Retained items, excess property and facilities abroad

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1. Keeping items bought for assistance

Section 605 of the Foreign Assistance Act of 1961, codified at 22 U.S.C. 2355, lets the government keep commodities and defense articles bought for assistance instead of handing them over (22 U.S.C. 2355). Items procured to carry out the Act may be retained by, or transferred on reimbursement to, a federal agency the President chooses, instead of going to a foreign country or international organization (22 U.S.C. 2355(a)). That happens whenever the President judges it in the best interests of the United States, or when Congress calls for it by concurrent resolution.

Retained items may be disposed of without following the usual federal property disposal laws, where necessary to prevent spoilage or waste or to conserve their usefulness (22 U.S.C. 2355(a)). Money from any disposal or transfer goes back to the account used to buy the items, or to the account currently available for the same general purpose.

2. Repayment in kind and returned articles

Where commodities are transferred to the government as repayment of assistance, they may be used for the Act’s purposes and within its limits (22 U.S.C. 2355(b)). Defense articles also come back. When a recipient country or international organization returns defense articles as no longer needed for their original purpose, money from their sale, transfer or disposal is credited to the account used to buy them (22 U.S.C. 2355(d)). The money may instead go to the account currently available for the same general purpose. Excess defense articles under the separate statutory program are covered in what excess defense articles are.

3. Excess property for development projects

Section 608, codified at 22 U.S.C. 2358, deals with excess government property (22 U.S.C. 2358(a)). Congress states its sense that, in furnishing assistance under subchapter I, excess personal property should be used wherever practicable instead of, or alongside, buying new items for assisted projects. Other property already owned by a federal agency should also be used where that would save substantially.

To support this, the President may keep $5,000,000 of part I of subchapter I funds in a separate account free from fiscal year limits (22 U.S.C. 2358(a)). The account pays for acquiring, storing, renovating, rehabilitating, packing, crating, handling and transporting excess or other government property ahead of known needs. Personnel costs are included. Domestic excess property held under this authority at any one time may not exceed $15,000,000 in total original acquisition cost.

Property acquired this way can be furnished in two ways (22 U.S.C. 2358(a)). It may go out under any subchapter I provision that has funds for assistance, with the separate account repaid from those funds for all costs. It may instead go out on an advance-of-funds or reimbursable basis to friendly countries and relief agencies, with the account repaid under that authority.

4. Limits on domestic excess property

Domestic excess property may be transferred to the agency administering subchapter I only on one of two conditions (22 U.S.C. 2358(b)). Either it is for use only by a federal agency, or it has been found, in the way used for surplus property, not to be needed for donation. Those limits do not apply to transfers in any fiscal year of property with a total original acquisition cost of up to $45,000,000.

5. Before shipment

Apart from the environmental route below, government excess property may be made available for subchapter I purposes only with the administering agency’s prior approval. The approval covers the shipment, or the transfer if the property is already in the country (22 U.S.C. 2357(c)(1)). It must also make three written determinations.

The first is that the property is needed in the quantity requested and suitable for its purpose (22 U.S.C. 2357(c)(1)(A)). The second concerns the designated end user’s status, responsibility and ability to use and maintain the property (22 U.S.C. 2357(c)(1)(B)). The third is that the property’s residual value, serviceability and appearance would not reflect unfavorably on the image of the United States (22 U.S.C. 2357(c)(1)(C)). That residual value must also justify, and at least equal, the costs of packing, crating, handling, transportation and other accessorial costs. For transfers under part VIII of subchapter I, the Department of State is treated as the administering agency (22 U.S.C. 2357(c)(2)).

6. Excess property for environmental protection

A separate route supports environmental protection abroad (22 U.S.C. 2357(d)). The Secretary of State acts through the Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs. The Secretary may transfer government-owned excess property to a friendly country, an international organization, the American Red Cross or another eligible voluntary nonprofit relief agency. The transfer must support subchapter I activities designed to enhance environmental protection in foreign countries.

The Secretary must make the same three written determinations (22 U.S.C. 2357(d)(1), 22 U.S.C. 2357(d)(2) and 22 U.S.C. 2357(d)(3)). They cover need and suitability, the end user’s status and ability to use and maintain the property, and residual value, serviceability and appearance against packing, crating, handling, transportation and other accessorial costs. How agencies are paid for furnishing services and commodities is covered in allocating assistance funds to other agencies.

7. Building quarters, schools and hospitals abroad

The Act also lets assistance funds create property abroad for the people who run programs (22 U.S.C. 2396(c)). Notwithstanding any other law, up to $6,000,000 of assistance funds a year, in addition to funds available under other authorities, may be used to build or otherwise acquire essential living quarters, office space and supporting facilities outside the United States. The same money may build or acquire schools, including dormitories and boarding facilities, and hospitals for program personnel, other government personnel and their dependents. Assistance funds may also equip, staff, run and maintain those schools and hospitals.

Instead of building, up to $2,500,000 a year may be used to assist schools outside the United States that educate the dependents of program and other government personnel (22 U.S.C. 2396(d)). That route is used where it would be more economical, or would best serve American interests, than acquiring or building a school.

Key terms

Retention	Keeping items bought for assistance for American government use instead.
Concurrent resolution	A resolution of both houses of Congress that can call for retention.
Domestic excess property	Property classified as domestic excess under the federal property laws in titles 40 and 41.
Original acquisition cost	The measure used for the $15,000,000 and $45,000,000 limits.
Residual value	The remaining worth of excess property, which must at least cover shipping costs.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Facilities abroad need security and life support from the day they open. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.