CHAPTER 138-COOPERATIVE AGREEMENTS WITH NATO ALLIES AND OTHER COUNTRIES

Sec. 2341.

2342.

2343.

2344.

2345.

2346.

2347.

2348.

2349.

2349a.

2350.

Authority to acquire logistic support, supplies, and services for elements
of the armed forces deployed outside the United States.
Cross-servicing agreements.

Waiver of applicability of certain laws.

Methods of payment for acquisitions and transfers by the United States.
Liquidation of accrued credits and liabilities.

Crediting of receipts.

Limitation on amounts that may be obligated or accrued by the United
States.

Inventories of supplies not to be increased.

Overseas Workload Program.

Annual report on non-NATO agreements.

Definitions.

§ 2341. Authority to acquire logistic support, supplies, and services for elements of the armed forces deployed outside the United States

Subject to section 2343 of this title and subject to the availability of appropriations, the Secretary of Defense may—

(1) acquire from the Governments of North Atlantic Treaty Organization countries, from North Atlantic Treaty Organization subsidiary bodies, and from the United Nations Organization or any regional international organization of which the United States is a member logistic support, supplies, and services for elements of the armed forces deployed outside the United States; and

(2) acquire from any government not a member of the North Atlantic Treaty Organization logistic support, supplies, and services for elements of the armed forces deployed (or to be deployed) outside the United States if that country

(A) has a defense alliance with the United States;

(B) permits the stationing of members of the armed forces in such country or the homeporting of naval vessels of the United States in such country;

(C) has agreed to preposition materiel of the United States in such country; or

(D) serves as the host country to military exercises which include elements of the armed forces or permits other military operations by the armed forces in such country.

(Added P.L. 96–323, § 2(a), Aug. 4, 1980, 94 Stat. 1016, § 2321; renumbered § 2341 and amended P.L. 99-145, § 1304(a) (1), (4), Nov. 8, 1985, 99 Stat. 741; revised in its entirety P.L. 99-661, § 1104(a), Nov. 14, 1986, 100 Stat. 3963.); amended P.L. 102-484, § 1312(a), Oct. 23, 1992, 106 Stat. 2547; P.L. 103–337, § 1317(a), Oct. 5, 1994, 108 Stat. 2899.)

§ 2342. Cross-servicing agreements

(a)(1) Subject to section 2343 of this title and to the availability of appropriations, and after consultation with the Secretary of State, the Secretary of Defense may enter into an agreement described in paragraph (2) with any of the following:

(A) The government of a North Atlantic Treaty Organization country.

(B) A subsidiary body of the North Atlantic Treaty Organization.

(C) The United Nations Organization or any regional international organization of which the United States is a member.

(D) The government of a country not a member of the North Atlantic Treaty Organization but which is designated by the Secretary of Defense, subject to the limitations prescribed in subsection (b), as a government with which the Secretary may enter into agreements under this section.

(2) An agreement referred to in paragraph (1) is an agreement under which the United States agrees to provide logistic support, supplies, and services to military forces of a country or organization referred to in paragraph (1) in return for the reciprocal provisions of logistic support, supplies, and services by such government or organization to elements of the armed forces.

(b) The Secretary of Defense may not designate a country for an agreement under this section unless

(1) the Secretary, after consultation with the Secretary of State, determines that the designation of such country for such purpose is in the interest of the national security of the United States; and

(2) in the case of a country which is not a member of the North Atlantic Treaty Organization, the Secretary submits to the Committee on Armed Services and the Committee on Foreign Relations of the Senate and the Committee on Armed Services and the Committee on International Relations of the House of Representatives notice of the intended designation at least 30 days before the date on which such country is designated by the Secretary under subsection (a).

(c) The Secretary of Defense may not use the authority of this subchapter to procure from any foreign government or international organization any goods or services reasonably available from United States commercial sources.

(d) The Secretary shall prescribe regulations to ensure that contracts entered into under this subchapter are free from selfdealing, bribery, and conflict of interests.

(Added P.L. 96–323, § 2(a), Aug. 4, 1980, 94 Stat. 1016, § 2322; renumbered § 2342 and amended P.L. 99-145, § 1304(a) (1), (4), Nov. 8, 1985, 99 Stat. 741; revised in its entirety P.L. 99-661, § 1104(a), Nov. 14, 1986, 100 Stat. 3963; amended P.L. 100-180, § 1231(g), Dec. 4, 1987, 101 Stat. 1160; P.L. 101-189, §931(e)(1), Nov. 29, 1989, 103 Stat. 1535; P.L. 101-510, § 1451(a), Nov. 5, 1990, 104 Stat. 1692; P.L. 103-337, § 1317(b), Oct. 5, 1994, 108 Stat. 2900; P.L. 104-106, § 1502(a)(16), Feb. 10, 1996, 110 Stat. 504; P.L. 106-65, § 1067(1), Oct. 5, 1999, 113 Stat. 774.)

