Every year, the National Defense Authorization Act (NDAA) offers the clearest annual snapshot of where Congress believes the nation’s defense priorities lie. The FY 2027 cycle leaves no doubt about the answer: China. Across committees, chambers, and party lines, the sheer number and breadth of China-related measures is unmistakable—almost two hundred provisions spanning export controls, sanctions, investment screening, procurement, supply chain security, Taiwan, and beyond. Many are modest reporting requirements; others would reshape how companies source, invest, and transact. Taken together, they reflect a durable bipartisan consensus that military, economic, and technological competition with China is now an organizing principle of U.S. national security law.
This post—the first in a series—maps these provisions by issue area, offering a concise summary of what each would do and how it fits within the wider policy landscape. This installment covers proposed amendments to the statutory framework governing the Section 1260H List of Chinese military companies, the expanding consequences of Section 1260H designation, and other China-related procurement, use, and funding restrictions.
Survey of China-Related Provisions
This survey summarizes provisions across the House- and Senate-side FY 2027 NDAA texts—the House-passed bill (H.R. 8800) and the SASC-reported bill (S. 4784) and its Manager’s Package—that reference China directly or through the statutory shorthand of a “country of concern,” “covered nation,” or “foreign adversary”—categories that place China on a roster of countries that also includes, at a minimum, North Korea, Russia, and Iran.
This survey is not a comprehensive account of every measure that affects these categories, but rather a targeted map of where, and how, the FY 2027 NDAA reaches China’s role in the federal acquisition enterprise. The reach of these provisions ultimately depends on whether—and in what form—the bill becomes law.
The 1260H List
Extension of Public Reporting of Chinese Military Companies. This short amendment would extend the sunset of the Section 1260H reporting requirement from 2030 to 2035. This keeps in force, for an additional five years, the requirement that the Department of War (DoW) publish an annual public list of Chinese military companies operating in the United States. (House-passed NDAA, Sec. 1243; SASC-enacted NDAA, Sec. 849(2)(A))
Modifications to Public Reporting of Chinese Military Companies. The House provision would modify the Section 1260H reporting regime by relaxing the update frequency. Although current law requires publication of an updated list at least annually, the amendment would instead permit the Secretary of War to publish an updated list as he determines appropriate, based on the latest information available. Both the House- and SASC-enacted bills would require the Secretary to issue regulations implementing Section 1260H, and both would add new definitions to sharpen the identification of entities that belong on the List. (House-passed NDAA, Sec. 1244; SASC-enacted NDAA, Sec. 849(3)-(4))
FASC Exclusion Orders for Chinese Military Company Designees. This provision would require the Secretary of War, within 90 days of adding an entity to the 1260H List, to refer that entity to the Federal Acquisition Security Council (FASC) with a recommendation for a government-wide exclusion order that bars every executive agency from procuring any “covered article” produced or provided by the listed entity. The FASC must review the referral within 270 days and, if warranted, transmit a recommendation to the President within 90 days. The term “covered article,” incorporated from 41 U.S.C. §§ 1321 and 4713, is defined broadly to reach information technology (including cloud computing services), telecommunications equipment and services, the processing of information subject to the Controlled Unclassified Information program, and any hardware, systems, devices, software, or services with embedded or incidental information technology.
