DoD Proposed Rule Brings FOCI Reporting & Mitigation to Unclassified Contracts

8 June 2026

On May 7, 2026, the US Department of Defense ("DoD," also known as the Department of War) published its long-anticipated proposed rule to amend the Defense Federal Acquisition Regulation Supplement ("DFARS") to address risks associated with foreign ownership, control or influence ("FOCI") of defense contractors and subcontractors performing on certain unclassified contracts. The proposed rule would generate significant new disclosure obligations for a large number of US government contractors, as well as expand the pool of contractors subject to DoD FOCI mitigation requirements. Historically, FOCI reporting and mitigation has focused on contractors that need to access classified information under the National Industrial Security Program (NISP). The proposed rule would broaden that framework to unclassified DoD contracts and subcontracts over US$5 million, though it is not yet clear what FOCI mitigation measures in the unclassified context will involve. Contracts for commercial products and services would be exempt absent a DoD determination that the contract involves certain risks. The proposed rule is open for public comment until July 6, 2026.

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