rial charges, including an amount for administration not less than the FMS administrative surcharge. Full replacement cost pricing shall be used for all sales of defense articles from DoD stocks and all diversions from DoD procurement, even when a lower price could be charged under FMS pricing principles.

(4) U.S. Government fiscal obligation for a procurement contract may not exceed the cash received from the sale, nor may the replacement cost of defense articles delivered from DoD stocks exceed the cash received from the sale. If there is an increase in the procurement contract cost, the purchaser shall be required to make additional cash payment to the Military Service to fund the contract fully, plus applicable Surcharges, when such an increase is known.

(5) Accountability shall be in accordance with DoD 7290.3-M with reimbursements from sales being credited to the current appropriation, fund, or account of the selling agency. surcharges, such as nonrecurring cost recoupment charge, asset use charge, and FMS administrative surcharge, shall be accountable as FMS surcharges under DoD 7290.3-M.

(c) Establishment of Priorities and Allocations. (1) Unless otherwise directed by the Under Secretary of Defense for Policy in coordination with the Assistant Secretary of Defense (Manpower, Reserve Affairs, and Logistics), sales are not authorized if they result in inventory stockage levels dropping below the established reorder points. Except as provided in section 21(i) of the Arms Export Control Act, sales are not authorized if they constitute a withdrawal of assets from U.S. stocks that result in a significant adverse impact on the combat readiness of the Military Services.

(2) When procurement is required, or manufacture in government-owned facilities is necessary, the Military Department concerned shall determine whether a sale will be concluded. Unless directed by the Defense Security Assistance Agency (DSAA) (see § 251.5(c)(3), below) the Military Department concerned is responsible for the establishment of priorities for procurement or manufacture and for allo

cations and delivery of military equipment and services. In determining production priorities and allocations, the Military Departments shall consider fully all existing DoD requirements for U.S. and other foreign require. ments and normally will schedule delivery, manufacture, and allocation on a first-in, first-out basis. In making such determinations the Military Departments shall be guided by DoD Directives 4410.6 and related assignments of force activity designators by the Joint Chiefs of Staff.

(3) If there are two or more competing foreign requirements, the Director, DSAA, shall determine priorities or shall make allocations. Such priorities or allocations for foreign requirements shall supersede determinations made by the Military Department under § 251.5(c)(2), above.

(d) Sales Agreement. (1) The sales agreement with the U.S. company will identify the company, the items and quantities being sold, the estimated availability of the items, whether from DoD stocks or procurement, the estimated price of the items, the end item into which the GFE or GFM item or items will be incorporated for resale, the identity of the foreign purchaser and the number and date of the munitions export license, or State Department approval.

(2) The sales agreement shall be approved by the appropriate Military Department's General Counsel and shall, as a minimum, indicate that the U.S. Government:

(i) Retains the right to cancel in whole or in part or to suspend performance at any time under unusual or compelling circumstances if the national interest so requires.

(ii) Provides no warranty or guarantee, either expressed or implied, regarding the items being sold.

(iii) Shall provide best efforts to comply with the delivery leadtime cited, but will incur no liability for failure to meet an indicated delivery schedule.

(iv) Shall use its best efforts to deliver at the estimated prices, but that the purchaser is obligated to reimburse the U.S. Government for the total cost if it is greater than the estimated price.

(3) Moreover, the sales agreement shall state that:

(i) Payment terms are cash, payable in advance, in accordance with

§ 251.5(b)(2), above;

(ii) Delivery shall be "FOB origin" with purchaser to arrange for continental U.S. (CONUS) transportation, except for sensitive or hazardous cargo that normally shall be shipped by way of the Defense Transportation Service (DTS) at rates established in DoD 7290.3-M;

(iii) The purchaser is responsible for both insurance coverage, if desired, and ultimate customs clearance for export;

(iv) The purchaser is required to reimburse the U.S. Government for all costs incurred by the U.S. Government if the purchase agreement is canceled by the purchaser before delivery of the defense materiel or completion of defense services.

(v) The purchaser renounces all claims against the U.S. Government, its officers, agents, and employees arising out of or incident to this agreement, whether concerning injury to or death of personnel, damage to or destruction of property, or other matters, and will indemify and hold harmless the U.S. Government, its officers, agents, and employees against any such claims of third parties and any loss or damage to U.S. Government property.

(vi) The items sold to foreign governments on a direct commercial basis under an approved export license may be used only for incorporation into end items or as concurrent or followon support in conjunction with a sale of the end item and for no other purpose. The U.S. company agrees to provide for protection of classified information and will require the agreement with the foreign government to provide for protection of U.S. classified information.

§ 251.6 Responsibilities.

(a) The Under Secretary of Defense for Policy, or designee, shall provide overall guidance regarding the sale of GFE or GFM to U.S. companies for commercial export.

