EDA.2.1. Pricing. The USG processes Excess Defense Articles (EDA) items in accordance with DoD Financial Management Regulations (DoD FMR) 7000.14-R, Volume 15, Chapter 7. Section 706 of P.L. 106-280 (the Security Assistance Act of 2000) which states that it is the sense of Congress that the President should make expanded use of the authority to sell EDA by using the flexibility to ascertain the market value of the EDA. The Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) is responsible for approving pricing exceptions. Storage charges are not automatically applied to EDA transfers; however, the Implementing Agency (IA) will include reasonable charges assessed against items stored beyond 60 days past Letter of Offer and Acceptance (LOA) acceptance in the LOA. These charges must be stated in an LOA note. See Appendix 6 Note "Excess Defense Articles (EDA) Storage Charges for Grant EDA" for the exact note wording.

EDA.2.2. Leahy Vetting. Leahy vetting is required for Department of State (State) security assistance (SA) provided, in accordance with section 620M of the Foreign Assistance Act (See 22 U.S.C. 2378d, the “State Leahy Law”).

EDA.2.3. Excess Defense Article Survey Messages. IAs, with the exception of Defense Logistics Agency (DLA) Disposition Services, typically use survey messages to advise the Security Cooperation Organizations (SCOs) of potential purchasers of present or future availability of EDA and to gather information to evaluate partner requirements. Only the owning IAs and the U.S. Coast Guard (USCG) may submit survey messages. Survey messages normally include item(s) description and condition. They may also include rough order of magnitude cost/value of end items, costs, and lead-times for support items, supportability dates, and other information as appropriate. Survey messages should allow a minimum 45-day response time to the extent feasible.

EDA.2.3.1. For non-Significant Military Equipment (SME), the IA drafts survey messages and addresses them to SCOs for action, with DSCA, State, Department of Commerce (DOC), the Joint Chiefs of Staff, Directorate of Strategy, Plans and Policy (JCS (J-5)), and the geographic Combatant Commanders (CCDRs) as information addressees.

EDA.2.3.2. For SME, the IA drafts survey messages and forwards them to DSCA for coordination and approval with the JCS (J-5), DOC, and State before release to SCOs for action. The IA only sends issued survey messages to those approved SCOs, with information copies to DSCA, State, DOC, the JCS (J-5), and the geographic CCDRs. Copies of survey messages must not be forwarded to SCOs that are not included as an action or information addressee. Unapproved release could provide a false impression of DoD intent to offer materiel to a partner not approved by DoD, State, and DOC.

EDA.2.4. Joint Visual Inspection of Excess Defense Articles. Partners are encouraged to inspect EDA prior to delivery. A partner can conduct an inspection before or after an EDA transfer has been authorized. If an inspection occurs before the transfer is authorized, the IA must make every reasonable effort to ensure the partner understands that conducting the inspection is not a promise or guarantee by the USG to transfer the inspected item. Partners must pay for their participation in a Joint Visual Inspection (JVI). Partners can request a JVI by submitting a written request to the appropriate IA. IAs must provide written notice to DSCA and State at least 30 days prior to conducting the JVI. This provides an opportunity for DSCA and State to ensure that performing the JVI is consistent with U.S. national security and foreign policy. The notice must include the partner name, the item(s) to be inspected, and the known or approximate dates when the JVI will occur. The IAs must send the notice to the DSCA Country Portfolio Director, the DSCA EDA Program Manager, and the Department of State, Bureau of Political and Military Affairs (State (PM)) by email (PM_RSATFMSTeam@state.gov).

EDA.2.5. Blanket Order Excess Defense Article Transfers. Partners may establish blanket order EDA cases and lines only for non-SME consisting of spare parts, clothing, basic field equipment, office equipment, supplies, furniture, or other non-SME items as approved by DSCA. The partner may also request blanket order cases and lines for packing, crating, and handling (PC&H) or Transportation in conjunction with EDA transfers of similar, non-SME items. The IA must identify in the LOA the end-item being supported when spares or component parts are being transferred.

