I 
119TH CONGRESS 
1ST SESSION H. R. 3961 
To prohibit the Secretary of Defense from entering into software source 
code contracts with entities with certain relationships with China, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 12, 2025 
Mr. FALLON (for himself, Mrs. KIGGANS of Virginia, Mr. MCGUIRE, Mr. HIG-
GINS of Louisiana, Mr. MCCORMICK, and Mr. GOODEN) introduced the 
following bill; which was referred to the Committee on Armed Services 
A BILL 
To prohibit the Secretary of Defense from entering into 
software source code contracts with entities with certain 
relationships with China, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. PROHIBITION ON SOFTWARE SOURCE CODE 
CONTRACTS WITH ENTITIES WITH CERTAIN 
RELATIONSHIPS WITH CHINA. 
(a) IN GENERAL.—The Secretary of Defense may not 
enter into, renew, or extend a contract for the provision 
of software source code with a person described in sub-
section (b). 
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(b) PERSON DESCRIBED.—A person described in this 
subsection is a person that— 
(1) owns, operates, substantially funds, or has 
a material interest in a facility located in covered 
country, if such facility has a primary purpose (as 
determined by the Secretary) of researching or de-
veloping artificial intelligence; 
(2) has allowed a covered country to access to 
the software, or the source code relating to such 
software, that is the subject of the contract, where 
such access could allow the covered country to re-
verse engineer such software source code; or 
(3) operates a data center (as such term is de-
fined in section 453 of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17112)) in a cov-
ered country with respect to such software source 
code, including a data center operated— 
(A) by a parent, subsidiary, or affiliate of 
an entity seeking to enter into, renew, or extend 
a contract with the Secretary; or 
(B) on behalf of such an entity by a cov-
ered country. 
(c) WAIVER AUTHORITY.—The Secretary may waive 
the prohibition under this section if the Secretary deter-
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mines such a waiver is in the national security interests 
of the United States. 
(d) APPLICABILITY.—This section shall apply only 
with respect to contracts entered into, renewed, or ex-
tended within three years after the date of the enactment 
of such section. 
(e) DEFINITIONS.—In this Act: 
(1) The term ‘‘covered country’’ has the mean-
ing given the term ‘‘covered foreign entity’’ in sec-
tion 812 of the National Defense AuthorizationAct 
for Fiscal Year 2024 (Public Law 118–31; 10 
U.S.C. 4501 note prec.). 
(2) The term ‘‘material interest’’ means a fi-
nancial or other interest that the Secretary deter-
mines is significant enough to influence a decision or 
action of an individual. 
Æ 
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