SEC. 2. MODIFICATION OF CERTIFICATION AND REPORT 
REQUIREMENTS RELATING TO SALES OF 
MAJOR DEFENSE EQUIPMENT WITH RESPECT 
TO WHICH NONRECURRING COSTS OF RE-
SEARCH, DEVELOPMENT, AND PRODUCTION 
ARE WAIVED OR REDUCED UNDER THE ARMS 
EXPORT CONTROL ACT. 
(a) CERTIFICATION.—Section 36(b) of the Arms Ex-
port Control Act (22 U.S.C. 2776(b)) is amended by add-
ing at the end the following: 
‘‘(7)(A) In the case of any letter of offer to sell any 
major defense equipment for $14,000,000 or more, in ad-
dition to the other information required to be contained 
in a certification submitted to the Congress under this 
subsection, or a similar certification prior to finalization 
of a letter of offer to sell, each such certification shall in-
clude the value of any charge or charges for the propor-
tionate amount of any nonrecurring costs of research, de-
velopment, and production of the major defense equipment 
that was waived or reduced under section 21(e). 
‘‘(B) Each such certification shall also include infor-
mation on— 
‘‘(i) the type of waiver or reduction; 
‘‘(ii) the percentage of otherwise obligated non-
recurring costs with respect to which the waiver or 
reduction comprises; 
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‘‘(iii) a justification for issuance of the waiver 
or reduction; 
‘‘(iv) in the case of a waiver or reduction made 
under paragraph (2)(A) of section 21(e)— 
‘‘(I) the manner in which a sale would sig-
nificantly advance standardization with the for-
eign countries or international organization de-
scribed in such section; and 
‘‘(II) the extent to which the sale’s signifi-
cance should be considered relative to the exist-
ing capabilities of the foreign country or inter-
national organization and the manner in which 
the major defense equipment would enhance the 
capacity of the country or organization in joint 
operations; and 
‘‘(v) in the case of a waiver or reduction made 
under paragraph (2)(B) of section 21(e)— 
‘‘(I) the military needs and ability to pay 
of the foreign country or international organiza-
tion; 
‘‘(II) the price and capability of other rel-
evant options that are or likely would be consid-
ered by the foreign country or international or-
ganization for purchase in lieu of the major de-
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fense equipment described in the letter of offer; 
and 
‘‘(III) the previous buying history and ex-
isting capabilities of the foreign country or 
international organization.’’. 
(b) REPORT.—Section 36(a) of the Arms Export 
Control Act (22 U.S.C. 2776(a)) is amended— 
(1) in paragraph (11), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (12), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(13) with respect to requests to waive or re-
duce nonrecurring costs with respect to the sale of 
major defense equipment for $14,000,000 or more 
under this Act, a report on— 
‘‘(A) the total number of such requests 
that have been approved or denied during the 
quarter, including the total number of such re-
quests that are currently under review and 
pending a decision; 
‘‘(B) for each such request— 
‘‘(i) an identification of the foreign 
country or international organization re-
questing the waiver or reduction; 
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‘‘(ii) the total amount of nonrecurring 
costs to be waived or reduced; 
‘‘(iii) a description of the major de-
fense equipment to be purchased; and 
‘‘(iv) the justification for the waiver or 
reduction; and 
‘‘(C) for each such request that is ap-
proved, the actual amount of nonrecurring costs 
that are waived or reduced that are attributable 
to quantities of major defense equipment sold 
under such request.’’. 
(c) REPEAL OF WAIVER AUTHORITY IN CASE OF 
SALES OF MAJOR DEFENSE EQUIPMENT ALSO BEING 
PROCURED
FOR
USE
BY
UNITED
STATES
ARMED 
FORCES.—Section 21(e)(2) of the Arms Export Control 
Act (22 U.S.C. 2761(e)(2)) is amended— 
(1) in subparagraph (B)— 
(A) in the matter preceding clause (i)— 
(i) by striking ‘‘The President’’ and 
inserting ‘‘Except as provided subpara-
graphs (D) and (E), the President’’; and 
(ii) by striking ‘‘that—’’ and all that 
follows through ‘‘(i) imposition’’ and in-
serting ‘‘that imposition’’; 
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(B) by striking ‘‘sale; or’’ and inserting 
‘‘sale.’’; and 
(C) by striking clause (ii); and 
(2) by inserting at the end the following new 
subparagraphs: 
‘‘(D) The President may not waive the charge 
or charges for a proportionate amount of any non-
recurring costs that would otherwise be considered 
appropriate under paragraph (1)(B) for a particular 
sale to a country or international organization for a 
two-year period that begins on any of the following 
dates: 
‘‘(i) The date of approval of a waiver 
under paragraph (1)(B) of a charge or charges 
that are valued at $16,000,000 or more under 
this Act with respect to a sale to the country 
or organization. 