(b) The Director, Defense Security Assistance Agency, shall:

(1) Monitor the sale of GFE or GFM to U.S. companies and implementation of this Directive.

(2) Determine priorities or make allocations between two or more competing foreign requirements.

(c) The Secretaries of the Military Departments:

(1) Shall execute the functions conferred upon the Secretary of Defense by Section 30 of the Arms Control Act.

(2) May redelegate the authority under Section 30 but such delegation may not be below the level of the commanding officer or head of a procuring activity of the Military Department responsible for procurement or acquisition of the applicable end item.

(3) Shall provide a quarterly report to the Director, DSAA, of sales made to U.S. companies under Section 30.

(d) The Assistant Secretary of Defense (Comptroller) shall monitor pricing compliance and financial administration set forth under DoD 7290.3-M.

(a) Outer continental shelf. All submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in section 2 of the Submerged Lands Act (ch. 65. 67 Stat. 29 (1953), codified at 43 U.S.C. 1301 et seq. (1970)) and of which the subsoil and seabed appertain to the United States and are subject to its jurisdicion and control.

(b) State-owned offshore submerged lands. Coastal portions of lands beneath navigable waters, as defined in section 2 of the Submerged Lands Act.

(c) Offshore areas. The water surface areas and the submerged land areas over which the United States exercises jurisdiction and control.

(d) Offshore military activities program. The program established here to implement DoD policies and procedures for those activities, operations, and installations that require an offshore environment.

$252.4 Policy.

The Department of Defense supports the basic principle that lands comprising the Outer Continental Shelf and State owned offshore areas should be utilized in the highest national interest. The Department of Defense policy, therefore, is that its use of offshore areas will be limited to that considered essential for military purposes, and that such use will be shared with non-military interests to the maximum extent feasible.

(a) Upon determination by the Department of the Interior, or the coastal States, that the mineral potential of certain offshore areas presently being or proposed to be used for military purposes must be explored or exploited, the Department of Defense will endeavor to accommodate to the maximum feasible extent the joint military and commercial utilization of these areas.

(b) If it is determined that non-military interests cannot be accommodated without degradation of military programs, and alternatives are neither available nor economically or militarily feasible, the Department of Defense will attempt to reach agreement with the Department of the Interior or the coastal States, as applicable, to ex

clude conflict areas from leasing programs.

§ 252.5 Responsibilities.

(a) The Assistant Secretary of Defense (Manpower, Reserve Affairs, and Logistics) (ASD (MRA&L)), or designee, in meeting the objectives of the policies here established, shall:

(1) Develop and maintain a comprehensive program for the military use of the offshore environment; and provide direction and guidance to the Military Departments, as appropriate.

(2) Review and direct Military Departments' offshore activities.

(3) Negotiate, in coordination with the appropriate Military Departments, and enter into such administrative arrangements and agreements with the Department of the Interior and the States as may be necessary to ensure that the Department of the Interior's or States' leasing plans and programs are compatible with the Department of Defense missions.

(4) Represent the Department of Defense on the Secretary of the Interior's Outer Continental Shelf Advisory Board.

(5) Conduct continuing liaison with the Department of the Interior and appropriate coastal States to ensure compatibility between each other's programs.

(6) Inform concerned Military Departments of new developments in the Department of the Interior's, States' and significant industry mineral leasing plans that may affect present or potential military interests in offshore

areas.

(b) Under the general direction of the ASD(MRA&L), the Military Departments shall:

(1) Review proposed Department of the Interior's and States' mineral leasing maps and alert the ASD(MRA&L) of proposed lease areas that could be incompatible with the military missions. Where joint use is feasible, recommend conditions and stipulations that should be imposed in leases to ensure the integrity of military missions, and otherwise protect the interests of the United States against claims arising out of damage to prop

erty or injury to non-Government personnel.

(2) Establish and maintain lines of communications and coordination to ensure that each Military Department is fully cognizant of plans, programs, and negotiations of the other Military Departments regarding offshore areas. (3) Review notices referred to in § 252.5(d)—and provide comments to the Chief of Engineers (Department of the Army) regarding the compatibility of proposed actions with offshore military activities.

(4) Inform the Chief of Engineers, Department of the Army, of any change in the status of offshore ranges, restricted areas or operation

areas.

(5) Develop legislation, when requested by the General Counsel, DoD, pursuant to the Engle Act, (Pub. L. No. 85-337, 72 Stat. 28 (1958), codified at 43 U.S.C. 155 et seq. (1070)), to restrict specified areas from operation of the mineral leasing provisions of the Outer Continental Shelf Lands Act, (ch. 345, 67 Stat. 462 (1953), codified at 43 U.S.C. 1331 et seq. (1970 and Supp. V. 1975) as amended by Outer Continental Shelf Lands Act Amendments of 1978, Pub. L. No. 95-372, 92 Stat. 629).

(6) Conduct other activities related to the offshore environment as requested by the ASD(MRA&L).

