initially submitted to the U.S. Navy International Logistics Control Office (NAVILCO), at Philadelphia, Pennsylvania. NAVILCO, who is respon- sible for introducing/controlling all 10-2 FIGURE 10-1 Flow of FMS Material to the Customer U.S. Contractor )ontract G) U.S. Stocking Activity i Order NAVILCO © Material Title Transfers to FMS Customer at This Point FREIGHT FORWARDER FMS Material Shipments to Customer Country via Premium Mode (Air Freight) © FMS Country Rep. In U.S. FMS Material Shipments to Customer Country via Surface Mode (Commercial Shipping) Coordination MILSTRIP "Pull" Requisition DD 1348/DD 1348M FMS CUSTOMER © 10-3/(10-4 blank) FIGURE 10-1 Flow of FMS Material to the Customer STEPS IN PROCESS fn customer prepares requisition and submits to navilco navilco processes requisition and forwards to cognizant inventory manager for supply action (^INVENTORY manager transmits requisition to STOCKING ACTIVITY (STOCK ^■^ POINT) FOR ISSUE FROM AVAILABLE STOCK, OR PREPARES PURCHASE ORDER FOR PROCUREMENT FROM COMMERCIAL SOURCE (U.S. CONTRACTOR) (T) STOCK POINT ISSUES AND SHIPS ITEM TO CUSTOMER, OR MMCOMMERCIAL SUPPLIER (U.S. CONTRACTOR) PRODUCES ITEM UNDER PURCHASE ORDER 1 CONTRACT © ITEM IS INSPECTED AND ACCEPTED AT CONTRACTORS PLANT; DD FORM 250 IS SIGNED. TITLE (OWNERSHIP) FOR MATERIAL TRANSFERS TO FMS CUSTOMER (7JMATERIAL IS SHIPPED (TRANSPORTED) BY COMMON CARRIER (COMMERCIAL ^^TRUCK) OR U.S. PARCEL POST, TO DESIGNATED FREIGHT FORWARDER FOR PROCESSING/TRANS-SHIPMENT © © FREIGHT FORWARDER SEGREGATES MATERIAL BY DESTINATION AND FMS CASE NOS., FOR OVERSEAS SHIPMENT AND DELIVERY TO CUSTOMER MATERIAL IS SHIPPED TO CUSTOMER COUNTRY BY AVAILABLE COMMERCIAL SHIPPING (SURFACE MODE) OR AIR SHIPPED (PREMIUM MODE) MOjSHIPMENT RECEIVED BY CUSTOMER AT DESIRED IN-COUNTRY DESTINATION ^■^ DELIVERY POINT Material Title Transfers to FMS Customer at This Point FREIGHT FORWARDER FMS Material Shipments to Customer Country via Premium Mode (Air Freight) , © I FMS Country Rep. In U.S. FMS Material Shipments to Customer Country via Surface Mode (Commercial Shipping) Coordination MILSTRIP "Pull" Requisition DD 1348/DD 1348M MILSTRIP "Pull" Requisition DD 1348/DD 1348M FMS CUSTOMER © © 10-3/(10-4 blank) 10131 (Continued) 10132 INVENTORY MANAGER ACTION 10133 SOURCE OF SUPPLY ACTION Navy FMS program, requirements, cap- tures specific financial and material data from the requisition, and forwards the document to the appropriate U.S. inventory manager. The inventory manager (Navy Systems Command, Inventory Control Point, Defense Logistics Agency, General Services Administration, or other des- ignated activity) determines whether the material is available at a U.S. Government source of supply or must be purchased from a commercial source. If the requested material is available in the U.S. Government system, the inven- tory manager generally directs the stocking activity to release the material for shipment to the FMS cus- tomer's freight forwarder. If the material is not available in government stocks, the requisition is placed as a contract order with a commercial manu- facturer or supplier. The contractor is also generally instructed to ship the material to the appropriate freight forwarder . Sources of supply, both government and commercial, pack the material and arrange for its delivery to the appro- priate freight forwarder. Government sources of supply identify the proper freight forwarder to address by tran- slating certain MILSTRIP codes on the form DD 1348 requisition. These codes are converted to full clear text addresses in the U.S. Department of Defense Military Assistance Program Address Directory (MAPAD) (DOD 5105.38). The appropriate freight forwarder address is annotated on the DD Form 1513 Offer and Acceptance document by the customer country. Commercial con- tractors are provided the address of the freight forwarder in the contract document by which the material is or- dered. 10-5 10133 (Continued) 10134 TRANSFER OF DEPOT/CONTRACTOR TITLE TO FMS CUSTOMER Sources of supply are responsible for the proper packaging and marking of FMS material. The material will be packaged suitable for overseas ship- ment and will be marked as a minimum with the: FMS case number Requisition number Priority Shipped from address Shipped to address Ultimate consignee address (coded and clear text) (if applicable) Mark for (if applicable). Sources of FMS material are also respon- sible for arranging transportation of the material to the freight forwarder. Common carriers (trucking companies, airlines, railroads, and coastal ship- ping companies) are utilized for this purpose. The mode of shipment is de- pendent upon the requisition priority and type of material. It is important to note as shown in Figure 10-1 that U.S. Government responsibility and ownership for the FMS material ends when the source of material (government or commercial) releases the material to a carrier. Ownership transfers to the foreign customer and billing for the material occurs based on proof that the material was picked up by a carrier. For govern- ment sources of supply the proof of shipment picked up by the carrier is the completed DD Form 1348-1, DOD Single Line Item Release/Receipt Document. For commercial suppliers (contractors) the DD Form 250, Material Inspection and Receiving Report, represents the 10-6 10134 (Continued) 10135 DISCREPANCIES proof of shipment (picked up by the carrier). Forms DD 1348-1 and DD 250 are explained in detail later in the chapter. Freight forwarders and foreign customers are asked to deal directly with carriers for discrepancies such as damages in shipment and losses in transit. These discrepancies are known as carrier discrepancies. Because of the transfer of title noted above, the U.S. Government does not have respon- sibility for these types of discrepan- cies . It is important to note, in accor- dance with U.S. Interstate Commerce Commission regulations which govern freight movements in the United States, that when shipment discrepancies are evidenced, the freight forwarder, as the receiving agent, must so indicate on the receipt document. The freight forwarder then has the option of re- fusing to accept delivery of the mate- rial, or accepting delivery on an ex- ception basis, with extent of damage or loss carefully noted on the receipt document. If the freight forwarder refuses to accept delivery of a ship- ment, a claim must be made against the carrier within 120 days. If delivery is accepted, the claim must be regis- tered within two years . The U.S. source of supply or pri- vate contractor does retain responsibil- ity for discrepancies known as shipper discrepancies . These include shortages due to improper counts, duplicate ship- ment, and damages prior to shipment. The freight forwarder or foreign cus- tomer may deal directly with SAAC in these cases. The detailed procedures for processing discrepancies are ex- plained in Chapter 7. 10-7/(10-8 blank) 10200 10210 FREIGHT FORWARDER RECEIPT OF MATERIAL 10211 NOTICE OF AVAILABILITY SECTION B— PROCEDURES FMS material will be shipped to the freight forwarder from either U.S. Government or commercial contractor sources of supply. The shipments from either source may be: Automatic Shipments . Auto- matic shipments are turned over to a carrier for trans- portation to the freight for- warder whenever the material becomes available. Shipments Subsequent to Notice of Availability . Shipments subsequent to notice of avail- ability are held at the source and a notice is sent to the freight forwarder informing him that the material is available for shipment. As previously discussed in Chapter 2, "Offer/Release Option Codes," Item 19 of the DD Form 1513, Offer and Acceptance Document determines whether FMS material shipments are shipped automatically to the freight forwarder or held at the source, pending notice of availability. MILSTRIP Notices of Availability (NOA) are prepared on DD Form 1348-5, "Notice of Availability/Shipment." Figure 10-2 shows an example of a manually prepared notice. The requirement for an NOA is dependent upon the Offer/Release Option Code, card column 46. Offer/Release Option Code "A" authorizes automatic shipment to the appropriate address in the Military Assistance Program Address Directory, 5105. 38-D. 10-9/(10-10 blank) FIGURE 10-2 Notice of Material Availability DD Form 1348-5 >1ENT FROM (Issuing Activity's complete name and address) Naval Supply Center Norfolk, Virginia 23512 ATTN: Transportation Officer NUMBER OF LINE ITEM(S) IDENTIFIED ON ACCOMPANYING DDFORM(S) 25Q/1348-1 lE NO. TYPE PACK CN PIECES WEIGHT (Lbs) 50 SECURITY CLASSIFICATION UNCLASSIFIED EXTREME DIMENSIONS/WEIGHT WEIGHT (Lbs) length (Feet) width (Feet) height (Feet) TO BE COMPLETED BY ADDRESSEE (Press hard when writing) ain Copy 2 for your records. 2. Fold Copy 3, place in envelope and mail af once to the Issuing Activity's address. >•- and address of Consignee) 1 Supply Center street c ^ Be h r i ng international 415 Rarir.an Center Blrig 4 STATE (Include ZIP Code) New Jprspy 08219 shipment : Motor truck r Behring International 415 Raritan Center Edison, NJ 08219 Bldg 4 L 1 J COPY 1 10-11/(10-12 blank) FIGURE 10-2 Notice of Material Availability DD Form 1348-5 FIELD For: Notice No: Case No: Type Pack: Pieces: Weight: Cube: Security Classification: EXPLANATION Name of FMS Customer Country A serial number for the Notice of Avail- ability. Consists of 3 digit Julian date of the notice and an alphabetic identification code. Serial number should be used on correspondence, replies, or inquiries related to notice. FMS Case Number MILSTRIP code identifying the type of packaging for the shipment. Codes are identified in MILSTRIP Manual. Number of pieces in the shipment. Total weight of the shipment in pounds. Volume of the shipment in cubic feet. For classified material enter highest classification, e.g., CONFIDENTIAL, SECRET. Otherwise enter UNCLASSIFIED. NOTICE OF AVAILABILITY/SHIPMENT FOR (Name of Country) Latonia NOTICE NUMBER 031A CASE NO. LAT FROM (Issuing Activity'* complete name and address) Naval Supply Center Norfolk, Virginia 23512 ATTN: Transportation Officer NUMBER OF LINE ITEM(S) IDENTIFIED ON ACCOMPANYING DDFORM(S) 250/1348-1 TYPE PACK CN AMMUNITION/EXPLOSIVES CLASS PIECES WEIGHT (Lbs) 50 CUBE SECURITY CLASSIFICATION UNCLASSIFIED EXTREME DIMENSIONS/WEIGHT — WEIGHT (Lbs) length (Feet) width (Feet) height (Feet) TO BE COMPLETED BY ADDRESSEE (Press hard when writing) 1. After completion detach both copies - retain Copy 2 for your records. 2. -Fold Copy 3, place in envelope and mail at once to the Issuing Activity's address. ONSIGNED TO (Enter the complete name and address of Consignee) i— CONSIG I NAME Latonia Naval Supply Center CITY Edison street C / Q Behr i ng international 415 Raritan CpntPr FfMg A STATE (Include ZIP Code) Npw Jprspy 08219 OTHER INFORMATION Mode of Shipment: Motor truck r ADDRESSEE Behring International Bldg 4 415 Raritan Center Edison, NJ 08219 L ~1 J DD FORM 1348-5, 1 Jun 69 COPY 1 10-11/(10-12 blank) 10211 (Continued) Offer/Release Option Code "Y" indicates that shipment will be released to the freight forwarder on the 15th calendar day after the Notice of Avail- ability (NOA) date, unless alternate shipping instruc- tions are received. 