‘‘(ii) The date that is the last day of any 
five-year period in which the country or organi-
zation receives 15 or more waivers of a charge 
or charges under paragraph (1)(B) with respect 
to sales to the country or organization. 
‘‘(iii) The date that is the last day of any 
five-year period in which the country or organi-
zation receives waivers of a charge or charges 
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under paragraph (1)(B) that are valued at 
$425,000,000 or more under this Act with re-
spect to sales to the country or organization. 
‘‘(E)(i) In the case of any proposed waiver of 
the charge or charges which would otherwise be con-
sidered appropriate under paragraph (1)(B) for a 
particular sale to a country or international organi-
zation of major defense equipment for $10,000,000 
or more under this Act, the President shall submit 
to the Speaker of the House of Representatives, the 
Committee on Foreign Affairs of the House of Rep-
resentatives, and to the chairman of the Committee 
on Foreign Relations of the Senate a notification 
with respect to such proposed waiver. 
‘‘(ii) The President may not waive such charge 
or charges if Congress, not later than 60 calendar 
days after receiving such notification, enacts a joint 
resolution prohibiting the proposed waiver.’’. 
(d) MAXIMUM AGGREGATE AMOUNT OF CHARGES 
FOR ADMINISTRATIVE SERVICES.—Section 21(e) of the 
Arms Export Control Act (22 U.S.C. 2761(e)) is amend-
ed— 
(1) in paragraph (1), by inserting ‘‘subject to 
paragraph (4),’’ before ‘‘administrative services’’; 
and 
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of charges for administrative services that are re-
quired by paragraph (1)(A) with respect to a sale of 
defense articles or a sale of defense services would 
exceed the maximum aggregate amount of charges 
for administrative services determined under sub-
paragraph (A) for the fiscal year.’’. 
(e) 
MODIFICATION
OF
ADMINISTRATIVE
EX-
PENSES.— 
(1) IN GENERAL.—Section 43(b) of the Arms 
Export Control Act (22 U.S.C. 2792(b)) is amend-
ed— 
(A) in paragraph (1), by adding ‘‘and’’ at 
the end; 
(B) in paragraph (2), by striking ‘‘; and’’ 
and inserting a period; and 
(C) by striking paragraph (3). 
(2) 
CONFORMING
AMENDMENT.—Section 
21(e)(1)(A) of the Arms Export Control Act (22 
U.S.C. 2761(e)(1)(A)) is amended by striking ‘‘and 
section 43(c)’’. 
(f) BIENNIAL REVIEW AND MODIFICATION OF USER 
CHARGES.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary of Defense, acting 
through the Director of the Defense Security Co-
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operation Agency, shall, not less than once every two 
years— 
(A) carry out a review of user charges 
under the foreign military sales program and, 
based on the results of the review, modify the 
user charges as appropriate; and 
(B) submit to the appropriate congres-
sional committees a report that contains the re-
sults of the review carried out under subpara-
graph (A) and a description of any user charges 
that, based on the results of the review, were 
modified under subparagraph (A). 
(2) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES DEFINED.—In this subsection, the term ‘‘ap-
propriate congressional committees’’ means— 
(A) the Committee on Armed Services and 
the Committee on Foreign Affairs of the House 
of Representatives; and 
(B) the Committee on Armed Services and 
the Committee on Foreign Relations of the Sen-
ate. 
SEC. 3. REVIEW AND REPORT ON USE AND MANAGEMENT 
OF ADMINISTRATIVE SURCHARGES UNDER 
THE FOREIGN MILITARY SALES PROGRAM. 
(a) REVIEW.— 
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(1) IN GENERAL.—The Secretary of Defense, 
acting through the Director of the Defense Security 
Cooperation Agency, shall review options for expand-
ing the use of administrative surcharges under the 
foreign military sales program, including practices 
for managing administrative surcharges and con-
tract administrative services surcharges. 
(2) MATTERS TO BE INCLUDED.—The review 
conducted under paragraph (1) shall include the fol-
lowing: 
(A) A determination of which specific ex-
penses are incurred by the United States Gov-
ernment in operation of the foreign military 
sales program that the administrative surcharge 
does not currently pay for. 
(B) The estimated annual cost of each of 
such specific expenses. 
(C) An assessment of the costs and bene-
fits of funding such specific expenses through 
the administrative surcharge, including any 
data to support such an assessment. 
(D) An assessment of how the Department 
of Defense could calculate an upper bound of a 
target range for the administrative surcharge 
account and the contract administration serv-
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ices surcharge account, including an assessment 
of the costs and benefits of setting such a 
bound. 
(E) An assessment of how the Department 
of Defense calculates the lower bound, or safety 
level, for the administrative surcharge account 
and the contract administration services sur-
charge account, including what specific factors 
inform the calculation and whether such a 
method for calculating the safety level is still 
valid or should be revisited. 