§ 2343. Waiver of applicability of certain laws

Sections 2207, 2304(a), 2306(a), 2306(b), 2306(e), 2306a, and 2313 of this title and section 3741 of the Revised Statutes (41 U.S.C. 22) shall not apply to acquisitions made under the authority of section 2341 of this title or to agreements entered into under section 2342 of this title.

(Added P.L. 96–323, § 2(a), Aug. 4, 1980, 94 Stat. 1017, § 2323; renumbered § 2343 and amended P.L. 99-145, §961(b), § 1304(a)(5), Nov. 8, 1985, 99 Stat. 703, 741; amended P.L. 100-26, §7(g)(2), April 21, 1987, 101 Stat. 282; P.L. 100-456, § 1233(d), Sept. 29, 1988, 102 Stat. 2057; P.L. 101-189, §931(e)(1), Nov. 29, 1989, 103 Stat. 1535; P.L. 102-190, § 1061(a)(12), Dec. 5, 1991, 105 Stat. 1473; P.L. 103–337, § 1317(c)(1), (2)(A), Oct. 5, 1994, 108 Stat. 2900.)

§ 2344. Methods of payment for acquisitions and transfers by the United States

(a) Logistics support, supplies, and services may be acquired or transferred by the United States under the authority of this subchapter on a reimbursement basis or by replacement-in-kind or exchange of supplies or services of an equal value.

(b)(1) In entering into agreements with the Government of another North Atlantic Treaty Organization country or other foreign country for the acquisition or transfer of logistic support, supplies, and services on a reimbursement basis, the Secretary of Defense shall negotiate for adoption of the following pricing principles for reciprocal application:

(A) The price charged by a supplying country for logistics support, supplies, and services specifically procured by the supplying country from its contractors for a recipient country shall be no less favorable than the price for identical items or services charged by such contractors to the armed forces of the supplying country, taking into account price differentials due to delivery schedules, points of delivery, and other similar consid

erations.

(B) The price charged a recipient country for supplies furnished by a supplying country from its inventory, and the price charged a recipient country for logistics support and services furnished by the officers, employees, or governmental agencies of a supplying country, shall be the same as the price charged for identical supplies, support, or services acquired by an armed force of the supplying country from such governmental

sources.

(2) To the extent that the Secretary of Defense is unable to obtain mutual acceptance by the other country involved of the reciprocal pricing principles for reimbursable transactions set forth in paragraph (1)—

(A) the United States may not acquire from such country any logistic support, supply, or service not governed by such reciprocal pricing principles unless the United States forces commander acquiring such support, supply, or service determines (after price analysis) that the price thereof is fair and reasonable; and

(B) transfers by the United States to such country under this subchapter of any logistic support, supply, or service that is not governed by such reciprocal pricing principles shall be subject to the pricing provisions of the Arms Export Control Act (22 U.S.C. 2751 et seq.).

(3) To the extent that indirect costs (including charges for plant and production equipment), administrative surcharges, and contract administration costs with respect to any North Atlantic Treaty Organization country or other foreign country are not waived by operation of the reciprocal pricing principles of paragraph (1), the Secretary of Defense may, on a reciprocal basis, agree to waive such costs.

(4) The pricing principles set forth in paragraph (2) and the waiver authority provided in paragraph (3) shall also apply to agreements with North Atlantic Treaty Organization subsidiary bodies and the United Nations Organization or any regional international organization of which the United States is a member under this subchapter.

(c) In acquiring or transferring logistics support, supplies, or services under the authority of this subchapter by exchange of supplies or services, the Secretary of Defense may not agree to or carry out the following:

(1) Transfers in exchange for property the acquisition of which by the Department of Defense is prohibited by law.

(2) Transfers of source, byproduct, or special nuclear materials or any other material, article, data, or thing of value the transfer of which is subject to the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.).

(3) Transfers of chemical munitions.

