BOLIVAR Act Blocks Federal Contracts for Companies Doing 'Significant Business' with Venezuela, Citing National Interest Exceptions

The aptly named Banning Operations and Leases with the Illegitimate Venezuelan Authoritarian Regime Act (BOLIVAR Act) is a straight-up economic pressure play. It prohibits U.S. federal agencies from signing contracts with any company or person known to be doing "significant business" with the current, unrecognized Venezuelan government. Think of it as putting a firewall around U.S. taxpayer dollars: if you’re helping the regime the U.S. is actively trying to isolate, you can’t get a federal contract here. This restriction, detailed in Section 2, is set to last for three years once the Act becomes law.

The Federal Contract Blacklist: Who’s In and Who’s Out

This bill directly impacts the world of government contracting. If you’re a mid-sized IT firm, a construction company, or even a catering service that also happens to have a significant lease or equipment operating in Venezuela, you could be disqualified from bidding on U.S. federal jobs. The term "business operations" is defined broadly to cover almost any commercial activity—buying, selling, leasing, or owning property—meaning it’s not just about direct deals with the government, but any significant commerce in the country. For federal agencies, this means adding a new layer of due diligence to every contract, which could slow things down and raise costs as they vet bidders.

The Secretary of State’s Big Red Button

While the ban sounds strict, the bill builds in several key escape hatches, mostly under the control of the Secretary of State. The ban doesn't apply if the contract is for essential humanitarian aid (like disaster relief or life-saving medicine) or for getting non-combatant Americans out of the country. Crucially, the Secretary of State can also approve a contract if they decide it’s in the national security interests of the U.S. government. Furthermore, if a company already has a license from the Office of Foreign Assets Control (OFAC) allowing them to operate in Venezuela, they are exempt from this contracting ban.

The National Interest Wildcard

Here’s the part that policy wonks will be watching closely: the Secretary of State can waive the entire prohibition if they determine that doing so is in the "national interest" of the United States. This is a powerful, discretionary tool (Section 2, Waivers). While this flexibility is necessary to avoid unintended consequences—like blocking a crucial defense contractor over a minor Venezuelan subsidiary—it also means the Secretary gets wide latitude to decide who gets a pass and who doesn't. This broad authority, combined with the lack of a clear definition for what constitutes “significant business,” creates potential uncertainty for contractors and opens the door for political judgment calls rather than strict application of the rule. For busy people, this means that the actual impact of the BOLIVAR Act will depend heavily on how the State Department chooses to define and enforce these exceptions over the next three years.