10212 DD FORM 1348-1 ACCOMPANYING THE DD 1348-5 10213 FREIGHT FOR- WARDER REPLIES TO NOA 10214 NOA WITHOUT EXPORT RELEASE REQUIREMENT Offer/Release Option Code "Z" indicates that shipment will be held, pending receipt of shipping/other instructions from the freight forwarder. Each individual line item in a ship- ment unit will have an accompanying DD Form 1348-1. The DD Form 1348-5 will serve as a cover document for each ship- ment unit. Together, these documents comprise the original Notice of Availa- bility (NOA). Shipments from procurement may use DD Form 250, Material Inspection and Receiving Report, or other authorized documents, in lieu of DD Form 1348-1. The freight forwarder is required to furnish shipping or other instructions after receipt of an original Notice of Availability. Replies to NOA will be furnished in two different manners: (1) Notice of Availability without Export Release Requirement; and (2) Notice of Availability with Export Release required. The freight forwarder reply to an original NOA without an export release requirement may be by letter, Freight Forwarder forms designed to provide shipping/other instructions or on the original DD 1348-5, Notice of Availa- bility/Shipment. Replies should identify: 10-13 10214 (Continued) 10215 DELAY NOTICE OF AVAILABILITY 10216 NOA EXPORT RELEASE REQUIRED Activity preparing the response NOA serial number FMS case number Requested shipment or pickup date Clear single destination address (if the material is to be shipped) . Material is held by the shipping activity pending receipt of release instructions from the freight forwarder for Offer/Release Option Code "Z" ship- ments . Should such instruction not be received within 15 calendar days after the NOA date, a duplicate of the NOA will be transmitted to the designated notice recipient, with the same shipment unit number assigned. This duplicate NOA will be annotated to indicate the shipment delay is caused by the freight forwarder's failure to furnish release and shipping instructions. This consti- tutes a Delay Notice of Availability. In the event shipments are delayed, customer countries may be liable for additional storage and holding costs. Export Release is MTMC routing authority to load, tender, move cer- tain categories of shipments (i.e., hazardous material, ammunition, classified, etc.) as specified in Military Traffic Management Regulations (NAVSUP Instruction 4600.70), Chapter 202. The freight forwarder reply to an original NOA with export release requirec will furnish shipping or other instructic and coordinate these or other shipment instructions with the Military Traffic Management Command (MTMC). 10-14 10216 (Continued) 10217 FREIGHT FORWARDER REJEC- TION OF SHIPMENT 10218 SHIPMENTS FROM GOVERNMENT SOURCES When an export release is required, the shipment will be held pending receipt of releasing authority and shipping in- structions from the MTMC and if such in- structions are not received within 15 calendar days after the NOA date, a follow-up only to MTMC will be made by the shipping activity. When a country replies to a NOA and rejects the shipment because the shipment unit contains material which will constitute a duplicate shipment, the shipping activity will withdraw the rejected material from the ship- ment and prepare a new Notice of Availability/Shipment. FMS material shipped from U.S. Government sources of supply will be documented by DD Form 1348-1, DOD Single Line Item Release/Receipt Document. This document is a 6-copy form contain- ing numerous MILSTRIP codes which describe the initial requisition and the shipping information for the material . Two sets of documents are prepared for all FMS transactions. The number 5 copy of the original DD Form 1348-1 and a complete duplicate set of documents will be mailed to the freight forwarder separately from the material. For parcel post shipments, one copy of the original set will be attached to the outside of the container with remaining copies inside. If the container is not large enough for such attachment, the copy will be placed in- side the container. For material shipped by other than parcel post, an advance copy Collect Commercial Bill of Lading (CCBL) will also be forwarded to the freight forwarder. Material will arrive with the number 4 copy of the DD Form 1348-1 attached to the outside of the container and the re- maining copies inside. (The U.S. source of supply will retain the original front copy of the form. ) 10-15 10218 (Continued) 10219 SHIPMENTS FROM PRIVATE CONTRACTORS Figure 10-3 shows a DD Form 1348-1. The notes explain the data elements which are of importance to freight for- warders . Shipments from private contractors or suppliers will occur when the material was unavailable at government sources when requisitioned and a commercial contract order was established to pro- vide the material. The contracting activity, usually an inventory manager, instructs the supplier to ship the material to the designated freight forwarder. A government representative will normally inspect and certify the material as satisfactory at the contractor's plant or warehouse. Material shipped by commercial con- tractors will be documented by DD Form 250, Material Inspection and Receiving Report (MIRR), or infrequently DD Form 1155, Order for Supplies or Services. Freight forwarders will normally receive four copies of the DD Form 250 with the material, one copy of which will be attached to the outside con- tainer. Some contracts may provide for the contractor to forward a separate advance copy of the DD Form 250 to the freight forwarder when the material is shipped. No action is required of freight forwarders with respect to certifica- tion or signing of DD Form 250. How- ever, since in many instances the DD Form 250 is the only documentation provided for contract material, freight forwarders should be familiar with certain data elements on the form. Knowledge of this data will assist the freight forwarder in identifying the material for further shipment to the FMS customer. 10-16 FIGURE 10-3 DOD Single Line Item Release/Receipt Document, DD Form 1348-1 DD FORM 1348-1 DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT * ' * H 10 l" l"! 11 !"! 1 *! 16 !^ 'iM^'n ^ »|«j"j?»|?^ »|)ljii|33|M[ji|3IQt« OR PARI NU M » S_ QUAWIW1 OQCUMtNl NJMH ~^ g SUPPtrdfHTW S FUMD OttUI HOI , - «w " * 5- «l **l 5 I OAK - i SHIPPED FROM WAREHOUSE LOCATION SELECTED BY AND DATE SUBSTITUTE DaTa(iT£mORiGinalLY REQUEST D) FREIGHT CLASSIFICATION NOMENCLATURE FREIGHT RATE T-v. NOv.f.fJCLAl.JtfE TYPEOFCONTAINERlS) PaCea. M-^f;^ itewisis t . v W o dig^ .^chtiveite^ 1 - p (US.*"* 1 Custom" W" (Mai^f 01 ' Co^ono^S^Code w o f ^^ COde too iettet ^ Date Serial Suff^ Code r Ae identify^ «* c , fl, *. ^ {olV , at dets DD FORM 1348-1 DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT SUBSTITUTE DATA(ITEMORIGINALLY REQUEST Dl] FREIGHT CLASSIFICATION NOMENCLATURE 9 10 II I) I) II IS It 17 II 19 7071 17 StQCK OR PART NUMMR 757577 lull? X 31 17 J] 34 35 X 37 M 39 to < «« « II <9» MHlRfU « it 89 70 71 I! 73 7« 7S 75 77 71 79 K DOUARS |CTS, WAREHOUSE LOCATION SELECTED BY AND DATE MARK FOR PROJECT FREIGHT RATE DOLLARS | CTS ITEM NOMENCLATURE TYPE OF CONTAINERS) TOTAL WEIGHT PACKED BY AND DATE NO OF CONTAINERS RECEIVED. BY AND DATE WAREHOUSED BY AND DATE INSPECTED BY AND DATE WAREHOUSE LOCATION FIRST DESTINATION ADDRESS t3 TRANSPORTATION CHARGEABLE TO DATE SHIPPED U B/LADING. AW8. OR RECEIVER SIGNATURE (AND DATE) I 15 RECEIVER S DOCUMENT NUMBER ec © O 5 10-17/(10-18 blank) FIGURE 10-3(2) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 DD FORM 1348-1 DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT z s p o y < s z o z a 2 O < a> - | | 2 « o ? O (A 5 ■l.l.l.lil. ' •I.U.MU. £M*M* ■r »J»J»}»|»|30!,. s «M«I«'H«J» 51 HjH *|+ «[«[» sojeij6;|(3|u|6i|u 6?|wjtS m|ft|njn "M"I"M"I«> DOC I i' >0(Nt flOM ft itoc« 0» o_ 1 mb onm KT _ = 'iQ° 5 •!C 1 RM | AODtL *!MGU"SmOMJ| 0*n | SERIAL OOllAtS | as 1 MARK FOR j PROJECT TOTAl PtlCf DOUAfS | CIS ! 1 B _lc D WAREHOUSE LOCATION F TTPf Of G UNIT [UNIT WEIGHT PACK UNIT CUBE J U FC N M F C j FREIGHT RATE DOCUMfM IMAT DAK COW |P QUANTITY 1' Q !r S SUBSTITUTE DATA|iTEM ORIGINALLY T BEQUEST D FREIGHT CLASSIFICATION NOMENCLATURE 1 V ITEM NOMENCLATURE T TYPEOFCONTAINEBIS' 2 TOTAL WEIGHT 3 t £ E U 1 s E E s ± RECEIVED BY AND DATE INSPECTED BY AND DATE 8 ' jj PACKED BY ANO DATE NO OF CONTAINERS 5 TOTAL CUBE WAREHOUSED BY AND DATE 9 WAREHOUSE LOCATION 10 REMARKS Be CC OD JEE fifiS' DESTINATION A0OBESS DATE SHIPPED 1! FF ! GG 13 TRANSPORTATION CMAACEA8LE TO 14 B/LAOING. AWB, OR RECEIVER SIGNATURE (AND DATE) 1 1 5 RECEIVER S DOCUMENT NUMBER 10-19/(10-20 blank) FIGURE 10-3(2) DOD Single Line Item Release/Receipt Document, DD Form 1348-1 ^easeOP^Codes Case Des^ tot Project Code priority &*j&&\ • - - — \T ts iittlriaiy \deivtift es u ^eric cVvatactets^ M T*e^ eIieq ° DD FORM 1348-1 DOD SINGLE LINE ITEM RELEASE/RECEIPT DOCUMENT SUBSTITUTE DATA[ITEMORIGINALLY REQUEST Dl FREIGHT CLASSIFICATION NOMENCLATURE 1 I 10 II hi 11 11 IS It IP II » » i! li STOCK OB PART HUMKR »|ll|li[n|M[ls|3t|lj|)l|3)| 91 CODE H SHIPPED TO COOEl Acme Freight Forwarders, Inc. #7 Industrial Park Orange, New Jersey 07814 DESCRIPTK It 5. DISCOUNT TERMS 7. PACE 1 •.ACCEPTANCE POINT s 0. ADMINISTERED BY CI DCASR - Chicago O'Hare International Airport Chicago, Illinois IS1402U II. PAYMENT .ILL BE MADE BY 'S1402U DCASR - Chicago DCRI - FMC O'Hare International Airport Chicago. Illinois LT0431 Central Navy Depot Barlane, Latonia FMS Case No. XYZ MFR PN W8119629 PC 501, Compressor Spring Assy. Latonia, LT 0431-5092-1005, GW 75 Lbs. FMS Case No. XYZ PROCUREMENT QUALITY ASSURANCE Ea 110.00 220.00 RECEIVER'S USE J3. CONTRACTOR USE ONLY REPLACES EDITION OF t AUG 67 WHICH MAY BE USED 10-23/(10-24 blank) 10220 Red Transportation Priority 1 Blue Transportation Priority 2 (Continued) White Transportation Priority 3 It is important that the freight forwarder be able to recognize priority shipments and give special expeditor treatment in the processing and transshipment of priority cargo, including the use of premium transportation where necessary. 10-25/(10-26 blank) 10300 10310 GENERAL 10320 REPAIRABLES PROCESSING SECTION C — AREAS OF SPECIAL INTEREST The purpose of this section is to describe three areas of special interest to freight forwarders. The areas are: Repairable Items Publications Classified Material. The action taken by the freight for- warder will change slightly for each of these three types of material. The subject of repairable items is addressed in detail in Chapter 5. The concepts are briefly restated here. Many items of FMS material can be repaired when they become unserviceable. This procedure is generally less expen- sive than purchasing a completely new item. Two procedures for accomplishing this repair are currently available to FMS customers : Return and Exchange Procedures Return, Repair, and Reshipment Procedures . In both procedures unserviceable items are shipped to the U.S. by the FMS cus- tomer. This material is normally shipped to the country's freight for- warder. If the item is under Return and Exchange, the U.S. source of supply will issue a new replacement item upon receipt of the unserviceable unit. Under Return, Repair, and Reship, the unserviceable item will be repaired in the U.S. and returned to the FMS country . The freight forwarder is of major importance in the repairables programs. Timely processing is crucial in the return and exchange program because 10-27 10320 (Continued) NAVILCO will not authorize the issue of a new item until receipt of the unser- viceable unit in the U.S. supply system is confirmed. Timely and efficient pro- cessing of unserviceable units by the freight forwarder will also substantially reduce the total time cycle for the retur repair, and ship program. Unserviceable units will be returned to the U.S. DOD supply system through the FMS country's freight forwarder and must be accompanied by a DD Form 1348-1 (DOD Single Line Item Release/Receipt Document prepared as described in Chapter 5. The freight forwarder will arrange for onward shipment of the repairable item to the activity noted in the "Ship To" (Block B) address of the DD Form 1348-1 as shown in Figure 10-5. The freight forwarder ' s special role in the repairables program is completed when the unserviceable unit is shipped to the U.S. address. The replacement or repaired item will be shipped to the freight forwarder, but it is processed in the same manner as any other FMS material en route to the customer. 10330 PUBLICATIONS Technical publications are crucial items in the FMS program. They often provide the only operating and mainte- nance instructions for multimillion- dollar equipments. Without the publi- cations these equipments may remain unused or unmaintained. 