The Pentagon needs to develop an institutional algorithm for scrubbing contracts so that U.S. adversaries do not have access to sensitive information, according to the Navy secretary.
Navy Secretary Richard Spencer described a scenario to the Senate Armed Services Committee today where the service was about to award a contract to a prime contractor but discovered a division of the company was in a joint venture with Huawei, a Chinese telecommunications company.
“We turned around and said, 'Whoa, stop the horses, we'd like to know what this means,'” he said.
The prime contractor reassured the Navy the company would not use any of the assets from Huawei. However, when Spencer requested governance documents of the joint venture the conversation became “frosty,” he said.
Spencer told reporters following the hearing the Navy inserted “prophylactic language” in the contract that outlined what the service's limits were for Huawei.
“There was not too much wiggle room at all -- we'll see how the company reacts,” he said.
The next step is the Navy will begin working with the Office of Commercial Economic Analysis, which is funded by both the Air Force and Navy. Delegating work to OCEA will not add another administrative burden to the service's contracting office, Spencer said.
“I bring this up as an example: It's not just the South China Sea; it's across the full spectrum that China is coming at us,” Spencer said.
Sen. Jeanne Shaheen (D-NH), a member of the committee, said it is important to realize the threat from adversaries is not only external but also internal. This includes information, disinformation and cyber, she said.