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B-208698 1 (1982-09-02)

handle is hein.gao/gaobabmol0001 and id is 1 raw text is: It113 < 1 0 COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON D.C. 2054 September 2, 1982 B-208698 The Honorable John Glenn United States Senate Subject: Proposed Arms Sales Legislation Should Be Subject to Arms Export Control Act Dear Senator Glenn: On June 15, 1982, you requested that we comment on proposed legislation (H.R. 6370) to amend section 107 of the Foreign Assistance Authorization Act of 1983 that would allow the U.S. Government to sell Government-furnished equipment to U.S. con- tractors for incorporation into an end item for export. Because of anticipated delays in passage of security assistance legisla- tion, an independent bill (H.R. 6758), intended to accomplish the same objective, was also introduced and passed by the House of Representatives on July 19, 1982. The most important consideration about each of these bills is that neither proposes to enact the provision as part of the Arms Export Control Act (AECA) but are free standing; therefore, various congressional restrictions and controls over the sale of defense articles and services would not apply. These bills also differ from each other in two ways that further affect controls. First, H.R. 6758 authorizes the Secretary of Defense to sell these items whereas H.R. 6370 authorizes the President to do so. Second, H.R. 6758 would permit defense services to be sold in addition to the defense articles and unclassified publications which the Government could sell to U.S. contractors under both bills. Without these or similar legislation, the U.S. Government has no authority to make sales directly to contractors. To date, the AECA authorizes sales only to an eligible country or inter- national organization. The U.S. Government, as a sole source supplier of some defense equipment, requires the country to enter into a government-to-government agreement with the United States to acquire the equipment. This agreement may either take the form of a foreign military sales (FMS) agreement or another agreement designating the U.S. contractor as the agent of the purchasing country. One reason cited for enacting the legisla- tion is to avoid this increased government red tape. 119390

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