United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office National Security and International Affairs Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1995-05-31 monographic deposited born digital 24 p. GA 1.13:NSIAD-95-147 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-95-147 P0b002ee18037236e f:ns95147 DGPO 2010-08-12 2011-03-24 GAOREPORTS-NSIAD-95-147 machine generated eng fdlp REPORT GAOREPORTS-NSIAD-95-147 NSIAD-95-147 Foreign military sales Exporting Research and development costs Defense cost control International economic relations Competition Defense industry Advanced weapons systems Foreign military sales costs Government collections Australia New Zealand Japan F-16A/B Aircraft F-16C/D Aircraft Norway Turkey Foreign Military Sales Program Letter Report NSIAD

Pursuant to a congressional request, GAO provided information on military exports, focusing on: (1) the government's recovery of nonrecurring research and development costs on sales of major defense equipment; (2) the effect of charging a flat or standard rate rather than the current pro rata fee; and (3) views from supporters and opponents on the recovery of these costs.<p/>GAO found that: (1) the Department of Defense (DOD) recovered $181 million in nonrecurring costs on foreign military sales in fiscal year (FY) 1994 and the Defense Security Assistance Agency waived about $273 million in nonrecurring cost charges on sales to North Atlantic Treaty Organization countries and Japan in FY 1994; (2) DOD anticipates recoveries of $845 million between FY 1995 and FY 1999; (3) if the charge for nonrecurring costs is repealed, as proposed, some collections would continue for years as charges are recovered on deliveries associated with prior years' sales; (4) an alternative to the current pro rata charge is a flat rate charge, which would be easier to calculate and would not need to be periodically updated; (5) the effect of using a flat rate varies, depending on the way it is applied; (6) supporters of cost recovery believe that recovery cost charges should be collected on both foreign military sales and direct commercial sales; and (7) opponents of the charges believe they adversely affect the defense industry's competitiveness in the world market and could affect the national economy in the long run. https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-95-147/html/GAOREPORTS-NSIAD-95-147.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-95-147/pdf/GAOREPORTS-NSIAD-95-147.pdf GAO/NSIAD-95-147 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-95-147 Letter Report GAO/NSIAD-95-147; Military Exports: Recovery of Nonrecurring Research and Development Costs; Foreign military sales Exporting Research and development costs Defense cost control International economic relations Competition Defense industry Advanced weapons systems Foreign military sales costs Government collections Australia New Zealand Japan F-16A/B Aircraft F-16C/D Aircraft Norway Turkey Foreign Military Sales Program Title 22 Section 2761 22 U.S.C. 2761