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2026-01-13 Federal Market Insights Episode 38 — Session Overview

WPI Podcast Episode 38 Summary 

FOCI – Foreign Ownership Control or Influence

January 13, 2026

Currently FOCI requirements apply to cleared contractors – those contractors that have been awarded and perform classified contracts. In the near future, most likely some time in 2026, FOCI requirements will expand to include Covered Contractors. This expansion is required by section 847 of the 2020 NDAA.

Covered Contractors are defined in Section 847 of the 2020 NDAA – “means a company that is an existing or prospective contractor or subcontractor of the Department of Defense on a contract or subcontract with a value in excess of $5,000,000” This term also applies to companies involved with DoD research when the value of the research vehicle is $5,000,000 or greater.

As a result of this change, the current number of companies which will be required to comply with FOCI requirements will increase greatly. Currently, there are approximately 13,000 covered under FOCI. With the new rule, this number is expected to grow to between 200,000 and 250,000.

In general, Commercial Products or Services (see FAR part 2) will be excluded from FOCI coverage. However, Commercial Products or Services may also require FOCI coverage when contracts may disclose Personal Identifying Information (PII), Cybersecurity or National Security Information.

FOCI is managed by DoD. The three main position/organizations involved are:

  • Under Secretary for Intelligence and Security
    • Oversees implementation
    • Ensures Consistence across DoD
  • Defense Counter Intelligence and Security Agency (DCSA)
    • Case studies of beneficial ownership
    • Assessments
    • Risk Mitigation
  • Defense Intelligence Agency
    • Counter Intelligence Support

For cleared contactors (those performing classified contracts), DCSA makes the determination, performs the assessment and manages/approves mitigation efforts/strategies. For covered but unclassified contracts, the contracting officers will determine whether to impose FOCI requirements and approve mitigation measures. If FOCI is required, a contractor will have 90 days from award to meet the requirements.

Unlike some other programs that require the program to be certified initially, at a pre-defined interval or when a qualifying change occurs, FOCI reviews are triggered upon contract award.

FOCI determinations are concerned with all factors where a non-US individual/company can exert control or influence over a company’s decisions. FOCI concerns depend on the type of information being handled: confidential, TS, SAP, or other. Other concerns might be whether the information is current or cutting edge. These concerns also vary with foreign involvements. There are foreign countries of concern such as China, Russia, Iran and North Korea. There is also a list of Designated Foreign Adversaries. Reviews will also look at a variety of factors such as who is the foreign government, past behavior, history of tech transfer and compliance with US Laws.

Companies that have foreign ownership or involvement may still be eligible to conduct business with the Federal Government/DoD. However, they will likely need to implement mitigation measures which satisfy DCSA and will be required to perform compliance reviews.

Companies initiate the process by submitting Form 328. The process takes time. Therefore, the submission should be well in advance of initiating solicitation/contract activities.

To hear WPI’s FMI FOCI podcast please use the following link:

https://attendee.gotowebinar.com/recording/759030712741345539

For more information about FOCI, Defense Production Act of doing business with the government (Federal, State or Local) please contact WPI’s main office at 414-270-3600.     To register for WPI support/services please complete the Client Consent Form at – https://www.wispro.org/work-with-wpi/