Trump Orders the Pentagon to Stop Waiving Domestic-Sourcing Rules for Defense Contractors Starting in 2027

Executive Order 14415, signed July 20, 2026, directs the Secretary of War and the service secretaries to stop issuing waivers under 10 U.S.C. 4872(c)(1) for covered materials as of January 1, 2027, except where a contractor files a formal mitigation plan identifying the non-compliant source, documenting exhaustive efforts to find a compliant one, and setting a timeline to remove it. It also requires contractors at any tier to submit a complete indentured Bill of Materials tracing components back to raw-material origin, to vet suppliers for financial risk, foreign ownership or control, and manufacturing risk, and to notify the department of significant supply-chain risks within 15 days. Failure to qualify an alternative source is grounds to suspend or terminate task orders or contracts; the Secretary may refer suspected fraud in a mitigation plan to the Attorney General.

The order pushes compliance costs and disclosure obligations deep into the defense supplier base, and concentrates the remaining waiver authority with the Secretary and the national security adviser. It carves out the U.S. Strategic Critical Minerals Reserve known as Project Vault and materials from projects financed by the Export-Import Bank, the Development Finance Corporation, or four cabinet departments — exemptions that will shape which suppliers benefit.

Implementing guidance is due within 180 days, with implementing regulations 90 days after that, and semiannual reports to the national security adviser through January 1, 2028.