On August 25, 2022 the Defense Acquisition Regulations System published two new DFARS clauses prohibiting the award of covered Department of Defense (“DoD”) contracts to contractors that leverage resources in China unless those resources are disclosed. Implementing Section 855 of the FY22 National Defense Authorization Act and effective immediately, the clauses are DFARS 252.225-7057 “Preaward Disclosure of Employment of Individuals Who Work in the People’s Republic of China” and DFARS 252.225-7058 “Postaward Disclosure of Employment of Individuals Who Work in the People’s Republic of China.” These clauses will be incorporated into DoD solicitations and contracts with an estimated value over $5 million unless a senior procurement executive waives the disclosure requirements due to national security interests. The requirements do not apply to contracts for commercial products and commercial services, including contracts for commercially available off-the-shelf (“COTS”) items, or to contracts at or below the simplified acquisition threshold (currently $250,000).

DFARS 252.225-7057 specifically prohibits award of a contract to any corporation, company, limited liability company, limited partnership, business trust, business association, or other similar entity, including any subsidiary thereof, performing work on a covered contract [1] in the People’s Republic of China, including by leasing or owning real property used in the performance of the covered contract in the People...

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