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Defense Supply Chain Risk Alert
Understanding Section 1260H and PRC Military-Civil Fusion Risks
As the Department of War (DoW) continues strengthening the Defense Industrial Base (DIB), supply chain security has become a critical national security priority. Defense contractors, subcontractors, manufacturers, technology companies, and innovative startups should be aware of growing federal scrutiny surrounding companies connected to the People's Republic of China (PRC) military-industrial complex.
One important resource is the Section 1260H List, published annually by the U.S. Department of War.
What is Section 1260H?
Section 1260H of the National Defense Authorization Act (NDAA) requires the DoW to identify Chinese military companies operating directly or indirectly in the United States.
The resulting list identifies entities determined by the Department of War to have ties to China's military-industrial complex and Military-Civil Fusion (MCF) strategy.
Military-Civil Fusion is a national strategy of the PRC that seeks to leverage civilian companies, technologies, research institutions, and commercial innovation to support military modernization and national defense objectives.
For U.S. businesses participating in federal contracting, defense manufacturing, research and development, and critical technology sectors, awareness of these entities is becoming increasingly important.
Why This Matters to Connecticut Businesses
Many Connecticut companies support:
● Department of War programs
● Aerospace and defense manufacturing
● Maritime and submarine supply chains
● Advanced manufacturing
● Robotics and autonomous systems
● Artificial intelligence applications
● Semiconductor and electronics production
● SBIR/STTR-funded innovation programs
Even if a company is not a prime contractor, supply chain risks can flow through multiple tiers of suppliers and subcontractors.
What Should Companies Do Now?
Connecticut manufacturers, defense contractors, and innovation firms do not need to immediately remove every supplier that may appear on a government watch list. However, companies should understand their supply chains, monitor federal guidance, and proactively assess potential risks before they become contract performance issues.
How CT APEX Can Help
CT APEX Accelerator assists Connecticut businesses with:
● Defense market entry strategies
● Defense Industrial Base readiness
● Supply chain mapping
● Prime contractor engagement
● Cybersecurity and CMMC resources
● SBIR/STTR commercialization support
● Government contracting readiness
As supply chain security continues to evolve as a national priority, awareness and proactive planning will help Connecticut companies remain trusted partners in the defense and innovation ecosystem.
Resource: Companies are encouraged to periodically review the Department of War Section 1260H list and related supply chain security guidance as part of their supplier risk management process.
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