A bill to authorize the sale of defense articles to United States companies for incorporation into end items to be sold to friendly countries.

Amends the Arms Export Control Act to authorize the President to sell defense articles to U.S. companies for incorporation into end items that will be sold by such companies to a friendly foreign country or international organization. Requires that the price of such articles shall not be less than their replacement or actual cost. Authorizes the President to sell defense services in support of such sales of defense articles if specified conditions are met.

Permits such sales of defense articles and services only if: (1) the end item to which the articles apply is to be procured for the armed forces of a friendly country or international organization; (2) the articles would be supplied to the prime contractor as government-furnished equipment or materials if the end item were being procured for the use of the U.S. armed forces; and (3) the articles and services are available to the prime contractor only from U.S. Government sources or are not available from U.S. commercial sources as necessary to meet the prime contractor's delivery schedule.