Introduction
As federal regulations on unmanned aircraft systems (UAS) (commonly known as drones) continue to evolve, institutions engaged in federally-funded research must ensure compliance with new restrictions aimed at safeguarding national security. The Federal Acquisition Regulation (FAR) clause 52.240-1, “Prohibition on UAS Manufactured or Assembled by American Security Drone Act-Covered Foreign Entities.” and the Department of Defense (DoD) 1260H restrictions each impose strict limitations on drones associated with certain non-domestic entities. These measures aim to protect sensitive research data and prevent potential security risks.
Overview of FAR 52.240-1 Prohibition
Effective December 22, 2025, FAR 52.240-1 prohibits the procurement, operation, and use of UAS or drones manufactured or assembled by entities that the Federal Acquisition Security Council (FASC) designated as "American Security Drone Act-covered foreign entities" (“ASDA-covered entities”) , which are listed in the System for Award Management (SAM) at sam.gov.
Key Prohibitions
- Contractors may not deliver, use, or procure any UAS from these ASDA-covered entities in performance of federal contracts where the FAR clause is included in the award. It is anticipated that this clause will be included in all federal contracts moving forward.
- Federal funds cannot be used to acquire or operate such UAS.
- These restrictions must be flowed down to all subcontractors.
DoD 1260H Prohibited Entities
The Department of Defense established the DoD 1260H List, under the William M. (Mac) Thornberry National Defense Authorization Act (NDAA) for Fiscal Year 2021, identifying Chinese Military Companies operating in the United States. The DoD recently updated this list on Jan. 7, 2025 to include UAS manufacturers such as DJI (Shenzhen DJI Innovation Technology Co., Ltd.), Autel Robotics Co., Ltd., and Aerospace CH UAV Co., Ltd.
Compliance Requirements
- Contractors must ensure that no UAS or related components from listed companies are used in DoD-funded projects.
- DJI, Autel, and other restricted UAS brands are strictly prohibited on DoD-funded projects.
- Organizations must conduct supply chain due diligence to verify compliance with these regulations.
Other Federal Agency Regulations
In addition to FAR 52.240-1 and DoD restrictions, other federal agencies have similar requirements regarding UAS and related communication components:
- For example, the U.S. Department of Energy requires that unmanned aircraft as well as other communication components made or manufactured in a foreign country of risk be disclosed to the sponsoring federal agency at the time of proposal and throughout the lifetime of the award.
Compliance & Next Steps
To support compliance, these restricted entity lists are included in Descartes Visual Compliance, a screening tool used by Michigan State University (MSU) and other institutions to monitor restricted entities and ensure adherence to federal regulations. MSU individuals should leverage such tools to verify vendor compliance before procurement.
Actions Required
- Review all drones and related components against the SAM and 1260H lists before purchase or use in federal research or DoD-funded projects. This can be accomplished by screening in Visual Compliance where these lists are included.
- Cease operations using prohibited UAS before December 22, 2025, for any federal award whether the FAR clause applies or DoD contract.
- Update internal procurement policies to restrict acquisition from banned manufacturers for all federally funded research and DoD projects.
- Ensure that all subcontractors involved in federal research or DoD projects are informed and compliant.