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FAR and DFARS › DFARS Part 225: Foreign Acquisition › Subpart 225.73

DFARS 225.7303-5 Acquisitions wholly paid for from nonrepayable funds.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section governs how to price Foreign Military Sales (FMS) acquisitions that are wholly paid for with nonrepayable funds. It requires pricing on the same costing basis as DoD buys for its own use, allows certain direct and indirect costs for foreign customer unique requirements, and prohibits recovery of offset agreement costs. This matters because it limits what a contractor can charge and recover on these contracts.

Applies to: FMS acquisitions wholly paid for from nonrepayable funds

What it requires

  • Price FMS wholly paid for from nonrepayable funds on the same costing basis as DoD acquisitions of like items for its own use
  • Do not recover costs incurred for offset agreements with a foreign government or international organization if the LOA is financed with nonrepayable funds

Key terms: FMS · nonrepayable basis · costing basis · IR&D/B&P · offset agreements

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) In accordance with 22 U.S.C. 2762(d), price FMS wholly paid for from funds made available on a nonrepayable basis on the same costing basis with regard to profit, overhead, IR&D/B&P, and other costing elements as is applicable to acquisitions of like items purchased by DoD for its own use.

(b) Direct costs associated with meeting a foreign customer's additional or unique requirements are allowable under such contracts. Indirect burden rates applicable to such direct costs are permitted at the same rates applicable to acquisitions of like items purchased by DoD for its own use.

(c) A U.S. defense contractor may not recover costs incurred for offset agreements with a foreign government or international organization if the LOA is financed with funds made available on a nonrepayable basis.

Sections that refer to it

  • 225.7303-2 Cost of doing business with a foreign government or an international organization.

← 225.7303-4 Contingent fees. · 225.7304 FMS customer involvement. →

Rule changes for DFARS Part 225

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

DFARS 225.7303-5 Acquisitions wholly paid for from nonrepayable funds · SpendQuery