10-28 FIGURE 10-5 DD Form 1348-1 for Return of Repairable Item to Designated Overhaul Point in U.S. SHIPTO- 1 9 10 II !1U II hi 16 11 II 19 10 II 111 IIM 15 16 111 lit 19 30 31 hi 33131 35 36 3) M 39 « II II 13 u IS 16 18 19 to S] 61 S3 SI 66 St 67 68 69 60 61 tl t3 M 65 66 6? 68 69 10 71 72 73 II 76 76 77 78 79 80 DOCUMfN! NUM6t> 2 SUP lEOUISITIONER ] OATI | SERIAL |gpjl 06 E 2010 002460661 EA00001 P LT044 5 028 00 01 TP 1 2 SHIPPED FROM LATONIAN NAVAL SUPPLY CENTER BARLANI, LATONIA RECEIVING OFFICER NORFOLK NAVAL SHIPYARD NORFOLK, VA. USA WAREHOUSE LOCATION ITPi 0' UNIT UNIT WEIGHT UNIT CARGO PACK CUBE U FC SUSSTITUTE DATAIITEM ORIGINALLY REQUEST M FREIGHT CLASSIFICATION NOMENCLATURE IFC FREIGHT RATE \ 10-29 10330 (Continued) 10331 CLASSIFIED MATERIAL The urgency of need for publica- tions often causes the FMS customer to require special handling of them by freight forwarders. The ability of the freight forwarder to provide special handling is enhanced if shipments of publications can be readily identified. The exact level of special handling to be provided for publications is fully dependent upon the agreement be- tween the FMS customer and the freight forwarder. The special services often include: Unique conspicuous markings and labeling of publications for onward shipment to the FMS customer Reduced time frames for the processing and reshipment of publications Use of specified modes to accomplish the onward move- ment of publications. Publications may also require special handling because of their security classification. The pro- cessing of classified material is the final area of special interest to be addressed in this chapter. The subject of classified material is explained in detail in Chapter 6. The purpose of repeating the topic here is to inform the FMS customer and the freight forwarder of the significant responsibilities incurred by the freight forwarder in processing classified material. The first and most important requirement for processing classified material is that the freight forwarder company and its facility be properly certified or cleared to handle such 10-30 10331 (Continued) 10332 SECURITY/ PILFERAGE CODES material. Freight forwarders should contact the nearest Defense Contract Administration Service Regional Office (DCASR) to determine the exact require- ment for obtaining the necessary clearances . After obtaining the proper clear- ances and establishing the proper physi- cal security for classified material it is important that the freight forwarder be able to identify classified material when it is shipped to him. It is likely that nearly all classified material will be shipped from U.S. Government sources of supply. Therefore, the freight for- warder should be familiar with the DD Form 1348-1 data elements that indicate whether a shipment is classified, and at what level it is classified. Classified material can be identi- fied by particular "Security/Pilferage Codes" ("SEC"). This one-character alphabetic code indicates that material is classified and the level of classifi- cation. Codes "A," "B," "C," and "D" indicate that an item is classified "Confidential." Codes "E," "S," "G," and "H" indicate that an item is classified "Secret." Codes "F," "K," "L, " and "T" indicate that an item is classified "Top Secret." These codes are placed on the DD Form 1348-1 shipping document when the material being shipped is in fact clas- sified. The codes, when applicable, are contained in block "N" of the DD Form 1348-1. Figure 10-6 shows an ex- ample of a DD Form 1348-1 for an item classified "Confidential." 10-31 FIGURE 10-6 DD Form 1348-1 for Shipment of Classified Material block n — securit v pilferage code slolisMs rmstm ill 4 9 6 7 « 9 10 II 12 1J 14 IS 116 I Mil 19 20 111 111 23 24 29 lit 111 lit 29 30 31 32 33 34 3S 36 37 S! 39 40 41 42 43 44 49 46 4; 41 49 90 91 9? 5: |g SUPPLfMSttUgY Ijlluwc rasgusmaO] ovrl | sehial ||>^ »ooms S A01NFZ 0100 LP41 04168 EA0000 1 PXXA44 509 2 09 2 1 P22ABC 94 99 96 97 98 99 60 61 62 63 64 69 66 67 69 69 70 7] 111 73 74 79 76 77 71 75 » UNI Alit dollar |as 05 176 1Q1AL MiCl oauuB IctT SHIPPED FROM NAVAL PUBS & FORMS CENTER SHIP TO WAREHOUSE LOCATION UNIT WEIGHT SUBSTITUTE DAIA|ITEM ORIGINALLY REQUEST D)| FREIGHT CLASSIFICATION NOMENCLATURE 10-32 10333 SCREENING FOR CLASSIFIED MATERIAL 10340 WHAT TO INCLUDE IN THE FREIGHT FORWARDER CONTRACT 10341 STATEMENT OF WORK Freight forwarders and FMS country- receiving personnel should carefully screen the DD Form 1348-1 to determine whether the material represented is classified. If the material is clas- sified, proper care must be taken at all steps in the movement process to safeguard the security of the items. As described in paragraph 10110, the freight forwarder occupies a key role in the delivery of material to the FMS customer. As a designated agent of the customer country under contract to the foreign government, the freight for- warder must receive specific guidance from the customer country clearly defin- ing the scope of effort required and delineating his assigned tasks. These details are usually provided contractual coverage in the form of a "Statement of Work" to be included in the contract with a freight forwarder. The services of a qualified freight forwarder in the United States are pro- cured under contract by the customer country for the purpose of receiving , processing and transshipment of FMS material purchased from the U.S. Government. The customer country is responsible for negotiation with the freight forwarder for the services required and for management of all functions related to handling of FMS material in transit. The U.S. Govern- ment has no jurisdiction or responsi- bility for accomplishment of these functions . The following functions and tasks are required to insure effective trans- portation support and delivery of FMS material to the correct in-country destination. Each of these procedural areas is a responsibility of the FMS customer country. Delegation of respon- sibility to the freight forwarder for 10-33 10341 (Continued) accomplis specific cretion o responsib forwarder included of Work" contract: hment of these general and tasks can be made at the dis- f the customer. When such ility is assigned to freight , specific coverage should be under the detailed "Statement in the freight forwarder's a. Export License . The freight forwarder should be provided appropriate export licenses for all FMS cases for material expected to be handled. ties b. Warehousing and Storage Facili - Adequate warehousing and freight terminal facilities should be available for segregated receipt, processing, and temporary storage of material from the time of delivery from the carrier until transshipped via air or surface carriers. Suitable materials handling equipment will be required for off- loading and loading commercial carrier equipment. c. Receipt and Staging of Mate- rial ♦ When material is received from a delivering commercial carrier, in- spection should be made immediately to determine if number of pieces and iden- tification of material correspond with items listed in the appropriate shipping documents. If shortages, damage, or pilferage are evident, documentation should be annotated to support claim action against the carrier. If discrep- ancies exist, the material should be held in a designated area, pending reso- lution or claim action. If the shipment checks out with no apparent discrepancy, the carrier will be released and material moved to a staging area or designated collection point for further processing. 10-34 10341 d. Processing Material for Trans - shipment . The processing of material (Continued) for onward delivery to the customer country should include, but is not limited to, the following: (1) Hold advance copies of DD Form 1348-1 and DD Form 250 in a suspense file pending receipt of material. (2) Match the advance copies of DD Form 1348-1/DD Form 250, or those received subsequent to receipt of material, with the actual case contract (i.e., items ordered) or with documentation received with the shipment, by TCN/Document Number, stock number, quantity, case number, "mark for" address, or any other element of identification that will assure the shipment received is fully identified with an appro- priate FMS case and actually des- tined for movement to the country represented. (3) Resolve any discrepancies by contact with the shipping activity or preparation of a Standard Form 364, Report of Item Discrepancy (ROID), or other suitable communica- tion for submission to the country representative (see Chapter 7 on ROIDs). (4) Examine exterior markings on shipping containers to determine that markings are correct and ade- quate to fully identify the shipment upon receipt of material by the requisitioner in-country; correct markings, as necessary. (5) Assure that accompanying documents remain intact in the Pack- ing List Envelope on the outside of 10-35 10341 the shipping container or package, to facilitate ready identification (Continued) and processing by the in-country representative upon receipt. (6) Examine all shipping con- tainers for adequacy to withstand handling, stowage, and movement risks incurred for the air or sur- face shipment mode of transportation selected. (7) Repackage, recrate, or reinforce containers found not ade- quate for onward movement. Freight forwarder should have a recooperage capability integral with the freight terminal facility for accomplishing these actions . Although export pack is prescribed for all FMS shipments, some contractor shipments may be domestic pack for CONUS delivery only. Also, some small parcel post shipments may not conform with ex- port packaging specifications. Some packages may be burst open, crushed, or weakened due to rough handling by a carrier, with no apparent damage to contents. When, in the opinion of the freight for- warder, the shipment will not with- stand further handling and over-ocean movement, it should be repackaged. It is a freight forwarder service responsibility to provide adequate onward protection to the in-transit material. The customer country is responsible for any additional costs incurred. (8) Small packages should be consolidated to the maximum extent possible, into larger shipping containers, by case, priority, and final destination. It should be assured that all proper markings are placed on the new shipping 10-36 10341 container to facilitate ready identification at destination. (Continued) (9) Appropriate documentation should be prepared for each ship- ment, i.e., bills of lading, air waybills, air or ocean manifests, customs declaration and clearance documents, and other required documentation . e. Containerization . Where pos- sible, surface cargo should be loaded in seavan-type or sealand van-type con- tainers, to minimize loss, damage, and pilferage. However, container cargo shipments can only be used where the freight forwarder or the country has a break-bulk capability at the overseas port of discharge, for the purpose of offloading from the container and for- warding to the appropriate in-country destination. Complete listing of all shipments containerized should be provided. f . Transportation Arrangements . (1) Cargo space should be obtained and shipment booked with the selected air or surface carrier. (2) Cargo should be delivered to and loaded aboard the appropriate air or surface carrier conveyance. (3) All appropriate movement documentation should be provided upon tender of the shipment to the designated carrier. (4) • When material has been loaded aboard the carrier, copies of all documentation must be sent to the country as expeditiously as possible. 