in effect
Executive Order 14415, signed July 20, 2026, directs the Department of War and military departments to tighten enforcement of existing federal law (10 U.S.C. 4872) requiring that materials used in defense equipment be sourced domestically or from allied nations. It establishes new restrictions on waivers that had previously allowed contractors to use materials from geopolitical adversaries, and creates new supply chain tracking and reporting requirements.
Starting January 1, 2027, the Secretary of War and military department secretaries may no longer freely issue waivers that allow non-compliant (foreign adversary-sourced) materials in defense contracts — waivers will only be granted if a contractor submits a formal mitigation plan identifying the non-compliant source, proving domestic alternatives were unavailable, and committing to a specific timeline for removing those materials. Contractors must also submit a complete “indentured Bill of Materials” tracing every component, part, and raw material back to its origin, and must screen all suppliers for financial instability, foreign ownership or control, and manufacturing risks. Contractors using materials from “unreliable foreign suppliers” must qualify alternative sources or face potential contract suspension or termination. The Department of War must map national security vulnerabilities in supply chains using available tools including artificial intelligence, and the Secretary must report progress to the National Security Advisor every six months through January 2028. A carve-out protects materials sourced through U.S.-government-backed financing programs such as Project Vault (Export-Import Bank) and the U.S. International Development Finance Corporation.
Defense contractors and their subcontractors at every tier — including small businesses and new entrants, for whom the regulations are directed to minimize undue burden — must map their full supply chains, vet suppliers, and eliminate materials tied to adversary-controlled sources or face contract consequences. The Department of War bears new administrative responsibilities for developing policy, promulgating regulations, reviewing exemptions, and compiling reports, and must refer cases of contractor fraud or willful noncompliance to the Attorney General.