The Secretary of Defense, with the concurrence of the Secretary of State, may enter into a memorandum of understanding (or other formal agreement) with a foreign country or international organization to provide for the testing, on a reciprocal basis, of defense equipment (1) by the United States using test facilities of that country or organization, and (2) by that country or organization using test facilities of the United States.
(b) Payment of Costs.—A memorandum or other agreement under subsection (a) shall provide that, when a party to the agreement uses a test facility of another party to the agreement, the party using the test facility is charged by the party providing the test facility in accordance with the following principles:
The user party shall be charged the amount equal to the direct costs incurred by the provider party in furnishing test and evaluation services by the providing party’s officers, employees, or governmental agencies.
(c) Determination of Indirect Costs; Delegation of Authority.—
The Secretary of Defense shall determine the appropriateness of the amount of indirect costs charged by the United States pursuant to subsection (b)(2).
(d) Retention of Funds Collected by the United States.—
(e) Definitions.—In this section:
(1) The term “direct cost”, with respect to the use of a test facility pursuant to a memorandum or other agreement under subsection (a)—
means any item of cost that is easily and readily identified to a specific unit of work or output within the test facility where the use occurred, that would not have been incurred if such use had not occurred; and
(2) The term “indirect cost”, with respect to the use of a test facility pursuant to a memorandum or other agreement under subsection (a)—
means any item of cost that is not easily and readily identified to a specific unit of work or output within the test facility where the use occurred; and
The term “test facility” means a range or other facility at which testing of defense equipment may be carried out.