22 U.S.C. § 2761: Sales from stocks

in the case of a defense article not intended to be replaced at the time such agreement is entered into, not less than the actual value thereof; in the case of a defense article intended to be replaced at the time such agreement is entered into, the estimated cost of replacement of such article, including the contract or production costs less any depreciation in the value of such article; or in the case of the sale of a defense service, the full cost to the United States Government of furnishing such service, except that in the case of training sold to a purchaser who is concurrently receiving assistance under chapter 5 of part II of the Foreign Assistance Act of 1961 [ 22 U.S.C. 2347 et seq.] or to any high-income foreign country (as described in that chapter), only those additional costs that are incurred by the United States Government in furnishing such assistance. For purposes of subparagraph (A) of paragraph (1), the actual value of a naval vessel of 3,000 tons or less and 20 years or more of age shall be considered to be not less than the greater of the scrap value or fair value (including conversion costs) of such vessel, as determined by the Secretary of Defense. Except as provided by subsection (d) of this section, payment shall be made in advance or, if the President determines it to be in the national interest, upon delivery of the defense article or rendering of the defense service. Personnel performing defense services sold under this chapter may not perform any duties of a combatant nature, including any duties related to training and advising that may engage United States personnel in combat activities, outside the United States in connection with the performance of those defense services. the identity of such country; a description of such hostilities or terrorist acts; and the number of members of the United States Armed Forces and the number of United States civilian personnel that may be endangered by such hostilities or terrorist acts. If the President determines it to be in the national interest pursuant to subsection (b) of this section, billings for sales made under letters of offer issued under this section after June 30, 1976 , may be dated and issued upon delivery of the defense article or rendering of the defense service and shall be due and payable upon receipt thereof by the purchasing country or international organization. Interest shall be charged on any net amount due and payable which is not paid within sixty days after the date of such billing. The rate of interest charged shall be a rate not less than a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding short-term obligations of the United States as of the last day of the month preceding the billing and shall be computed from the date of billing. The President may extend such sixty-day period to one hundred and twenty days if he determines that emergency requirements of the purchaser for acquisition of such defense articles or defense services exceed the ready availability to the purchaser of funds sufficient to pay the United States in full for them within such sixty-day period and submits that determination to the Congress together with a special emergency request for the authorization and appropriation of additional funds to finance such purchases under this chapter. administrative services, calculated on an average percentage basis to recover the full estimated costs (excluding a pro rata share of fixed base operation costs) of administration of sales made under this chapter to all purchasers of such articles and services as specified in section 2792(b) of this title and section 2792(c) of this title ; a proportionate amount of any nonrecurring costs of research, development, and production of major defense equipment (except for equipment wholly paid for either from funds transferred under section 503(a)(3) of the Foreign Assistance Act of 1961 [ 22 U.S.C. 2311(a)(3) ] or from funds made available on a nonrepayable basis under section 2763 of this title ); and the recovery of ordinary inventory losses associated with the sale from stock of defense articles that are being stored at the expense of the purchaser of such articles. The President may reduce or waive the charge or charges which would otherwise be considered appropriate under paragraph (1)(B) for particular sales that would, if made, significantly advance United States Government interests in North Atlantic Treaty Organization standardization, standardization with the Armed Forces of Japan, Australia, the Republic of Korea, Israel, or New Zealand in furtherance of the mutual defense treaties between the United States and those countries, or foreign procurement in the United States under coproduction arrangements. imposition of the charge or charges likely would result in the loss of the sale; or in the case of a sale of major defense equipment that is also being procured for the use of the Armed Forces, the waiver of the charge or charges would (through a resulting increase in the total quantity of the equipment purchased from the source of the equipment that causes a reduction in the unit cost of the equipment) result in a savings to the United States on the cost of the equipment procured for the use of the Armed Forces that substantially offsets the revenue foregone by reason of the waiver of the charge or charges. The President may waive, for particular sales of major defense equipment, any increase in a charge or charges previously considered appropriate under paragraph (1)(B) if the increase results from a correction of an estimate (reasonable when made) of the production