Government to Block Shady Semiconductors in Defense Contracts
Published Date: 2/17/2026
Proposed Rule
Summary
Starting December 23, 2027, federal agencies like the DoD, NASA, and others won’t be allowed to buy certain semiconductor products or services that don’t meet new rules. This change affects companies selling tech parts to the government and aims to boost national security. If you’re involved, get ready to adjust your contracts and plans before the deadline, and don’t forget to share your thoughts by April 20, 2026!
Analyzed Economic Effects
6 provisions identified: 2 benefits, 3 costs, 1 mixed.
Contractors must check and certify chips
If you sell electronic parts, products, or services to the federal government, you must perform a reasonable inquiry before you submit an offer and certify you will not provide covered semiconductor products or services. Offerors must also disclose any known covered semiconductors in their offers and prime contractors must flow the prohibition clause into subcontracts (FAR 52.240-XX and FAR 52.240-YY). These requirements apply to contractors and subcontractors and the certification requirement applies to both primes and subcontractors.
Broad prohibition affects many government suppliers
Beginning December 23, 2027, federal agencies are prohibited from procuring electronic products or services that include covered semiconductor products or services, and from acquiring electronic products for use in critical systems that use such covered semiconductors. The prohibition applies to all acquisitions, including micro-purchases and commercial IT and telecommunications services, with a limited exception for commercial products or services with no alternative until December 23, 2028.
Paperwork and compliance costs quantified
The rule adds a new information collection and the Regulatory Impact Analysis estimates total public costs of about $1,798 million (undiscounted) over 10 years and total public and Government net present value costs of about $1,859 million. Year 1 public costs are estimated at $530 million, with later years lower.
Fast 72-hour reporting and legal safe harbor
On or after December 23, 2027, contractors must report in writing within 72 hours if they identify or suspect a covered semiconductor product or service in items delivered to the Government. If a contractor or lower-tier supplier provides timely disclosure, they are protected from civil liability and will not automatically be found not responsible, provided they follow the rule's documentation and removal efforts.
Temporary waivers can allow continued sales
Agency heads may waive the prohibition for up to renewable two-year periods if, after consultation with the Secretary of Commerce and other national security officials, no compliant product is available at U.S. market prices or the waiver will not compromise critical national security interests. The Secretary of Defense and the Director of National Intelligence also have waiver authorities for critical national security interests.
Commerce lists and disclosures boost buyer visibility
The Department of Commerce will host a list of entities determined to be covered and may host a list of organizations that certify their products or services do not contain prohibited semiconductors; contractors may reasonably rely on those Commerce certifications. Contractors are also required to disclose inclusion of covered semiconductors to non‑Federal customers, which increases transparency for non‑Federal buyers.
Your PRIA Score
Personalized for You
How does this regulation affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this federal register document and every other regulation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Key Dates
Department and Agencies
Related Federal Register Documents
2026-12807 — Information Collection; Paperwork Reduction Act Changes in FAR Case 2026-002, Revolutionary Federal Acquisition Regulation Overhaul Parts 6, 7, 10, 18, 26, 37, and 41
The government is shaking up some key rules about how federal agencies collect information when buying goods and services. This overhaul affects contractors, agencies, and anyone involved in federal purchases, aiming to cut down paperwork and make things clearer and faster. Comments on these changes are open until August 24, 2026, so get ready to share your thoughts and help shape the future of federal buying!
2026-12806 — Information Collection; Paperwork Reduction Act Changes in FAR Case 2026-001, Revolutionary Federal Acquisition Regulation Overhaul Parts 1, 2, 4, 33, 39, 40, and 53
The government is shaking up the rules for how federal agencies collect paperwork from contractors, making things simpler and smarter. If you work with or for the government, these changes could affect how you submit info and save you time and hassle. You’ve got until August 24, 2026, to share your thoughts before the new rules roll out!
2026-12561 — Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 5, 24, and 29
The government is shaking up how it buys stuff by simplifying rules in parts 5, 24, and 29 of the Federal Acquisition Regulation. This change affects all federal agencies and contractors, aiming to save taxpayer money and cut red tape. Comments on the proposed changes are open until July 23, 2026, so get ready to weigh in!
2026-12560 — Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 6, 7, 10, 18, 26, 37, and 41
The government is shaking up the Federal Acquisition Rules to make buying smarter, faster, and less wasteful for everyone involved—from agencies to contractors. These changes cut red tape in key areas like planning, competition, and small business support, aiming to save taxpayer money and speed up deals. If you work with federal contracts, get ready to adapt by late July 2026 when public feedback closes!
2026-12559 — Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 1, 2, 4, 33, 39, 40, and 53
The government is shaking up the Federal Acquisition Regulation to cut red tape and save taxpayer money. This big update affects anyone who works with federal contracts, making rules simpler and smarter. Comments are open until July 23, 2026, so get ready for a smoother, faster way to do business with the feds!
2026-12562 — Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 3 and 49
The government is shaking up how it buys stuff by cutting confusing rules in parts 3 and 49 of the Federal Acquisition Regulation. This change affects contractors and agencies, aiming to save taxpayer money and speed up buying processes. Comments are open until July 23, 2026, so jump in and share your thoughts!
Previous / Next Documents
Previous: 2026-03044 — Sabine Pass Safety Fairway Anchorages
The Coast Guard wants to add two new deep-water anchor spots near Sabine Pass, Texas, mainly for big oil tankers with deep drafts. This change will make shipping safer and smoother, helping energy move faster and boosting the economy. If you have thoughts, send them in by May 18, 2026—no cost to you, just your voice!
Next: 2026-03070 — Petition for Reconsideration of Action in Rulemaking Proceeding; Application for Review of Action in Rulemaking Proceeding; Correction
The Federal Communications Commission fixed some wrong dates in a recent notice about petitions and reviews in a rulemaking process. People involved need to file oppositions by April 6, 2026, and replies by May 9, 2026. This correction helps everyone stay on track without confusion or delays.