- § 4871. Contracts: consideration of national security objectives
- § 4872. Acquisition of sensitive materials from non-allied foreign nations: prohibition
- § 4873. Additional requirements pertaining to printed circuit boards
- § 4874. Award of certain contracts to entities controlled by a foreign government: prohibition
- § 4875. Prohibition on acquisition of personal protective equipment and certain other items from non-allied foreign nations
§ 4871. Contracts: consideration of national security objectives
(a)Disclosure of Ownership or Control by a Foreign Government.—The head of an agency shall require a firm or a subsidiary of a firm that submits a bid or proposal in response to a solicitation issued by the Department of Defense to disclose in that bid or proposal any significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary) that is owned or controlled (whether directly or indirectly) by a foreign government or an agent or instrumentality of a foreign government, if such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) 1
1 See References in Text note below.
of the Export Administration Act of 1979 (50 U.S.C. 4605(j)(1)(A)) has repeatedly provided support for acts of international terrorism.(b)Prohibition on Entering Into Contracts Against the Interests of the United States.—Except as provided in subsection (c), the head of an agency may not enter into a contract with a firm or a subsidiary of a firm if—
(1) a foreign government owns or controls (whether directly or indirectly) a significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary); and
(2) such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) 1 of the Export Administration Act of 1979 (50 U.S.C. 4605(j)(1)(A)) has repeatedly provided support for acts of international terrorism.
(c)Waiver.—
(1)
(A) If the Secretary of Defense determines under paragraph (2) that entering into a contract with a firm or a subsidiary of a firm described in subsection (b) is not inconsistent with the national security objectives of the United States, the head of an agency may enter into a contract with such firm or subsidiary if in the best interests of the Government.
(B) The Secretary shall maintain records of each contract entered into by reason of subparagraph (A). Such records shall include the following:
(i) The identity of the foreign government concerned.
(ii) The nature of the contract.
(iii) The extent of ownership or control of the firm or subsidiary concerned (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government concerned or the agency or instrumentality of such foreign government.
(iv) The reasons for entering into the contract.
(2) Upon the request of the head of an agency, the Secretary of Defense shall determine whether entering into a contract with a firm or subsidiary described in subsection (b) is inconsistent with the national security objectives of the United States. In making such a determination, the Secretary of Defense shall consider the following:
(A) The relationship of the United States with the foreign government concerned.
(B) The obligations of the United States under international agreements.
(C) The extent of the ownership or control of the firm or subsidiary (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government or an agent or instrumentality of the foreign government.
(D) Whether payments made, or information made available, to the firm or subsidiary under the contract could be used for purposes hostile to the interests of the United States.
(d)List of Firms Subject to Prohibition.—
(1) The Secretary of Defense shall develop and maintain a list of all firms and subsidiaries of firms that the Secretary has identified as being subject to the prohibition in subsection (b).
(2)
(A) A person may request the Secretary to include on the list maintained under paragraph (1) any firm or subsidiary of a firm that the person believes to be owned or controlled by a foreign government described in subsection (b)(2). Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do exist, the Secretary shall include the firm or subsidiary on the list.
(B) A firm or subsidiary of a firm included on the list may request the Secretary to remove such firm or subsidiary from the list on the basis that it has been erroneously included on the list or its ownership circumstances have significantly changed. Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do not exist, the Secretary shall remove the firm or subsidiary from the list.
(C) The Secretary shall establish procedures to carry out this paragraph.
(3) The head of an agency shall prohibit each firm or subsidiary of a firm awarded a contract by the agency from entering into a subcontract under that contract in an amount in excess of $25,000 with a firm or subsidiary included on the list maintained under paragraph (1) unless there is a compelling reason to do so. In the case of any subcontract requiring consent by the head of an agency, the head of the agency shall not consent to the award of the subcontract to a firm or subsidiary included on such list unless there is a compelling reason for such approval.
