Defense Trade: Issues Concerning the Use of Offsets in International Defense Sales

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Testimony issued by the Government Accountability Office with an abstract that begins "Views on defense offsets range from beliefs that they are both positive and an unavoidable part of doing business overseas to beliefs that they negatively affect the U.S. industrial base. Defense offsets are often viewed as the key to foreign sales and thus increased business on the prime contractor level. They can also result in reduced unit costs to the U.S. military because of the increased size of production runs. However, the use of a foreign supplier by a U.S. prime contractor as a result of an offset ... continued below

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United States. Government Accountability Office. July 8, 2004.

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Description

Testimony issued by the Government Accountability Office with an abstract that begins "Views on defense offsets range from beliefs that they are both positive and an unavoidable part of doing business overseas to beliefs that they negatively affect the U.S. industrial base. Defense offsets are often viewed as the key to foreign sales and thus increased business on the prime contractor level. They can also result in reduced unit costs to the U.S. military because of the increased size of production runs. However, the use of a foreign supplier by a U.S. prime contractor as a result of an offset may lead to decreased business opportunities for U.S. suppliers. Additionally, U.S. prime contractors may develop long-term relationships with foreign suppliers, which may lead to the transfer of capability from the U.S. defense industrial base. As a result of congressional concerns about emerging trends in defense offsets, GAO conducted a number of reviews and issued multiple reports. Because of GAO's work in this area, Congress asked us to provide our observations on offset issues. Specifically, GAO is providing observations on (1) what constitutes offsets and how they are used in defense trade, (2) how that use has changed over time, and (3) the quality and extent of information concerning offsets that is currently available."

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Government Accountability Office Reports

The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for the U.S. Congress investigating how the federal government spends taxpayers' money. Its goal is to increase accountability and improve the performance of the federal government. The Government Accountability Office Reports Collection consists of over 13,000 documents on a variety of topics ranging from fiscal issues to international affairs.

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  • July 8, 2004

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  • June 11, 2014, 5:03 a.m.

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United States. Government Accountability Office. Defense Trade: Issues Concerning the Use of Offsets in International Defense Sales, text, July 8, 2004; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc294416/: accessed May 20, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.