Action Kit: FAR (Federal Acquisition Regulation) Semiconductor Prohibition (Effective Dec 2027)

Event Summary: The FAR Council proposes to prohibit federal agencies from procuring products or services containing covered semiconductor products or services, effective December 23, 2027. This implements Section 5949 of the FY2023 NDAA (National Defense Authorization Act) and will impact supply chain compliance across all federal contracts.

---

Immediate Actions (This Week)

• [ ] Designate a semiconductor compliance lead — Assign a contracts or supply chain manager to own this issue through implementation
• [ ] Inventory current contracts with deliveries post-Dec 2027 — Identify all active contracts, IDIQs, and task orders with performance periods extending beyond the effective date
• [ ] Flag high-risk product categories — Review IT hardware, telecommunications equipment, IoT devices, automotive components, and any products with embedded semiconductors in your current offerings
• [ ] Notify your supply chain team — Alert procurement and supplier management of the upcoming prohibition; begin supplier communication planning
• [ ] Review your proposal pipeline — Identify open opportunities with award dates in 2024-2026 that will have post-2027 delivery requirements

Short-Term Actions (30 Days)

• [ ] Conduct supplier risk assessment — Survey your Tier 1 and critical Tier 2 suppliers to identify those using semiconductors from covered countries (China, Russia, Iran, North Korea per NDAA Section 5949)
• [ ] Map semiconductor touchpoints in your products/services — Document every product line, service offering, or deliverable that contains or relies on semiconductor components
• [ ] Establish a semiconductor traceability process — Create procedures to track country-of-origin for semiconductors through your supply chain, including subcontractor flows
• [ ] Draft supplier certification requirements — Prepare contractual language requiring suppliers to certify compliance with the semiconductor prohibition
• ] **Update your compliance management system** — Add semiconductor sourcing controls to your purchasing system (reference the [Secure Operations Guide (/insights/secure-operations-guide) for supply chain security frameworks)
• [ ] Engage legal and contracts counsel — Review existing contract clauses, flow-down requirements, and potential modification needs for contracts crossing the Dec 2027 threshold
• [ ] Monitor the comment period — Track the proposed rule's comment deadline and any industry feedback that might influence final implementation

Long-Term Actions (90+ Days)

• [ ] Develop alternative sourcing strategies — Identify compliant semiconductor suppliers and manufacturers; evaluate domestic or allied-nation sources for critical components
• [ ] Update your proposal boilerplate — Revise standard compliance matrices, technical approach templates, and past performance narratives to address semiconductor sourcing
• [ ] Integrate semiconductor compliance into capture — Add semiconductor risk assessment to your bid/no-bid criteria and gate reviews for opportunities with post-2027 performance
• [ ] Train your capture and proposal teams — Ensure BD, capture managers, and proposal writers understand how to address semiconductor compliance in proposals and ORAs
• [ ] Establish ongoing monitoring — Create a process to track regulatory updates, agency-specific implementation guidance, and any FAR clause modifications through final rule publication
• [ ] Prepare for contract modifications — Develop a playbook for negotiating contract mods on existing vehicles that will require semiconductor compliance after Dec 2027
• [ ] Coordinate with teaming partners — For joint ventures and subcontracting relationships, establish shared compliance protocols and certification flows
• ] **Document compliance for DCAA/DCMA** — Ensure your purchasing system and internal controls demonstrate adequate semiconductor sourcing oversight (align with [CMMC (Cybersecurity Maturity Model Certification) Compliance Guide (/insights/cmmc-compliance-guide) supply chain requirements)

---

Compliance Checklist

When the final FAR rule is published, your compliance program must address:

