Guide

Foreign Military Sales vs Direct Commercial Sales: which one, and who decides?

Updated 12 September 2026

As a matter of policy the U.S. Government is neutral on whether a partner buys U.S. defense articles through Foreign Military Sales or commercially, with one class of exceptions: the articles and services the Secretary of State has designated Government-to-Government-Only, which may be transferred only through government channels. Within that boundary the purchaser decides — a U.S. company can ask DSCA for a Direct Commercial Sales preference on a specific solicitation, valid for one year, and Foreign Military Financing may fund a commercial contract only for eligible partners, currently all NATO members and Major Non-NATO Allies (as of 11 September 2026).

In this guide

What is a Direct Commercial Sale?
A Direct Commercial Sale is made by U.S. industry directly to a foreign buyer under a Department of State license and is not administered through Foreign Military Sales procedures. The two are different procurement methods for the same U.S. defense articles and services.
When must a sale go through Foreign Military Sales?
Defense articles and services may be designated Government-to-Government-Only on criteria such as technological sensitivity, and the manual keeps a consolidated list of them. A designated item is sold only through government channels.
What is a Direct Commercial Sales preference?
Where the U.S. Government is neutral on the route, a U.S. defense firm may designate a preference that a sale of its products be made commercially. If the Implementing Agency then receives a request for the same item, it notifies the purchaser of the preference.
Can a purchaser ask for a Foreign Military Sales offer and a commercial quote at the same time?
It is U.S. Government policy not to compete with U.S. industry for foreign defense sales. A purchaser that has Foreign Military Sales data and then wants a commercial quote should cancel its Letter of Request first, and one that solicited bids first must show that the commercial effort has ceased.
Can one purchase combine Foreign Military Sales and Direct Commercial Sales?
An overall sale can be separated into a Foreign Military Sales portion and a Direct Commercial Sales portion, and U.S. industry may request defense articles and services from the U.S. Government to support a commercial sale.
Can Foreign Military Financing pay for a direct commercial contract?
A partner's Foreign Military Financing allocation may fund a direct commercial contract only if the partner meets specific eligibility criteria; otherwise the financing is used through a Foreign Military Sales case.
Who manages the procurement in a Foreign Military Sale?
Under Foreign Military Sales the U.S. Government assumes responsibility for the procurement: it selects the source, negotiates the contract and administers it under the rules it uses for its own purchases. Under a Direct Commercial Sale the purchaser deals with the contractor directly and carries those functions itself.
What are the advantages and disadvantages of Foreign Military Sales compared with Direct Commercial Sales?
Neither route is faster than the other in general, and the U.S. Government does not support cost comparisons between them. The government-to-government relationship can be viewed as an advantage or a disadvantage depending on the purchaser.

Foreign Military Sales vs Direct Commercial Sales: which one, and who decides?

In comparing the FMS system to the DCS system, it is important to realize that the decision rests with the international partner, and the USG is generally neutral, aside from the Government-to-Government-Only (G2G-Only) list. Additionally, both FMS and DCS acquisitions offer various international partner participation options. In essence, the decision concerning procurement via FMS or DCS fundamentally involves a decision about the degree of procurement involvement the international partner desires to assume and what degree of procurement responsibility the international partner is willing to give to the DOD.

References

Drawn exclusively from publicly available authorities.

SAMM

SAMM C4.3.4 — Neutrality.
SAMM C4.3.5 — Government-to-Government Only Determinations.
SAMM C4.3.6 — Direct Commercial Sales Preference.
SAMM C4.3.7 — Concurrent Foreign Military Sales and Commercial Negotiations.
SAMM C4.4.3 — Logistics Support.
SAMM C6.3 — Case Execution - Acquisition
SAMM C1.3.2.6.2.1 — Defense Contract Management Agency.

Public authorities

Arms Export Control Act of 1976, as amended, §36(b) (22 U.S.C. §2776(b)) — AECA §36(b)

Facts referenced

Validity period of an approved Direct Commercial Sales preference — one year (as of 11 September 2026) — SAMM C4.3.6.3
Partners eligible to use Foreign Military Financing for a direct commercial contract (current statutory scope) — all NATO members and Major Non-NATO Allies (as of 11 September 2026) — SAMM C9.7.3
Countries originally granted authority to use Foreign Military Financing for direct commercial contracts (FY 1989 Congressional Presentation) — Israel, Egypt, Jordan, Morocco, Tunisia, the Republic of Turkiye, Portugal, Pakistan, Yemen, and Greece (as of 11 September 2026) — SAMM C9.7.3

RoleIndustry Business Development RoleWeapon System Program Office Pipeline stagePre-LOR — Requirements & Engagement Pipeline stageLetter of Request Submission GuideDoes Congress have to approve arms sales?

Foreign Military Sales vs Direct Commercial Sales: which one, and who decides?

Foreign Military Sales vs Direct Commercial Sales: which one, and who decides?

References

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