Decoupling from Chinese Chips: Unpacking the Proposed Section 5949 Supply Chain Ban

Robyn N. Burrows and Samarth Barot

Samarth Barot headshot image

In December 2022, we discussed the passage of Section 5949 of the Fiscal Year 2023 National Defense Authorization Act (“NDAA”), which introduced prohibitions on certain semiconductor products and services from designated Chinese manufacturers. At the time, the statute’s scope remained unclear, particularly regarding whether the restrictions would apply only to federal sales or extend to contractor “use” of covered technologies, similar to Section 889’s Part B prohibition. On February 17, 2026, the Federal Acquisition Regulatory (“FAR”) Council released a proposed rule that provides important clarity on these questions and establishes a compliance framework for government contractors.

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Understanding the Potential Anthropic Ban: Key Considerations for Federal Contractors

Robyn N. Burrows and Merle M. DeLancey, Jr. ●

On February 27, 2026, President Trump posted on Truth Social directing all federal agencies to “immediately cease” use of Anthropic’s artificial intelligence (“AI”) technology. Simultaneously, Defense Secretary Pete Hegseth announced on X he was designating the company a “supply chain risk to national security” and prohibiting federal contractors from doing any business with Anthropic. This unprecedented action against a domestic company has significant supply chain implications for government contractors. Below, we summarize what led to this development, the legal authorities pertaining to supply chain bans, and practical guidance for contractors navigating this evolving situation.

1. Background: From Contract Dispute to Presidential Directive

The conflict between Anthropic and the federal government emerged from a contract dispute over the company’s AI usage restrictions. Anthropic, which holds a $200 million Pentagon contract and was the first frontier AI company to deploy its models on classified government networks, maintained two “red lines” in its contract negotiations: it refused to allow its AI model, Claude, to be used for mass domestic surveillance of Americans or in fully autonomous weapons systems.

The Pentagon demanded that Anthropic agree to “all lawful use” of its technology without Anthropic’s proposed restrictions. Anthropic’s refusal led President Trump and Secretary Hegseth to announce their decisions against Anthropic on social media. Secretary Hegseth stated that Anthropic would be “immediately” designated a supply chain risk, prohibiting any federal contractor working with the military from “any commercial activity with Anthropic.”

Anthropic has announced it will challenge the supply chain risk designation in court, calling it “legally unsound.”

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Federal Circuit Clarifies “Interested Party” Status in Percipient.ai v. United States

Robyn N. Burrows and Michael Joseph Montalbano

When a Federal Circuit panel held that subcontractors had standing to challenge procurement violations, Judge Clevenger warned of a flood. Under the panel’s holding, thousands of subcontractors could inundate the Court of Federal Claims with allegations that agencies had violated applicable procurement laws. Progress on major programs could slow as the Government dealt with a wave of new protest litigants.

On August 28, 2025, the full Federal Circuit reversed course. The Court reaffirmed the long-standing definition of “interested party,” holding that only actual or prospective bidders or offerors with a direct economic interest in the outcome of the procurement may protest.

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Blank Rome Attorneys Appointed to American Bar Association’s Public Contract Law Section Leadership for the 2025–2026 Term

We are pleased to announce that a record nine attorneys from Blank Rome’s nationally recognized Government Contracts group have been appointed to leadership roles in the American Bar Association’s (“ABA”) Public Contract Law Section for the 2025–2026 term.

Visit our website to learn more about their roles and ABA’s Section of Public Contract Law.

Webinar: Impacts on Government Contractors: 180 Days of the Trump Administration—Quick Hits on Executive Orders, Actions, and Policies

Blank Rome-Hosted Live Webinar
July 29, 2025
12:00–1:00 p.m. EDT | 9:00–10:00 a.m. PDT


Please join Blank Rome Government Contracts attorneys Justin A. ChiarodoDominique L. CasimirRobyn N. Burrows, and Sara N. Gerber for this timely webinar with key updates for government contractors navigating the first 180 days of the Trump Administration, and the days ahead.

Topics include:

  • Civil rights enforcement / diversity, equity, and inclusion
  • Federal Acquisition Regulation update
  • Contract and grant terminations 

This session is part of Blank Rome’s summer live webinar series 180 Days of the Trump Administration—Quick Hits on Executive Orders, Actions, and Policies (ending on Wednesday, August, 13, 2025), where our interdisciplinary Trump Administration Resource Team is unpacking the most pressing legal, regulatory, and policy developments from the Trump administration’s first 180 days.

Click here to register for the July 29 government contractor session and for any future sessions: Summer 2025- Trump 180 Day Webinar Series | RSVP Blank.

You may also view any past sessions on demand here: On-Demand Webinar Series: 180 Days of the Trump Administration.

