§2770 — Title 22 Foreign Relations and Intercourse | U.S. Code

Summary

The President may, under negotiated cash contracts, sell or make-and-sell defense items and sell related defense services to U.S. companies. These sales must be priced at least at replacement, contract, or actual cost. The items must be for use inside end products that the company will sell commercially to a friendly foreign country or international organization with an export license or approval under section 2778. Ammunition parts have extra limits on direct delivery. Any support services sold must be done inside the United States. Money from the sales goes back to the selling agency’s current appropriation or fund. Sales are allowed only if three rules are met: the end item is for the armed forces of a friendly country or international organization; the articles would have been government-furnished if the U.S. were buying the end item; and the articles or services are only available from U.S. government sources or not available from U.S. commercial sources when needed. Definitions: defense articles — military items; defense services — military support/services, as defined in section 2794(3) and (4).

Title 22, §2770

Foreign Relations and Intercourse — Source: USLM XML via OLRC

(a)Subject to the conditions specified in subsection (b) of this section, the President may, on a negotiated contract basis, under cash terms (1) sell defense articles at not less than their estimated replacement cost (or actual cost in the case of services), or (2) procure or manufacture and sell defense articles at not less than their contract or manufacturing cost to the United States Government, to any United States company for incorporation into end items (and for concurrent or follow-on support) to be sold by such a company either (i) on a direct commercial basis to a friendly foreign country or international organization pursuant to an export license or approval under section 2778 of this title or (ii) in the case of ammunition parts subject to subsection (b) of this section, using commercial practices which restrict actual delivery directly to a friendly foreign country or international organization pursuant to approval under section 2778 of this title. The President may also sell defense services in support of such sales of defense articles, subject to the requirements of this subchapter: Provided, however, That such services may be performed only in the United States. The amount of reimbursement received from such sales shall be credited to the current applicable appropriation, fund, or account of the selling agency of the United States Government.

(b)Defense articles and defense services may be sold, procured and sold, or manufactured and sold, pursuant to subsection (a) of this section only if (1) the end item to which the articles apply is to be procured for the armed forces of a friendly country or international organization, (2) the articles would be supplied to the prime contractor as government-furnished equipment or materials if the end item were being procured for the use of the United States Armed Forces, and (3) the articles and services are available only from United States Government sources or are not available to the prime contractor directly from United States commercial sources at such times as may be required to meet the prime contractor’s delivery schedule.

(c)For the purpose of this section, the terms “defense articles” and “defense services” mean defense articles and defense services as defined in section 2794(3) and (4) of this title.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1989—Subsec. (a). Pub. L. 101–165 inserted “either (i)” after “such a company” in first sentence and inserted before period at end of first sentence “or (ii) in the case of ammunition parts subject to subsection (b) of this section, using commercial practices which restrict actual delivery directly to a friendly foreign country or international organization pursuant to approval under section 2778 of this title”.

Executive Documents

Delegation of Functions For delegation of functions of the President under this section, see section 1(d) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16129, set out as a note under section 2751 of this title. Functions were previously delegated by Ex. Ord. No. 11958, which was formerly set out as a note under section 2751 of this title and was revoked, subject to a

Savings Provision

, by section 4 of Ex. Ord. No. 13637.

§2770 General Authority