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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle F—Industrial Base Matters

P. L. 117-81

Joint Explanatory Statement

(a) Disclosure Requirements.--

(1) Initial disclosures.--The Secretary of Defense shall require each covered entity to disclose to the Secretary of Defense if the entity employs one or more individuals who will perform work in the People's Republic of China on a covered contract when the entity submits a bid or proposal for such covered contract, except that such disclosure shall not be required to the extent that the Secretary determines that such disclosure would not be in the interest of national security.

(2) Recurring disclosures.--For each of fiscal years 2023 and 2024, the Secretary of Defense shall require each covered entity that is a party to one or more covered contracts in the fiscal year to disclose to the Secretary if the entity employs one or more individuals who perform work in the People's Republic of China on any such contract.

(3) Matters to be included.--If a covered entity required to make a disclosure under paragraph (1) or (2) employs any individual who will perform work in the People's Republic of China on a covered contract, such disclosure shall include--

(A) the total number of such individuals who will perform work in the People's Republic of China on the covered contracts funded by the Department of Defense; and

(B) a description of the physical presence in the People's Republic of China where work on the covered contract will be performed.

(b) Funding for Covered Entities.--The Secretary of Defense may not award a covered contract to, or renew a covered contract with, a covered entity unless such covered entity has submitted each disclosure such covered entity is required to submit under subsection (a).

(c) Semi-annual Briefing.--Beginning on January 1, 2023, the Secretary of Defense shall provide to the congressional defense committees semi-annual briefings that summarize the disclosures received by the Department over the previous 180 days pursuant to this
section, and such briefings may be classified.

(d) Definitions.--In this section:

(1) Covered contract.--The term ``covered contract'' means any Department of Defense contract or subcontract with a value in excess of $5,000,000, excluding contracts for commercial products or services.

(2) Covered entity.--The term ``covered entity'' means any corporation, company, limited liability company, limited partnership, business trust, business association, or other similar entity, including any subsidiary thereof, performing work on a covered contract in the People's Republic of China, including by leasing or owning real property used in the performance of the covered contract in the People's Republic of China.

(e) Effective Date.--This section shall take effect on July 1, 2022.

The Senate amendment contained a provision (sec. 837) that would require the Secretary of Defense to require defense contractors to disclose their use of workforce and facilities in the People's Republic of China in the performance of certain defense contracts.

The House bill contained no similar provision.

The agreement includes the Senate provision with an amendment that would require the Secretary of Defense to report disclosures to the congressional defense committees, make clarifying edits to the provision, and establish an effective date of July 1, 2022.

S. 2792--Senate Report117-39

Employment transparency regarding individuals who perform work in the People's Republic of China (sec. 837)

The committee recommends a provision that would require the Secretary of Defense to require defense contractors to disclose their use of workforce and facilities in the People's Republic of China in the performance of certain defense contracts.