FAR on the Chopping Block: Potential Impacts on Protests

Elizabeth N. Jochum and Robyn N. Burrows

As those in the federal contracting community wait anxiously for rumored and hinted at changes to the Federal Acquisition Regulation (“FAR”), we are beginning to evaluate how certain of those changes might most impact our clients. In the first of a series engaging in some mild—or wild, depending on your outlook—speculation about these potential changes, we take a look at how the removal of certain FAR requirements might impact bid protests.

One of the cardinal rules of bid protests is that protests not alleging solicitation improprieties must be filed no later than 10 days after the basis of protest is known or should have been known. 4 C.F.R. § 21.2(b). There is a key exception, however—for procurements under which a debriefing is requested. If requested, a debriefing is required, and the initial protest cannot be filed before the debriefing date offered and must be filed no later than 10 days after the debriefing concludes. In other words, a protester’s timeliness clock does not start ticking until the debriefing concludes.

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A Roadmap for Terminations for Convenience in the DOGE-Era

Elizabeth N. Jochum, Robyn N. Burrows, and Sara N. Gerber


The Department of Government Efficiency’s (“DOGE”) scrutiny of federal contracts has resulted in a spike in notices of termination for convenience. Given DOGE’s broad mandate to reduce federal spending, we expect a sustained increase in the use of terminations for convenience to end contracts the administration considers “wasteful” or not aligned with its priorities.

But while termination notices make one thing clear—the contract is over—it can leave contractors with questions about their rights and obligations.

What Is a Termination for Convenience and Can I Challenge It?

The right to terminate for convenience is included expressly in almost all government contracts—and is generally considered to be a government right even when not expressly included.[1] Terminations for convenience allow the federal government to unilaterally end a contract (or a portion of a contract) immediately and without alleging contractor fault. The government typically invokes a termination for convenience after determining the contract is no longer in its best interests, and this can occur for a wide variety of reasons, such as budget cuts, or changes in government priorities or project requirements. Typically, the government does not explain why it is terminating a contract for convenience.

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Blank Rome Attorneys Appointed to American Bar Association’s Public Contract Law Section Leadership for the 2024–2025 Term

Blank Rome LLP is pleased to announce that eight attorneys from the firm’s nationally recognized Government Contracts group have been appointed to leadership roles in the American Bar Association’s Public Contract Law Section for the 2024–2025 term.

Visit our website to learn more about their roles and the Section of Public Contract Law.

OMB Embraces Government Use of Artificial Intelligence

Robyn N. Burrows and Sara N. Gerber

Last month, the Office of Management and Budget (“OMB”) issued a memorandum directing federal agencies to adopt artificial intelligence (“AI”) and advance its use to inform and carry out agency actions. OMB’s new policy addresses three main areas it views as necessary for responsibly deploying AI in agency decision-making: (1) strengthening AI governance; (2) advancing AI innovation; and (3) managing risks from the use of AI. With OMB encouraging the use of AI to streamline agency actions wherever possible, government contractors can also expect to see AI increasingly used in the procurement process.

AI Governance

OMB directed agencies to designate a Chief AI Officer whose responsibilities will include coordinating agency use of AI, developing a workforce with the skillsets necessary for implementing AI, and “identifying and prioritizing appropriate uses of AI that will advance both their agency’s mission and equitable outcomes.”

The Chief AI Officer is also tasked with ensuring that AI code and the data used to develop and test AI are inventoried and shared in data repositories. That individual must also prepare and submit annually to OMB an “AI use case inventory” documenting instances in which AI is used to address a particular need. For example, the Department of State’s (“DOS”) AI Inventory includes a bot that it developed “to automate the data entry in the Federal Procurement Data System” which the State Department reports has reduced the burden on the agency’s procurement staff and improved compliance on DATA Act reporting.

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OMB Issues Guidance on Application of Section 889 to Federal Assistance Recipients—and Confirms No Part B “Use” Prohibition

Robyn N. Burrows ●

On April 22, 2024, the Office of Management and Budget (“OMB”) issued final guidance regarding the application of the Section 889 telecommunications ban to federal grants, loans, and cooperative agreements under 2 C.F.R. § 200.216. As a quick recap, Part A of Section 889 prohibits contractors from providing the federal government covered telecommunications equipment and services from certain Chinese manufacturers, whereas Part B prohibits contractors from using covered equipment and services. Section 889 also applies to grant, loan, and cooperative agreement recipients and subrecipients through 2 C.F.R. § 200.216, with certain differences. Most notably, OMB recently clarified that the Part B “use” prohibition does not apply to recipients and subrecipients, meaning they may use covered telecommunications equipment and services as long as they are not purchased with federal funds.

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