10-37 10341 (Continued) g. Customs Clearance . (1) Export Declaration (US Department of Commerce Form 7525-V, "Shipper's Export Declaration") mus be prepared for all FMS shipments. (2) After the declaration has been prepared, exit customs clearance must be effected by sub- mission of documents to the col- lector of customs or export control officers. (3) The freight forwarder is responsible for obtaining and submitting bills of lading connecte( with the export and attending to certain other formalities, such as consular invoices, certificates of origin, and other required documents . (4) Assistance should be rendered to the country in the provision of all formal documenta- tion required to accomplish clear- ance in-country through the country customs agencies . (5) All export of FMS material will be reported to the U.S. Depart- ment of Commerce as required by current federal statutes. h . Financial Management . When FMS material is shipped to the freight forwarder on a collect commercial bill of lading, prompt settlement of freight charge accounts should be made. This should be handled through payment of charges upon delivery, or establishment of credit arrangments with delivery carriers. i. Claims . The freight forwarder will establish a claims handling capa- bility, and be responsible for filing claims against commercial carriers on behalf of the FMS customer for loss, damage, shortages, and pilferage of material incurred while in custody of 10-38 10341 (Continued) the carrier. The FMS customer will be credited with any reparation actually recovered as a result of claim action. j . Return of Reparable Material . A capability should be established to receive all material returned from the customer country to CONUS for repair, overhaul, servicing, etc.; clear the material through U.S. Customs; and for- ward it prepaid to the designated CONUS overhaul and repair facility. k. Insurance . Commercial insur- ance coverage should be provided for protection of all country-owned FMS material while in custody of the freight forwarder . 1. Notice of Availability (NOA) . If the offer/release code specifies prior notification to the freight for- warder of material ready for shipment, the freight forwarder must provide expeditious response to each NOA re- questing shipping instructions . Any alternate shipping instructions pro- vided, such as a different carrier mode, alternate shipping address, port or consignee other than that specified in the MAP AD, will be observed. Instruc- tions for holding the material until a specified date for future delivery or until availability of a vessel will not ordinarily be honored, as DOD shipping activities have limited transit holding space and cannot be used as in-transit storage facilities for the convenience of a freight forwarder. m. Tracer Action . Every assis- tance possible is to be provided the customer country on follow-up tracing of specific material shipments. The FMS customer should be provided all receipt and transshipment data. If no record of receipt is indicated and the FMS customer provides evidence of 10-39 10341 (Continued) shipment furnished by the origin ship- ping activity, tracer action will be initiated with the carrier concerned and the FMS customer apprised of find- ings . n. Multiple Delivery Addressees . Shipments will be made only to the single address specified in the MAPAD or designated in an official response to the NOA and delivery authorized only to the consignee address indicated on the bill of lading. Any further reconsignment, diversion, storage, or other deviation directed by a freight forwarder that results in additional costs will be at the freight forwarder/ FMS customer expense. o. Discrepancy Reporting . The country representative will be advised by means of a Standard Form 364, Report of Item Discrepancy (ROID), or other suitable communication, of any discrep- ant shipments, e.g., misaddressed, misdirected shipments, erroneous docu- mentation, faulty marking that precludes identification, or any other discrep- ancy that appears to be the responsi- bility of the U.S. Government shipping activity. Faulty packaging should be reported on a DD Form 6, Packaging Improvement Report, with pictures, if possible, to accompany the ROID. p. Pilot Pickup of Material . When the freight forwarder is advised that a country-owned/operated aircraft is scheduled for a flight into CONUS to pick up country-owned material held by the freight forwarder, arrangements should be made with the U.S. Military Aerial Port of Entry for loading the country aircraft. Material to be loaded will be transported at freight forwarder expense Free-Along-Side (FAS) the aircraft. Any loading, off-loading, or handling charges also will be at 10-40 10341 (Continued) freight forwarder expense. If storage of material is required prior to load- ing date/time designated, off-base storage facilities will be required. Under no circumstances will U.S. mili- tary facilities or personnel be utilized for storage and handling of FMS customer- owned material or loading/unloading of the FMS customer aircraft, unless specifically authorized by the cognizant Military service with prior funding arrangements completed. q. Administrative Responsibility . The freight forwarder is responsible for maintenance of adequate and accurate files on all FMS transactions, includ- ing, but not limited to, due-in files, advance shipping documents, NOA's and response, receiving documents, shipping manifests, bills of lading, customs clearance documents, tracer actions, claims actions, container listings, accurate listings of reimbursable ex- penses, invoices, and other documents or correspondence related to the ship- ments. Sufficient information should be on file to provide response imme- diately to any query of the country on status of any shipment. r. Reporting System . A report- ing procedure should be devised to keep the country representative advised on the current status of FMS shipments, to include advance notice of shipments due-in, receipt of shipment, processing status, anticipated forwarding date, vessel name, voyage number, itinerary, and estimated date of arrival at port of discharge. With shipments identified to a specific case, the customer coun- try can plan receipt in advance and minimize the necessity of tracking in- dividual shipments. s. Control of Shipments . The freight forwarder should maintain com- plete visibility control over each 10-41 10341 (Continued) shipment, from date of receipt from carrier, through processing and staging phases, and until finally shipped to the FMS customer. This will provide information on the location and status of each shipment in the system at all times, and facilitate immediate response to any query concerning status of materia in transit. 10350 HOW TO OBTAIN A FREIGHT FORWARDER SECURITY CLEARANCE t. Military Assistance Program Address Directory (MAPAD) . This is the sole source directory in use by DOD shipping activities to determine current shipping addresses. The freight forwarder shall immediately advise the country representative when any address for receipt of material or documenta- tion is to be changed, 60 days in advance of proposed change of address when possible. This will enable the country representative to initiate action with the Defense Automatic Addressing System Office (DAASO) to notify shipping activities and have the revised addresses published in the MAPAD. Direct requests from the freight forwarder to shipping activities for address changes are not authorized and will be ignored. It is imperative that all address changes be made known immediately to maintain the MAPAD in current status and preclude the possi- bility of misdirected shipments. As discussed in Chapter 6, in- stances frequently arise in the FMS Program when a customer country will receive classified security material. One of the conditions cited in the Offer and Acceptance DD Form 1513, to which the FMS customer must agree, requires that classified material be provided a degree of physical protec- tion to safeguard against its unautho- rized disclosure or loss, equivalent to the protection provided by the U.S. Government. This requirement refers to types of security storage enclosures 10-42 10350 or containers, locks, guards, etc., used in varying combinations, to safe- (Continued) guard classified material physically in custody and to prevent loss by theft or unauthorized disclosure (compromise) . The freight forwarder is required to provide an adequate, physically secure facility suitable for handling the safeguarded receipt and temporary storage of classified material being held in- transit awaiting shipment. To obtain the necessary authorization for handling classified material ship- ments, the freight forwarder must acquire a classified facility clear- ance. The facility clearance for the freight forwarder is based on a detailed on-site inspection and review of con- ditions of physical security which are determined to exist at the freight for- warder's facility. The inspection is conducted by field representatives of the Defense Contract Administration Service Region (DCASR). DCASR is the cognizant defense industrial facility security matters in the United States . The steps and conditions to be met in obtaining the required security clearance for a freight forwarder's facility are based on the physical protection requirements prescribed in the Department of the Navy Information Security Program Regulation, OPNAV Instruction 5510.1. The procedure for obtaining a facility clearance for a freight forwarder includes the following: a. Letter of Authorization To Act as a Designated Representative of the Customer Country . The freight forwarder must be assigned in writing by letter from a competent authority (for example, the senior logistics commander in the foreign military service) directing the 10-43 10350 freight forwarder to serve as the desig- nated representative (agent) of the (Continued) foreign government, authorized to re- ceive, store and handle shipments of classified material. A copy of this letter must be provided to the DCASR office responsible for certifying the freight forwarder's facility clearance. b . On-Site Inspection of Freight Forwarder's Facility for Safeguarding Classified Material Shipments In-Transit , The military representative of the custo- mer country (for example, the Defense Attache) in the United States makes a written request (by letter) to the De- fense Contract Administration Service regional headquarters for the area in which the freight forwarder's facility is located. DCASR headquarters are located in six major regions within the United States: New York, NY Philadelphia, PA Atlanta, GA Chicago, IL Dallas, TX Los Angeles, CA. c. Facility Clearance Formally Certified by DCASR . When all conditions required for the physical protection and safeguarding of classified material have been satisfied, as prescribed in OPNAV Instruction 5510.1 and other per- tinent directives, a facility clearance for the freight forwarder's facility is formally certified by DCASR on the basis of the results of the on-site inspection. It should be noted that a variety of time- consuming events must occur to achieve a security clearance. The freight forwarder must prepare written procedures as to how and with what equipment, facilities and personnel the classified material will be protected. In addition, equipment may have to be procured, secured areas con- structed and guard services acquired. 