22 U.S.C. § 2762 — Procurement for cash sales

(a) Presidential authority, dependable undertaking, and interest. Unless this section says otherwise, the President may enter into contracts to procure defense articles or services for sale in United States dollars to a foreign country or international organization without charging an otherwise available appropriation or contract authorization. The recipient must give the United States Government a dependable undertaking: (1) to pay the contract's full amount, protecting the Government from loss; and (2) to make funds available in the amounts and at the times needed to pay the contract and any damages or costs from canceling it, before those amounts are due. Interest must be charged on any net amount by which the country or organization is behind on all its outstanding unliquidated dependable undertakings considered together. The rate may not be below a rate determined by the Secretary of the Treasury after considering the average market yield on outstanding United States short-term obligations on the last day of the month before the net arrearage. Interest is calculated from the date of the net arrearage. (b) Emergency letters of offer and available appropriations. If the President decides it is in the national interest, the President may issue letters of offer that bill when the article is delivered or service performed and require payment within 120 days after billing. The President may do this only after also deciding that the purchaser's emergency need exceeds its ready access to enough funds for dependable-undertaking payments, and submitting both decisions to Congress with a special emergency request for authorization and additional appropriations to finance the purchases under this chapter. Department of Defense appropriations may pay the procurement contracts. The amounts later received from the recipient country or organization must reimburse those appropriations. (c) Renegotiation Act of 1951. That Act does not apply to procurement contracts entered into before or after this provision under this section, section 2769, or predecessor laws. (d) Competitive pricing. (1) A procurement contract implementing a sale under this section for an article or service paid for entirely with nonrepayable funds must use the same costing basis for profit, overhead, independent research and development, bid and proposal costs, and other cost elements that applies when the Department of Defense buys like items for its own use. (2) Direct costs of meeting the purchaser's additional or unique requirements may be allowed under paragraph (1) contracts. The loadings applied to those direct costs must use the same rates that apply when the Department buys like items for its own use.