The Rule That Decides Whether You Can Sell Into Federal Missions

The Law

In December 2022, Congress passed the James M. Inhofe National Defense Authorization Act. Buried inside it: Section 5949.

What It Means

Section 5949 bans federal agencies from buying anything containing a semiconductor from three restricted manufacturers:

• Semiconductor Manufacturing International Corporation (SMIC)
• ChangXin Memory Technologies (CXMT)
• Yangtze Memory Technologies Corporation (YMTC)

If your mission touches a federal agency, even through a prime, this reaches your bill of materials.

The Catch

It's not about the part number. It's about where the actual die was fabricated, and most companies have no idea. Packaging, testing, and fabrication are often three different companies in three different countries.

Why This Is Hard

You're not buying from one supplier, you're buying through a chain, distributors, trading houses, fabrication facilities you've probably never heard of. Most SmallSat teams have visibility into the first link or two, and nothing beyond it. And it doesn't stay still: suppliers switch fabs, get acquired, re-source under shortage pressure, often without telling you.

The Timeline

• February 17, 2026: the FAR Council published the rule that starts enforcing this.
• December 23, 2027: enforcement begins, about fifteen months from now.

Getting It Wrong

A false certification carries real consequences: fines, and potential debarment from future federal work. This isn't a paperwork slap on the wrist.

Not a One-Time Fix

Suppliers change, sourcing changes, and a provenance check done once goes stale fast. This has to be maintained continuously.

We're Launching Provenance Tracker

That's why we're launching Provenance Tracker. It maps your component sourcing tier by tier, documents what's confirmed and what isn't, and keeps that record current instead of going stale.