The President has issued an executive order that tightens domestic and allied sourcing requirements for defense supply chains under 10 U.S.C. 4872. Starting January 1, 2027, the Secretary of War will stop granting waivers for non-compliant “covered materials” except when contractors submit an accepted formal mitigation plan identifying the non-compliant source, documenting efforts to find compliant alternatives, and setting a firm remediation timeline. Failure to qualify a domestic source generally won’t count as “non-availability” unless the contractor shows active, funded qualification efforts.
Within 180 days, the Department of War must issue rules requiring contractors at every tier to submit a complete indentured Bill of Materials tracing components to raw-material origin, implement supplier vetting for financial, foreign-influence, and manufacturing risks, and bar use of “unreliable foreign suppliers.” Noncompliance can trigger contract terminations or fraud referrals. The order exempts Project Vault and other U.S.-financed critical-mineral sources, and requires biannual progress reports through January 2028.