Consolidation and rationalization of restrictions on procurement from certain foreign countries

(a) Establishment of new chapter in title 10, United States Code Subpart I of part V of title 10, United States Code, is amended by adding at the end the following new chapter: 390 Restrictions on procurement from certain foreign countries 4991. Definitions In this chapter: (1) The term Commerce Control List means the list maintained by the Bureau of Industry and Security and set forth in Supplement No. 1 to part 774 of the Export Administration Regulations (as defined in section 1742 of the Export Control Reform Act of 2018 (50 U.S.C. 4801). (2) The term commercial product has the meaning given the term in section 103 of title 41. (3) The term commercially available off-the-shelf item (COTS) has the meaning given the term in section 104 of title 41. (4) The term covered country means— (A) the Democratic People’s Republic of Korea (North Korea); (B) the People’s Republic of China; (C) the Russian Federation; and (D) the Islamic Republic of Iran. (5) The term covered entity means— (A) an entity domiciled in a covered country or subject to the influence or control of the government of a covered country, as determined by the Secretary of Defense; (B) an entity identified as a Communist Chinese military company under section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283; 10 U.S.C. 113 note); (C) an entity on the Non-SDN Chinese Military-Industrial Complex Companies List maintained by the Office of Foreign Assets Control of the Department of the Treasury; (D) Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, Dahua Technology Company, or any subsidiary or affiliate of such entities; or (E) any other entity designated by the Secretary of Defense as posing a national security risk due to its ties to a covered country. (6) The term covered item means goods, services, or materials identified in this chapter as subject to procurement restrictions, including chemical materials, munitions, strategic and critical materials, telecommunications equipment, unmanned aircraft systems, printed circuit boards, personal protective equipment, and batteries. (7) The term covered telecommunications equipment or services means— (A) telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate); (B) telecommunications or video surveillance equipment used for public safety, security of government facilities, physical security surveillance of critical infrastructure, or other national security purposes, that is produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate); (C) telecommunications or video surveillance services provided by the entities described in subparagraphs (A) and (B) or using equipment produced by such entities; and (D) telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be owned or controlled by, or otherwise unduly influenced by, the government of a covered country. (8) The term simplified acquisition threshold has the meaning given the term in section 134 of title 41. 4992. Prohibition on procurement from covered countries and entities (a) Prohibition Except as provided in this chapter, the Secretary of Defense may not— (1) procure, renew, or extend a contract for the procurement of any covered item that is, or contains materials or components that are mined, refined, processed, manufactured, or assembled, in whole or in part, by a covered country or covered entity; (2) enter into, renew, or extend a contract with an entity that uses a covered item as a substantial or essential component of any system or as critical technology as part of any system; or (3) enter into, renew, or extend a contract with an entity that uses any equipment, system, or service that itself uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, regardless of whether such use is in performance of a Department of Defense contract. (b) Applicability (1) Paragraphs (1) and (2) of subsection (a) apply to prime contracts and subcontracts at any tier under such contracts. (2) Subsection (a)(3) applies only to the prime contractor with whom the Department of Defense enters into a contract. (3) Federal bidders and contractors— (A) may reasonably rely on certifications of compliance from covered entities and subcontractors when providing proposals to the Department of Defense; and (B) are not required to conduct independent third-party audits or other formal reviews related to such certifications. (4) Nothing in this section shall permit the Secretary to apply the prohibitions in subsection (a) to existing contracts for goods, services, or technology, including when such contracts are modified, extended, or renewed, entered into prior to the effective date of the relevant prohibited good or service. (c) Covered items This section applies to the following items: (1) Chemicals listed under the heading Task 1: Domestic Production of Critical Chemicals in section 3.0E of the document of the Department of Defense titled Statement of Objectives (SOO) for Critical Chemicals Production (FOA: FA8650–19–S–5010, Appendix VI, Call: 012) and dated December 5, 2022, or any successor document. (2) Goods, services, or technology provided by an entity identified in the annual list published in the Federal Register by the Department of Defense of Chinese military companies operating in the United States pursuant to section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283; 10 U.S.C. 113 note), except that the prohibition shall not apply to— (A) goods, services, or technology to provide a service that connects to the facilities of a third party, including backhaul, roaming, or interconnection arrangements; or (B) components (as defined in section 105 of title 41). (3) (A) Goods and services— (i) on the munitions list of the International Traffic in Arms Regulations; (ii) on the Commerce Control List that— (I) are classified in the 600 series; or (II) contain strategic and critical materials, rare earth elements, or energetic materials used to manufacture missiles or munitions. (B) The prohibition pursuant to this paragraph does not apply in connection with a visit by a vessel or an aircraft of the United States Armed Forces to the People’s Republic of China. (4) Strategic and critical materials, including specialty metals and rare earth elements (as referenced in sections 4863 and 4872 of this title, and section 857 of the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (Public Law 117–263; 10 U.S.C. 4811 note)). (5) Unmanned aircraft systems (as referenced in section 848 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 10 U.S.C. 4871 note)). (6) Printed circuit boards (as referenced in section 4873 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 10 U.S.C.)). (7) Personal protective equipment (as referenced in section 4875 of this title). (8) Batteries from specified companies (as referenced in section 154 of the National Defense Authorization Act for Fiscal Year 2024 (Public Law 118–31; 10 U.S.C. 4651 note prec.)). (9) Covered telecommunications equipment or services (as referenced in section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Public Law 115–232; 10 U.S.C. 3901 not prec.)). 4993. National security waiver (a) Authority The Secretary of Defense may waive the prohibitions under section 4992 of this title if the Secretary determines in writing that such waiver is necessary to the national security interests of the United States. (b) Requirements A written determination under subsection (a)— (1) shall specify the quantity or scope of covered items or materials or the scope of covered telecommunications equipment or services to which the waiver applies and the time period over which the waiver applies; and (2) shall be provided to the congressional defense committees not later than 15 days before issuing the waiver, except that in the case of an urgent national security requirement, such certification may be provided up to 7 days after the waiver is issued. (c) Delegation The authority under subsection (a)— (1) may be delegated to either the senior acquisition executive of a military department or the official responsible for all acquisition functions of such other element or organization of the Department of Defense concerned, for a waiver applicable to one or more acquisition programs or procurements within that military department or element of the Department of Defense; or (2) may be delegated to the Deputy Secretary of Defense or the Under Secretary of Defense for Acquisition and Sustainment for a waiver applicable to more than one military department. 4994. Exceptions for commercial products, COTS items, and thresholds (a) Commercial products and cots items (1) In general Except as provided in paragraph (2), this chapter applies to the procurement of commercial products and COTS items. (2) Exception This chapter only applies to COTS items that are— (A) specialty metals, including mill products, that have not been incorporated into end items, subsystems, assemblies, or components; (B) forgings or castings of specialty metals, unless incorporated into COTS end items, subsystems, or assemblies; or (C) covered items or covered telecommunications equipment or services that perform a mission-critical function and are not incorporated into end items, subsystems, assemblies, or components. (b) Simplified acquisition threshold Section 4992 of this title does not apply to acquisitions in amounts below the simplified acquisition threshold. (c) Outside the United States Section 4992 of this title does not apply to procurements outside the United States in support of contingency operations or for use outside the United States.. (b) Implementation and effective date (1) Effective date The amendments made by this section shall take effect on January 1, 2028. (2) Regulations The Secretary of Defense shall prescribe regulations to implement chapter 390 of title 10, United States Code, as added by subsection (a), including updates to the Defense Federal Acquisition Regulation Supplement (DFARS).