(Added P.L. 96–323, § 2(a), Aug. 4, 1980, 94 Stat. 1017, § 2324; amended P.L. 97-22, § 11(a)(8), July 10, 1981, 95 Stat. 138; renumbered § 2344 P.L. 99-145, § 1304(a)(1), Nov. 8, 1985, 99 Stat. 741; amended P.L. 99-661, § 1104(b), Nov. 14, 1986, 100 Stat. 3964; P.L. 101-189, §§ 931(e)(1), 938(a), (b), Nov. 29, 1989, 103 Stat. 1535, 1539; P.L. 102–25, § 701(f)(2), April 6, 1991, 105 Stat. 115; P.L. 103–337, § 1317(d), Oct. 5, 1994, 108 Stat. 2900.)

§ 2345. Liquidation of accrued credits and liabilities

(a) Credits and liabilities of the United States accrued as a result of acquisitions and transfers of logistic support, supplies, and services under the authority of this subchapter shall be liquidated not less often than once every 12 months by direct payment to the entity supplying such support, supplies, or services by the entity receiving such support, supplies, or services.

(b) Payment-in-kind or exchange entitlements accrued as a result of acquisitions and transfers of logistic support, supplies, and services under authority of this subchapter shall be satisfied within 12 months after the date of the delivery of the logistic support, supplies, or services.

(Added P.L. 96–323, § 2(a), Aug. 4, 1980, 94 Stat. 1018, § 2325; renumbered § 2345, P.L. 99–145, § 1304(a)(1), Nov. 8, 1985, 99 Stat. 741; amended P.L. 99-661, § 1104(c), Nov. 14, 1986, 100 Stat. 3965; P.L. 101-189, §931(e)(1), Nov. 29, 1989, 103 Stat. 1535; P.L. 103-337, § 1317(e), Oct. 5, 1994, 108 Stat. 2900.)

§ 2346. Crediting of receipts

Any receipt of the United States as a result of an agreement entered into under this subchapter shall be credited, at the option of the Secretary of Defense, to (1) the appropriation, fund, or account used in incurring the obligation, or (2) an appropriate appropriation, fund, or account currently available for the purposes for which the expenditures were made.

(Added P.L. 96-323, § 2(a), Aug. 4, 1980, 94 Stat. 1018, § 2326; renumbered § 2346, P.L. 99–145, § 1304(a)(1), Nov. 8, 1985, 99 Stat. 741; amended P.L. 101-189, §931(e)(1), Nov. 29, 1989, 103 Stat. 1535; P.L. 103-337, § 1317(f), Oct. 5, 1994, 108 Stat. 2900.)

§ 2347. Limitation on amounts that may be obligated or accrued by the United States

(a)(1) Except during a period of active hostilities involving the armed forces, the total amount of reimbursable liabilities that the United States may accrue under this subchapter (before the computation of offsetting balances) with other member countries of the North Atlantic Treaty Organization, subsidiary bodies of the North Atlantic Treaty Organization, or from the United Nations Organization or any regional international organization of which the United States is a member may not exceed $200,000,000 in any fiscal year, and of such amount not more than $50,000,000 in liabilities may be accrued for the acquisition of supplies (other than petroleum, oils, and lubricants).

(2) Except during a period of active hostilities involving the armed forces, the total amount of reimbursable liabilities that the United States may accrue under this subchapter (before the computation of offsetting balances) with_affecting a country which is not a member of the North Atlantic Treaty Organization, but with which the United States has one or more acquisition or cross-servicing agreements, may not exceed $60,000,000 in any fiscal year, and of such amount not more than $20,000,000 in liabilities may be accrued for the acquisition of supplies (other than petroleum, oils, and lubricants). The $60,000,000 limitation specified in this paragraph is in addition to the limitation specified in paragraph (1).

(b)(1) Except during a period of active hostilities involving the armed forces, the total amount of reimbursable credits that the United States may accrue under this subchapter (before the computation of offsetting balances) with other member countries of the North Atlantic Treaty Organization, subsidiary bodies of the North Atlantic Treaty Organization, or from the United Nations Organization or any regional international organization of which the United States is a member may not exceed $150,000,000 in any fiscal year.

(2) Except during a period of active hostilities involving the armed forces, the total amount of reimbursable credits that the United States may accrue under this subchapter (before the computation of offsetting balances) with a country which is not a member of the North Atlantic Treaty Organization, but with which the United States has one or more acquisition or cross-servicing agreements may not exceed $75,000,000 in any fiscal year. Such limitation specified in this paragraph is in addition to the limitation specified in paragraph (1).

(c) When the armed forces are involved in a contingency operation or in a non-combat operation (including an operation in support of the provision of humanitarian or foreign disaster assistance or in support of peacekeeping operations under chapter VI or VII of the Charter of the United Nations), the restrictions in subsections (a) and (b) are waived for the purposes and duration of that operation.