Securing Energy Supply Chains

Summary#

The Securing Energy Supply Chains Act would create a new federal law; it does not amend an existing Act. It would require the Secretary of Energy to create an “Energy Non-Procurement List” and restrict certain Department of Energy (DOE) contracts involving listed entities. The stated goal is to identify entities whose activities are detrimental to U.S. security or foreign policy. The bill has been introduced and referred to the House Energy and Commerce Committee; it is not law.

  • Within 90 days of enactment, the Secretary must make a list based on the most recent information available. The Secretary must prioritize entities that provide critical materials or batteries, including battery components.
  • The Secretary may include entities connected to foreign entities of concern or named federal lists, their parent or subsidiary companies, and other entities the Secretary determines meet specified security or foreign-policy criteria. The Secretary must revise the list at least annually.
  • Beginning one year after enactment, DOE generally may not enter into or renew a goods-or-services contract with a covered person or entity on the list. DOE contractors and their first-tier subcontractors also generally may not enter into or renew covered subcontracts with them. An exception applies if the Secretary finds the goods or services cannot be obtained elsewhere in the manner, time, or quantity needed for the project.
  • A “covered individual or entity” also includes someone who funds or buys goods or services from an entity on the list. A covered subcontract is one worth more than $250,000.
  • Bidders for DOE contracts must certify they are not covered. If a contractor, or a first- or second-tier subcontractor, is found to be covered during a contract, DOE must terminate the contract unless an exception applies.
  • The Secretary must study overlaps among federal lists and report findings and recommendations to Congress.

What it means for you#

  • DOE and other federal offices: The Energy Secretary must create and update the list, publish its unclassified portion, report on exceptions to procurement restrictions, and conduct a study with other federal officials.
  • DOE bidders, contractors, and subcontractors: Bidders must certify they are not covered. DOE contractors and their first-tier subcontractors face restrictions on covered subcontracts. A DOE contract may have to end if a contractor or certain subcontractors are found to be covered.
  • Entities on the list and people or entities that fund or buy from them: They could be treated as covered for these DOE procurement rules. The bill does not impose a general ban on private trade with listed entities.
  • Taxpayers and the public: The public would be able to see the unclassified list, but the reasons for including or removing an entity would be submitted to Congress in a classified annex.
  • The bill does not set out an application, notice, appeal, or review process for entities affected by the list.

Money#

No publicly available information.

  • The bill requires DOE to create and update the list, prepare reports, and conduct a study, but provides no cost estimate or funding amount.
  • It requires reports on contracts that use the supply-availability exception, including recommendations on developing domestic sources when those sources do not exist.

What is unclear#

  • The bill does not explain how the Secretary would decide that an entity’s activities are detrimental, or what evidence or process would be used.
  • It does not define “funding,” “procures,” or several other key terms. That makes the reach of “covered individual or entity” uncertain.
  • It does not specify how an entity could learn it is being considered for the list, challenge its inclusion, or seek removal.
  • The materials do not include the laws referenced for definitions or current federal procurement rules. I cannot verify how this bill’s definitions or restrictions would interact with those laws and rules.
  • The bill does not explain how the new list would interact with existing federal lists. It requires a study and recommendations on harmonizing them.

Case for#

  • The bill appears intended to reduce DOE’s procurement ties to entities the Secretary identifies as a security or foreign-policy risk.
  • Prioritizing critical materials and batteries focuses attention on goods the bill identifies as important to energy supply chains.
  • The exception for goods unavailable from another source could let a project proceed when switching suppliers is not workable.
  • The required study could help identify overlap among federal lists and clarify which entities agencies should not contract with.

Case against#

  • One concern is that the Secretary has broad power to add entities, while the bill does not set out a public decision process or an appeal route.
  • The reasons for listing an entity would be classified, limiting what the public can know about individual decisions.
  • The definition of covered entities reaches beyond listed entities to people or organizations that fund or buy from them. The bill does not clarify how far that reach extends.
  • The procurement exception depends on a Secretary’s finding about available alternatives, but the bill does not specify how that finding is made or reviewed.
  • DOE may have to terminate contracts after discovering a covered contractor or subcontractor, which could disrupt projects; the bill does not estimate those effects or costs.