LOA

Definition

LOA (Letter of Offer and Acceptance) is the formal document in the Foreign Military Sales (FMS) process through which the U.S. government offers defense articles or services to a foreign government. The LOA specifies items, estimated costs, delivery schedule, and terms. Once signed by the foreign government and returned with initial payment, it becomes a binding agreement.

Where this matters in federal contracting

LOA is a measurement used in federal contract evaluation, source selection, oversight, or performance management. Understanding LOA matters because evaluators use metrics like it to compare proposals quantitatively, score past performance, set award-fee outcomes, and decide who gets the next option year. Contractors who track how LOA is calculated — and what target values look like in their NAICS or service area — write proposals that are concrete and defensible instead of generic and easily dismissed. LOA also has implications for contract administration: getting the calculation methodology wrong post-award is a common source of disputes and contracting-officer modifications. Pair LOA with the related metrics above to see how the federal government composes evaluation criteria into source-selection narratives.

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