- The order limits waivers for critical materials from covered countries
- The order requires contractors to map critical supply chains for national security acquisitions
- Explore defense modernization priorities at the Potomac Officers Club’s DOW summits
President Donald Trump has signed an executive order directing the Department of War to restrict waivers for critical materials used in defense acquisitions and require contractors to map their supply chains in support of domestic and allied sourcing requirements as part of efforts to secure U.S. defense supply chains.
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The White House said Monday the order adds new supply chain requirements for sourcing defense materials domestically and from allied nations.
What Are the New Restrictions on Waivers for Critical Materials?
Beginning Jan. 1, 2027, the secretary of war and secretaries of military departments will stop issuing waivers for the acquisition of covered materials, except as outlined in the order. The secretary may continue to grant waivers if a prime contractor or subcontractor submits an accepted mitigation plan that identifies the source of the noncompliant material; documents efforts made to obtain compliant material; describes steps to remove the noncompliant material from the supply chain; and sets a timeline for full compliance.
The EO states that a contractor’s failure to qualify a domestic source will not count as unavailability for waiver purposes unless the contractor demonstrates active, funded efforts to qualify one. The secretary can pursue contractual remedies or refer contractors to the attorney general for fraud or for failing to carry out an approved mitigation plan. The order also directs the secretary to review DOW’s exemption for electronic devices to confirm it still meets current national security needs.
What Does the Order Require for Supply Chain Mapping?
The order gives the secretary of war 180 days to develop guidance requiring prime contractors and subcontractors at every tier to map and disclose critical supply chains for DOW acquisitions tied to national security. Contractors will need to submit a complete bill of materials tracing components back to their raw material origins, establish supplier vetting procedures covering financial, foreign ownership and manufacturing risks, and avoid sourcing covered materials from unreliable foreign suppliers.
The secretary will issue implementing regulations within 90 days of completing the guidance and will aim to prevent undue burdens on small businesses, nontraditional defense companies and new entrants.
What Does the Order Say About Qualifying Domestic Sources?
The order gives the secretary of war 180 days to identify existing DOW acquisitions tied to national security and to require contractors relying on unreliable foreign suppliers to qualify alternative sources. Contractors that fail to do so could face suspended or terminated task orders, declined contract options or contract termination.
The secretary must also develop a strategy within 90 days to speed up testing and qualification of new sources and materials, including new software, testing procedures and qualification methods.
What Are the Other Reporting Requirements Under the EO?
The EO requires the secretary of war to report to the assistant to the president for national security affairs every six months through Jan. 1, 2028 on waiver use, mitigation plan progress and regulatory implementation.
The order will not affect the U.S. Strategic Critical Minerals Reserve, known as Project Vault, or contractor acquisitions of materials financed through the Export-Import Bank, the U.S. International Development Finance Corporation, or federal agencies.
How Does the EO Fit Into Broader US Critical Minerals Efforts?
The executive order follows a series of recent government initiatives aimed at strengthening the U.S. critical minerals base. The Department of War’s Office of Strategic Capital recently introduced the National Security Fund Finance program to provide capital support for credit funds addressing gaps, shortages and vulnerabilities in critical minerals essential to national security.
The Department of Energy’s Advanced Research Projects Agency-Energy took a similar step in June, allocating $72 million to early-stage research and development projects supporting domestic magnet production and critical minerals supply chains. In February, Trump signed an executive order establishing the America First Arms Transfer Strategy, which uses U.S. arms transfers to advance foreign policy goals, support the domestic defense industrial base and reinforce critical supply chains.
