A new executive order issued this week by President Donald Trump authorizes the Department of Defense to use artificial intelligence capabilities to map vulnerabilities in the department’s supply chain.
The primary purpose of the EO regarding “Securing America’s Defense Supply Chain and Ensuring Domestic Availability of Critical Materials” is to limit the use of exemptions for the acquisition of covered materials under 10 USC 4872.
“Despite long-standing prohibitions on the use of sensitive materials procured from geopolitical adversaries, defense contractors have historically neglected domestic production and resiliency. My administration will act to ensure strict compliance with the legal requirements of 10 USC 4872, resulting in resiliency in domestic and allied supply chains,” President Trump said in the directive.
He ordered Secretary of Defense Pete Hegseth to develop policies and implementation guidelines that would require all prime contractors and subcontractors to help “map and account” for all acquisitions that “support, involve, or relate to the national security of the United States,” from raw materials to end-use products delivered to the Department of the Army, as determined by the Secretary of Defense. (Department of the Army is the Trump administration’s preferred name for the Department of Defense.)
Under the new guidance, military contractors will be required to submit complete contract documentation to the Department of Defense that traces all components, parts, equipment and software in their supply chain back to the origin of the raw materials. They must also put in place procedures and other requirements to carry out risk assessments and “actively” vet suppliers and subcontractors.
The US defense industrial base is huge and reportedly includes hundreds of thousands of companies. President Trump’s proclamation noted that the Department of Defense may use AI to facilitate supply chain mapping efforts.
“The Department of the Army shall use tools and techniques that incorporate artificial intelligence to map and support national security vulnerabilities associated with key raw material procurement or other links in the supply chain in response to vulnerabilities, bottlenecks, and single points of failure identified by contractor acquisition information, consistent with the requirements of 10 USC 4872(c)(1) or (e)…this order,” President Trump wrote in the proclamation.
The President also indicated that new software may be needed to facilitate the testing and certification of new sources and materials for prime contractors and subcontractors. The Secretary of Defense was directed to develop a new strategy along these lines within 90 days.
“As part of this strategy, the Secretary will identify and initiate steps to rescind any regulations that impede the rapid testing and certification of sources and materials needed for defense production,” President Trump said.
He noted that the Department of Defense should work to ensure that small businesses, non-traditional defense companies, and new defense entrants are not “unduly burdened” by new regulations resulting from the implementation of the EO.
According to the statute, contractors seeking exemption under 10 USC 4872(c)(1) or (e) may submit formal mitigation plans to address supply chain vulnerabilities.
President Trump suggested there could be severe penalties for vendor misconduct.
If Department of Defense leadership determines that a prime contractor or subcontractor is defrauding or intentionally misleading the Federal Government with respect to any portion of the mitigation plan, or otherwise in accordance with the terms and conditions established and approved in the mitigation plan by the Secretary or his/her designee. “If the Secretary determines that there has been an intentional or willful failure to implement a mitigation plan, the Secretary shall take all actions and exercise any contractual remedies the Secretary deems appropriate, consistent with applicable law,” the President wrote, adding that the department “may consult further.” The matter will be referred to the Attorney General for investigation and possible prosecution if necessary. ”