quantity base that was used for calculating the charge or charges for purposes of such paragraph. a support or procurement partnership agreement; or a NATO/SHAPE project. The Secretary of Defense may reimburse the fund established to carry out section 2792(b) of this title in the amount of the charges waived under subparagraph (A) of this paragraph. Any such reimbursement may be made from any funds available to the Department of Defense. is entered into pursuant to the terms of the charter of that organization; and is for the common logistic support of activities common to the participating countries; and the term “NATO/SHAPE project” means a common-funded project supported by allocated credits from North Atlantic Treaty Organization bodies or by host nations with NATO Infrastructure funds. Any contracts entered into between the United States and a foreign country under the authority of this section or section 2762 of this title shall be prepared in a manner which will permit them to be made available for public inspection to the fullest extent possible consistent with the national security of the United States. The President may enter into North Atlantic Treaty Organization standardization agreements in carrying out section 814 of the Act of October 7, 1975 ( Public Law 94–106 ), and may enter into similar agreements with countries which are major non-NATO allies, for the cooperative furnishing of training on bilateral or multilateral basis, if the financial principles of such agreements are based on reciprocity. Such agreements shall include reimbursement for all direct costs but may exclude reimbursement for indirect costs, administrative surcharges, and costs of billeting of trainees (except to the extent that members of the United States Armed Forces occupying comparable accommodations are charged for such accommodations by the United States). Each such agreement shall be transmitted promptly to the Speaker of the House of Representatives, the Committee on Foreign Affairs of the House of Representatives, and the Committees on Appropriations, Armed Services, and Foreign Relations of the Senate. in connection with the placement or administration of any contract or subcontract for defense articles, defense services, or design and construction services entered into after October 29, 1979 , by, or under this chapter on behalf of, a foreign government which is a member of the North Atlantic Treaty Organization or the Governments of Australia, New Zealand, Japan, the Republic of Korea, or Israel, if such government provides such services in accordance with an agreement on a reciprocal basis, without charge, to the United States Government; or in connection with the placement or administration of any contract or subcontract for defense articles, defense services, or design and construction services pursuant to the North Atlantic Treaty Organization Security Investment program in accordance with an agreement under which the foreign governments participating in such program provide such services, without charge, in connection with similar contracts or subcontracts. In carrying out the objectives of this section, the President is authorized to provide cataloging data and cataloging services, without charge, to the North Atlantic Treaty Organization, to any member government of that Organization, or to the Governments of the Republic of Korea, Australia, New Zealand, Japan, or Israel if that Organization, member government, or the Governments of the Republic of Korea, Australia, New Zealand, Japan, or Israel provides such data and services in accordance with an agreement on a reciprocal basis, without charge, to the United States Government. the country or international organization to which the sale is proposed to be made; the amount of the proposed sale; a description of the defense article or service proposed to be sold; a full description of the impact which the proposed sale will have on the Armed Forces of the United States; and a justification for such proposed sale, including a certification that such sale is important to the security of the United States. No delivery may be made under any sale which is required to be reported under paragraph (1) of this subsection unless the certification required to be transmitted by paragraph 1 (E) of paragraph (1) is in effect. 1 So in original. Probably should be “subparagraph”. Before entering into the sale under this chapter of defense articles that are excess to the stocks of the Department of Defense, the President shall determine that the sale of such articles will not have an adverse impact on the national technology and industrial base and, particularly, will not reduce the opportunities of entities in the national technology and industrial base to sell new or used equipment to the countries to which such articles are transferred. previously was transferred to such country or organization under this chapter; is not an end item; and will be exchanged for a defense article of the same type that is in the stocks of the Department of Defense. has a requirement for the defense article being returned; and has available sufficient funds authorized and appropriated for such purpose; or is accepting the return of the defense article for subsequent transfer to another foreign government or international organization pursuant to a letter of offer and acceptance implemented in accordance with this chapter; and has available sufficient funds provided by or on behalf of such other foreign government or international organization pursuant to a letter of offer and acceptance implemented in accordance with this chapter. The foreign government or