Today, Congress announced the final version of the National Defense Authorization Act (“NDAA”) for Fiscal Year 2024. The NDAA is an annual bill that contains important provisions related to the Department of Defense and international security, among other things. An earlier version of the bill contained two key provisions related to the Foreign Agents Registration
Following our recent overview of key topics to watch in the National Defense Authorization Act (“NDAA”) for Fiscal Year (“FY”) 2024, available here, we continue our coverage with a “deep dive” into NDAA provisions related to the People’s Republic of China (“China” or “PRC”) in each of the House and Senate bills. DoD’s focus on strengthening U.S. deterrence and competitive positioning vis-à-vis China features prominently in the 2022 National Defense Strategy (“NDS”) and in recent national security discourse. This focus is shared by the Select Committee on Strategic Competition Between the United States and the Chinese Communist Party (“Select Committee”), led by Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL).
It is no surprise, then, that House and Senate versions of the NDAA include hundreds of provisions—leveraging all elements of national power—intended to address what the NDS brands as China’s “pacing” challenge, including many grounded in Select Committee policy recommendations. Because the NDAA is viewed as “must-pass” legislation, it has served in past years as a vehicle through which other bills not directly related to DoD are enacted in law. In one respect, this year is no different—the Senate version of the NDAA incorporates both the Department of State and Intelligence 2024 Authorization bills, each of which includes provisions related to China.
To get a flavor of the approach to China in this year’s NDAA, look no further than the “Ending China’s Developing Nation Status Act” in Section 1399L of the Senate bill, which would require U.S. opposition to granting China “developing nation” status in treaties under negotiation and by international organizations of which the U.S. and China are members, such as the World Trade Organization. Classification as a “developing nation” affords China access to preferential loans and other economic benefits intended to increase trading opportunities, notwithstanding its current status as an upper-middle income country (as determined by the World Bank), and the world’s second largest economy, trailing only the U.S. Not to be outdone, Section 155 of the House bill contains a provision mandating expedited deployment of advanced radars to track high-altitude balloons and other potential threats to the U.S., in direct response to the incident earlier this year in which a Chinese balloon flew across the U.S. before being shot down by the Air Force.
Given these provisions, and many more (some we discuss below), this year’s NDAA strikes us as different. It incorporates many more China-related provisions and many of these would impose greater obligations on government contractors to limit their interactions with the PRC and entities affiliated with the PRC Government. Whether the laundry list of China-related provisions in the current NDAA survive, and in what form, will be determined by the conference process currently underway. But these provisions have the potential to impose significant near-term burdens on contractors—requiring them to assess their obligations and make adjustments to ensure compliance. Indeed, these provisions may be far more disruptive than requirements imposed by prior year NDAA China provisions that contractors have navigated by reassessing supply chains and increasing due diligence. All government contractors and suppliers to government contractors with any connection to China would be well advised to monitor how the NDAA conference approaches resolution of this legislation over the coming months.Continue Reading Not to Be Outpaced: NDAA Presents Measures Addressing China
Earlier this month the Biden Administration released its long-anticipated Executive Order on Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern (“EO”), which imposes (1) prohibitions on certain outbound investments in the semiconductors and microelectronics, quantum information technologies, and artificial intelligence sectors, and (2) mandatory notification requirements for a…
The FAR Council released an Interim Rule in August implementing part of Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019. In this briefing, we highlight points where the Interim Rule provides clarity; definitional issues that remain unresolved; and new procedural requirements that government contractors should track.
The House of Representatives passed its version of the FY2020 National Defense Authorization Act (“NDAA”) last week. The headline story was the remarkably close, party-line vote: in contrast to past years, the bill received no Republican votes, and eight Democratic Members voted against it.
Those partisan dynamics obscured the inclusion of two important amendments – one Republican and one Democratic – regarding bid protest policy that the House quietly adopted in its bill. The provisions are not yet law, since the House and Senate must still resolve differences in their respective NDAAs through the conference process. In this post, we summarize these provisions and encourage government contractors to watch them closely in the coming months.
