Excess Defense Articles · 3 of 3
The statute is generous about the article itself. "Excess defense articles may be transferred under this section without cost to the recipient country" (22 U.S.C. 2321j(c)(1)).
It is equally clear about everything else. Except in one narrow case, funds available to the Department of Defense "may not be expended for crating, packing, handling, and transportation of excess defense articles transferred under the authority of this section" (22 U.S.C. 2321j(e)(1)).
The manual states the consequence for the recipient. Recipients are responsible for packing, crating, handling and transportation costs, and for refurbishment work and follow-on support, which may be purchased from the Department through Foreign Military Sales (SAMM EDA.8). The equipment costs nothing. Moving it, restoring it and keeping it running is a funded program of its own.
Transportation may be provided without charge, but only where four conditions are met together (22 U.S.C. 2321j(e)(2)):
The weight limit is the binding one in practice. Fifty thousand pounds is a modest air movement, so the exception cannot carry a vehicle fleet or a ship's worth of spares. Authorization for space available movement must be requested with the transfer request itself, stating weight, proposed method, route and any time constraints (SAMM EDA.8).
Where excess articles are sold rather than granted, pricing follows the Department's financial management regulation. Approval of pricing exceptions rests with the Under Secretary of Defense (Comptroller) (SAMM EDA.2.1).
Congress has expressed a view on the use of that discretion. The Security Assistance Act of 2000 records the sense of Congress in favor of greater use of the authority to sell excess articles, drawing on the flexibility available to ascertain their market value (SAMM EDA.8).
One charge is easy to overlook. Storage charges are not applied automatically, but the implementing agency includes reasonable charges for items stored beyond 60 days past acceptance of the Letter of Offer and Acceptance, stated in a case note (SAMM EDA.2.1). A recipient that accepts an offer before it can arrange collection starts a clock.
The basis of transfer is stated in four words. Excess articles are transferred "as is, where is" (SAMM EDA.2.6). There is no warranty of condition and no obligation to deliver.
Title normally transfers at the point of origin unless a case note specifies otherwise, under the standard terms and conditions of the Letter of Offer and Acceptance (SAMM EDA.2.5.1). For items located in Germany, a case note typically moves that point to the nearest point of debarkation outside the country. From the moment of title transfer, the movement and the risk belong to the recipient.
There is one route by which work can still be done afterwards. Where the partner explicitly authorizes it, Title 10 building partner capacity funding can be used to refurbish, repair or transport the property after title has transferred (SAMM EDA.2.5.1).
Because condition is not guaranteed, inspection is the recipient's protection, and the manual encourages it. Partners are encouraged to inspect excess articles before delivery, and an inspection may take place before or after a transfer has been authorized (SAMM EDA.2.4).
Two conditions attach. Partners pay for their own participation in a joint visual inspection. And where an inspection happens before the transfer is authorized, the implementing agency must make every reasonable effort to ensure the partner understands that inspecting an item is not a promise that it will be transferred (SAMM EDA.2.4).
The process has its own notice period. Written notice goes to the Defense Security Cooperation Agency and the Department of State at least 30 days before the inspection, naming the partner, the items and the approximate dates (SAMM EDA.2.4).
Ocean movement brings a further set of rules. Cargo preference law sets a floor of 50 percent. Agencies are to take the steps necessary and practicable to ensure that at least half the gross tonnage furnished for the account of a foreign country moves on privately owned commercial vessels of the United States. That applies to the extent such vessels are available at fair and reasonable rates (46 U.S.C. 55305(a)).
The manual applies that to grant transfers and tells implementing agencies to account for it when a case is drafted. Recipients use United States flag vessels unless a non-availability waiver has been issued by the Maritime Administration (SAMM EDA.8). A transport plan built on the cheapest available carrier is a plan that may not survive case review.
A payment default closes the grant route. Where a partner is in default of payment by more than six calendar months on a loan, all grant transactions for that partner are put on hold until the sanction is lifted, absent a Presidential waiver (SAMM EDA.2.5.3). Sales of excess articles continue to be permitted under the same sanction, so the route changes rather than closing.
An offer of excess equipment is not certain until title moves. Where an unforeseen urgent requirement arises for items already offered but not yet transferred, the implementing agency notifies the Defense Security Cooperation Agency and the Under Secretary of Defense for Policy (SAMM EDA.2.5.2).
Withdrawal is not automatic. It occurs only after that office has weighed American requirements against the potential damage to national security and foreign policy goals if the transfer is cancelled. Where the two do not point the same way, the question is elevated for decision (SAMM EDA.2.5.2).
For a recipient planning around a delivery, the practical point is that nothing is settled by the survey response. The transfer authorization is the document that fixes it. The conditions that have to be satisfied before that authorization is given are set out in the conditions on an excess defense articles transfer.
| PCH&T | Packing, crating, handling and transportation, the recipient's cost under 22 U.S.C. 2321j(e). |
|---|---|
| As is, where is | The basis of transfer, carrying no warranty of condition and no delivery obligation. SAMM EDA.2.6. |
| JVI | Joint visual inspection, which the partner pays to attend. SAMM EDA.2.4. |
| Space available | Movement on unused capacity, one of the four conditions of the transport exception. |
| MARAD | Maritime Administration, which issues non-availability waivers from cargo preference. |
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.
Transport, refurbishment and follow-on support are the recipient’s cost on an excess transfer. Sentfore works in that space, providing secure movement, protective security, facilities and life support around defense programs in difficult environments. Requirements can be sent through the contact page.