DoD Proposes Expanding Foreign Ownership Screening Beyond Classified Contracts

On May 7, 2026, the U.S. Department of Defense (DoD) published a proposed rule (the Proposed Rule) that would, for the first time, require companies performing unclassified work for DoD to disclose whether they are subject to foreign ownership, control, or influence (FOCI), a screening process that historically has been required primarily for contractors with access to classified information.

DoD estimates that the Proposed Rule would affect an estimated 37,740 contractors and subcontractors. The Proposed Rule would implement statutory mandates under the National Defense Authorization Acts (NDAAs) for Fiscal Years 2020 and 2021, as well as elements of a 2024 DoD policy instruction on FOCI risk mitigation. Comments on the Proposed Rule are due on July 6, 2026.

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