Continue Reading House and Senate Will Debate Bid Protest Policy
The Department of Defense (“DoD” or “the Department”) released its annual report to Congress on the Military and Security Developments Involving the People’s Republic of China (“PRC”) on May 2, 2019. This annual report details DoD’s assessment of Chinese security strategy and military strategy over the next 20 years, with a particular focus on China’s future course of military-technological developments. The Secretary of Defense sends both a classified and unclassified version of the report to Congress each year to fulfill the requirements of Section 1202 of the National Defense Authorization Act for Fiscal Year (“FY”) 2000, as amended by Section 1260 of the NDAA for FY 2019. Notably, the 2019 amendments refined the scope of the reporting requirements to include elements regarding emerging efforts by the PRC on espionage, technology transfer, economic pressure, political coercion, information operations, and predatory lending under its Belt and Road initiative.
The report highlights significant strategic challenges presented by Chinese foreign and military policy. Its tone underscores sharp differences with several recent policy decisions and comments that take a more accommodating view of Chinese policy. The UK defense minister, for example, was recently ousted over a leak concerning Britain’s proposed decision to allow Huawei to participate in certain parts of its 5G network. The DoD report, by contrast, describes serious threats from China’s coercive military-civilian strategy. China is taking major steps to modernize its military capabilities and can force cooperation under its laws from all potential sources of innovation within its borders.
Industry leaders in the United States should take note of this approach. As they engage with U.S. government leaders and policy makers, it will be important to look for ways to continue building on key innovation efforts in the United States, and with allies and partners, to harness dual-use emerging technologies for future capabilities. The report also makes clear that cybersecurity and counter-espionage protocols will be key to thwarting efforts of the Chinese government – acting either through governmental agencies or through Chinese companies – to gain insight into the military and industrial capabilities of the United States.
Continue Reading Department of Defense Releases Annual Report to Congress on the Military and Security Developments Involving the People’s Republic of China
The aerospace and defense industry, including those in the defense trade press, have since late evening of November 6, 2018 been wrestling with the implications of the midterm elections for U.S. defense policy and spending over the next two years. Quite frankly, it is too early to say with certainty. As Leo Rosten, the famous political scientist and humorist, once said, “Some things are so unexpected that no one is prepared for them.” That statement seems an appropriate caution given the current tumult of U.S. domestic politics.
That caution given, we can offer a couple, dare we say, steadfast observations about what is likely to be “normal” even given change to control of the House:
- The President retains significant power to determine national security policy, and often enjoys first-mover advantage in this area; continuity, rather than change, will likely be the broad theme.
- Congress has passed an annual National Defense Authorization Act for 58 consecutive years, and we expect them to do so again. This remains a must-pass piece of legislation, including policy issues in the jurisdiction of other committees (for example, the Foreign Investment Risk Review Modernization Act that governs the Committee on Foreign Investment in the United States was included in last year’s defense bill).
But with the change in control of the House, we do expect a more contentious and potentially drawn out debate regarding key defense policy priorities of the Trump administration and congressional Republicans.
Continue Reading Implications of the 2018 Midterm Elections for U.S. National Defense Policy and Spending
Generating and sustaining the United States’ global economic and military superiority over more than the last half century has depended on a dominant U.S. global economic position and perpetual technological innovation. The United States has increasingly relied on a global industrial supply chain and a relatively open environment for foreign investment in early stage technology development to sustain this dominant position, but in so doing has built risk into the foundation of its competitive advantage. The U.S. Government has growing concerns that these past practices meant to extend the U.S. economic and military advantage are contributing to its erosion. As a result, the Department of Defense (DoD), other Executive agencies, and Congress are taking steps to mitigate risks across the defense industrial and innovation supply chains that provide hardware, software, and services to the U.S. Government.
Continue Reading How Well Do You Know Your Supply Chain? New Policy Developments Affect Defense and Security Contractors
This will be a relatively quiet week on Capitol Hill. The House of Representatives is on a scheduled district work period, and the national observance of Veterans Day on Wednesday means the Senate will be in for an interrupted, but busy, week.
The Senate is scheduled to resume legislative business on Monday and will vote…
The House of Representatives is now considering the Fiscal Year 2015 National Defense Authorization Act (NDAA). The House Armed Services Committee (HASC) reported out the $513 billion measure on May 7th rejecting many of the Administration’s requests including reduction in military pay raise, authority for the base closures, as well as cancellation of older weapon…