Federal software ban targets foreign-owned firms, favors U.S. competitors
H.R. 7604 — Contracting America First Act · Filed by Lauren Boebert (R-CO) · Introduced Feb 20, 2026 · Referred to committee
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What it does
This bill prohibits federal agencies from contracting with software companies that are majority-owned by non-U.S. citizens for systems handling sensitive personal data of 500+ federal employees. Contractors must certify under penalty of perjury that they are not foreign-owned; agencies can waive the ban only for national security reasons with 30-day congressional notice. Violators face contract termination and debarment from future federal work.
Why we flagged it
The bill's operative mechanism is a categorical ban on federal procurement from foreign-majority-owned software vendors for systems handling federal employee data. It is framed as a national security / data protection measure but functions as a market-access restriction favoring U.S.-owned competitors.
What the text implies
- The definition of 'internationally owned' (majority ownership by non-U.S. citizens) may capture U.S.-incorporated subsidiaries of foreign parent companies, potentially excluding major multinational software vendors even if U.S.-managed.
- The 'sensitive personal information' definition is expansive and self-referential ('any other information that...could reasonably be expected to result in...national security risk'), giving agencies wide discretion to classify data and thus expand the ban's scope.
The full analysis lists 5 implications of this text.
Who stands to gain
U.S.-owned software companies (competitive advantage in federal procurement); Domestic IT service providers (reduced foreign competition for federal contracts)