S. 5548: Securing National Security Systems from Chinese Optical Transceivers Act of 2026

This bill would expand an existing federal procurement restriction to cover certain optical transceivers in addition to semiconductor products and services. Optical transceivers are components used in data and communications equipment to send and receive optical signals.

Main effect

The bill would bar or limit federal agencies from buying certain optical transceivers that are identified as “covered optical transceivers.” In practice, this means the federal government would be restricted from procuring optical transceivers tied to specified Chinese companies, their affiliates, successors, or other entities later designated as connected to a foreign government of concern.

Which products are covered

The bill defines a “covered optical transceiver” as one that is designed, developed, manufactured, or supplied by:

• Zhongji Innolight Co., Ltd. (InnoLight)
• Eoptolink Technology Inc., Ltd. (Eoptolink)
• their subsidiaries, affiliates, or successors
• any other entity the Secretary of Defense or Secretary of Commerce determines is owned or controlled by, or otherwise connected to, a foreign country of concern, if that determination is published in the Federal Register

The definition also includes products that contain firmware, software, or parts from those entities. The bill separately defines “optical transceiver” broadly to include pluggable optics, integrated optical modules, linear pluggable optics, and products or services that incorporate or are produced using such items.

When the restrictions would take effect

The procurement restrictions for covered optical transceivers would take effect five years after enactment. This delayed start is intended to give time for implementation and supply chain adjustments.

Regulations and implementation

Within three years, the Federal Acquisition Regulatory Council would need to update procurement regulations to apply the restrictions to covered optical transceivers. Those rules would also need to apply similar limitation and disclosure requirements that already exist for semiconductor-related restrictions, with some adjustments for optical transceivers.

The bill also says the regulations should not force agencies to rely on proprietary vendor-authentication features if those features would prevent buying or using a non-covered optical transceiver simply because it came from a different supplier than the host equipment manufacturer.

Agency analysis and planning

Within 180 days, the Secretary of Commerce, working with other agencies, would have to study:

• domestic and allied/partner production capacity for optical transceivers
• risks from covered optical transceivers in federal systems
• risks in federal contractors’ and subcontractors’ supply chains
• strategies to increase trusted production and improve supply-chain traceability
• whether the restrictions can be implemented without disrupting federal access to needed equipment

That analysis would be sent to the Federal Acquisition Security Council.

Recommendations and reporting

Within two years, the Federal Acquisition Security Council would need to issue recommendations for reducing supply-chain risks related to federal purchases of optical transceivers. Those recommendations would consider security impacts, effects on access to commercial technology, and risks from suppliers whose non-federal supply chains include covered optical transceivers.

Within 60 days after the Commerce Department completes its assessment, Commerce would report its findings and recommendations to Congress and congressional leadership.

Beginning one year after enactment, and annually for ten years, the Federal Acquisition Security Council would have to include updates in its annual report about the development and effects of these recommendations and any related regulations.

Related oversight

The bill would also require updated reporting to Congress on the implementation of the optical-transceiver restrictions and on whether waiver authority is useful or workable for this category of products.

Relevant Companies

• None found