10-44 10350 (Continued) 10360 HOW TO EVALUATE A FREIGHT FORWARDER * S PERFORMANCE The written procedures must be approved by DCASR and all actions to protect the material completed prior to issuance of the facility clearance. Should any discrepancies be cited in the report of inspection by the DCASR field office, corrective action must be taken by the freight forwarder before the facility clearance can be granted. Discrepancies which remain outstanding, and for which corrective action is delayed or deferred, will have an adverse affect on obtaining the final facility clearance certified for the freight forwarder. d. Personnel Security Clearance . In addition to the facility clearance, prompt action must be taken to identify personnel whose duties will require them to process the receipt, storage or shipment of the classified material. The requirements for clearance apply to management supervisors, warehousemen, guards, or any other persons who will have responsibilities and access to the classified materials. Action to obtain security clearances should be initiated with the appropriate DCASR office as noted above. These actions should begin at an early date, as acquiring security clearances may take several months . The DCASR Headquarters will obtain the assistance of DISC (Defense Industrial Security Clearance Office), Columbus, Ohio, to certify clearances of the required personnel . An important responsibility of the customer country in connection with freight forwarder operations is to evaluate the freight forwarder's per formance. A number of related factors will contribute to the overall effec- tiveness of a freight forwarder's activ- ities. These factors can serve as indicators to the quality of a freight forwarder's performance. A periodic 10-45 10360 review and evaluation by the customer of the freight forwarder's performance (Continued) with respect to these factors will serve to strengthen and improve the quality and effectiveness of the freight for- warder's operations. Any or all of the following factors are suggested for use by the customer in accomplishing this evaluation: a. Transit time data. b. Adequacy and timeliness of freight forwarder reporting of receipt and transshipment of cargo. c. Expeditious response to country follow-ups and tracer actions. d. Material condition upon receipt at each in-transit segment in the transportation pipeline. e. Damage/claim actions (by various carriers, CONUS and over-ocean); freight forwarder effectiveness in filing and processing claims and in reporting to the country the amounts of reparation received. f. Effectiveness of consolidation and containerization to preclude loss, damage, and pilferage. g. Effectiveness in receipt, processing, and transshipment of repar- ables and reparable return shipments . h. Timely response to Notices of Availability to preclude delays in delivery. i . Conformance with country special instructions in handling of priority shipments, and other shipments requiring special handling. 10-46 10360 j . Comparison of overall costs of high tariff carriers with low damage/ (Continued) claims ratios, as opposed to low tariff carriers with high damage/claim ratios, to assist freight forwarders in carrier selection. k. Consistency in freight for- warder billing for like services, e.g., per transaction, tonnage, cubage, case value, commodity, time frame, or other financial arrangement negotiated with the freight forwarder. 1 . Other factors which a country desires to employ in the measurement, comparison, and evaluation of the per- formance and services of its designated freight forwarder. 10370 This chapter has described the important role of freight forwarders in SUMMARY the movement of FMS material. It has: Emphasized that freight for- warders are the contractual agents of the FMS customer countries, and are not ele- ments of the U.S. supply system Described in general terms the material movement process for FMS material Described the concept of transfer of title to FMS material at the source of supply Described shipment related documentation in detail for both U.S. government and pri- vate shipments 10-47 10370 Described the special proce- dures for freight forwarder (Continued) handling of: Repairables Publications Classified material. 10-48 REFERENCES FOR CHAPTER 10 Military Assistance Program Address Directory (MAP AD) Department of Defense Publication DOD 5105. 38D MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command (NAVSUP) Publication 437 (NSN 0530 LP 170 0083) U.S. Navy International Logistics Program Naval Supply Systems Command Instruction (NAVSUPINST) 4900.34. 10-49/(10-50 blank) CHAPTER 11. SUPPLY ASSISTANCE TEAM AVAILABILITY AND SCOPE CHAPTER 11. SUPPLY ASSISTANCE TEAM AVAILABILITY AND SCOPE TABLE O F CONTENTS Page Number 11100 SECTION A--DESCRIPTION 11110 Purpose of Supply Assistance 11120 Role of the Fleet Material Support Office (FMSO) 11130 The International Logistics Support Department (FMSO Code 98) 11140 Responsibilities of FMSO Code 98 11141 Supply Management Consulting Services 11142 Basic Supply System 11143 Review of Training 11-1 11-1 11-1 11-1 11-1 11-2 11-3 11-3 11200 SECTION B--PROCEDURES 11210 How to Acquire the Services of the International Logistics Support Department 11211 Preparation for Visit 11-5 11-5 11-5 11300 SECTION C--AREAS OF SPECIAL INTEREST 11310 Objective Disclosure 11320 Need to Visit Country 11330 Need for Separate FMS Case for Supply Assistance 11-7 11-7 11-7 11-7 CHAPTER 11. SUPPLY ASSISTANCE TEAM AVAILABILITY AND SCOPE 11100 11110 PURPOSE OF SUPPLY ASSISTANCE 11120 ROLE OF THE FLEET MATERIAL SUPPORT OFFICE (FMSO) 11130 THE INTERNATIONAL LOGISTICS SUPPORT DEPARTMENT (FMSO CODE 98) 11140 RESPONSIBILITIES OF FMSO CODE 98 SECTION A — DESCRIPTION The purpose of this chapter is to describe the supply assistance that is available to foreign customers through the International Logistics Management Assistance Program. This program has been established to provide a central organization within the U.S. Navy to render assistance to foreign navies in developing and managing their own sup- ply systems. The organization responsible for the supply assistance program is the U.S. Navy Fleet Material Support Office (FMSO) at Mechanicsburg, Pennsylvania. FMSO operates under the command and management direction of the Commander, Naval Supply Systems Command (NAVSUP). The role of FMSO in international lo- gistics is in addition to its other responsibilities in providing system design, programming, and technical and administrative support to the U.S. Navy Supply System. The group within the FMSO organi- zation that accomplishes the supply assistance for foreign customers is the International Logistics Support Department (FMSO Code 98). This de- partment consists of a number of per- sonnel who are knowledgeable and ex- perienced in all phases of afloat and ashore supply management. Three major foreign customer as- sistance responsibilities are assigned to the International Logistics Support Department: To provide supply management consulting services to for- eign customers To make available a complete basic supply system that can be implemented by foreign customers 11-1 11140 (Continued) 11141 SUPPLY MANAGE- MENT CONSULTING SERVICES To review and recommend changes to the training con- ducted in the United States for foreign supply personnel. Each of these responsibilities and ser- vices will be explained in the follow- ing paragraphs. The methods of acquiring the services are described in paragraph 11310. Supply management consulting ser- vices are provided to help the foreign customer country solve problems within its own system of supply. The services normally begin with a visit by the U.S. team to the customer country to examine the supply system as it currently exists. This visit is accomplished by a team from FMSO Code 98. The team may consist of from one to four of- ficers and civilian professionals, and the length of the visit will vary de- pending upon the needs and desires of the country. The size of the team and the length of the visit are initially determined by the customer country based on its own assessment of the problem. During the initial visit, the U.S. team examines the methods cur- rently being used by the country to supply material to its naval units. The team assesses the status of the existing system, and determines if and where improvement might be made. A detailed written report is prepared which documents the findings of the visit. The report also contains spe- cific recommendations for improvements to the supply system. Additional visits to reexamine the system or to assist the foreign navy in implementing the recommenda- tions can be made. These additional 11-2 11141 (Continued) consulting visits are accomplished, based upon the desires of the foreign customer, but must be scheduled and funded as described in paragraph 11210. 11142 BASIC SUPPLY SYSTEM 11143 REVIEW OF TRAINING As a result of the consulting visits, the country may desire to alter or replace its existing supply system. The International Logistics Support Department has developed a complete basic supply system which may be implemented totally or partially by a foreign customer. This basic system includes procedural documenta- tion and instructions to allow full operation by the foreign navy. The customer country may have unique situations within its own military structure that prevent use of the basic system exactly as it was designed. For this reason, the system has been constructed so that it can be tailored to fit the needs of indi- vidual customer countries. The basic system also has been designed in modular fashion so that the entire system need not be adopted. Specific functional sections of the system can be independently placed into use. For example, a particular foreign navy supply system may need improvement only in the area of ship- ping and receiving material. In this case, the applicable shipping and receiving sections of the basic system could be implemented without changing the rest of the customer system. The final area in which the In- ternational Logistics Support Depart- ment provides services related to foreign customers is to review train- ing programs that are conducted in the United States for foreign navy supply personnel. The courses are reviewed 11-3 11143 in light of the problems which are en- countered during the consulting and (Continued) assistance visits. Recommendations are made to change the courses when necessary. In this manner, the courses can be structured to place proper em- phasis on areas that are known to be problems in many supply systems. These courses are described in Chapter 12. 11-4 11200 11210 HOW TO ACQUIRE THE SERVICES OF THE INTERNATIONAL LOGISTICS SUPPORT DEPARTMENT 11211 PREPARATION FOR VISIT SECTION B--PROCEDURES A foreign navy interested in uti- lizing the services of the Interna- tional Logistics Support Department (FMSO Code 98) should request assis- tance through the local U.S. MAAG, Military Mission, Defense Attache, or U.S. Embassy. This request should in- clude an estimate of the amount of assistance needed. The MAAG or other U.S. in-country activity will notify the U.S. Chief of Naval Operations (Code OP-63) of the foreign country's requirement. OP-63 will obtain a Price and Availability Statement from FMSO Code 98. The statement provides cost information for an initial visit to the country and provides a possible date for the visit. A Foreign Mili- tary Sales (FMS) case must be estab- lished to fund the salaries and travel of the assistance team. Any other costs to the United States incurred in implementing recommendations or a basic supply system must also be funded in an FMS case. The FMS case should specify in detail what services the foreign country desires. The foreign customer should make ample advance preparation for the U.S. assistance team visit. Proper preparation will allow for maximum use of the team's time in country and will probably result in less expensive services for the customer. Preparation should include but not be limited to: Arrangement for language in- terpretations if necessary Preparation of an overview briefing of the foreign country's logistic network 11-5 11211 . Preparation of detailed brief- ings on specific problem areas (Continued) Scheduling of visits and in- terviews with key supply per- sonnel at various activities. 11-6 11300 SECTION C--AREAS OF SPECIAL INTEREST 11310 OBJECTIVE DISCLOSURE 11320 NEED TO VISIT COUNTRY 11330 NEED FOR SEPARATE FMS CASE FOR SUPPLY ASSISTANCE This section provides several points of specific interest to the customer and reiterates some key points that have been previously noted. The results of the team visits are documented in objective reports that detail problem areas in the cus- tomer country's supply system. The customer should realize that the re- ports and recommendations will be ob- jective and will explicitly list weak- nesses in the system. Although strengths in the existing system will probably be noted, the purpose of the assistance visit is to correct those areas that need improvement. The need for the assistance team to visit the customer country is re- emphasized. The team can fully assess the existing system only by observing it in operation. Customer countries should remember this fact when request- ing assistance. Because of its impor- tance, the visit should be scheduled when it will be least disruptive to the country's ongoing operations, but at a time when it will reveal all as- pects of the system at work. The services of the International Logistics Support Department (FMSO Code 98 ) must be provided under a separate FMS agreement. Customers of the FMS program should realize that the assistance is not a part of their regular FMS agreement to purchase materials or equipment from the U.S. Government. The services of the team should be requested using the proce- dures noted in paragraph 11210. 