H.R. 2765: Securing America’s Federal Equipment Supply Chains Act

This bill, titled the "Securing America’s Federal Equipment Supply Chains Act," aims to establish strict guidelines for the procurement of information and communications technology (ICT) products by the Department of Defense (DoD). Below is a summary of its provisions:

Definitions

The bill outlines specific definitions for key terms used within the legislation:

• Authorized Reseller: A reseller or distributor of a covered product that has a direct contractual relationship with the original equipment manufacturer (OEM).
• Covered Product: Refers to ICT hardware and its associated software and firmware. It excludes other types of software or hardware primarily designed for functions not related to electronic data transmission.
• End-use Product: A product that is ready to be utilized by the end user.
• Information and Communications Technology: ICT as defined in existing federal regulations.
• Original Equipment Manufacturer: A company that manufactures its products from sourced components and sells them under its own name.

Procurement and Usage Restrictions

The bill restricts the DoD from purchasing or using any covered products from sources other than:

• Original Equipment Manufacturers (OEMs)
• Authorized Resellers

This is designed to ensure that the DoD's ICT supply chain is secure and consists only of products from reputable sources.

Waiver Provisions

There are specific conditions under which the Secretary of Defense can waive these procurement restrictions:

• If needed for scientifically valid research; or
• To avoid compromising mission-critical operations.

In such cases, the Secretary must notify Congress and provide justification and security measures taken to mitigate risk.

Vendor Assistance

The bill requires the Secretary of Defense to create guidance to assist entities that want to become authorized resellers of covered products, helping them meet the requirements established in the bill.

Reporting Requirements

The Secretary of Defense is mandated to report annually to Congress on:

• The number and types of waivers granted,
• The legal basis for these waivers, and
• Actions taken to minimize waiver occurrences in the future.

Funding and Implementation

No additional funding is allocated to implement this bill. The provisions will take effect one year after the bill is enacted.

Relevant Companies

• MSFT (Microsoft Corporation): As a major provider of software and hardware, Microsoft may be required to adjust its sales strategies for government contracts to comply with the procurement restrictions.
• AAPL (Apple Inc.): Similar to Microsoft, Apple may be affected as the DoD considers sourcing from only authorized vendors.
• HPQ (HP Inc.): As a provider of individual ICT devices, HP may need to reinforce its reseller agreements with the DoD.
• DELL (Dell Technologies Inc.): Dell may need to ensure that it meets the new authorized reseller criteria to maintain its government sales.