(e)Distribution of List.—The Administrator of General Services shall ensure that the list developed and maintained under subsection (d) is made available to Federal agencies and the public in the same manner and to the same extent as the list of suspended and debarred contractors compiled pursuant to subpart 9.4 of the Federal Acquisition Regulation.
(f)Applicability.—
(1) This section does not apply to a contract for an amount less than $100,000.
(2) This section does not apply to the Coast Guard or the National Aeronautics and Space Administration.
(g)Regulations.—The Secretary of Defense, after consultation with the Secretary of State, shall prescribe regulations to carry out this section. Such regulations shall include a definition of the term “significant interest”.
(Added Pub. L. 99–500, § 101(c) [title X, § 951(a)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–164, and Pub. L. 99–591, § 101(c) [title X, § 951(a)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–164, § 2327; Pub. L. 99–661, div. A, title IX, formerly title IV, § 951(a)(1), Nov. 14, 1986, 100 Stat. 3944, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100–180, div. A, title XII, § 1231(8), Dec. 4, 1987, 101 Stat. 1160; Pub. L. 100–224, § 5(b)(2), Dec. 30, 1987, 101 Stat. 1538; Pub. L. 105–85, div. A, title VIII, § 843, Nov. 18, 1997, 111 Stat. 1844; Pub. L. 108–136, div. A, title X, § 1031(a)(16), Nov. 24, 2003, 117 Stat. 1597; Pub. L. 114–328, div. A, title X, § 1081(b)(3)(C), Dec. 23, 2016, 130 Stat. 2418; renumbered § 4871, Pub. L. 116–283, div. A, title XVIII, § 1870(d)(2), Jan. 1, 2021, 134 Stat. 4286; Pub. L. 117–81, div. A, title XVII, § 1701(t)(2)(B), (C), Dec. 27, 2021, 135 Stat. 2150.)
§ 4872. Acquisition of sensitive materials from non-allied foreign nations: prohibition
(a)In General.—Except as provided in subsection (c), the Secretary of Defense may not—
(1) procure any covered material melted or produced in any covered nation, or any end item that contains a covered material manufactured in any covered nation, except as provided by subsection (c); or
(2) sell any material from the National Defense Stockpile, if the National Defense Stockpile Manager determines that such a sale is not in the national interests of the United States, to—
(A) any covered nation; or
(B) any third party that the Secretary reasonably believes is acting as a broker or agent for a covered nation or an entity in a covered nation.
(b)Applicability.—Subsection (a) shall apply to prime contracts and subcontracts at any tier.
(c)Exceptions.—Subsection (a)(1) does not apply under the following circumstances:
(1) If the Secretary of Defense—
(A) identifies a specific end item for which a specific covered material of satisfactory quality and quantity, in the required form, cannot be procured as and when needed at a reasonable price; and
(B) waives subsection (a)(1) for such specific end item and such specific covered material for a period not exceeding 36 months.
(2) To the procurement of an end item described in subsection (a)(1) or the sale of any covered material described under subsection (a)(1) by the Secretary outside of the United States for use outside of the United States.
(3) To the purchase by the Secretary of an end item containing a covered material that is—
(A) a commercially available off-the-shelf item (as defined in section 104 of title 41), other than—
(i) a commercially available off-the-shelf item that is 50 percent or more tungsten by weight; or
(ii) a mill product, such as bar, billet, slab, wire, cube, sphere, block, blank, plate, or sheet, that has not been incorporated into an end item, subsystem, assembly, or component;
(B) an electronic device, unless the Secretary of Defense, upon the recommendation of the Strategic and Critical Materials Board of Directors pursuant to section 10 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–1), determines that the domestic availability of a particular electronic device is critical to national security; or
(C) a neodymium-iron-boron magnet manufactured from recycled material if the milling of the recycled material and sintering of the final magnet takes place in the United States.