(F) An assessment of the process used by 
the Department of Defense to review and set 
rates for the administrative surcharge and the 
contract administration services surcharge, in-
cluding the extent to which outside parties are 
consulted and any proposals of the Department 
of Defense may have for better ensuring that 
the fee rates are set appropriately. 
(G) Such other matters as the Secretary of 
Defense determines to be appropriate. 
(b) REPORT.—Not later than 120 days after the date 
of the enactment of this Act, the Secretary of Defense, 
acting through the Director of the Defense Security Co-
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operation Agency, shall submit to the congressional de-
fense committees a report on— 
(1) the findings of the review conducted under 
paragraph (1); and 
(2) any legislative changes needed to allow the 
surcharge under the foreign military sales program 
to pay for any expenses currently not covered by ad-
ministrative surcharge under the foreign military 
sales program. 
(c) FOREIGN
MILITARY
SALES
PROGRAM
DE-
FINED.—In this subsection, the term ‘‘foreign military 
sales program’’ means the program authorized under 
chapter 2 of the Arms Export Control Act (22 U.S.C. 
2761 et seq.). 
SEC. 4. PERFORMANCE MEASURES TO MONITOR FOREIGN 
MILITARY SALES PROGRAM. 
(a) IN GENERAL.—The Secretary of Defense, acting 
through the Director of the Defense Security Cooperation 
Agency and in consultation with the heads of other rel-
evant components of the Department of Defense, shall en-
hance the ability of the Department of Defense to monitor 
the performance of the foreign military sales program by 
taking the following actions: 
(1) Develop performance measures to monitor 
the timeliness of deliveries of defense articles and 
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defense services to purchasers in accordance with 
the delivery schedule for each sale under the foreign 
military sales program. 
(2) Identify key choke points, processes, and 
tasks that contribute most significantly to delays, 
shortcomings, and issues in the foreign military sales 
program. 
(3) Review existing performance measures for 
the foreign military sales program to determine 
whether such measures need to be updated, replaced, 
or supplemented to ensure that all key aspects of the 
foreign military sales program’s efficiency and serv-
ice of United States national interests are able to be 
monitored and informed by reliable data. 
(b) REPORT ON PERFORMANCE MEASURES.— 
(1) IN
GENERAL.—Not later than 180 days 
after the date of the enactment of this Act, the Sec-
retary of Defense, acting through the Director of the 
Defense Security Cooperation Agency, shall submit 
to the congressional defense committees a report 
that lists the performance measures developed and 
identified under subsection (a). 
(2) MATTERS TO BE INCLUDED.—The report 
required by paragraph (1) shall— 
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(B) MATTERS
TO
BE
INCLUDED.—Each 
update of the report required by paragraph (1) 
shall also include the following: 
(i) For any performance measures 
that indicate a decreased level of perform-
ance from the prior year— 
(I) a description of the factors 
that led to such decreased level of per-
formance; and 
(II) plans to improve such level 
of performance. 
(ii) For any performance measures 
that remain unable to be monitored due to 
lack of reliable and accessible data, an up-
date on plans to improve the monitoring of 
data. 
(c) BRIEFING.—Not later than 180 days after the 
date on which the Secretary of Defense, acting through 
the Director of the Defense Security Cooperation Agency, 
submits to the congressional defense committees the re-
port required by subsection (b), the Comptroller General 
of the United States shall provide a briefing to the con-
gressional defense committees on the report, including an 
evaluation of the performance measures developed and 
identified under subsection (a). 
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SEC. 5. REPORT AND BRIEFING ON ADMINISTRATIVE 
BUDGETING OF FOREIGN MILITARY SALES 
PROGRAM. 
(a) IN GENERAL.—Not later than one year after the 
date of the enactment of this Act, the Comptroller General 
of the United States shall provide a briefing to the con-
gressional defense committees and submit to the congres-
sional defense committees a report on the methodology 
used by the Department of Defense to determine future- 
year needs for administrative surcharges under the foreign 
military sales program. 
(b) MATTERS TO BE INCLUDED.—The briefing and 
report required by subsection (a) shall include the fol-
lowing: 
(1) A description of the methodology the De-
partment of Defense used to develop the overall ad-
ministrative budget of the foreign military sales pro-
gram and the administrative budgets for each other 
relevant component of the Department of Defense 
that receives funds from the foreign military sales 
program. 
(2) An assessment of the extent to which the 
methodology described in paragraph (1) reflects rel-
evant best practices. 
(3) Any other related matters the Comptroller 
General determines to be appropriate. 
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SEC. 6. DEFINITIONS. 
In this Act: 
(1) CONGRESSIONAL DEFENSE COMMITTEES.— 
The term ‘‘congressional defense committees’’ has 
the meaning given such term in section 101 of title 
10, United States Code. 
(2) FOREIGN MILITARY SALES PROGRAM.—The 
term ‘‘foreign military sales program’’ means the 
program authorized under chapter 2 of the Arms 
Export Control Act (22 U.S.C. 2761 et seq.). 
Æ 
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