To prohibit the Secretary of Defense from entering into software source code contracts with entities with certain relationships with China, and for other purposes.

This bill would prevent the Department of Defense (DoD) from entering into, renewing, or extending contracts to obtain software source code from any person who has certain relationships with China. A “person described” includes entities with: (1) ownership or substantial financial or material interest in a facility located in a country covered by the bill whose primary purpose is AI R&D; (2) past or current authorization of a covered country’s access to the software or its source code (in a way that could enable reverse engineering); or (3) operation of a data center in a covered country related to the software, including data centers operated by or for a parent, subsidiary, or affiliate of the contracting entity, or operated by the covered country on behalf of the entity. The Secretary could grant a waiver if it serves national security interests. The prohibition applies only to contracts within three years after enactment. Definitions for “covered country” and “material interest” are provided, tying the bill to existing NDAA and energy policy definitions. In short, the bill aims to bar DoD software source code contracts with entities tied to China in ways that could threaten U.S. security, particularly through AI facility ties, potential reverse engineering, or foreign-operated data centers, for a limited three-year period unless a waiver is granted.