§ 2762. — Procurement for cash sales.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 22USC2762]
TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 39--ARMS EXPORT CONTROL
SUBCHAPTER II--FOREIGN MILITARY SALES AUTHORIZATIONS
Sec. 2762. Procurement for cash sales
(a) Authority of President; dependable undertaking by foreign country or
international organization; interest rates
Except as otherwise provided in this section, the President may,
without requirement for charge to any appropriation or contract
authorization otherwise provided, enter into contracts for the
procurement of defense articles or defense services for sale for United
States dollars to any foreign country or international organization if
such country or international organization provides the United States
Government with a dependable undertaking (1) to pay the full amount of
such contract which will assure the United States Government against any
loss on the contract, and (2) to make funds available in such amounts
and at such times as may be required to meet the payments required by
the contract, and any damages and costs that may accrue from the
cancellation of such contract, in advance of the time such payments,
damages, or costs are due. Interest shall be charged on any net amount
by which any such country or international organization is in arrears
under all of its outstanding unliquidated dependable undertakings,
considered collectively. The rate of interest charged shall be a rate
not less than a rate determined by the Secretary of the Treasury taking
into consideration the current average market yield on outstanding
short-term obligations of the United States as of the last day of the
month preceding the net arrearage and shall be computed from the date of
net arrearage.
(b) Issuance of letters of offer under emergency determination;
availability of appropriations for payment
The President may, if he determines it to be in the national
interest, issue letters of offer under this section which provide for
billing upon delivery of the defense article or rendering of the defense
service and for payment within one hundred and twenty days after the
date of billing. This authority may be exercised, however, only if the
President also determines that the emergency requirements of the
purchaser for acquisition of such defense articles and services exceed
the ready availability to the purchaser of funds sufficient to make
payments on a dependable undertaking basis and submits both
determinations to the Congress together with a special emergency request
for authorization and appropriation of additional funds to finance such
purchases under this chapter. Appropriations available to the Department
of Defense may be used to meet the payments required by the contracts
for the procurement of defense articles and defense services and shall
be reimbursed by the amounts subsequently received from the country or
international organization to whom articles or services are sold.
(c) Applicability of Renegotiation Act of 1951
The provisions of the Renegotiation Act of 1951 [50 App. U.S.C. 1211
et seq.] do not apply to procurement contracts heretofore or hereafter
entered into under this section, section 2769 of this title, or
predecessor provisions of law.
(d) Competitive pricing
(1) Procurement contracts made in implementation of sales under this
section for defense articles and defense services wholly paid for from
funds made available on a nonrepayable basis shall be priced on the same
costing basis with regard to profit, overhead, independent research and
development, bid and proposal, and other costing elements, as is
applicable to procurements of like items purchased by the Department of
Defense for its own use.
(2) Direct costs associated with meeting additional or unique
requirements of the purchaser shall be allowable under contracts
described in paragraph (1). Loadings applicable to such direct costs
shall be permitted at the same rates applicable to procurement of like
items purchased by the Department of Defense for its own use.
(Pub. L. 90-629, ch. 2, Sec. 22, Oct. 22, 1968, 82 Stat. 1323; Pub. L.
93-189, Sec. 25(3), Dec. 17, 1973, 87 Stat. 730; Pub. L. 94-329, title
II, Sec. 207, June 30, 1976, 90 Stat. 738; Pub. L. 95-384, Sec. 17,
Sept. 26, 1978, 92 Stat. 740; Pub. L. 96-533, title I, Sec. 105(b)(2),
Dec. 16, 1980, 94 Stat. 3134; Pub. L. 104-107, title V, Sec. 531A(a),
Feb. 12, 1996, 110 Stat. 731; Pub. L. 106-113, div. B, Sec. 1000(a)(7)
[div. B, title XII, Sec. 1223], Nov. 29, 1999, 113 Stat. 1536, 1501A-
498.)
References in Text
The Renegotiation Act of 1951, referred to in subsec. (c), is act
Mar. 23, 1951, ch. 15, 65 Stat. 7, as amended, which was classified
principally to section 1211 et seq. of Title 50, Appendix, War and
National Defense, prior to its omission from the Code. See Codification
note set out under section 1211 of Title 50, Appendix.
Amendments
1999--Subsec. (d). Pub. L. 106-113 designated existing provisions as
par. (1) and added par. (2).
1996--Subsec. (d). Pub. L. 104-107 added subsec. (d).
1980--Subsec. (c). Pub. L. 96-533 substituted ``procurement
contracts'' for ``contracts for the procurement of defense articles and
defense services'' and inserted reference to contracts entered into
under section 2769 of this title.
1978--Subsec. (c). Pub. L. 95-384 added subsec. (c).
1976--Subsec. (a). Pub. L. 94-329, Sec. 207(a), inserted provisions
requiring interest to be charged on any net amount a country or
international organization is in arrears and the rate of interest to be
determined by the Secretary of Treasury considering current average
market yield of short-term obligations of United States on a particular
day.
Subsec. (b). Pub. L. 94-329, Sec. 207(b), substituted provisions
authorizing President to issue letters of offer with provisions for
billing on delivery of article or rendering of service and payment
within 120 days after billing date where President determines that
emergency conditions exist, for provisions authorizing President to
accept a dependable undertaking of a foreign country or international
organization with respect to sales of defense articles and services and
to make payment within 120 days of delivery of article or rendering of
service.
1973--Pub. L. 93-189 designated text preceding first proviso as
subsec. (a) and inserted ``Except as otherwise provided in this
section,'' before ``the President'', designated first proviso as subsec.
(b) and inserted reference to acceptance of a dependable undertaking of
a foreign country or international organization, and struck out further
provisions setting forth Presidential powers with respect to sales
agreements with and payments by purchasing countries or international
organizations.
Effective Date of 1996 Amendment; Implementing Regulations
Section 531A(b) of Pub. L. 104-107 provided that: ``Section 22(d) of
the Arms Export Control Act [subsec. (d) of this section], as added by
subsection (a)--
``(1) shall take effect on the 60th day following the date of
the enactment of this Act [Feb. 12, 1996];
``(2) shall be applicable only to contracts made in
implementation of sales made after such effective date; and
``(3) shall be implemented by revised procurement regulations,
which shall be issued prior to such effective date.''
Delegation of Functions
Functions of President under subsec. (a) of this section delegated
to Secretary of Defense by section 1(d) of Ex. Ord. No. 11958, Jan. 18,
1977, 42 F.R. 4311, as amended, set out as a note under section 2751 of
this title.
Prior Provisions
Provisions similar to those comprising subsec. (d)(2) of this
section were contained in the following appropriation acts:
Pub. L. 106-113, div. B, Sec. 1000(a)(2) [title V, Sec. 556], Nov.
29, 1999, 113 Stat. 1535, 1501A-100.
Pub. L. 105-277, div. A, Sec. 101(d) [title V, Sec. 536], Oct. 21,
1998, 112 Stat. 2681-150, 2681-181.
Pub. L. 105-118, title V, Sec. 535, Nov. 26, 1997, 111 Stat. 2416.
Pub. L. 104-208, div. A, title I, Sec. 101(c) [title V, Sec. 533A],
Sept. 30, 1996, 110 Stat. 3009-121, 3009-153.
Pub. L. 104-107, title V, Sec. 531A(c), Feb. 12, 1996, 110 Stat.
731.
Section Referred to in Other Sections
This section is referred to in sections 2291c, 2311, 2751, 2767,
2775, 2776, 2777, 2779, 2791, 2795 of this title.
