Supply chain security is a popular buzzword in the federal government especially when it comes to domestic procurement and focusing on initiatives like the Buy American Act (BAA). The newest Executive Order (EO) is no different, but that doesn’t mean you should gloss over it, especially if you’re a contractor within the Defense Industrial Base (DIB).
On July 20, 2026, the White House issued another major policy directive aimed at supply chain security with the release of the EO “Securing America's Defense Supply Chains and Ensuring Domestic Acquisition of Critical Materials.” With this EO, contractors should expect greater scrutiny of their supply chains and increased emphasis on sourcing from domestic suppliers. If your company currently works with the Department of Defense (DoD) or plans to in the future, this blog is for you.
Many critical minerals, rare earth elements, and specialty materials used in federal procurement are currently sourced or processed outside the United States. This new Supply Chain EO seeks to change this by encouraging contractors to source key materials used to manufacture, maintain, and repair military equipment from domestic or allied sources whenever possible.
To accomplish this, the EO:
Limits when the Secretary of Defense should issue waivers for critical materials from covered nations.
Initiates more comprehensive supply chain mapping for critical supply chains, as designated by the Secretary of War.
Encourages defense contractors to begin qualifying new domestic sources of critical minerals, materials, and components from domestic and partner nation sources, while also removing regulatory barriers in the qualification process.
We’ll dive deeper into each of these directives below.
One of the biggest changes involves waivers for certain prohibited foreign materials used in defense acquisitions. Historically, contractors could request waivers (under 10 U.S.C. 4872) with specific circumstances when compliant materials were unavailable. Under the new Executive Order, getting those waivers is expected to become significantly more difficult beginning on January 1, 2027.
Contractors looking to source a non-compliant material must submit a formal mitigation plan that:
Another major focus of the Executive Order is supply chain visibility. Within 180 days of this EO, the Secretary of Defense must issue a policy requiring contractors to map and illuminate critical supply chains (from raw materials to end products) for national security acquisitions. This policy is supposed to be implemented in a way that doesn’t place “undue burden” on small businesses, non-traditional defense companies, and new entrants.
Within this requirement, contractors must submit a Bill of Materials (BOM) that traces all components, parts, equipment, software, and materials back to the origin of raw materials in their supply chains. Additionally, contractors must establish and implement written procedures to vet all suppliers and subcontractors that support the critical supply chain.
Vetting suppliers and subcontractors include checking:
Within 180 days of this order, the DoD must find existing acquisitions (related to national security) where contractors are relying on supply chains that include material or components supplied by an unreliable foreign supplier, and direct them to, as soon as possible, qualify an alternate supplier.
You might be wondering, what “qualify” really means in this context. This EO also directs the Secretary of War to develop a strategy to accelerate testing and qualification of new sources and materials. This strategy myst include developing new software, technical testing procedures, qualification methodologies, and resources, within 90 days of this order.
This part of the EO doesn’t really impact contractors much directly, but it shows that the government is going to put safeguards in place to track the directives above.
Every 6 months from the date of the order until January 1, 2028, the Secretary of War must submit a report to the Assistant to the President for National Security Affairs describing the actions taken to address the order. The report must include:
Not every acquisition related to national security will be under this EO. "Project Vault" (a U.S. Strategic Critical Minerals Reserve) and critical minerals or components produced by a company or project receiving grants, financing, loans, equity investment, or other such support from the Department of State, the Department of War, the Department of Commerce, or the Department of Energy are exempt from this.
This Executive Order is primarily focused on Department of Defense acquisitions involving critical materials and components used in national security programs. Contractors supporting military systems, weapons platforms, and other defense-related procurements will likely feel its effects first.
However, we expect some of these regulations to eventually trickle down to more acquisitions within the DIB, and maybe into civilian projects too. Over the past several years, initiatives involving cybersecurity, supply chain risk management, and domestic manufacturing have gradually expanded beyond DoD into other areas of federal contracting.
Each new EO brings the potential for regulations that impact your government contracts, including the GSA Multiple Award Schedule (MAS). If you want to stay “in the know” on these updates and future news, check out our weekly blog recap and our monthly govcon newsletter. If you have any questions about your GSA Schedule, or are interested in contracting with the government, we’re here to help!