(d)Definitions.—In this section:
(1)Covered material.—The term “covered material” means—
(A) samarium-cobalt magnets;
(B) neodymium-iron-boron magnets;
(C) tungsten metal powder;
(D) tungsten heavy alloy or any finished or semi-finished component containing tungsten heavy alloy; and
(E) tantalum metals and alloys.
(2)Covered nation.—The term “covered nation” means—
(A) the Democratic People’s Republic of North Korea;
(B) the People’s Republic of China;
(C) the Russian Federation; and
(D) the Islamic Republic of Iran.
(3)End item.—The term “end item” has the meaning given in section 4863(m) of this title.
(Added Pub. L. 115–232, div. A, title VIII, § 871(a), Aug. 13, 2018, 132 Stat. 1904, § 2533c; amended Pub. L. 116–92, div. A, title VIII, § 849, Dec. 20, 2019, 133 Stat. 1508; renumbered § 4872 and amended Pub. L. 116–283, div. A, title VIII, § 844(a), title XVIII, § 1870(d)(2), (3), Jan. 1, 2021, 134 Stat. 3766, 4286; Pub. L. 117–81, div. A, title XVII, § 1701(t)(2)(B), (C), (3), Dec. 27, 2021, 135 Stat. 2150; Pub. L. 117–263, div. A, title XIV, § 1411(d)(2)(B), Dec. 23, 2022, 136 Stat. 2872; Pub. L. 118–31, div. A, title VIII, § 834, Dec. 22, 2023, 137 Stat. 337.)
§ 4873. Additional requirements pertaining to printed circuit boards
(a)In General.—
(1) Beginning on the date determined under paragraph (3), the Secretary of Defense may not acquire a covered printed circuit board from a covered nation.
(2) Paragraph (1) shall not apply with respect to any acquisition of supplies or services below the micro-purchase threshold under section 3573 of this title.
(3) Paragraph (1) shall take effect on January 1, 2027.
(b)Waiver.—
(1) The Secretary may waive the prohibition under subsection (a) if the Secretary determines in writing that—
(A) there are no significant national security concerns regarding counterfeiting, quality, or unauthorized access created by such waiver;
(B) the waiver is required to support national security; and
(C) a covered printed circuit board of satisfactory quality and sufficient quantity, in the required form, cannot be procured as and when needed from nations other than a covered nation at reasonable cost, excluding comparisons with non-market economies.
(2) Not later than 10 days after the Secretary provides a waiver under paragraph (1), the Secretary shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a written notice setting forth the reasoning for the waiver, together with a copy of the waiver itself.
(c)Definitions.—In this section:
(1)Covered nation.—The term “covered nation” means—
(A) the Democratic People’s Republic of North Korea;
(B) the People’s Republic of China;
(C) the Russian Federation; and
(D) the Islamic Republic of Iran.
(2)Covered printed circuit board.—The term “covered printed circuit board” means any specified type of partially manufactured or complete bare printed circuit board or fully or partially assembled printed circuit board that—
(A) performs a mission critical function in any product or service that is not a commercial product or commercial service; or
(B) is a component of—
(i) a defense security system; or
(ii) a system, other than a defense security system, that transmits or stores information and which the Secretary identifies as national security sensitive in the contract under which such printed circuit board is acquired.
(3)Secretary.—The term “Secretary” means the Secretary of Defense.
(4)Commercial product; commercial service; commercially available off-the shelf item.—The terms “commercial product”, “commercial service”, and “commercially available off-the-shelf item” have the meanings given such terms in sections 103, 103a, and 104 of title 41, respectively.
(5)Defense security system.—
(A) The term “defense security system” means an information system (including a telecommunications system) used or operated by the Department of Defense, by a contractor of the Department, or by another organization on behalf of the Department, the function, operation, or use of which—
(i) involves command and control of an armed force;
(ii) involves equipment that is an integral part of a weapon or weapon system; or
(iii) subject to subparagraph (B), is critical to the direct fulfillment of military missions.
