(a) Sale of defense articles and services by President to United States companies; restriction on performance of services; reimbursement credited to selling agency
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) Conditions of sale
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) “Defense articles” and “defense services” defined
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.
1989—Subsec. (a). Pub. L. 101–165inserted “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”.
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.
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
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