(c) This part does not limit the responsibilities of the Secretary of the Navy assigned under the provisions of the Marine Resources and Engineering Development Act of 1966, (Pub. L. No. 89-454, 80 Stat. 203, codified at 33 U.S.C. 1101 et seq. (1976)). Moreover, the Secretary of the Navy shall:

(1) Represent the Department of Defense on matters for which the Secretary is assigned responsibility pursuant to the Marine Resources and Engineering Development Act of 1966.

(2) Inform the ASD(MRA&L) of programs planned or developed, and actions taken to ensure that marine resources and the Offshore Military Activities Programs are consistent.

(d) The Secretary of the Army will provide notices to the ASD(MRA&L), to affected military installations and activities and to the Director, Defense Mapping Agency (Hydrographic

Center), of potential obstructions and hazards to navigation pursuant to the River and Harbor Act of 1899 (ch. 425, 30 Stat. 1151, codified at 33 U.S.C. 401 et seq. (1976), and proposed permits for obstructions to be located on the Outer Continental Shelf pursuant to section 4(e) of the Outer Continental Shelf Lands Act to ensure compatibility with the Offshore Military Activities Program.

PART 253-ASSIGNMENT OF AMERICAN NATIONAL RED CROSS AND UNITED SERVICE ORGANIZATIONS, INC., EMPLOYEES TO DUTY WITH THE MILITARY SERVICES

Sec.

253.1 Reissuance and purpose.
253.2 Applicability and scope.
253.3 Definitions.
253.4 Policy.

253.5 Responsibilities.
253.6 Procedures.

AUTHORITY: Pub. L. 83-131, 5 U.S.C. 301. SOURCE: 48 FR 35644, Aug. 5, 1983, unless otherwise noted.

8 253.1 Reissuance and purpose.

This rule reissues this Part to update policy and procedures governing the investigation of American National Red Cross (hereafter "Red Cross") employees and United Service Organizations, Inc. (USO), staff for the purpose of determining the security acceptability of such personnel for assignment to duty with the Military Services.

§ 253.2 Applicability and scope.

(a) This rule applies to the Office of the Secretary of Defense, the Military Departments, the Unified and Specified Commands, and the Defense Investigative Service (hereafter referred to as "DoD Components"). The term "Military Services," as used herein, refers to the Army, the Navy, the Air Force, and the Marine Corps.

(b) This rule does not apply to U.S. citizens or foreign nationals who are available locally at overseas locations for temporary or part-time employment with the Red Cross or the USO. Policy and procedures governing investigation and security acceptability of

locally hired employees shall be determined by the Military Department concerned.

§ 253.3 Definition.

Employee. Any full-time, salaried individual serving with or employed by the Red Cross or the USO who is subject to assignment for overseas duty with the Military Services.

§ 253.4 Policy.

(a) It is the policy of the Department of Defense that an employee shall be accepted for assignment to duty with the Military Services overseas only after it first has been determined, based upon an appropriate personnel security investigation, that such acceptance for assignment is clearly consistent with the national interest.

(b) The standard and criteria for determining the security acceptability of an employee for assignment or continuation of assignment with the Military Services overseas shall be identical to those established for making security clearance determinations for personnel employed in private industry under §§ 155.4 and 155.5 of this title.

(c) An employee will not be assigned for duty with the Military Services overseas or continued in such an assignment when it has been determined that assignment or continuation of assignment is not clearly consistent with the national interest.

(d) Completed security forms (DD Form 398, Personnel Security Questionnaire (BI/SBI), or 398-2, Personnel Security Questionnaire (National Agency Check)) shall be forwarded to the Defense Industrial Security Clearance Office (DISCO), Defense Investigative Service, for initiation of the NAC or BI, as appropriate.

(e) Upon completion of the appropriate investigation, the results shall be returned to the DISCO where a determination shall be made concerning security acceptability of the employee. If the determination is favorable, the DISCO shall provide a statement to that effect to the Red Cross or the USO. If the DISCO is unable to make a favorable security acceptability determination, the procedures described in § 253.6(f)(3), below, shall apply.

(f) Whenever any DoD Component or the Red Cross or the USO receives information indicating that an employee's assignment or continuation of assignment with the Military Services overseas may not clearly be consistent with the national interest, the information shall be furnished to the DISCO for appropriate review. In such cases, the following actions shall be taken:

(1) The DISCO shall arrange for the conduct of any investigation warranted to resolve the adverse or questionable information.

(2) In cases arising after the initial security acceptability determination has been made, the DISCO shall review the information or report of investigation to determine whether the security acceptability determination is to continue in effect. If such adjudication is favorable, no further action is required. The Red Cross or the USO will not be notified in such cases in order to preclude the possibility of any adverse inference being drawn.

(3) If, after reviewing the information or report of investigation, the DISCO is unable to make a favorable security acceptability determination,