(B) Subparagraph (A)(iii) does not include a system that is to be used for routine administrative and business applications (including payroll, finance, logistics, and personnel management applications).
(6)Specified type.—The term “specified type” means a printed circuit board that is—
(A) a component of an electronic device that facilitates the routing, connecting, transmitting or securing of data and is commonly connected to a network, and
(B) any other end item, good, or product specified by the Secretary in accordance with subsection (d)(2).
(d)Rulemaking.—
(1) The Secretary may issue rules providing that subsection (a) may not apply with respect to an acquisition of commercial products, commercial services, and commercially available off-the-shelf items if—
(A) the contractor is capable of meeting minimum requirements that the Secretary deems necessary to provide for the security of national security networks and weapon systems; including, at a minimum, compliance with section 224 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 10 U.S.C. 2302 note); and
(B) either—
(i) the Government and the contractor have agreed to a contract requiring the contractor to take certain actions to ensure the integrity and security of the item, including protecting the item from unauthorized access, use, disclosure, disruption, modification, or destruction; or
(ii) the Secretary has determined that the contractor has adopted such procedures, tools, and methods for identifying the sources of components of such item, based on commercial best practices, that meet or exceed the applicable trusted supply chain and operational security standards of the Department of Defense.
(2) The Secretary may issue rules specifying end items, goods, and products for which a printed circuit board that is a component thereof shall be a specified type if the Secretary has promulgated final regulations, after an opportunity for notice and comment that is not less than 12 months, implementing this section.
(3) In carrying out this section, the Secretary shall, to the maximum extent practicable, avoid imposing contractual certification requirements with respect to the acquisition of commercial products, commercial services, or commercially available off-the-shelf items.
(e)Applicability.—This section shall apply only with respect to contracts entered into after the issuance of a final rule implementing this section.
(f)Rule of Construction.—Nothing in this section shall be construed to prohibit the Department of Defense from entering into a contract with an entity that connects to the facilities of a third party, for the purposes of backhaul, roaming, or interconnection arrangements, on the basis of the noncompliance by the third party with the provisions of this section or use of equipment or services that do not route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.
(Added Pub. L. 116–283, div. A, title VIII, § 841(a), Jan. 1, 2021, 134 Stat. 3762, § 2533d; amended Pub. L. 117–81, div. A, title VIII, § 851(a), Dec. 27, 2021, 135 Stat. 1844; renumbered § 4873 and amended Pub. L. 117–81, div. A, title XVII, § 1701(e)(2)(A), Dec. 27, 2021, 135 Stat. 2138.)
§ 4874. Award of certain contracts to entities controlled by a foreign government: prohibition
(a)In General.—A Department of Defense contract or Department of Energy contract under a national security program may not be awarded to an entity controlled by a foreign government if it is necessary for that entity to be given access to information in a proscribed category of information in order to perform the contract.
(b)Waiver Authority.—
(1) The Secretary concerned may waive the application of subsection (a) to a contract award if—
(A) the Secretary concerned determines that the waiver is essential to the national security interests of the United States; or
(B) in the case of a contract awarded for environmental restoration, remediation, or waste management at a Department of Defense or Department of Energy facility—
(i) the Secretary concerned determines that the waiver will advance the environmental restoration, remediation, or waste management objectives of the department concerned and will not harm the national security interests of the United States; and
(ii) the entity to which the contract is awarded is controlled by a foreign government with which the Secretary concerned is authorized to exchange Restricted Data under section 144 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2164(c)).
(2) The Secretary concerned shall notify Congress of any decision to grant a waiver under paragraph (1)(B) with respect to a contract. The contract may be awarded only after the end of the 45-day period beginning on the date the notification is received by the committees.
