Some of the differences between FMS sales and foreign direct
commercial sales are:
- Nature of relationship – In foreign direct commercial sales,
customer negotiates directly with the vendor. Whereas, the US DOD
negotiates with the customer on behalf of the vendor.
- Involvement of US government- In foreign direct commercial
sales, the US government is not involved in the transaction.
Whereas, the involvement of the US government through US DOD is
there in foreign military sales as it assumes contracting risk and
be responsible for making it sure that vendor meets cost, schedule,
and performance requirements.
- Export licenses- Export approval must be taken for the vendor
from the US State Department, in foreign direct commercial sales.
Whereas, foreign military sales is a government to government
transfer, hence, the process of export is managed by the US DOD
itself.