To prohibit the Secretary of Defense from entering into software source code contracts with entities with certain relationships with China, and for other purposes.
- Bill Number
- H.R. 3961
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Armed Forces and National Security
- Status
- Introduced
- Latest Action
- 2025-06-12: Referred to the House Committee on Armed Services.
- Last Updated
- 2025-07-22T12:39:55Z
AI-Generated Summary
Purpose
This bill aims to protect U.S. national security by restricting the Department of Defense (DoD) from contracting for software source code with entities that have significant ties to China or other specified countries. It focuses on preventing potential access to sensitive technology that could be exploited.
Key Provisions
- Prohibition on Contracts: The Secretary of Defense is barred from entering into, renewing, or extending contracts for software source code with "covered persons." These are entities that:
- Own, operate, substantially fund, or hold a material interest (a significant financial or other stake that could influence decisions) in facilities in a "covered country" primarily focused on artificial intelligence (AI) research or development.
- Have granted a covered country access to the software or its source code in a way that could allow reverse engineering (breaking down the code to understand and copy its functions).
- Operate a data center (a facility for storing and processing large amounts of data) in a covered country related to the software, including those run by affiliates or on behalf of the entity by the covered country.
- Waiver Option: The Secretary can override the prohibition if it serves U.S. national security interests.
- Time Limit: The rules apply only to contracts entered, renewed, or extended within three years of the bill's enactment.
- Definitions:
- "Covered country" refers to nations defined as "covered foreign entities" under section 812 of the National Defense Authorization Act (NDAA) for Fiscal Year 2024, which primarily targets China and related risks.
- "Material interest" is any significant financial or other stake that could sway decisions.
Significant Changes to Existing Law
This bill introduces a targeted ban on software source code contracts, expanding on prior NDAA restrictions (like those in section 812) that limit dealings with foreign entities posing security risks. It adds specific criteria for AI facilities, software access, and data centers, which were not explicitly detailed in previous laws, while including a temporary three-year applicability period not commonly seen in similar prohibitions.
Potential Impacts
- On Government Agencies: The DoD may face challenges in sourcing software, potentially increasing costs or delays in procurement as it vets contractors more rigorously. Other agencies relying on DoD tech could see indirect effects.
- On Citizens: Limited direct impact, but it could enhance cybersecurity for defense-related systems, indirectly benefiting public safety by reducing risks of foreign espionage or tech theft.
- On International Relations: Strengthens U.S. efforts to safeguard technology from countries like China, potentially escalating tensions in tech trade and AI competition, while signaling stricter export controls.
Main Stakeholders Affected
- Department of Defense and Military: Primary enforcer, with responsibilities for contract reviews and waivers.
- Software and Tech Companies: U.S.-based firms with China ties (e.g., subsidiaries or data centers) may lose DoD business, affecting revenue and operations.
- Entities in Covered Countries: Chinese AI researchers, data center operators, and affiliates could face barriers to U.S. defense contracts.
- U.S. Taxpayers and National Security Community: Benefits from reduced vulnerability but may bear higher costs for compliant alternatives.
Notable Legal, Constitutional, or Political Implications
- Legal: The waiver authority provides flexibility but could invite challenges if waivers are seen as arbitrary; the bill aligns with existing NDAA frameworks, reducing conflict with current law.
- Constitutional: Supports Congress's power to regulate military spending and foreign affairs, with no apparent First Amendment or due process issues as it targets contracts, not speech.
- Political: Reinforces bipartisan concerns over China-related security threats, potentially influencing broader U.S. policy on technology exports and AI governance without mandating international agreements.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (6)
Rep. Kiggans, Jennifer A. [R-VA-2], Rep. McGuire, John J. [R-VA-5], Rep. Higgins, Clay [R-LA-3], Rep. McCormick, Richard [R-GA-7], Rep. Gooden, Lance [R-TX-5], Rep. Jackson, Ronny [R-TX-13]
Recent Actions
- 2025-06-12: Referred to the House Committee on Armed Services.
- 2025-06-12: Introduced in House
- 2025-06-12: Introduced in House
Bill Versions
- To prohibit the Secretary of Defense from entering into software source code contracts with entities with certain relationships with China, and for other purposes. — issued 2025-06-12 — PDF (3 pages)