international organization receiving a new or repaired defense article in exchange for a repairable defense article pursuant to paragraph (1) shall, upon the acceptance by the United States Government of the repairable defense article being returned, be charged the total cost associated with the repair and replacement transaction. The total cost charged pursuant to subparagraph (A) shall be the same as that charged the United States Armed Forces for a similar repair and replacement transaction, plus an administrative surcharge in accordance with subsection (e)(1)(A) of this section. The authority of the President to accept the return of a repairable defense article as provided in subsection (a) shall not be subject to chapter 137 legacy provisions (as such term is defined in section 3016 of title 10 ) of title 10 or any other provision of law relating to the conclusion of contracts. previously was transferred to such country or organization under this chapter; is not significant military equipment (as defined in section 2794(9) of this title ); and is in fully functioning condition without need of repair or rehabilitation. has a requirement for the defense article being returned; and has available sufficient funds authorized and appropriated for such purpose; or is accepting the return of the defense article for subsequent transfer to another foreign government or international organization pursuant to a letter of offer and acceptance implemented in accordance with this chapter; and has available sufficient funds provided by or on behalf of such other foreign government or international organization pursuant to a letter of offer and acceptance implemented in accordance with this chapter. Upon acquisition and acceptance by the United States Government of a defense article under paragraph (1), the appropriate Foreign Military Sales account of the provider shall be credited to reflect the transaction. The authority of the President to accept the return of a defense article as provided in paragraph (1) shall not be subject to chapter 137 legacy provisions (as such term is defined in section 3016 of title 10 ) of title 10 or any other provision of law relating to the conclusion of contracts. the President, in the budget of the President for fiscal year 1997, proposes legislation that if enacted would be qualifying offsetting legislation; and there is enacted qualifying offsetting legislation. If the conditions in subsection (b) are met, then the amendments made by subsection (a) shall take effect on the date of the enactment of qualifying offsetting legislation [ Sept. 23, 1996 ]. offset fully the estimated revenues lost as a result of the amendments made by subsection (a) for each of the fiscal years 1997 through 2005; expressly state that they are enacted for the purpose of the offset described in subparagraph (A); and are included in full on the PayGo scorecard. The term ‘PayGo scorecard’ means the estimates that are made by the Director of the Congressional Budget Office and the Director of the Office of Management and Budget under section 252(d) of the Balanced Budget and Emergency Deficit Control Act of 1985 [ 2 U.S.C. 902(d) ].” are aware of evolving United States regional- and country-level foreign partner defense capability-building priorities; and coordinate with the security cooperation workforce to enhance responsiveness to foreign partner requests and defense capability-building priorities; and adherence to meeting the foreign partner defense capability-building requirements identified in Department of Defense strategy documents; responsiveness to foreign partner defense capability-building requests; ability to meet foreign partner defense capability-building delivery schedule requirements; and advancement of foreign partner defense capability-building priorities identified in the guidance described in subsection (b). incorporates priorities of the national security strategy report (submitted pursuant to section 108 of the National Security Act of 1947 ( 50 U.S.C. 3043 )) and the national defense strategy (required under section 113(g) of title 10 , United States Code); is informed by the theater campaign plans and theater security cooperation strategies of the combatant commands; is disseminated to the security cooperation workforce and the defense acquisition workforce. identify regional and country-level foreign partner defense capability-building priorities; identify levels of urgency and desired timelines for achieving foreign partner defense capability-building priorities; and provide guidance to the defense acquisition workforce and the security cooperation workforce on levels of resourcing, innovation, and risk tolerance that should be considered in meeting urgent needs through the execution of foreign military sales. The term ‘defense acquisition workforce’ means the Department of Defense acquisition workforce described in chapter 87 of title 10, United States Code. The term ‘security cooperation workforce’ has the meaning given the term in section 384 of title 10 , United States Code.” informed by input from the purchaser of such foreign military sale; and executed in a manner that effectively addresses urgency of need and associated risk tolerance of such purchaser; and in establishing such requirement, ensure that such purchaser is provided an opportunity to provide input on urgency of need and associated risk tolerance, alternative acquisition approaches that may be taken to accelerate program delivery, and the schedule, cost, and capability trade-offs associated with such alternate approaches. A United States prime contractor may enter into a covered