What an acquisition and cross-servicing agreement is

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1. Two authorities in one subchapter

Chapter 138 of title 10 covers cooperative agreements with NATO allies and other countries, and its first subchapter is headed acquisition and cross-servicing agreements. It gives the Secretary of Defense two related powers. One is to buy logistic support from foreign governments and international organizations for forces deployed abroad (10 U.S.C. 2341). The other is to sign agreements under which the United States and a partner supply each other (10 U.S.C. 2342).

2. Buying support for forces abroad

Subject to available appropriations, the Secretary may acquire logistic support, supplies and services for elements of the armed forces deployed outside the United States (10 U.S.C. 2341). The suppliers can be the governments of NATO countries, NATO subsidiary bodies, the United Nations Organization, or any regional international organization.

A government outside NATO can also be a supplier, for forces deployed or to be deployed abroad, if it meets one of four conditions (10 U.S.C. 2341). It has a defense alliance with the United States. It permits American forces to be stationed there or American naval vessels to be homeported there. It has agreed to the prepositioning of American materiel. Or it hosts military exercises that include American forces, or permits other American military operations in the country.

3. Cross-servicing agreements

The second power is the agreement itself. After consultation with the Secretary of State, the Secretary of Defense may agree to provide logistic support, supplies and services to a partner’s military forces. The return is the reciprocal provision of the same by that partner to American forces (10 U.S.C. 2342(a)). The partners can be NATO governments, NATO subsidiary bodies, the United Nations Organization or a regional international organization. They can also be a non-NATO government the Secretary has designated.

Designation has conditions (10 U.S.C. 2342(b)). The Secretary must determine, after consulting the Secretary of State, that designating the country is in the interest of national security. For a country outside NATO, the appropriate committees of Congress must receive notice of the intended designation at least 30 days before it is made. A separate notice of intent to enter into the agreement must also reach them at least 30 days before it is signed. For this section, the committees are the Armed Services and foreign affairs committees of each house (10 U.S.C. 2342(i)).

4. What can change hands

The subchapter defines the goods and services it covers (10 U.S.C. 2350). Logistic support, supplies and services means food, billeting, transportation including airlift, petroleum, oils and lubricants, clothing, communications and medical services, and ammunition. It also covers base operations support and construction incident to it, storage, use of facilities, training, spare parts and components, repair and maintenance, calibration, and port services.

One further category is included on a limited basis. The term covers temporary use of general purpose vehicles and other nonlethal items of military equipment that are not designated as significant military equipment on the United States Munitions List (10 U.S.C. 2350). A transfer can be a sale, whether paid in currency, replacement-in-kind or an equal-value exchange. It can also be a lease, a loan, or another temporary provision under a cross-servicing agreement.

5. What the authority may not be used for

Three limits keep the agreements within bounds. The Secretary may not use the subchapter to procure from any foreign government or international organization goods or services reasonably available from American commercial sources (10 U.S.C. 2342(c)). An agreement may not be used to pass support on to a country or organization that has not signed an agreement itself (10 U.S.C. 2342(d)). The third limit is stated plainly: "An agreement described in subsection (a)(2) may not provide or otherwise constitute a commitment for the introduction of the armed forces into hostilities" (10 U.S.C. 2342(e)).

A set of procurement statutes is switched off for these transactions. Listed provisions do not apply to acquisitions under the acquisition authority or to agreements under the cross-servicing authority (10 U.S.C. 2343). They include the full and open competition requirement, the provisions on required cost or pricing data and examination of contractor records, and the prohibition on Members of Congress making contracts with the government.

6. Oversight and accounting

Two provisions timed from the enactment of the National Defense Authorization Act for Fiscal Year 2020 set up controls. The Secretary had to designate an existing senior official with primary responsibility for accounting for support received or provided, and for consistent standards and guidance to the armed forces and combatant commands (10 U.S.C. 2342(f)). That official also oversees implementation in coordination with the Under Secretary of Defense for Policy.

Regulations must ensure that contracts under the subchapter are free from self-dealing, bribery and conflicts of interest (10 U.S.C. 2342(g)). They must also provide for accurate accounting, and for trained personnel who understand their accounting responsibilities. The Comptroller General was required to review how those regulations are implemented.

7. The annual report

By January 15 each year the Secretary reports to the appropriate committees in detail (10 U.S.C. 2342(h)). The report lists agreements that entered into force or were applied provisionally in the preceding fiscal year, with signature dates and, for non-NATO countries, the dates of the two notices to Congress. For each agreement it gives the class of supply, the total dollar amount, the amount collected and the outstanding balance, both for support provided and for support received.

Old balances are singled out. Any transaction not reconciled more than one year after it occurred is described, with its date, the recipient and its value. The report also explains any waiver of the annual dollar limits granted for a contingency or non-combat operation. How those limits and payments work is covered in paying for cross-servicing transactions.

Key terms

Cross-servicing agreement	A reciprocal agreement under which the United States and a partner provide each other logistic support, supplies and services.
Logistic support, supplies, and services	The defined list of goods and services, from food and fuel to port services, the subchapter covers.
NATO subsidiary body	A NATO organization or international military headquarters covered by the two status treaties the definition names.
Transfer	A sale, lease, loan or other temporary provision of support under a cross-servicing agreement.

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

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