11-7/(11-8 blank) CHAPTER 12. OTHER AREAS FOR SPECIAL ATTENTION CHAPTER 12. OTHER AREAS FOR SPECIAL ATTENTION TABLE OF CONTENTS Page Number 12100 FMS IMPLEMENTATION REVIEWS 12-1 12110 The Review Objective 12-1 12120' Review Scheduling 12-1 12130 FMS Implementation Review Conferences 12-2 12140 Customer Responsibilities 12-3 12150 Reports 12-5 12200 NAVILCO FIELD ASSISTANCE OFFICE 12-7 12300 TRAINING CONDUCTED IN THE UNITED STATES FOR FOREIGN SUPPLY PERSONNEL 12-9 12310 Navy Supply Management Course for Senior Foreign Officers 12-9 12320 Junior Foreign Officers Supply Course 12-9 12330 Basic Supply Course 12-10 12340 Field Support Depot Management Course 12-10 12350 Training Availability Details 12-10 CHAPTER 12. OTHER AREAS FOR SPECIAL ATTENTION 12100 12110 THE REVIEW OBJECTIVE 12120 REVIEW SCHEDULING FMS IMPLEMENTATION REVIEWS The U.S. Navy conducts Foreign Military Sales Implementation Reviews periodically for customer countries when the volume of a foreign country's FMS activity warrants. At these reviews representatives of foreign countries are invited to meet with USN representatives at specified locations in the continen- tal United States to: Exchange information on problem areas associated with implementation of FMS cases Attempt a reconciliation of requisition and shipment records maintained by the foreign customer's purchasing organization with those main- tained by the U.S. Navy Evaluate the status of the foreign customer country's entire FMS program against common baselines. In about June of each year, the Chief of Naval Material, acting for the Chief of Naval Operations, requests the Commander, Naval Supply Systems Command to propose a schedule for the next fiscal year's FMS Implementation Reviews. NAVSUP, in conjunction with NAVILCO, prepares a tentative schedule of the recommended countries and proposed conference dates for CNM. The schedule is based on the size of the FMS program under consideration, the length of time since the last review, and the expected time until the next projected review. Due to the diversity of FMS cases, it is not feasible to establish a specific sequence and schedule for all customer countries and all cases. In addition, 12-1 12120 (Continued) 12130 FMS IMPLEMEN- TATION REVIEW CONFERENCES the size of some customer countries' FMS business will not warrant the need to schedule an implementation review. The normal sequence of FMS Implementation Review conferences for the larger programs is to meet every two years. After CNM receives and reviews the tentative schedule from NAVSUP, it is forwarded to CNO for approval . Approxi- mately four months prior to the sched- uled conference the CNO will forward a letter to the customer country advising it when the FMS Implementation Review Conferences are scheduled and invite the customer country to send representa- tives . There are two meetings which com- prise the FMS Implementation Review Conference. The first is an initial meeting held at NAVILCO in Philadelphia, Pennsylvania, which has the following objectives: To reconcile U.S. records with those of the customer country To improve U.S. Navy perfor- mance in the delivery of material. The basic elements of this phase of the review are: Determination of all "open" requisitions according to NAVILCO records Determination of all "open" requisitions according to the customer country A meeting between NAVILCO and the customer country repre- sentatives to compare and reconcile records 12-2 12130 (Continued) The s two weeks NAVILCO, i Command He Matters of major logi are discus the purpos Correction and update of records based on the file comparison. econd meeting, approximately after the first meeting at s held at Naval Material adquarters in Washington, D.( a broader scope, such as sties and systems problems, sed at this meeting. It is e of this meeting to: Review the results of the NAVILCO-customer country meeting Review the general status of the FMS program for each customer Identify areas for possible improvement Discuss any specific problem areas. 12140 CUSTOMER RESPONSIBILITIES Based upon agenda items and topics to be discussed during this phase of the review, representatives of NAVAIR, NAVELEX, NAVSEA, and appropriate field activities may attend in addition to representatives of OPNAV, NAVMAT, NAVSUP, NAVILCO and the customer coun- try. The two meetings of the FMS Imple- mentation Review Conference provide a forum for the customer country to evaluate the details and the policies of FMS participation, and to present recommendations for FMS case implemen- tation. After the letter of invitation, discussed in paragraph 12120, issued by the CNO, NAVILCO prepares and forwards to the customer country an open item 12-3 12140 listing. This listing identifies all requisitions for which U.S. Navy records (Continued) indicate that materials remain undeliv- ered. The customer country is respon- sible for identifying differences between customer records and the NAVILCO listing. It is this information which constitutes the customer country's input for the NAVILCO meeting. The customer country should follow the guidance below for reviewing/up- dating the open item listing. For all requisitions where data differ between customer and U.S. records: Indicate items previously cancelled Indicate items shipped, date shipped, mode of shipment, supplying activity, and contract number if available. Evaluate whether or not items on requisitions over 120 days old are still required. Advise NAVILCO which of these items may be cancelled outright. Advise NAVILCO which of these items may be cancelled and resubmitted under a current FMS case. Customer country preparation for the Washington conference should include identification of agenda items and topics for discussion. Any problems identified should cite specific examples wherever possible. This input should be made to the Chief of Naval Material (MAT-08FG) at least one month in advance of the scheduled meeting date to permit proper staffing. 12-4 12150 The heart of the NAVILCO meeting is the reconciliation of the FMS case REPORTS records with those of the customer country. The reconciliation process determines which items have been re- ceived by the customer, which have been cancelled, and which are still required. Once this reconciliation is complete, a Summary of Ac complishments report is prepared by NAVILCO for distribution to NAVSUP, NAVMAT, and participants in the FMS Review. This summary report pro- vides the following information: Country program concerned Number and dollar value of the related FMS cases Date of reconciliation Number and dollar value of line items received Number and dollar value of line items not reconciled Number and dollar value of FMS cases which became candidates for closure Estimated number of NAVILCO man-hours required to conduct the reconciliation Recommendations. In addition to the above NAVILCO report, NAVMAT will forward a letter to the customer country upon completion of the Washington meeting. This letter summarizes matters which were discussed at the Headquarters, Naval Material Command. The summary will include background, discussion, and action taken or to be taken for each agenda item and topic discussed. 12-5/(12-6 blank) 12200 NAVILCO FIELD ASSISTANCE OFFICE The NAVILCO Field Assistance Office is established to provide liaison be- tween NAVILCO and its customers. The Field Assistance Office's mission is to conduct field assistance and indoc- trination visits to U.S. Government agencies, and to FMS customer countries, in conjunction with U.S. Navy-sponsored Security Assistance Programs. Specific responsibilities assigned to the Field Assistance Office (NAVILCO Code 04) are to: Act as the focal point for customer inquiries Resolve customer's problems with the assistance of the cognizant NAVILCO organiza- tional codes Indoctrinate U.S. and foreign personnel on NAVILCO 's organ- ization and mission Provide training of U.S. and foreign personnel in the FMS functional areas of supply, procurement, financial ac- counting, billing, and man- agement information systems. These responsibilities are carried out based upon NAVILCO' s knowledge that assistance is required by a customer, as well as a customer's request. Once it is determined advisable to visit a customer, NAVILCO initiates a letter of intent to the country. The letter requests permission to conduct a field assistance visit and propose dates for the visit. Also, it details agenda topics to be covered during the visit and solicits any problems, procedures, or policies the country would like to have discussed. 12-7 12200 The training provided by the Field Assistance Office covers the re- ( Continued) lationship of the foreign customer with the U.S. supply system through the Security Assistance Program. This con- trasts with the training provided by FMSO's International Logistics Support Department which assists the customer country in developing and managing its own supply system. 12-8 12300 TRAINING CONDUCTED IN UNITED STATES FOR FOREIGN SUPPLY PERSONNEL 12310 NAVAL SUPPLY MANAGEMENT COURSE FOR SENIOR FOREIGN OFFICERS 12320 JUNIOR FOREIGN OFFICER SUPPLY COURSE The Naval Supply Systems Command offers several courses which are held in the United States to train foreign supply personnel. These courses are designed to provide supply personnel of foreign countries with an understanding of the principles, procedures, and the techniques used for supply management in the U.S. Navy. Specific courses available are discussed in paragraphs 12310 through 12340. The Naval Supply Management Course for Senior Foreign Officers is conducted annually, usually in September and October, by NAVSUP in Washington, D.C. This 8-week course is designed to pro- vide foreign officers (in the grade of Commander, or equivalent, and higher rank) with an understanding of princi- ples and techniques in the major areas of supply management. The course us- ually includes field visits to Ships Parts Control Center (SPCC), the Fleet Material Support Office (FMSO), the Navy International Logistics Control Office (NAVILCO), the Naval Supply Center, Norfolk, Virginia, and to a Canadian supply activity. The Junior Foreign Officer Supply Course is conducted twice annually at the U.S. Navy Supply Corps School, Athens, Georgia. This 7-week course is intended to provide middle-level supply supervisors with a working-level knowledge of supply management, and familiarity with the U.S. Navy Supply System. Upon completion of the classroom portion of the course, field visits are arranged to Washington, D.C, the Navy International Logistics Control Office, and 1 to 2 weeks on-the-job functional training at one of two Naval Supply 12-9 12320 (Continued) 12330 BASIC SUPPLY COURSE 12340 FIELD SUPPORT DEPOT MANAGE MENT COURSE 12350 TRAINING AVAILABILITY DETAILS Centers (Norfolk, Virginia, or Oakland, California). In addition, depending on the future assignment of a particular officer, orientation tours aboard a U.S. Navy ship can be arranged. A 6-month basic supply course is taught at the U.S. Navy Supply Corps School, Athens, Georgia, for all newly commissioned Supply Corps Officers of the U.S. Navy. If desired, a foreign country may make arrangements for for- eign officers to attend a modified version of this course. The modified course includes all the normal supply functional areas, except disbursing and retail operations. Since foreign of- ficers are assigned to regular classes with other U.S. officers in attendance, it is necessary that all foreign of- ficers assigned to this course be pro- ficient in reading and writing the English language. A Field Support Depot Management Course is conducted periodically to provide specific training for supply personnel of those countries that choose to implement all or a portion of the basic supply system described in para- graph 11142. This 8-week course is conducted at the U.S. Naval Supply Corps School, Athens, Georgia. For further details, specific costs, and other information about these training programs, foreign navy customers should contact the Navy Sec- tion of a U.S. Military Assistance Advisory Group, U.S. Military Mission, U.S. Defense Attache, or U.S. Embassy in their respective country. Once the U.S. Navy component re- ceives a request for training of foreign personnel, it is forwarded to the Chief of Naval Operations (OP-63) in the United States for approval and scheduling. 