Proposed Arms Sales Legislation Should Be Subject to Arms Export Control Act

GAO was asked to comment on H.R. 6370, an amendment to the Foreign Assistance Authorization Act of 1983, that would allow the U.S. Government to sell Government-furnished equipment to U.S. contractors for incorporation into an end item for export. Because of anticipated delays, H.R. 6758, an independent bill intended to accomplish the same objective, was also introduced and passed by the House. One purpose of the legislation is to avoid requiring countries to enter into government-to-government agreements with the United States to acquire the equipment.

GAO found that Government and contractor officials strongly support the objective of these bills but want the protective provisions contained in the Arms Export Control Act to apply to contracts involving Government-furnished equipment sold to U.S. contractors for eventual export. They also believe that defense services should be limited to those required for installation, testing, and certification of Government-furnished equipment. Without these changes, GAO does not support either bill. GAO suggested changes in the language of H.R. 6758 which concern the intent and scope of the proposed legislation.