PROJECT CLEAR and Section 851: Strengthening Vendor Threat Mitigation and the Defense Industrial Base America’s defense industrial base depends on trusted supply chains.
That principle is no longer just a strategic talking point—it is now a contracting requirement with real consequences. On June 30, 2026, Section 851 of the Fiscal Year 2025 National Defense Authorization Act took effect. The provision prohibits the Department of Defense from entering into, renewing, or extending contracts with any company (or its parent or subsidiary) that maintains a contractual relationship with a “covered lobbyist”—an entity that engages in lobbying activities on behalf of any company listed as a Chinese military company under Section 1260H. On June 30, 2026, Section 851 of the Fiscal Year 2025 National Defense Authorization Act took effect.
To help industry navigate this new restriction, the Department launched PROJECT CLEAR. To help industry navigate this new restriction, the Department launched PROJECT CLEAR.
Why Section 851 Matters Now
Why Section 851 Matters Now Section 851 closes a specific vector of adversarial influence. It does not ban Chinese companies from operating in the United States, nor does it restrict legitimate advocacy.
Instead, it forces a choice: organizations that want to do business with the Department cannot share lobbyists with entities the Department has determined support China’s military or military-civil fusion strategy. The rule applies to the contractor, its parent, and its subsidiaries. A waiver is a documented “reasonable inquiry” that determines the other party is not a covered lobbyist. A waiver is possible, but only with congressional notification.
In practice, most organizations will need to examine their existing consulting, law firm, and public-affairs relationships against the 1260H List and maintain ongoing awareness as the list is updated. This is not abstract policy.
The Connection to Vendor Threat Mitigation
Vendor Threat Mitigation (VTM) is the Department’s broader program for identifying and managing risks posed by commercial entities that could support adversaries, enable influence operations, or compromise force protection and mission assurance. VTM processes already examine ownership, affiliations, access, and behavior. Section 851 adds a concrete, enforceable dimension: lobbying relationships that create potential channels of influence from Chinese military companies into the U.S. defense contracting ecosystem.
The same class deviation that implemented Section 851 also advanced Vendor Threat Mitigation support authorities. The two are complementary. Organizations that treat 1260H / lobbying due diligence as an isolated compliance exercise will struggle. Those that integrate it into a mature VTM program will move faster and with greater confidence.
How Organizations Should Respond
- Map current relationships. Identify every external firm engaged in lobbying or related activities for the organization, its parent, or subsidiaries.
- Cross-reference the 1260H List. Confirm whether those firms also represent any listed Chinese military company.
- Document reasonable inquiries. Create and retain evidence of the steps taken to determine coverage status.
- Establish continuous monitoring. The 1260H List is updated periodically; relationships change.
- Integrate into broader VTM. Treat lobbying risk as one element of a comprehensive vendor and third-party risk program that already examines ownership, access, and behavior.
- Prepare for representation requirements. Contracting officers are incorporating the new DFARS language; teams must be ready to certify.
PROJECT CLEAR supplies the official checklist and resources. Experienced partners can turn that guidance into repeatable, auditable processes that scale across a portfolio of contracts.
Looking Ahead
Section 851 is one more expression of a larger shift: the Department is systematically reducing pathways for adversarial influence in the defense industrial base. Lobbying relationships are now visible, measurable, and consequential.
Organizations that treat this as a narrow legal exercise will spend time reacting. Those that embed PROJECT CLEAR due diligence into mature Vendor Threat Mitigation capabilities will move with greater speed and lower risk—particularly when supporting high-priority customers such as USSOCOM.
Trusted supply chains are not optional. They are a contracting prerequisite. PROJECT CLEAR gives industry the tools to meet that standard. The next step is execution.
TMPC Inc. is a Tampa-based Service-Disabled Veteran-Owned Small Business specializing in Insider Threat programs, User Activity Monitoring, and Vendor Threat Mitigation in support of the Department of Defense and U.S. Special Operations Command. For questions about Section 851 readiness or integrating PROJECT CLEAR processes into your VTM program, contact the team at info@tmpcinc.com.