§2791 General provisions

Summary

Federal defense sales should focus on buying in the United States. Still, making or licensing U.S. defense items overseas is allowed when it clearly helps U.S. foreign policy, security, or the economy. When deciding, officials must look at whether the sale breaks or hurts U.S. licensing deals that bring money to the United States, how much of the item is actually U.S.-made, and whether the sale could fuel an arms race, help build weapons of mass destruction, support terrorism, increase the chance of conflict, or harm arms-control efforts. No government credit sale or loan guarantee for foreign coproduction or licensed production of U.S. defense items can go forward until the Secretary of State tells the right Congressional committees and gives the Speaker of the House and the President of the Senate full details in advance, including what would be made, its estimated value, and likely effects on U.S. jobs and production. The President must approve buying outside the U.S. only if it will not hurt the U.S. economy or the country’s industrial mobilization base, with special attention to areas with too many workers or the nation’s balance of payments. The Secretary of Defense, under the President, leads on military item needs, buying and fitting equipment into U.S. programs, training foreign troops, and delivering items, and sets procurement priorities. Contracts and export licenses can be canceled, suspended, or changed for urgent national-interest reasons, and Congress can fund refunds or pay damages when cancellations cause costs already paid to contractors or agencies. The President should use civilian contractors abroad for defense services whenever possible.