Military Offsets

Regulations Needed to Implement Prohibition on Incentive Payments Gao ID: NSIAD-97-189 August 12, 1997

The State Department has made little progress in developing regulations to implement the statutory prohibition governing incentive payments on military offset programs, known as the "Feingold Amendment." The amendment bans U.S. contractors from making incentive payments to a U.S. company or individual to induce them to buy goods or services from a foreign country that has an offset agreement with the contractor. The lack of progress at the State Department is due to internal disagreements over which organizational component should draft implementing language and the low priority assigned to completing this task. Regulations are needed to clarify key definitions found in the law and establish how State will implement the law's enforcement and penalty provisions.

GAO noted that: (1) the Department of State has made little progress in developing regulations implementing the Feingold Amendment because of internal disagreements over which organizational component should draft implementing language and the low priority assigned to completing this task; and (2) regulations are needed to clarify key definitions contained in the law and establish how State will implement the law's enforcement and penalty provisions.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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