The exclusion’s reach is deliberately broad. It would extend not only to the listed entity but also to its identified subsidiaries and affiliates, and the FASC review requirement would apply to all entities already on the 1260H List, not just newly added ones. Notably, an entity’s removal from the 1260H List would not automatically rescind the government-wide exclusion order, allowing the bar to outlast the listing itself. (House-passed NDAA, Sec. 1812)
Certification Requirement for Motor Carriers Transporting DoW Freight. This provision would bar DoW from awarding or allowing performance of any motor carrier freight contract unless the carrier certifies that, after reasonable inquiry, it is not owned or controlled by, and has no significant business relationships with, any entity on the most recent Section 1260H list. The requirement reaches prime contractors, subcontractors, and owner-operators at all tiers and must be flowed down into subcontracts and leases. A complementary provision would direct the Federal Motor Carrier Safety Administration, in coordination with DoW, to establish a Secure Defense Freight Carrier Registry within one year. Inclusion on the registry would require screening for ownership, control, or significant business relationships with any Section 1260H entity (or other foreign-adversary entity designated by the Secretary of War), plus re-vetting at least every two years. Beginning one year after the date the bill is enacted, a carrier may not bid on or perform a DoW freight contract unless registered, absent a waiver for exigent circumstances. (House-passed NDAA, Secs. 353, 354)
Revocation of Security Clearances for Certain Persons. This provision would require the Secretary of War to suspend or revoke the security clearance of any retired or separated member of the Armed Forces or DoW civilian employee who engages in lobbying contacts or activities (as defined in the Lobbying Disclosure Act of 1995) for or on behalf of an entity that is both: (1) included on the most recent Section 1260H List; and (2) included on the Treasury Department’s Non-SDN Chinese Military-Industrial Complex Companies (NS-CMIC) List. (House-passed NDAA, Sec. 1099L)
Cyber Incident Reporting Requirements for Operationally Critical Contractors. This provision would amend 10 U.S.C. § 391, which already requires “operationally critical contractors”—those the Secretary of War designates as critical sources of airlift, sealift, intermodal transportation services, or logistical support essential to mobilizing, deploying, or sustaining the Armed Forces in a contingency operation—to rapidly report cyber incidents on their networks to DoW. Section 1508 would add a new reporting trigger: such contractors must report, within 72 hours of discovery, any hardware, software, firmware, or embedded technology in their systems tied to certain Chinese entities, including any company on the Section 1260H List. (House-passed NDAA, Sec. 1508)
China-Related Procurement, Use, and Funding Bans
Prohibition on Procurement and Use of Humanoid Robotic Systems Produced, Developed, or Controlled by Foreign Adversaries. The House-passed bill would bar the DoW from procuring, leasing, or otherwise obtaining a “covered humanoid robotic system” produced or developed by China, or that incorporates Chinese firmware, software, AI models, cloud services, or remote access/update capability. A “covered humanoid robotic system” is a commercially available, network-connected robot designed for general purpose interaction in human-occupied environments, with dexterous articulated limbs and that is capable of autonomous or semi-autonomous operation using AI or machine learning systems. Industrial robots, non-networked systems, and regulated medical devices are expressly excluded from the definition. The ban applies only to contracts entered after enactment. (House-passed NDAA, Sec. 163)
The SASC Manager’s Package contains two counterpart provisions that would reframe this same prohibition around “covered unmanned ground vehicle systems”—expressly including mobile robotics and humanoid robots. The first bars DoW from procuring or operating such systems—including via a contract for services—made by a company domiciled in China or subject to Chinese influence or control. (SASC Manager’s Package, Sec. 5813) The second applies this same bar to the Intelligence Community. (SASC Manager’s Package, Division F, Intelligence Authorization Act, Sec. 607)
Prohibition on Chinese Community Party (CCP)-Linked Financial Services Providers on DoW Devices. This provision would prohibit DoW military and civilian personnel and contractors from downloading, installing, or using any application, platform, or software from a “CCP-linked financial services provider” on a DoW device. (House-passed NDAA, Sec. 1741)
Memorandum of Agreement (MOA) Requirement / Ban on IT Providers Sharing Cyber Vulnerabilities with China. This provision would bar DoW (beginning 270 days after enactment) from contracting with IT providers that make such IT commercially available to customers in China, or have operations/personnel or subsidiaries in China, unless they sign an MOA committing to: (1) disclose all security vulnerabilities in the procured product to DoW before anyone else; and (2) never give advance disclosure of such vulnerabilities to any company controlled by, or organized under Chinese law. (House-passed NDAA, Sec. 1526; SASC-enacted NDAA, Sec. 1635)
Prohibition on Chinese-Manufactured Optical Fiber. This provision would bar DoW from procuring optical fiber or optical fiber cable produced by entities owned by, controlled by, or subject to Chinese jurisdiction for use in DoW information networks or communications systems. The prohibition applies to contracts awarded on or after October 1 of the first fiscal year after NDAA enactment. (House-passed NDAA, Sec. 1814; SASC-enacted NDAA, Sec. 846)
Prohibition on Certain Silicon Carbide (SiC) Semiconductors Made in China. This provision would direct revision of Defense Federal Acquisition Regulation Supplement (DFARS) 252.225 to prohibit procurement of (non-Commercial Off The Shelf (COTS)) semiconductors manufactured on silicon carbide wafers made in China. The provision also would require briefings on domestic SiC wafer manufacturers challenged by Chinese exports, as well as an interagency policy that encourages allies to exclude Chinese SiC wafers from their national security systems and critical infrastructure and to apply trade enforcement actions to prevent Chinese dominance of the SiC supply chain. (House-passed NDAA, Sec. 1848)
Critical Materials: Tiered Sourcing Restrictions. This cornerstone provision would constitute a wholesale rewrite of 10 U.S.C. § 4872—baring the DoW, and its contractors at every tier, from procuring “covered material” or “a covered item that contains covered material” sourced from, by, or through a “covered nation,” including China. The provision would divide affected critical minerals and materials into two tiers with different standards:
- Tier 1 is the more demanding regime. Beyond avoiding materials from China, DoW may procure Tier 1 material only if the percentage of cost of such material that is produced domestically is at least 50%. This tier covers the most defense-critical inputs—NdFeB and samarium-cobalt magnets, tungsten heavy alloy, key neodymium and praseodymium oxides and metals, and tantalum—with molybdenum, gallium, and germanium phasing in on December 18, 2027.