(c)Definitions.—In this section:
(1) The term “entity controlled by a foreign government” includes—
(A) any domestic or foreign organization or corporation that is effectively owned or controlled by a foreign government; and
(B) any individual acting on behalf of a foreign government,
as determined by the Secretary concerned. Such term does not include an organization or corporation that is owned, but is not controlled, either directly or indirectly, by a foreign government if the ownership of that organization or corporation by that foreign government was effective before October 23, 1992.
(2) The term “proscribed category of information” means a category of information that—
(A) with respect to Department of Defense contracts—
(i) includes special access information;
(ii) is determined by the Secretary of Defense to include information the disclosure of which to an entity controlled by a foreign government is not in the national security interests of the United States; and
(iii) is defined in regulations prescribed by the Secretary of Defense for the purposes of this section; and
(B) with respect to Department of Energy contracts—
(i) is determined by the Secretary of Energy to include information described in subparagraph (A)(ii); and
(ii) is defined in regulations prescribed by the Secretary of Energy for the purposes of this section.
(3) The term “Secretary concerned” means—
(A) the Secretary of Defense, with respect to Department of Defense contracts; and
(B) the Secretary of Energy, with respect to Department of Energy contracts.
(Added Pub. L. 102–484, div. A, title VIII, § 836(a)(1), Oct. 23, 1992, 106 Stat. 2462, § 2536; amended Pub. L. 103–35, title II, § 201(d)(4), May 31, 1993, 107 Stat. 99; Pub. L. 103–160, div. A, title VIII, § 842(a)–(c)(1), Nov. 30, 1993, 107 Stat. 1719; Pub. L. 104–201, div. A, title VIII, § 828, Sept. 23, 1996, 110 Stat. 2611; renumbered § 4874, Pub. L. 116–283, div. A, title XVIII, § 1870(d)(2), Jan. 1, 2021, 134 Stat. 4286; Pub. L. 117–81, div. A, title XVII, § 1701(t)(2)(B), (C), Dec. 27, 2021, 135 Stat. 2150.)
§ 4875. Prohibition on acquisition of personal protective equipment and certain other items from non-allied foreign nations
(a)In General.—Except as provided in subsection (c), the Secretary of Defense may not procure any covered item from any covered nation.
(b)Applicability.—Subsection (a) shall apply to prime contracts and subcontracts at any tier.
(c)Exceptions.—
(1)In general.—Subsection (a) does not apply under the following circumstances:
(A) If the Secretary of Defense determines that covered materials of satisfactory quality and quantity, in the required form, cannot be procured as and when needed from nations other than covered nations to meet requirements at a reasonable price.
(B) The procurement of a covered item for use outside of the United States.
(C) Purchases for amounts not greater than $150,000.
(2)Limitation.—A proposed procurement in an amount greater than $150,000 may not be divided into several purchases or contracts for lesser amounts in order to qualify for this exception.
(d)Definitions.—In this section:
(1)Covered item.—The term “covered item” means an article or item of—
(A) personal protective equipment for use in preventing spread of disease, such as by exposure to infected individuals or contamination or infection by infectious material (including nitrile and vinyl gloves, surgical masks, respirator masks and powered air purifying respirators and required filters, face shields and protective eyewear, surgical and isolation gowns, and head and foot coverings) or clothing, and the materials and components thereof, other than sensors, electronics, or other items added to and not normally associated with such personal protective equipment or clothing; or
(B) sanitizing and disinfecting wipes, testing swabs, gauze, and bandages.
(2)Covered nation.—The term “covered nation” means—
(A) the Democratic People’s Republic of North Korea;
(B) the People’s Republic of China;
(C) the Russian Federation; and
(D) the Islamic Republic of Iran.
(Added Pub. L. 117–81, div. A, title VIII, § 802(a)(1), Dec. 27, 2021, 135 Stat. 1812, § 2533e; renumbered § 4875, Pub. L. 117–81, div. A, title VIII, § 802(b)(1), Dec. 27, 2021, 135 Stat. 1813.)