Foreign contributions and burden sharing

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1. Money and support that flow the other way

Most security cooperation law concerns what the United States provides. Three sections in the other cooperative agreements subchapter of chapter 138 of title 10 deal with the reverse. They cover a partner’s share of the cost of a joint project, cash that a host country pays toward the cost of American forces, and property, services and supplies a host country provides. Each sets rules on where the money or support goes and what it may be used for.

2. A partner’s share of a cooperative project

The United States may take part in a cooperative project with a friendly country or NATO on a cost-sharing basis. The partner’s contribution toward its share may then be credited to appropriations of a military department or another Defense Department organization the Secretary of Defense chooses (10 U.S.C. 2350i(a)).

The statute defines a cooperative project for this purpose (10 U.S.C. 2350i(c)). It is a jointly managed arrangement under a written cooperative agreement, undertaken to improve the participants’ conventional defense capabilities. It must provide for cost sharing of research, development, testing, evaluation or joint production, for concurrent production of a jointly developed article, or for American procurement from another participant. The broader cooperative project authority is covered in cooperative projects under the Arms Export Control Act.

Credited money is ring-fenced. It is available only to pay the share of project expenses allocated to the country or NATO that contributed it (10 U.S.C. 2350i(b)). That includes payments to contractors and other suppliers, including the Defense Department and other participants when they act as suppliers. It also includes damages and costs from performing or cancelling contracts, program office overhead and administrative costs, and refunds to other participants.

3. Burden sharing contributions

A separate authority covers host nation payments toward the cost of American forces. After consulting the Secretary of State, the Secretary of Defense may accept cash contributions from any country or regional organization designated for the purpose (10 U.S.C. 2350j(a)). Designation is also made by the Secretary of Defense in consultation with the Secretary of State.

The money is held country by country. Contributions not related to security assistance may be accepted, managed and spent in dollars, or in the host nation’s currency or the currency in which they were provided (10 U.S.C. 2350j(b)). They go into an account established for the purpose, with a separate account for each contributor, and remain available until expended.

Four uses are allowed, and no others (10 U.S.C. 2350j(c)). They are compensation for local national employees of the Defense Department, Defense Department military construction projects, and Defense Department supplies and services, each in the host nation or another country. The fourth is other logistical and operational support for American forces in a deployed or rotational status in a NATO member country.

That fourth category is defined (10 U.S.C. 2350j(g)). It covers the reasonable and proper costs of fuel, transportation, force protection including cyber protection, training ammunition, utilities, and medical and maintenance services. It includes services to keep infrastructure, pre-positioned stocks and equipment in good working order. It excludes pay, allowances and other normal benefits of American service members.

4. Building with contributed funds

Contributions can pay for military construction that is not otherwise authorized by law, provided it is consistent with the purposes of the contribution (10 U.S.C. 2350j(d)). The Secretary of Defense may carry out such a project, or a military department Secretary may, with the Secretary of Defense’s approval.

A notice and wait rule applies (10 U.S.C. 2350j(e)). The Secretary of Defense reports to the congressional defense committees on the need for the project, its current cost estimate and the justification for using this authority. Work may not begin until 14 days after the report is submitted electronically. The requirement falls away where the project is needed to support American forces because of a declaration of war or a presidential declaration of national emergency in force when the project starts. In that case the committees receive a notice of the decision and the current estimated cost, including any real property transaction.

5. The annual burden sharing report

By January 15 each year, the Secretary reports on contributions from designated countries in the preceding fiscal year (10 U.S.C. 2350j(f)). The report goes to the Armed Services, Foreign Relations or Foreign Affairs, and Appropriations Committees of both houses. It lists the contributing countries, explains the purpose of each contribution, and describes any written agreement with its signature date. For each country it gives the amount provided and any unobligated balance. It shows spending by eligible category, and any other matter the Secretary considers relevant.

6. Property and services from host countries

The third section concerns support in kind. For any element of the armed forces in its territory, a foreign country may provide real property or its use, and services and supplies, under a mutual defense agreement or occupational arrangement. The Secretary of Defense may accept them, along with services furnished as reciprocal international courtesies or customarily provided without charge (10 U.S.C. 2350g(a)).

What is accepted can be used without specific authorization, with one qualification. It may not be used for a program, project or activity where that use would violate a prohibition or limitation otherwise applicable to it (10 U.S.C. 2350g(b)). The Comptroller General audits money and property accepted under the section at intervals it considers warranted, and reports the results to Congress (10 U.S.C. 2350g(c)).

7. Why these rules matter to suppliers

Contributed funds pay for real work. A cooperative project contribution can pay contractors directly for articles and services on the partner’s share. Burden sharing money can pay for local employees, construction, supplies and services, fuel, transportation, maintenance and force protection for American forces abroad. In each case the account, the permitted uses and the reporting are set by statute.

Key terms

Cooperative project contribution	A partner’s payment toward its share of a joint project, usable only for that share.
Burden sharing contribution	Cash accepted from a designated country or regional organization toward costs of American forces.
Designated country	A contributor the Secretary of Defense designates, in consultation with the Secretary of State.
Other logistical and operational support	Fuel, transportation, force protection, utilities, medical and maintenance costs of forces in NATO countries.
Occupational arrangement	One of the two bases on which host country property, services and supplies may be accepted.

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.

How Sentfore supports this

Burden sharing funds pay for services, construction and support that have to be delivered on the ground. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.