Special Topics

Implementation of NDAA 847

What is NDAA Section 847?

On December 20th, 2019, the Fiscal Year 2020 the National Defense Authorization Act (NDAA) was signed into law. Section 847 of the FY20 NDAA focused on enhancing the assessment and mitigation of risks related to foreign ownership, control, or influence (FOCI) over Department of War (DOW) (aka Department of Defense (DoD) for the purposes of older documents) contractors, subcontractors, and those provided Defense Research Assistance Awards.  (It is noted that there is no language excluding academia from this requirement.) 

NDAA 847

Key Requirements

  • Risk Assessment: Contractors with contracts exceeding $5 million are considered “covered” and must complete an SF-328, Certificate Pertaining to Foreign Interests, identifying any FOCI at the time of contract award, amendment, or renewal.
  • Periodic Reassessments: Contractors are required to periodically reassess their compliance with FOCI disclosure requirements, especially when there are any changes in ownership or control. Periodic is referred to as at contract award, amendment, or renewal.
  • Expanded Scope: The rules apply to both classified and unclassified contracts, significantly increasing the number of entities subject to FOCI assessment and mitigation from the historical NISP to the entirety of the Defense Industrial Base (DIB).

Implementation Timeline

  • Regulatory Development: The DoD is in the process of amending the Defense Federal Acquisition Regulation Supplement (DFARS) to fully implement Section 847. This includes developing new policies and guidance.
  • Expected Completion: The implementation of these requirements is estimated to be completed in 2026.
  • Ownership of the Reviews: DCSA will serve as the DOD agent for reviewing the submissions of the SF-328 and providing the government customer with the results of the review.

Impact on Contractors

  • Compliance Obligations: Covered contractors must be prepared to address FOCI risks and may need to implement mitigation measures to the satisfaction of the DOD and their government customer.
  • Increased Analysis: The expanded FOCI requirements may lead to more in-depth evaluations of contractors, potentially affecting their ability to compete for DoD contracts.

This section aims to protect national security by ensuring that foreign interests do not compromise sensitive information and technologies within the defense sector.

We can help you!

If you need any assistance with your SF-328 Certificate Pertaining to Foreign Interests, let us know.  We are happy to help you work through the process.

More information from DCSA is available at: https://www.dcsa.mil/Section847/