Reed Smith Client Alerts

On December 20, 2019, President Trump signed the National Defense Authorization Act for fiscal year 2020 (the 2020 NDAA) into law (Public Law No. 116-92). The 2020 NDAA authorizes $738 billion dollars in appropriations for programs and activities of the Department of Defense (DOD), the U.S. executive agency that acquires the largest amount (by dollar value and volume) of goods and services within the U.S. government. This amount authorized by the 2020 NDAA represents roughly a $22 billion dollar increase over the 2019 NDAA. The 2020 NDAA includes a variety of provisions that are important for government contractors to be aware of, including provisions related to supply chain security, cybersecurity, software acquisition, cloud computing, and research and development, among others. This client alert discusses the provision of the 2020 NDAA that will impact defense contractors (manufacturers, distributors, resellers) supplying microelectronic products and wireless network services acquired by the DOD.

Section 224. Requiring defense microelectronics products and services meet trusted supply chain and operational security standards

Title II, section 224 of the 2020 NDAA requires the establishment of operational security standards that will protect the United States, the DOD, and defense contractors that do business with the DOD from the theft of intellectual property and ensure national security and public safety in the application of new generations of wireless network technologies and microelectronics. Section 224 refers to these operational security standards as trusted supply chain and operational security standards and requires the Secretary of Defense (SECDEF) to establish these security standards no later than January 1, 2021. By January 1, 2023, nearly all microelectronics products and wireless network services purchased by the DOD must meet these new security standards.