EDA.2.5.1. Title Transfer of Excess Defense Article Items. Title transfers at the point of origin unless specified otherwise in an LOA case note, pursuant to the LOA standard terms and conditions. For EDA items located in Germany, an LOA case note typically defines transfer title at the nearest point of debarkation outside of Germany. While EDA is a “where is, as is” transfer, the DoD can use Title 10 Building Partner Capacity (BPC) effort to refurbish, repair, or transport the property after title transfer if the partner explicitly authorizes these actions.

EDA.2.5.2. Offer Termination. U.S. Forces' unforeseen urgent requirements for excess items may arise after they are offered to a partner but before title of the EDA items has transferred to the partner. When items previously offered are no longer available, the IA must notify DSCA and the Office of the Under Secretary of Defense for Policy (OUSD(P)). Withdrawal of the offer occurs only after OUSD(P) has the opportunity to weigh U.S. requirements against the potential damage to national security and foreign policy goals if the EDA transfer is cancelled. If OUSD(P) agrees that U.S. requirements outweigh the potential damage to national security and foreign policy goals, then DSCA will advise the State that the offer is being withdrawn. If OUSD(P) determines that U.S. requirements do not outweigh the potential damage to foreign policy goals, then the issue will be elevated to Secretary of Defense (SECDEF) for decision under the procedures outlined in Section C6.4.6.

EDA.2.5.3. Limitation on Assistance to Partners in Default. Foreign Assistance Act (FAA) section 620(q) (22 U.S.C. 2370) provides that no assistance under the FAA will be furnished to any partner in default of payment in excess of six months on any loan made under the FAA. Annual legislation in the Foreign Operations, Export Financing and Related Program Appropriations Act generally provides that no funds appropriated in that act will be used to provide assistance to any partner in default of payment in excess of one calendar year on any loan under a program funded by that act. For partners that are in default of payment in excess of six calendar months, absent a Presidential waiver, all grant EDA transactions for the affected partner are put on hold until the sanction is lifted. However, sales (vice grant) of EDA continue to be permitted under these sanctions.

EDA.2.5.4. Excess Defense Articles for Naval Vessels. Title 10 U.S.C. 8677 requires authorizing legislation to transfer a naval vessel to another partner if it is in excess of 3,000 tons or is less than 20 years of age. The Navy International Programs Office (Navy IPO) is responsible for transfers of U.S. naval vessels and for the administration of transfers of USCG vessels and other excess USCG equipment. Ship Transfer Allocation Plans and any accompanying legislation must be approved by the Chief of Naval Operations and coordinated with the Secretary of the Navy before forwarding to DSCA for OUSD(P) action. DSCA coordinates all EDA ship transfers with OUSD(P), the JCS (J-5), DOC, and State to ensure compliance with statutory notification and authorizing legislation requirements.

EDA.2.5.5. Defense Logistics Agency Disposition Services Transfers. Defense Logistics Agency (DLA) can provide EDA as a grant or at a reduced price. As an IA, DLA Disposition Services is authorized to write and manage EDA cases. The items that are available through DLA are listed in the “Reutilization, Transfer, and Donation Web” (RTD Web), which is a computerized inventory interface system that enables registered users to view the items that are available as EDA. Partners can request access to RTD Web by submitting a Letter of Request (LOR) to the DLA Disposition Services Foreign Military Sales (FMS) Office (DLADispositionServicesFMS@dla.mil). Members of the U.S. security cooperation community can also request access by contacting the DLA Disposition Services FMS Office.

