GAO Review of Pricing for Foreign Military Training

GAO testified on its review of pricing for foreign military training. Two areas were summarized: (1) the price changes that have occurred in security assistance training since 1975 and their impact on the Arms Export Control Act requirement for recovery of full cost; and (2) the impact of the Reagan administration's proposed amendment to establish a single price for selling military equipment to foreign countries. According to Department of Defense and State personnel, the proposed amendment would: (1) reduce discriminatory treatment; (2) enable poorer countries to obtain more U.S. training; (3) eliminate the incentive to obtain token levels of grant assistance in order to lower foreign military sales tuition rates; and (4) reduce the costs of administering training sales. GAO commented on these points and concluded that the argumment of both agencies in favor of the proposed amendment did not outweigh its cost. Therefore, GAO opposed adoption of the amendment.