Department of Defense Releases Updated 1260H List That Includes WuXi AppTec – Implications under the BIOSECURE Act

The U.S. Department of Defense (DoD) has published its updated list of “Chinese Military Companies Operating in the United States”¹ under Section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (P.L. 116-283) (the “1260H List”) naming WuXi AppTec, among other companies. This development carries important implications under the BIOSECURE Act (the “Act”) for entities involved in federal contracts or awards that touch biotechnology equipment and services. The full updated 1260H List can be accessed here, and our previous Alert on the enactment of the Act as part of the 2026 National Defense Authorization Act can be accessed here.

The latest 1260H List includes WuXi AppTec Co., Ltd., BGI Group, MGI Tech Co., Ltd., and Complete Genomics, Inc. among other companies.² Each of these entities had been named as a “biotechnology company of concern” (BCC) in earlier drafts of the Act. The enacted legislation creates a process for companies appearing on the 1260H List to be designated as BCCs but does not name any specific companies as BCCs. Notably, WuXi Biologics is not named on the 1260H List and does not appear to be implicated by the naming of WuXi AppTec because it is not a subsidiary, parent, or successor of WuXi AppTec.

The Act prohibits federal departments and agencies from procuring, contracting with, or using biotechnology equipment or services of BCCs. It also prohibits federal contractors from using such equipment or services in performing federal contracts, and federal grant and loan recipients from expending federal grant or loan funds on such equipment or services.³ The term “contract” covers virtually all Federal Acquisition Regulation (FAR)-based contracts as well as DoD “other transaction authority” (OTA) awards.⁴

Companies appearing on the 1260H list will be designated as BCCs if the Office of Management and Budget (OMB) determines that they are involved in the manufacturing, distribution, provision, or procurement of any biotechnology equipment or services, which the Act defines broadly to include, among other things, equipment and services related to genetic and biological materials. Separately, the Act establishes an OMB-led process to identify other companies as BCCs based on certain criteria. OMB is required to publish a listing of companies designated as BCCs under both pathways within one year of the date of enactment; as such, publication of this list is expected around December 2026.

For entities that qualify as BCCs through the 1260H List pathway, prohibitions take effect 60 days after the FAR is revised to implement the Act with respect to those BCCs.⁵ Pursuant to the Act, the Federal Acquisition Regulatory Council (FARC) is required to revise the FAR within one year following the establishment of guidance by the OMB Director to implement the requirements of the Act.⁶ OMB is in turn required to release such guidance within 180 days of publication of its initial list of BCCs.⁷ Accordingly, if the FARC and OMB Director take the full amount of time allowed by the Act to complete these steps, companies designated as BCCs through the 1260H List pathway will be subject to the Act’s prohibitions around August 2028. However, if OMB or the FARC complete any of the required actions ahead of statutory deadlines, the prohibition may take effect sooner.

The Act also contains a five-year grandfathering provision that applies to biotechnology equipment or services provided under contracts with a BCC entered before the applicable effective date, i.e., the date when the FAR is updated to implement the Act with respect to the relevant particular BCC.⁸ The Act also creates a safe harbor under which equipment or services formerly, but no longer, produced or provided by a BCC are not treated as covered.⁹ Both facets of the Act work to provide an off-ramp for entities currently using equipment or services provided by companies designated as BCCs.

In response to its inclusion on the 1260H List, WuXi AppTec has issued a statement disputing its association with the Chinese military and noting that it intends to correct the listing. The Act provides a mechanism whereby an entity that believes it no longer meets the definition of a BCC may provide information and arguments to the Director of OMB to request removal from the list of BCCs.¹⁰ OMB must respond to such request within 90 days of receipt.¹¹ In line with its statement to “pursue all available remedies” to reverse its designation on the 1260H List, WuXi AppTec may leverage this process if it is deemed a BCC under the Act. The full text of the WuXi AppTec statement can be accessed here.

Companies and institutions that are federal government contractors or grant or loan recipients should actively monitor their supply chains and vendor lists for companies included on the 1260H List because these companies are likely to be included on the OMB list of BCCs later this year. Additionally, they should determine whether equipment or services provided by such companies fall under the Act’s broad definition of biotechnology equipment or services, and if so, whether such equipment or services are used in the performance of federal contracts or DoD OTA awards, or whether federal grant or loan funds are expended on such equipment or services. Conducting this analysis early will permit companies and institutions to assess whether they can take advantage of the Act’s grandfathering period or consider obtaining certain equipment and services from entities that are not BCCs.