Senators Warren and Grassley introduced bipartisan legislation that would require any company bidding on defense contracts to disclose basic beneficial ownership information. The bill closes a loophole that allowed contractors with under $5 million in contract value to skip foreign ownership disclosure entirely.
The legislation is overdue. It is also a useful diagnostic for where defense procurement actually stands on supply chain transparency.
The fact that this gap existed is not surprising if you understand how defense procurement was built. FAR and DFARS were designed primarily around performance outcomes, pricing transparency, and technical compliance. Beneficial ownership was largely treated as a counterintelligence concern handled separately, not as a standard procurement hygiene requirement.
The result is a system where a company with opaque foreign ownership can bid on and win defense work as long as it keeps its contracts under the threshold that triggers scrutiny. That is not an oversight. That is a structural gap.
The Warren-Grassley bill targets the government’s own procurement process. But actually meeting the new requirements could pose a massive challenge – and not just for primes. If you don’t have a current, verified view of the ownership structure of your direct suppliers, you have the same problem the government is trying to solve. Perhaps nobody is passing a law to make you fix it yet, but the writing is on the wall. As the government pushes public-private partnerships and stresses the elimination of foreign rivals upstream, an opaque supply chain is going to become a serious competitive disadvantage.
The senators are pushing to include this in the FY27 NDAA. It will likely pass in some form. When it does, primes and their procurement teams will face pressure to extend the same transparency requirements down their own supply chains.
Better to get ahead of it than wait for regulators to force your hand. If you’d like to learn how Craft.co can help with that, let’s talk.