- Tier 2, by contrast, imposes no domestic production floor; it simply requires that an increasing cost share of certain critical materials be sourced from outside China on a glide path—25% in 2028, 50% in 2029, 75% in 2030, and 100% beginning in 2031—calculated separately for each material category and backed by contractor certifications of qualifying supply agreements. Tier 2 reaches items containing gadolinium, samarium, neodymium, praseodymium, and terbium; tungsten and its precursors (with tungsten carbide added in 2029); and niobium oxides, metals, and alloys. (House-passed NDAA, Sec. 1803)
Prohibition on Procurement of Solar Components. This provision would preclude the use of FY 2027 DoW funds to procure photovoltaic cells, modules, or inverters manufactured by China. (House-passed NDAA, Sec. 875)
Elimination of Certain Payment Processing Equipment / Services. This provision would direct the Secretary of War to review all “retailers” (persons operating a business on a covered military installation under a contract, subcontract, lease, or licensing agreement) to determine whether each uses “covered” payment processing equipment—that is, equipment whose application processor, source code, secure processor, or secure firmware is developed, manufactured, owned, or controlled by an entity tied to China—as a substantial or essential component of a DoW contract. Within 90 days after the review, the Secretary must issue guidance prohibiting the use of such payment processing equipment and direct modification or termination of noncompliant contracts unless the retailer promptly ceases use. Effective January 1, 2027, the Secretary may not enter into a contract with a noncompliant retailer. (House-passed NDAA, Sec. 878)
Prohibition on Chinese-Origin Seafood in Military Dining Facilities and Commissaries. This provision would bar the Secretary of War from procuring seafood that originates or is processed in China for use in military dining facilities, including galleys aboard U.S. naval vessels. In parallel, the provision would prohibit the sale of raw or processed Chinese-origin seafood at military commissary stores. (House-passed NDAA, Sec. 644)
Prohibitions on Covered Distributed Ledger / Blockchain Equipment or Services. This provision would prohibit DoW acquisition of distributed ledger technology and blockchain equipment or services originating from China or another foreign adversary country. (House-passed NDAA, Sec. 1822)
Restrictions on Data Facility Equipment on DoW-Leased Facilities. This provision would prohibit DoW from entering into an enhanced use lease unless it prohibits the lessee (and any sublessor or operator) from installing or operating data facility equipment that contains one or more significant components manufactured in, or by an entity domiciled in or subject to the jurisdiction of, China. (House-passed NDAA, Sec. 2825)
Consolidation of Restrictions on Procurement from Certain Foreign Countries. This is another cornerstone provision that would codify and consolidate numerous existing DoW restrictions on procurement from China and other foreign adversaries by creating a new Chapter 390 of Title 10, effective January 1, 2028. The new framework would generally prohibit DoW from procuring “covered items” that are mined, refined, processed, manufactured, or assembled, in whole or in part, by China or by an entity domiciled in China or subject to the influence or control of the Chinese government; by a company on the 1260H List or Treasury’s Non-SDN Chinese Military-Industrial Complex Companies List; or by Huawei, ZTE, Hytera, Hikvision, Dahua and their affiliates; and any other entities designated by the Secretary of War as national security risks due to its ties to China.
The definition of “covered items” would encompass a broad range of sensitive products and technologies, including critical chemicals, certain munitions and export controlled items, strategic and critical materials, unmanned aircraft systems, printed circuit boards, personal protective equipment, specified batteries, and covered telecommunications and surveillance equipment and services. The provision would generally extend the covered item procurement restrictions to prime contracts and subcontracts at any tier, while allowing contractors to reasonably rely on supplier certifications without independent third-party audits.
