§2791 General Provisions

Summary

Buy American for defense items is the priority, but the government can allow coproduction or licensed production of U.S. defense articles outside the United States when that best helps U.S. foreign policy, national security, and the economy. When considering such sales, officials must weigh whether the sale would hurt U.S. licensing income, how much of the item is U.S.-made, and whether the sale could fuel an arms race, help develop weapons of mass destruction, aid terrorism, increase the chance of conflict, or undermine arms-control or nonproliferation efforts. No credit sale under section 2763 or guarantee under section 2764 that involves coproduction or licensed production abroad may proceed until the Secretary of State tells the proper congressional committees and gives the Speaker of the House and the President of the Senate full details, including what will be made, its estimated value, and the likely effect on U.S. jobs and production. Money from this program can be spent to buy abroad only if the President finds it will not harm the U.S. economy or industrial mobilization base, including effects on labor surplus or the balance of payments, unless the savings clearly outweigh those harms. Under the President’s direction, the Secretary of Defense has primary responsibility for deciding military end-item needs, buying equipment so it fits service programs, supervising foreign military training, and arranging movement and delivery of items, and for setting procurement and delivery priorities. Contracts under sections 2761, 2762, 2769, 2770, and 2767(d) may be canceled or suspended by the United States for unusual or compelling reasons in the national interest. Export licenses under section 2778 may be revoked or changed by the Secretary of State without prior notice. Congress may appropriate funds to refund buyers and pay damages or costs when cancellations affect contractors or government work in progress. The President must use civilian contract personnel abroad as much as possible to provide the sold defense services.