§2344 Methods of Payment for Acquisitions and Transfers by the United States

Summary

The United States may obtain or give logistics, supplies, and services by having others pay the cost, by replacing items in kind, or by trading items or services of equal value. When making deals with NATO countries or other foreign governments, the Secretary of Defense must try to get pricing that is fair both ways. If a supplying country buys something from its contractors for a U.S. partner, the price to that partner must be no higher than what the supplying country’s own forces pay for the same item, after considering delivery and similar differences. If the supplying country uses its own stock or government workers, the price to the partner must match what its own forces would pay. If reciprocal pricing cannot be agreed, the United States cannot buy items from that country unless a U.S. forces commander finds the price fair after analysis, and U.S. transfers to that country follow the pricing rules in the Arms Export Control Act (22 U.S.C. 2751 et seq.). The Secretary may also waive indirect or administrative costs on a reciprocal basis. The same pricing and waiver rules apply to NATO subsidiary bodies and the United Nations or regional international organizations. The U.S. may not trade for property the Department of Defense is barred from buying, nuclear materials covered by the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), or chemical munitions.