EDA.2.5.5.1. Non-Significant Military Equipment. For non-SME items, partners should submit an LOR for LOA to DLA Disposition Services. The LOR should state whether the partner is requesting the items to be provided as a grant or sold at a reduced price. The request should also state the total dollar amount the partner has allocated for the request, to include PC&H and transportation. DLA then sends the request to DSCA for coordination and approval. If the request is approved, DLA Disposition Services prepares an EDA blanket order LOA for the dollar amount specified in the LOR. Once the case is implemented, the partner can then requisition items through RTD Web. DLA Disposition Services ships requisitioned items when they are available.

EDA.2.5.5.2. Significant Military Equipment. For major end items and SME, partners should submit an LOR for LOA to DLA Disposition Services. The LOR should state whether the partner is requesting the items to be provided as a grant or sold at a reduced price. Upon receiving an LOR, DLA Disposition Services submits the request to DSCA for coordination and approval. When a request is approved, DLA Disposition Services allows the partner to requisition the approved items in RTD Web. Once the partner has selected the quantity of items that it is authorized to receive, or after six months, whichever occurs first, DLA Disposition Services prepares an LOA. DLA Disposition Services ships the requisitioned items to the partner after the LOA is implemented. If the partner requisitioned a quantity that is less than what it is authorized to receive, DLA Disposition Services provides the partner an additional six months to submit requisitions in RTD Web. If the partner selects additional items, DLA Disposition Services amends the LOA to add the items. This process can continue until DLA Disposition Services determines that the item is no longer available or the quantity of items the partner is authorized to receive is reached.

EDA.2.6. Excess Defense Article Planning Considerations. EDA is transferred on an “as is, where is” basis.

EDA.2.6.1. Articles must be drawn from existing DoD stocks.

EDA.2.6.2. No DoD procurement funds are to be expended for the transfer.

EDA.2.6.3. The transfer will not have adverse impact on U.S. military readiness.

EDA.2.6.4. The IA must determine that the transfer will not have any adverse effect on opportunities for any sale by U.S. industry.

EDA.2.6.5. Excess construction equipment cannot be transferred as EDA.

EDA.2.6.6. The total current value of all grant EDA transfers in each fiscal year may not exceed $500M.

EDA.2.6.7. Grant transfer of ships require specific legislation for each case (See 10 U.S.C. 8677).

EDA.2.7. Who Can Obtain Excess Defense Articles?

EDA.2.7.1. Eligibility for Excess Defense Article Sales. All FMS eligible partners can purchase EDA. See Table C4.T2.

EDA.2.7.2. Eligibility for Excess Defense Article Grants. To receive grant EDA, a partner must be justified to Congress for the fiscal year in which the transfer is proposed through the annual notification letters to Congress with State concurrence. Eligibility does not guarantee that any EDA offers will be made on a grant basis. Each EDA transfer is considered case-by-case. Questions about a partner’s eligibility to receive grant EDA is addressed to DSCA (Office of International Operations (IOPS)).

EDA.2.7.3. Foreign Assistance Act, Section 505 Assurances for Grant Excess Defense Articles. In order to be eligible to receive grant EDA, partners must have agreed to blanket end-use, security, and retransfer assurances. The text of these assurances is established by law. State obtains these FAA, section 505 (22 U.S.C. 2314), assurances through the exchange of diplomatic notes. EDA offers are not authorized until the exchange of notes is completed and copies received by State’s Office of the Legal Advisor.

EDA.2.7.4. Partner Delivery Priority for Grant Excess Defense Articles. Priority delivery of grant EDA is given to North Atlantic Treaty Organization (NATO) Allies and to Major Non-NATO Allies on the southern and southeastern flank of NATO, and to the Philippines to the maximum extent feasible over the delivery of such articles to other partners (FAA, section 516(c)(2) (22 U.S.C. 2321j)).

EDA.2.7.4.1. Major Non-North Atlantic Treaty Organization Allies. In accordance with 22 U.S.C. 2321k, 30 days after Congressional Notification (CN), the President may designate a partner as a Major Non-NATO Ally or terminate a partner’s designation as a Major Non-NATO Ally. The SAMM Glossary contains the partners designated as Major Non-NATO Allies.