S. 418 — Defending Defense Research from Chinese Communist Party Espionage Act of 2025

This section prohibits the Department of Defense (DoD) from providing any funds to a covered institution of higher education that, beginning January 1, 2027, enters into a contract with a covered nation or foreign entity of concern, unless the institution receives a waiver from the Secretary of Defense. The Secretary may issue a one-year waiver, upon a request submitted at least 120 days in advance that includes the full proposed contract text (translated into English if necessary) and a signed statement demonstrating benefits to the institution's mission, students, and U.S. security, stability, and economic vitality. Waiver determinations, made in consultation with the Secretary of Education and based on specified factors (e.g., economic situations of the U.S. and counterpart, national security risks), require congressional Armed Services committee notification at least two weeks prior to issuance; renewals for existing contracts follow similar procedures, with termination required if not renewed. For contracts entered into before January 1, 2026, that remain in effect, covered institutions must submit waiver requests by approximately 120 days before that date, after which the Secretary immediately issues a waiver until the earlier of January 1, 2028, or contract expiration. (Thus, the provision conditions DoD research and development funding authorized under 10 U.S.C. §4001—including via contracts, grants, and cooperative agreements with institutions of higher education—on avoiding ties to designated foreign adversaries absent approved waivers.)

This section establishes post-employment restrictions applicable to principal investigators of covered defense research projects (i.e., projects operated by an institution of higher education, funded in whole or in part by the Department of Defense, and involving a critical or emerging technology). Specifically, such principal investigators must agree not to seek or accept employment or conduct any compensated activity from a foreign entity of concern during the 10-year period beginning on the last day of their involvement. (1) The Secretary of Defense must identify critical or emerging technologies among those for which DoD funds research, publishing the list within 270 days of enactment and annually thereafter; (2) the Secretary may waive the restriction for U.S. persons upon 30 days' prior notice to the congressional defense committees, including justification and details on related DoD funds; and (3) the restrictions apply to research beginning one year after enactment.