Which statement best describes Major Defense Equipment cost thresholds?

Which statement best describes Major Defense Equipment cost thresholds?

• A. It includes only significant equipment
• B. It includes only costs
• C. It includes significant equipment, nonrecurring R&D over 50 million, and/or total production over 200 million
• D. It excludes significant equipment

Answer: (C)

Major Defense Equipment is defined by thresholds that determine when items fall under stricter export controls. The best statement recognizes that it isn’t limited to just “significant equipment” but also includes certain cost-based criteria. An item is considered Major Defense Equipment if it includes significant equipment, or if there are nonrecurring R&D costs above $50 million, or if the total production cost exceeds $200 million; meeting any one of these conditions makes it MDE. This matters because MDE triggers tighter licensing and control requirements under ITAR. The other options are incomplete: focusing only on significant equipment misses the cost criteria, focusing only on costs ignores the equipment aspect, and excluding significant equipment contradicts the definition.

Major Defense Equipment is defined by thresholds that determine when items fall under stricter export controls. The best statement recognizes that it isn’t limited to just “significant equipment” but also includes certain cost-based criteria. An item is considered Major Defense Equipment if it includes significant equipment, or if there are nonrecurring R&D costs above $50 million, or if the total production cost exceeds $200 million; meeting any one of these conditions makes it MDE. This matters because MDE triggers tighter licensing and control requirements under ITAR. The other options are incomplete: focusing only on significant equipment misses the cost criteria, focusing only on costs ignores the equipment aspect, and excluding significant equipment contradicts the definition.