Energy Supply Chain Bill Creates New Blacklist for Foreign Suppliers, Restricting DOE Contracts in One Year

The “Securing Energy Supply Chains Act” is essentially a new federal policy establishing a supply chain security firewall, managed by the Department of Energy (DOE). It creates a new official blacklist—the “Energy Non-Procurement List”—targeting foreign companies deemed a risk to U.S. national or economic security. The Secretary of Energy gets 90 days to start building this list, prioritizing entities that deal with critical materials or manufacture batteries and their components. This means if you work in the energy sector, especially with government contracts, this list is about to become a major factor in your business planning.

The New Blacklist: Who’s In and Why

This isn't just a suggestion; it’s mandatory. The Secretary must include any company already flagged by the Department of Defense as a “foreign entity of concern,” like those on the Chinese Military Company List. They also have the power to add any entity already on the Commerce Department’s existing screening lists or any other company they decide poses a risk (SEC. 3). For businesses relying on global supply chains for everything from solar panels to electric vehicle batteries, this means certain suppliers are about to become off-limits for federal projects. If you’re a government contractor, you need to start auditing your entire supply chain now, because the clock is ticking.

The Contract Ban: What It Means for Government Work

The real impact hits one year after the bill becomes law. Starting then, the DOE generally can’t sign new contracts or renew old ones with a “covered contractor”—which is defined as any company that uses, buys from, or incorporates components from an entity on the new blacklist (SEC. 4). Imagine you’re running a small engineering firm with a major DOE contract to install new grid storage. If your battery supplier sources a tiny but critical component from a newly blacklisted company, your entire firm could be barred from receiving federal funds. This provision is designed to force contractors to completely scrub their supply chains of restricted entities.

The Exception Clause: When Rules Bend

Recognizing that switching suppliers overnight isn't always possible, the bill includes a crucial escape hatch. The Secretary can grant an exception and continue working with a covered contractor if the necessary goods, services, or technology can't be obtained elsewhere in time or quantity (SEC. 4). This exception is only supposed to last as long as the contractor needs to find a “suitable replacement.” If you secure an exception, you’ll be sending monthly reports to the DOE detailing every transaction you have with the restricted entities for the duration of the contract. This is a significant administrative burden, but it’s the cost of doing business while trying to transition away from a flagged supplier.

Cleaning Up the Federal Mess

Finally, the bill addresses a common bureaucratic headache: too many lists. Within one year, the Secretary of Energy has to coordinate a study with the Departments of Commerce, Defense, State, and others to compare all the different federal blacklists—sanction lists, military lists, procurement lists—and figure out where they overlap (SEC. 5). The goal is to harmonize these lists and clarify exactly who the federal government is banned from dealing with. For contractors and manufacturers, this could eventually simplify compliance, but in the short term, it means navigating yet another new set of restrictions while the government figures out how to streamline the existing ones.