12-10 APPENDIX A - BIBLIOGRAPHY APPENDIX A(l) APPENDIX A BIBLIOGRAPHY 1. Cataloging Handbook- -H4, Federal Supply Code for Manufacturers, United States and Canada Defense Supply Agency (Defense Logistic Services Center, Battle Creek, Michigan) (NSN 0581 LP 004 1709) 2 . Cooperative Logistics Supply Support Arrangements (CLSSA) Department of Defense Instruction (DODINST) 2000.8 3 . Department of the Navy Information Security Program Regulation Chief of Naval Operations Instruction (OPNAVINST) 5510.1 4. Introduction to Federal Supply Catalogs and Related Publications Naval Supply Systems Command (NAVSUP) Publication 4000 (NSN 0588 LP 411 2000) 5. Management List - Navy (ML-N) Naval Supply Systems Command (NAVSUP) Publication 4100 (NSN 0588 LP 411 1000) 6 . Master Repairable Item List (MRIL) Naval Supply Systems Command (NAVSUP) Publication 4107 (NSN 0588 LP 410 2600) 7. Military Assistance and Sales Manual Department of Defense (DOD) Publication 5105. 38M 8. Military Assistance Program Address Directory (MAPAD) Department of Defense (DOD) Publication 5105. 38D (NSN 0526 LP 510 5430) 9. MILSTRIP/MILSTRAP Operating Procedures Manual Naval Supply Systems Command (NAVSUP) Publication 437 (NSN 0530 LP 170 0083) 10. Navy Stock List of Puboications and Forms Naval Supply Systems Command (NAVSUP) Publication 2002 (NSN 0535 LP 004 0100) APPENDIX A(2) 11 . Processing Repairables Chief of Navy Material Instruction (NAVMATINST) 4900. 13B 12 . Reporting and Processing of Discrepancy Reports Against Foreign Military Sales Shipments Defense Supply Agency (DSA) Regulation 4140.60 Naval Supply Systems Command Instruction (NAVSUPINST) 4920.9 13 . Uniform Military Movement and Issue Priority System (UMMIPS) Department of Defense Instruction (DODINST) 4410.6 Chief of Naval Operations Instruction (OPNAVINST) 4614.1 14. U.S. Navy International Logistics Program Naval Supply Systems Command Instruction (NAVSUPINST) 4900.34 APPENDIX B - GLOSSARY OF TERMS AND ABBREVIATIONS APPENDIX B(l) APPENDIX B GLOSSARY OF TERMS AND ABBREVIATIONS FOREWORD This Glossary of Terms and Abbreviations is a summary of selected terms and abbreviations frequently used in the Foreign Military Sales Program. The definitions included here are designed to assist the foreign customer in reaching a common understanding of terms applicable to Foreign Military Sales activities. Most of the terms and abbreviations selected for inclu- sion are associated in some way with FMS suppport. The definitions and abbreviations are identified here primarily to assist the foreign supply officer in his orientation and appreciation of the U.S. supply system, its procedures, and techniques. The Glossary is in two parts: 1. Summary of Selected Terms 2. Frequently Used Abbreviations. APPENDIX B(2) PART 1 GLOSSARY OF SELECTED FMS TERMS LETTER OF OFFER/ ACCEPTANCE (DD Form 1513) ACCEPTANCE DATE ACCEPTED CASE ACCESSORIAL CHARGES A formal government contract stating terms and conditions for the sale of material and services. The DD Form 1513 lists the items and/or services, estimated costs, the terms and conditions of sale, and provides for the foreign government's signature to indicate acceptance. The date which appears on the acceptance portion of DD Form 1513 and indicates the calendar date on which a foreign buyer agrees to accept the items and conditions contained in the FMS offer portion. An FMS offer and acceptance for definitized requirements signed by the designated representative of the customer country. A separate charge for packing, crating, port handling and loading, and transportation (PCH&T) associated with preparation and delivery of material. ACQUISITION VALUE The actual or estimated value of an item or service in terms of its original cost to the U.S., exclusive of any costs incurred subsequent to acquisition and without regard to the time at which actual acquisition oc- curred or the method by which it was financed. ADMINISTRATIVE CHARGES CASE, FMS Charges levied for use of the DOD Supply System. Identifies a DD Form 1513 foreign military sale. A contractual sales agreement between the U.S. and an eligible foreign country documented APPENDIX B(3) CASE DESCRIPTION by DD Form 1513. One FMS case designa- tor is assigned for the purpose of identification, accounting, and data processing for each accepted offer (DD Form 1513). A short generic description specifically prepared to describe the content of each FMS case. CASE DESIGNATOR CLOSED CASE A three-digit alphabetic code used with a country identification code to identify a particular foreign military sale. An FMS case on which all material has been delivered and/or all services have been performed; all financial transactions, including all collections, have been completed; and the customer has received a final statement of account. COMMERCIAL- TYPE ITEMS Any items, including those expended or consumed in use, which, in addition to to military use, are used and traded in normal civilian enterprise and which are, or can be, imported/exported through normal international trade channels. COMPLETED CASE CONCURRENT SPARE PARTS CONSTRUCTIVE DELIVERY Delivery of all material/services as stated on the DD Form 1513 and for which all collections have been com- pleted, but for which the final accounting statement has not been furnished the purchaser. Spare parts programmed as an initial stockage related to a major item and normally delivered concur- rently with the major item. Delivery of material to a carrier for transportation to the consignee, or delivery to a U.S. post office for shipment to the consignee. Delivery is evidenced by completed shipping APPENDIX B(4) CONSUMABLE SUPPLIES CONSUMPTION documents or listings of delivery at the U.S. post office. The delivery of material to the customer or the customer's designated freight forwarder at point of supply, production, or testing constitutes actual delivery. Supplies which are consumed in use, such as paint, fuel, cleaning and preserving materials, drugs and medicines, or items which lose their identity, such as spare parts. The actual or estimated quantity of an item consumed or expended during a given time interval, expressed in quantities by the most appropriate unit of measure. COOPERATIVE LOGISTICS SUPPLY SUPPORT ARRANGEMENTS (CLSSA) COUNTRY IMPLEMENTATION REVIEW COUNTRY REPRESENTATIVE An agreement between a U.S. military service and a friendly foreign military service setting forth the terms and conditions for providing support in peacetime through the U.S. Logistics System. This agreement replaces Cooperative Logistics Support Arrangements (CLSA) and Supply Support Agreements (SSA). NAVILCO coordination and recon- ciliation of FMS requisition status, delivery, and financial records with the supply system and customer country representatives. Designated country official such as Consul, Attache or Resident Customer Representative, responsible for control of FMS case transactions. DEFENSE ARTICLES Includes any weapon, weapons system, munition, aircraft, vessel, boat, or other implement of war; any property, installation, commodity, material, equipment, supply, or goods used for the purposes of furnishing military assistance; any machinery, APPENDIX B(5) facility, tool material, supply, or other items necessary for the manu- facture, production, processing, re- pair, servicing, storage, construction, transportation, operation, or use of any other defense article or any com- ponent or part of any articles listed above . DEFENSE SERVICE Includes any service, test, inspec- tion, repair training, publication, or technical or other assistance, or defense information used for the pur- pose of furnishing military assistance. "Training" includes formal or informal instruction of foreign students in the United States or overseas by officers or employees of the United States, contract technicians, contractors (including instruction at civilian institutions), or by correspondence courses; technical, education, or information publications and media of all kinds; and training aid orien- tation, training exercise, and mili- tary advice to foreign military units and forces . DELIVERED ( COMPLETED ) CASE DEPENDABLE UNDERTAKING DESIGNATED COUNTRY REPRESENTATIVE An FMS case on which all material has been delivered and all services have been performed. The case is not closed until final billing action is taken and funds are received. An agreement on the part of a foreign country to pay the U.S. on demand for goods and services provided A person or persons duly autho- rized by a foreign government to act on behalf of that government to nego- tiate, commit, sign contractual agree- ments, and/or accept delivery of material. APPENDIX B(6) DIRECT REQUISITIONING END ITEM EQUIPMENT An open-end requisitioning case covering undefinitized spare parts for a specific weapons system. The FMS case is of specific duration, normally 12 months . Assembled whole system or equip- ment, ready for its intended use, (1) for which only ammunition, fuel or other energy sources are required to place them in an operating state, and (2) consisting of components and parts with or without accessories or attachments, e.g., rifles, tanks, aircraft, ships. All items of a durable nature which are capable of continuing or repetitive utilitarian use by an in- dividual or organization. All articles other than supplies needed to outfit an individual or organization. as : Such equipment may be classified Individual equipment — items required for the personal use of individuals. Organizational equipment — items required for the use of an organization or unit. Special or project equipment — items not authorized in stan- dard equipment allowance publi- cations, but determined as essential in connection with a particular contemplated operation, function, or mission. APPENDIX B(7) EXPIRED LETTER OF OFFER/ ACCEPTANCE FOREIGN MILITARY SALES An FMS case which was not accepted or funded within prescribed time limita- tions or was canceled by the requesting country or the U.S. Government. For cash sales from stocks of the DOD; procurement for cash sales by the DOD; credit sales, and DOD guaranties covering the private financing of credit sales of defense articles and defense services. FOREIGN MILITARY SALES ORDER (FMSO) - I FOREIGN MILITARY SALES ORDER (FMSO) - II A letter of Offer and Acceptance (DD Form 1513) covering the estimated dollar values of the quantities of items to be stocked (on hand) and continuously procured (on order) for support of the country's U.S . -furnished equipment. A consumption FMSO which encom- passes a letter of Offer and Accept- ance (DD Form 1513) covering the participating country's estimated withdrawals of material from the supply system for an agreed period of time. FREIGHT FORWARDER IMPLEMENTATION DATE OFFER DATE INVENTORY CONTROL POINT Any representative designated by a customer country to accomplish/ control shipments of FMS material. The date when supply action on an FMS case is initiated or directed by the