§7543 Army Industrial Facilities: Sales of Manufactured Articles or Services Outside Department of Defense

Summary

Authorizes Army industrial plants that run on working capital (including arsenals) that make large-caliber cannons, gun mounts, recoil mechanisms, ammunition, munitions, or parts to sell items or related services to people or companies outside the Department of Defense when certain conditions are met. Sales are allowed if the buyer is a U.S. manufacturer, assembler, developer, or similar concern and will use the item to develop new products, put it into things sold to or used in contracts with U.S. agencies or friendly foreign governments, or use it in commercial products; the buyer is judged qualified; the sale won’t interfere with the plant’s DoD work or its military mission; services relate to an authorized item and are done in the U.S.; the Secretary of the Army finds the item or service isn’t available from a U.S. commercial source; the buyer agrees to protect the United States from claims except for intentional wrongdoing or extreme negligence; the plant can make the item with only minor subcontracting; and the sale is in the public interest. Regulations must let the major subordinate command commander approve sales, allow advance incremental funding (partial payments before and during the work), and—for plants that make cannons, mounts, recoil mechanisms, or parts—allow charging at least the variable costs, use fixed-price or buyer-agreed cost-reimbursement contracts, and keep working capital from non-appropriated sources to pay design, planning, and procurement costs. This does not change export controls under section 38 of the Arms Export Control Act (22 U.S.C. 2778). Definitions: commercial article—used for nondefense purposes; commercial service—service for nondefense purposes; advance incremental funding—partial payments, including some before work starts, with progress payments completing payment as work finishes; variable costs—costs that change with the amount produced or services sold.