United States:
The US National Defense Authorization Act For Fiscal Year 2021: Procurement Policy And Requirements
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The National Defense Authorization Act for Fiscal Year 2021
(“the Act”) contains a range of policy reforms and
requirements that will impact companies doing business with the
Government and the supply chain. Many of these measures will be
refined through rulemaking.
Among other provisions, the Act:
- Modifies the threshold for the Berry
Amendment, which restricts acquisition of certain materials to
domestic sources. - Imposes safeguards to prevent China
from acquiring defense-sensitive intellectual property, technology,
and data. - Expands restrictions on the
acquisition of certain materials from China, Russia, Iran, and
North Korea. Some controls are being phased in over time, which
should enable DoD and the defense industrial base (“DIB”)
to find alternative sources. - Directs DoD to assess supply chain
risks for a list of high-priority items, including
microelectronics, medical devices, pharmaceuticals, and
aluminum. - Emphasizes building domestic
capacity, including by prioritizing “to the maximum extent
practicable” the order of sources for “strategic and
critical materials,” which are not defined. The conference
report directs DoD to increase resiliency by expanding the DIB and
fostering industrial cooperation with allies and partners that
offer capacity. - Reflects continuing concern with cost
growth on defense programs. “Middle Tier” programs will
now receive additional scrutiny. - Requires identification of the
“beneficial owner” of a corporation and mandates that DoD
conduct periodic examinations of “covered contractors or
subcontractors” to assess compliance with Foreign ownership
control or influence (“FOCI”) restrictions and
requirements. - Contains cybersecurity provisions
that may impact contractors, including cybersecurity assessments
that may increase contractors’ compliance burdens.
See additional analysis on MayerBrown.com.
Originally Published by Mayer Brown, January 2021
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