July 15, 2019

July 15, 2019

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New Law Streamlines U.S. Sales to Jordan

Last year we reported on bipartisan efforts to fast-track sales of U.S. defense articles and services to the Hashemite Kingdom of Jordan (“Jordan”).  Last week President Obama signed into law the United States-Jordan Defense Cooperation Act of 2015 (“Act”). 

Pursuant to the Act, sales of U.S. defense articles, services, design and construction services, and major defense equipment to Jordan will receive expedited approvals.  Also, they will be subject to fewer administrative surcharges.  The only other beneficiaries of this treatment are member countries of the North Atlantic Treaty Organization (“NATO”), Australia, Israel, Japan, New Zealand, South Korea, and, in some cases, NATO itself.  The Act bestows this special treatment on Jordan specifically by amending certain sections of the Arms Export Control Act, 22 U.S.C. §§ 2751, et seq.  For example:

  • It elevates dollar thresholds and reduces the review period for proposed sales that must be reviewed by Congress.  See 22 U.S.C. §§ 2753(d), 2776, 2796a, 2796b.

  • The Director, Defense Security Cooperation Agency (“DSCA”), now may reduce or waive the typical surcharge applied to every sale for recoupment of nonrecurring costs of research, development, and production of major defense equipment.  See 22 U.S.C. § 2761(e)(2)(A).

  • The Director, DSCA, now may reduce or waive the typical surcharge applied for contract administration services provided by the U.S. government.  See 22 U.S.C. § 2761(h).

The Act is unlikely to be the final U.S. government effort to streamline deliveries of foreign aid and security assistance to Jordan and other U.S. allies in the Middle East.  The Act’s final section authorizes the U.S. Secretary of State to execute with Jordan a memorandum of understanding that will increase existing levels of U.S. security assistance to Jordan.  We will continue to monitor these developments.

© 2019 Covington & Burling LLP

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About this Author

E. Sanderson Hoe, Covington Burling, Contracts Lawyer, Negotiations Attorney
Senior Of Counsel

Sandy Hoe has practiced government contracts law for more than 40 years.  His expertise includes issues of contract formation, negotiation of subcontracts, bid protests, the structuring of complex private financing of government contracts, preparation of complex claims, and the resolution of post-award contract disputes through litigation or alternative dispute resolution.  His clients include major companies in the defense, telecommunications, information technology, financial, construction, and health care industries.

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