Military Base Retailers Face Immediate Shutdown Risk Under New Foreign Influence Security Act

The Military Installation Retail Security Act of 2025 is aiming to tighten security on U.S. military bases by cracking down hard on retailers—think base exchanges, food vendors, and service providers—that have long-term contracts and ties to what the law calls a “covered nation.” Essentially, this bill says if a business on a base is controlled by a country deemed a security risk, that business is now on the clock. It immediately bans the Department of Defense (DoD) from signing or renewing long-term deals with any retailer that is controlled by a covered nation. This applies to any contract or lease, including those run by nonappropriated fund instrumentalities, starting the day the law is enacted (Sec. 2).

The Security Sweep: Unfriending Foreign Ties

This isn't just about future contracts; it’s about cleaning house. The bill requires the Secretary of Defense to review every existing long-term agreement with a "covered retailer" within 180 days to check for hidden or direct ties to a covered nation. If that review confirms foreign control—defined as 20% or more ownership, or direct control by the nation—the contract must be terminated within 30 days of that finding. For families living on base, this could mean sudden changes to where they buy groceries, get their cars fixed, or grab coffee, depending on who runs those specific concessions. The entire purpose is to reduce the footprint of potential foreign influence on sensitive military installations, which is a clear national security goal.

Business Freeze: The Immediate Operational Halt

Here’s where things get real for current operators. Any existing retailer who is controlled by a covered nation must notify the Committee on Foreign Investment in the United States (CFIUS) about their ownership structure within 30 days of the bill’s enactment. The kicker? They cannot keep operating on the base until CFIUS finishes its review and gives them the green light (Sec. 2). Imagine running a base barbershop or a fast-food franchise on a base, having a valid long-term lease, and then being told you have to shut down tomorrow until the federal government finishes a 180-day security review. This immediate operational halt creates a massive, sudden financial burden and severe uncertainty for these businesses, potentially leading to rapid closures before any final determination is even made.

The Waiver and the Catch-22

There is a narrow escape hatch, but it's tough to squeeze through. The Secretary of Defense can waive the ban and allow a foreign-controlled retailer to operate, but only if two conditions are met: the goods or services provided must be “absolutely vital” for service member well-being and morale, and there must be no “reasonable alternatives available.” Think of a remote base where only one specific vendor can supply a necessary service. Even then, the Secretary must put strong security measures in place to mitigate any risk and notify Congress within 30 days. This exception is clearly designed to be used sparingly, meaning many existing foreign-linked retailers will likely face termination or operational freezes, potentially leading to a temporary loss of services for service members and their families until new vendors can be secured.