The provision would also provide targeted exceptions for specified commercial and COTS acquisitions, establish a national-security waiver process with congressional notification, protect certain existing contracts from retroactive application, and direct DoW to issue implementing regulations and conforming DFARS revisions. (SASC-enacted NDAA, Sec. 811)
Promoting the United States Drone Industrial Base. This provision would materially expand the supply chain reach of Section 848 of the NDAA for FY 2020, which prohibits DoW from operating or procuring drones manufactured in China or that incorporate specified Chinese-made components, software, connectivity, or data storage. The new provision would broaden the restricted component list to include communications devices, navigation systems, sensors, batteries, motors, and electronic speed controllers made in China. Beginning one year after enactment of the FY 2027 NDAA, the prohibition would extend to DoW procurement or operation of drones containing subcomponents or raw materials sourced from, processed in, or manufactured in China or by a China-domiciled entity. (SASC-enacted NDAA, Sec. 847)
Prohibition on Modems / Routers from China-Controlled Entities. This provision would prohibit DoW from acquiring any modem or router if the manufacturer, bidder, or offeror is an entity owned, controlled, directed, subcontracted by, affiliated with, or connected to the Chinese government. (SASC-enacted NDAA, Sec. 880)
Prohibition on Television Acquisitions from China-Controlled Entities. This provision would prohibit DoW from acquiring any television if the manufacturer, bidder, or offeror is connected to the Chinese government. (SASC-enacted NDAA, Sec. 881)
Prohibition on Connected Vehicles of Concern on Military Installations. This provision would establish a two-phase prohibition on the operation of certain connected vehicles on military installations or other DoW property. After July 1, 2027, the ban would cover vehicles prohibited under Commerce Department connected-vehicle regulations; after January 1, 2029, the ban also would apply to connected vehicles designed, developed, manufactured, or supplied by entities controlled by China or subject to its jurisdiction and that pose specified cybersecurity, infrastructure, or national-security risks. DoW would be required to publish and annually update a list of connected vehicles subject to the second-phase prohibition. (House-passed NDAA, Sec. 316; SASC-enacted NDAA, Sec. 353).
Expanded Prohibition on Use of Certain AI. This provision would substantially broaden restrictions established by Section 1532 of the NDAA for FY 2026 on DoW’s use of certain AI. The new provision would make mandatory (rather than discretionary) the Secretary of War’s issuance of guidance excluding and removing from DoW systems and devices AI developed by a “covered AI company,” with the corresponding prohibition on contractor use of such AI in the performance of DoW contracts taking effect 90 days after the guidance is issued. The provision also expands the definition of “covered AI”—AI already banned from use on DoW systems and devices—beyond DeepSeek and High Flyer to AI developed by ten other Chinese companies and any derivative AI models. The definition of “covered AI company” continues to capture entities included on the Consolidated Screening List maintained by the International Trade Administration of the Commerce Department and DoW’s 1260H List. (SASC-enacted NDAA, Sec. 1651)
A similarly styled provision would expand the current prohibition on Intelligence Community use of DeepSeek to any product or service from a Chinese entity on the Entity List, the Non-SDN Chinese Military-Industrial Complex list, or the 1260H List. It also broadens an Intelligence Community procurement prohibition to cover any “People’s Republic of China product or service”—broadly defined to include information or communications technology manufactured in China, Hong Kong, or Macau, or provided or manufactured by an entity connected to the Chinese government, unless the head of the intelligence element approves the procurement following an FBI-coordinated security assessment. (SASC Manager’s Package, Division F, Intelligence Authorization Act, Sec. 609)
Chip Equipment Quality, Usefulness, and Integrity Protection Act (Chip EQUIP Act). This provision would amend the CHIPS Act to bar CHIPS-funded recipients from procuring, installing, or using “ineligible semiconductor manufacturing equipment” made by China for a period of 10 years, beginning on the date on which the funding agreement is signed. (SASC Manager’s Package, Sec. 6053)
Prohibition on Sending / Receiving Objects via Entities of Certain Countries. This provision would prohibit Intelligence Community elements from using any shipping company or other entity owned or controlled by a person or governmental entity domiciled in China to domestically ship sensitive products, intellectual property, or technology that would pose a national security threat if acquired by China. (SASC Manager’s Package, Division F, Intelligence Authorization Act, Sec. 614)
Prohibition on Funds for Animal Research with Foreign Countries of Concern. This provision would bar the use of FY 2027 DoW funds for animal research conducted in collaboration with China or at a facility owned or controlled by China, including through any contract, agreement, or grant. (House-passed NDAA, Sec. 237)
Prohibition on Funds for Entertainment Projects with Chinese Ties. This provision would prohibit the use of FY 2027 DoW funds to knowingly provide active and direct support to a film, television, or other entertainment project where there is demonstrable evidence that the project has complied, or is likely to comply, with Chinese government or CCP demands to materially censor its content in furtherance of China’s national interests. (SASC-enacted NDAA, Sec. 1031)