• [ ] Country-of-origin verification — Documented process to verify semiconductors are not sourced from covered countries (China, Russia, Iran, North Korea)
• [ ] ] Supplier certification and flow-down — Contractual requirements for suppliers to certify semiconductor compliance and flow down to sub-tiers
• [ ] Bill of materials (BOM) transparency — Ability to produce semiconductor sourcing documentation for any product or service delivered under federal contract
• [ ] Purchasing system controls — Internal controls preventing procurement of non-compliant semiconductor products after Dec 23, 2027
• [ ] Contract clause compliance — Proper incorporation of the new FAR clause (to be assigned) in all solicitations and contracts with post-2027 performance
• [ ] Subcontractor management — Verification that subcontractors and suppliers have compliant semiconductor sourcing practices
• [ ] Exception and waiver tracking — Process to request and document any agency-granted waivers or exceptions (if provided in final rule)
• [ ] Ongoing monitoring and updates — Quarterly or annual recertification of supplier compliance as semiconductor sources change
• ] **CUI (Controlled Unclassified Information) handling for supply chain data** — Secure storage and transmission of supplier certifications and sourcing documentation (see [CUI-Safe CRM Guide (/insights/cui-safe-crm-guide))
• [ ] Audit trail and recordkeeping — Maintain records demonstrating compliance for DCMA, DCAA, or agency CO reviews

---

Resources

• Proposed Rule: Federal Register Notice (https://www.federalregister.gov) — Search for "FAR Case 2024-016" or "Prohibition on Certain Semiconductor Products"
• Statutory Authority: James M. Inhofe NDAA for FY2023, Section 5949
• FAR Council: Monitor acquisition.gov (https://www.acquisition.gov) for final rule publication and implementation guidance
• Agency Guidance: Watch for DoD (Department of Defense), GSA (General Services Administration), and NASA supplemental instructions as the Dec 2027 effective date approaches
• Comment Period: Check the Federal Register notice for public comment deadline (typically 60 days from publication)

---

How Cabrillo Club Automates This

Cabrillo Signals War Room has already detected this proposed FAR change and delivered this briefing to you within minutes of Federal Register publication. The War Room continuously monitors the FAR Council, agency policy memos, and Federal Register updates so you're alerted to semiconductor-related guidance, final rule publication, and any implementation delays or waivers — eliminating manual regulatory tracking.

Cabrillo Signals Match Engine automatically updates your opportunity pipeline scoring when events like this shift compliance requirements. Any open opportunity with a period of performance extending past December 2027 will be re-evaluated for semiconductor risk, and your match scores will reflect the new compliance burden. If you're pursuing IT hardware, telecommunications, or IoT-heavy contracts, the Match Engine flags these as higher-complexity opportunities requiring supply chain due diligence.

Cabrillo Signals Intelligence Hub allows you to configure saved searches for follow-on solicitations in affected categories. Set alerts for NAICS codes 334 (computer and electronic product manufacturing), 517 (telecommunications), and 541512 (computer systems design) with delivery dates post-2027. The Intelligence Hub will notify you when new RFIs, sources sought, or solicitations appear that will require semiconductor compliance, giving your capture team early visibility.

Proposal Studio (Proposal OS) integrates this regulatory change into your compliance matrices and technical approach generation. When you're responding to an RFP with post-2027 deliverables, Proposal OS automatically includes semiconductor sourcing compliance in your management approach, flags the need for supplier certifications in your subcontracting plan, and pulls relevant past performance examples where you've demonstrated supply chain transparency. The AI-powered drafting engine ensures you're addressing the FAR clause in every relevant proposal section.

Proposal Studio Workflow Tracker triggers a supply chain compliance gate review for any opportunity with semiconductor risk. When your capture manager moves an opportunity into the proposal phase, the Workflow Tracker automatically routes a semiconductor sourcing checklist to your procurement team, requests supplier certifications, and generates an audit-ready compliance package. This ensures your contracts and legal teams review semiconductor flow-down language before submission, reducing protest risk and CO questions.

Explore these features in your Cabrillo Club dashboard to see how the platform is already working for you on this and dozens of other regulatory changes affecting your pipeline.

---