The House Armed Services Committee released its FY2027 NDAA chairman’s markup last week, with further additions coming soon. The $1.15 trillion topline, meeting the administration’s request, got most of the coverage. But a line item in the industrial base policy section matters more to procurement teams.
The bill would require the Pentagon to establish a new office within the Office of Industrial Base Policy dedicated to reviewing and mitigating adversary capital inside the defense industrial base. That includes minority investment, board representation, licensing arrangements, and strategic partnerships that could create leverage for foreign adversaries (particularly China) over U.S. defense suppliers.
This is a longstanding problem for primes in defense and critical infrastructure. Private equity firms with ties to adversary nations have held stakes in companies supplying a range of critical supplies, from circuit boards, to rare earth materials, to batteries supplied to U.S. defense contractors.
The current DFARS screening framework is designed around classified contract access. Although a recent proposal is aimed at extending FOCI screening to any DoD contract worth more than $5 million, currently It does not reach the broader supply chain. The new office builds upon that proposal and an array of other proposals and projects to catch foreign suppliers and investments.
For DoD primes, upstream vendors, and anyone working in critical infrastructure, the writing is on the wall: you need to be able to highlight foreign vendors and influence, and eliminate adversarial entities from your supply chain. If you’re not there yet, it’s time to invest in supply chain illumination tools and expertise.