implementing agency. The date which appears on the offer portion of DD Form 1513 and which indicates the date on which an FMS offer is made to a foreign buyer. An organizational unit or activity within a Department of Defense supply system which is assigned the primary responsibility for the material APPENDIX B(8) MAXIMUM RELEASE QUANTITY (MRQ) MILITARY STANDARD REQUISITIONING AND ISSUE PROCEDURES (MILSTRIP) NON-RECURRING DEMAND ON-HAND STOCK LEVEL ON-ORDER STOCK LEVEL OPEN SALES CASE OPTIONS, TYPES management of a group of items either for a particular service or for the Defense Department. The largest quantity of an item of supply that will be issued automatically by a computer in response to a requisi- tion. A uniform procedure established by the Department of Defense for use within the Department of Defense to govern requisitioning and issue of material within standardized priorities. Demands placed on the supply sys- tem to establish or augment but not to replenish stock levels in the customer's country. The quantity of an item of supply required to be physically available in the supply system to meet anticipated demands . The quantity of an item of supply required to be continuously on contract to replenish the on-hand stock level. An FMS case is designated open as long as any portion of the transaction is incomplete, i.e., delivery of material, performance of services, financial transactions, or rendering of the final statement of accounts. Methods by which countries partic- ipating in the FMS program indicate, by coded entry on DD Form 1513, whether material shipments should be released automatically by the stock points or require prior notice to country repre- sentatives or freight forwarders . The type of option will be determined as a result of negotiations between the country representatives and CNO at the time of case negotiation. APPENDIX B(9) ORIENTATION TOURS Type A — Depicts automatic shipment without notice. Type Y — Advice to FMS country representatives/freight forwarders that FMS material will be shipped on the 15th day subsequent to the date of the Notice of Availability, unless alternate shipping instructions are received. Type Z — Advice to FMS country representatives/ freight forwarders that FMS material is ready for ship- ment and specific shipping instructions are required. Tours arranged for key foreign personnel for the purpose of orientation and indoctrination. PRICE AND AVAILABILITY PRICE INCREASE AUTHORITY PROCUREMENT LEAD TIME PURCHASE ORDER Requested by a customer country when that country requires material and services not listed on the Management List - Navy (ML-N), in which case he comes to NAVILCO for spares, etc., or Chief of Naval Operations for major items, etc., requesting the price, availability (from stock or outside purchase), and assignment of case number, Standard items are supplied at the latest price where available from stock. If procurement is necessary for standard or non-standard material, customer approval is to be secured before pur- chase is made at higher costs which exceed automatic FMS case price increase authorization . The interval between the initiation of a procurement request and receipt of an item into the supply system. Document authorizing a vendor to deliver material/equipment or perform services. Upon acceptance by vendor, this constitutes a purchase contract. APPENDIX B(10) RECURRING DEMAND RENEGOTIATION REORDER POINT REPAIRABLES SAFETY LEVEL Demands placed on the supply system to replenish and maintain pre- viously established stock levels. Adjustment of the dollar level of FMSO-I investment in U.S. stocks in direct proportion to changes in the dollar value of the recurring demand level, changes in program data and con- figuration changes . That level (quantity of material) at which the DOD inventory manager takes procurement action to replenish his stock. Equipments or components which, upon failure, are repaired and returned to stock for reissue. That level (quantity of material) required to be on hand to permit con- tinuous operations in the event of minor interruption of normal replenish- ment or unpredictable fluctuations in demand . STORAGE CHARGES SUPPLY OPERATION COSTS Charges for warehousing, care and preservation of material on hand in the U.S. inventories for a participating country. Refers to related costs of procure- ment and issue of material and articles delivered to FMS recipients but not included in the standard prices of the material. These costs include packing, crating, handling and transportation expenses incurred in the issue and transfer of material; and logistics management expenses incurred by activi- ties in the areas of procurement opera- tions, supply management, requisition control and processing, and related services. APPENDIX B(ll) SUPPLY SUPPORT AGREEMENTS (SSA) TRAINING See Cooperative Logistics Supply Support Arrangements (SSA - Obsolete terminology) . Formal or informal instruction of foreign students in the United States by contract technicians, contractors (including instruction at civilian institutions ) , or by correspondence courses; technical, educational, or information publications and media of all kinds; and training aids, orienta- tion, training exercises, and military advice to foreign military units and forces . UNIFORM MATERIAL MOVEMENT AND ISSUE PRIORITY SYSTEM (UMMIPS) A standard system used in the U.S Department of Defense to assign priori- ties for the issuance and movement of material. APPENDIX B(13) PART II GLOSSARY OF ABBREVIATIONS ADP ADSHIPDA APL ASO AUTODIN AVCAL B/L CAO CBL CLSSA CNM CNO COG COMNAVSUP CONUS COOPLOG COSAL C-MCRL DAAS DLA DLSC DOD DOP DRP DSAA DSC DTG EAM FAD FMS FMSO FMSO-I FMSO- I I FSN FY GBL GFE Automatic Data Processing Advise Shipping Data Allowance Parts List Aviation Supply Office Automatic Digital Network Aviation Consolidated Allowance List Bill of Lading Case Administering Office Commercial Bill of Lading Cooperative Logistics Supply Support Administration Chief of Naval Material Chief of Naval Operations Navy Material Cognizance Symbol Commander, Naval Supply Systems Command Continental United States Cooperative Logistics Consolidated Shipboard Allowance List Consolidated Master Cross-Reference List Defense Automatic Addressing System Defense Logistics Agency Defense Logistic Services Center Department of Defense Designated Overhaul Point Direct Requisitioning Procedure Defense Security Assistance Agency Defense Supply Center Date Time Group Electric Accounting Machine Force/Activity Designator Foreign Military Sales U.S. Navy Fleet Material Support Office Foreign Military Sales Order (Stock Level Case) Foreign Military Sales Order (Requisition/ Consumption Case) Federal Stock Number (see NSN) Fiscal Year Government Bill of Lading Government Furnished Equipment APPENDIX B(14) GFM GSA GSE ICP IOL ISSA JCS LOA MAC MAP AD MILSTRAP MILSTRIP ML-N MRIL MSC MTC NARF NAS NAVAIR NAVCOMPT NAVELEX NAVFAC NAVILCO NAVMAT NAVSEA NAVSUP NMC NPFC NRFI NSC NSD NSN NSY NTEC OPNAV OVHL PLT P/N QTY RFI SAAC Government Furnished Material General Services Administration Ground Support Equipment Inventory Control Point Initial Outfitting List Interservice Supply Support Agreement Joint Chiefs of Staff Letter of Offer and Acceptance Military Airlift Command Military Assistance Program Address Directory Military Standard Transportation Reporting and Accounting Procedures Military Standard Requisitioning and Issue Procedures Management List - Navy Master Repairable Item List Military Sealift Command Military Traffic Command Naval Air Rework Facility Naval Air Station Naval Air Systems Command Comptroller of the Navy Naval Electronic Systems Command Naval Facilities Engineering Command U.S. Navy International Logistics Control Office Naval Material Command Naval Sea Systems Command Naval Supply Systems Command Naval Material Command Naval Publications and Forms Center Not Ready For Issue Naval Supply Center Naval Supply Depot Naval Stock Number Naval Shipyard Naval Training Equipment Center Office of the Chief of Naval Operations Overhaul Procurement Lead Time Part Number Quantity Ready For Issue Security Assistance Accounting Center APPENDIX B(15) SNSL SPCC SSA SUPO SYS U/I U/P UMMIPS USG USA USAF USMC USN Stock Number Sequence List Ships Parts Control Center Supply Support Arrangements Supply Office System Unit of Issue Unit Price Uniform Material Movement and Issue Priority System United States Government United States Army United States Air Force United States Marine Corps United States Navy APPENDIX C - KEY USN POINTS OF CONTACT FOR FMS CUSTOMERS APPENDIX C(l) APPENDIX C KEY USN POINTS OF CONTACT FOR FMS CUSTOMERS U.S. NAVY ACTIVITY Chief of Naval Operations Chief of Naval Material Naval Air Systems Command Naval Electronic Systems Command Naval Publications and Forms Center DESIGNATED POINT OF CONTACT Director, Security Assistance Division Office of the Chief of Naval Operations (Code: OP-63 ) Washington, D.C. 20350 Assistant Deputy Chief of Naval Material (Security Assistance) (Code: MAT 08F) Headquarters Naval Material Command Washington, D.C. 20360 Director, Security Assistance Division (Code: AIR 01A4) Headquarters Naval Air Systems Command Washington, D.C. 20360 Director, International Logistics Program Office (Code: ELEX-09FL) Headquarters Naval Electronic Systems Command Washington, D.C. 20360 Commanding Officer Naval Publications and Forms Center (Customer Service) Philadelphia, PA 19111 APPENDIX C(2) U.S. NAVY ACTIVITY Naval Sea Systems Command Naval Supply Systems Command Navy Aviation Supply Office Navy Fleet Material Support Office Navy Ships Parts Control Center U.S. Navy International Logistics Control Office DESIGNATED POINT OF CONTACT Director, Security Assistance Division (Code: SEA-04G) Headquarters Naval Sea Systems Command Washington, D.C. 20360 Director, International Logistics Division (Code: SUP-033) Headquarters Naval Supply Systems Command Washington, D.C. 20376 Commanding Officer Aviation Supply Office (Code: SCF-A) 710 Robbins Avenue Philadelphia, PA 19120 Commanding Officer Fleet Material Support Office (Code: 98) Mechanicsburg, PA 17055 Commanding Officer Ships Parts Control Center (Code: 510) Mechanicsburg, PA 17055 Commanding Officer U.S. Navy International Logistics Control Office (Code: 04) Philadelphia, PA 19111 APPENDIX C(3) OTHER Defense Automatic Addressing System Office Security Assistance Accounting Center DESIGNATED POINT OF CONTACT Gentile Air Force Base Dayton, OH 45444 Director Security Assistance Accounting Center Lowery Air Force Base Denver, CO 80279 APPENDIX D - PROCEDURE FOR RECOMMENDING CHANGES TO FMS CUSTOMER GUIDE APPENDIX D (1) APPENDIX D PROCEDURE FOR RECOMMENDING CHANGES TO THE FMS CUSTOMER GUIDE Recommendations to the Commander, Naval Supply Systems Command for changes, corrections and revisions to the FMS Customer Guide are invited. To assist the reader in preparation and submission of recommendations for improvement in the format and content of the Guide, a sample letter for recommending such changes to the Commander NAVSUP (033) is provided for suggested use by all holders of the FMS Customer Guide: Date From: (Insert name and address of FMS Customer Rep- resentative originating Letter Recommending Change) To: Commander, Naval Supply System Command (Attention: Director, International Logistics Division, SUP 033) Department of the Navy Washington, D.C. 20376 Sub j : Recommended change to NAVSUP Publication 526, FMS Customer Guide 1. The following change is recommended for inclusion in the next revision and update of NAVSUP Publication 526, FMS Customer Guide : A. PROPOSED CHANGE Chapter Paragraph Page Description of Change (or Figure) (Entries in each column will identify the specific portion of the Guide, for example, the page, paragraph, or graphic illustration, requiring correction or revision) B. ADDITIONAL REMARKS (If required, to explain reason for proposed change described in Section A. above) Signature :.• U.S. GOVERNMENT PRINTING OFFICE: 1980—665-134/2060 UNIVERSITY OF ILLINOIS URBANA 3 0112 104100828