Overview
Steptoe partner Tyler Evans was quoted in Law360 discussing a proposed Defense Foreign Ownership Disclosure rule that would require contractors and subcontractors to disclose certain foreign ownership, control, and influence information when performing covered defense contracts. The article examines industry concerns that the proposal could create significant compliance obligations across the defense industrial base, particularly for companies that rely on nontraditional suppliers and emerging technology partners.
Tyler noted that while established defense contractors may be equipped to meet the new requirements, smaller and emerging companies with multiple minority investors could struggle to comply, potentially limiting their ability to participate in defense supply chains. He also raised concerns about the proposed rule's treatment of commercial products and services, urging the government to provide clearer guidance on when national security considerations could override the rule's commercial-item exception to avoid discouraging commercial companies from pursuing defense work.