agreement with a manufacturer to begin the process of acquiring long-lead Government-furnished equipment based on forecasted requirements prior to the execution of a contract for a commercial sale or issuance of a letter of offer and acceptance for a foreign military sale. The Secretary of Defense and each Secretary of a military department shall implement policies that allow United States prime contractors to enter into covered agreements described in paragraph (1). negotiating directly with the manufacturer of Government-furnished equipment, including with respect to the terms and conditions described in subsection (c)(1)(B); and providing any payment to such manufacturer; and transfer of Government-furnished equipment from such manufacturer to the prime contractor shall not occur until the date on which a contract for a commercial sale or letter of offer and acceptance is executed with respect to the foreign military sale that is the subject of the covered agreement. Nothing in this subsection shall be construed as authorizing, requiring, or providing for the United States Government to assume any liability or other financial responsibility with respect to a covered agreement. the prime contractor, in anticipation of a foreign military sale, enters into a contract with the manufacturer for the production of one or more defense articles (as defined in section 301 of title 10 , United States Code) that will be supplied to the prime contractor as Government-furnished equipment; the parties agree to the allocation of risks, obligations, profits, and costs in the event the anticipated foreign military sale does not occur, including whether the defense articles manufactured under the agreement are retained by the manufacturer; and the United States Government assumes no liability with respect to either party in the event the anticipated foreign military sale does not occur. The term ‘foreign military sales process’ means the processes for foreign military sales authorized under chapter 2 of the Arms Export Control Act ( 22 U.S.C. 2761 et seq.).” improving the understanding, among officials of the Department, of ally and partner requirements; enabling efficient reviews for release of technology; providing ally and partner countries with relevant priority equipment; accelerating acquisition and contracting support; expanding the capacity of the defense industrial base; working with other departments and agencies to promote broad United States Government support; and any other matters determined by the Secretary to be relevant to the Board. The Board shall be composed of not fewer than seven members, each of whom shall have expertise in security cooperation, security assistance, defense acquisition, business process reform, or any disciplines the Secretary determines to be important to the functioning of the Board. Officers or employees of the Department of Defense. Members of the Armed Forces. A registered lobbyist. Each member of the Board described in this subparagraph shall be individuals who are determined to be eligible for access to classified information necessary to participate on the Board.” may vary depending on the complexity of the foreign military sale; and shall cover the period beginning on the date of receipt of a complete letter of request (as described in chapter 5 of the Security Assistance Management Manual of the Defense Security Cooperation Agency) from a foreign country and ending on the date of the final delivery of a defense article or defense service sold through the foreign military sale. Not later than 180 days after the date of the enactment of this Act [ Dec. 12, 2017 ], the Secretary shall submit to the appropriate committees of Congress a report describing the milestones and timelines developed pursuant to paragraph (1) of this section. for which the final delivery of a defense article or defense service has not been completed; and that has not met a standard timeline to achieve a notional milestone as established under subsection (a). the number, set forth separately by dollar value and notional milestone, of foreign military sales that met the standard timeline to achieve a notional milestone established under subsection (a) during the preceding fiscal year; and the number, set forth separately by dollar value and notional milestone, of each foreign military sale that did not meet the standard timeline to achieve a notional milestone established under subsection (a), and a description of any extenuating factors explaining why such a sale did not achieve such milestone. The requirements of this subsection apply only to foreign military sales processes within the Department of Defense. the terms ‘defense article’ and ‘defense service’ have the meanings given those terms, respectively, in section 47 of the Arms Export Control Act ( 22 U.S.C. 2794 ); and the Committee on Armed Services and the Committee on Foreign Relations of the Senate; and the Committee on Armed Services and the Committee on Foreign Affairs of the House of Representatives.” to improve the staffing and processes of the licensing review cycle at the Defense Technology Security Administration and other reviewing authorities; and to maintain a cadre of contracting officers and acquisition officials who specialize in foreign military sales contracting. The Secretary of Defense shall establish a process for contractors to provide input, feedback, and adjudication of any differences regarding the appropriateness of governmental pricing and availability estimates prior to the delivery to potential foreign customers of formal responses to Letters of Request for Pricing and Availability.”