Nations procuring military goods and services through the U.S. Foreign Military Sales program are to pay a lower surcharge for contract administration services.

The U.S. Defense Security Cooperation Agency has announced it is lowering its Contract Administration Services Surcharge Rate from 1.5 percent to 1.2 percent effective Dec.1.

DSCA said it was able to lower the CAS rate after analyzing numerous "financial indicators, including the overall health of the CAS surcharge account, CAS provider expense levels, and historical sales levels."

The CAS surcharge -- assessed on the total value of an item or service -- covers the contract administrative management costs of the FMS program. Included are charges for quality assurance assessments and contract management.

The 3.5 percent FMS Administrative Surcharge levied on all sales will not be affected by the CAS reduction, the agency said.

Under the U.S. Arms Export Control Act, which authorized the Foreign Military Sales program, FMS must be managed at no cost to the U.S. government.