Menu

The Anthropic Dispute: What DoW Contractors Need to Know

Posted on September 1, 2026

Article by: Tyson Marx, Partner

The dispute between Anthropic and the federal government has dominated government contracting headlines over the past several months. Without getting caught up in the politics of the situation, this blogpost gives contractors who use and rely on Anthropic products like Claude what they need to know to avoid any contract penalties or false claims.

BLUF: At this juncture, the universe of contracts that are actually affected by the dispute is much smaller than the headlines would lead one to believe. Contractors need to figure out if the prohibition on Anthropic products like Claude extends to their specific contract.

Background

In 2018, Congress enacted the Federal Acquisition Supply Chain Security Act (“FASCSA”) to give the government a formal mechanism for removing risky technology from federal supply chains. Congress passed FASCSA with foreign adversaries as the primary target.

The Government’s dispute with Anthropic started as a contracting matter, not a FASCSA issue. In late 2025, the Department of War (“DoW”) made four $200M contracts to companies specializing in AI-technologies, including Anthropic. However, in February of 2026, DoW took issue with Anthropic’s “Acceptable Use” policy, which put restrictions on the use of its models for mass domestic surveillance and for fully autonomous lethal weapons systems. When Anthropic refused to change its terms, the President stated that federal agencies should not use Anthropic products, characterizing the company as a supply chain risk under FASCSA.

In March 2026, Secretary Hegseth designated Anthropic a supply chain risk to national security and stated that no contractor, supplier, or partner doing business with the U.S. military may conduct any commercial activity with Anthropic. These two proclamations, made by the President and Secretary Hegseth via social media, were later made into formal designations under the FASCSA statute and DoW statute regarding supply chain risks discussed in more detail below.

As explained below, however, DoW’s designation is more limited in scope and does not constitute a broad “ban on Anthropic products”.

What is a “supply chain risk” designation?

Anthropic has been hit with the supply chain risk designation in two different ways. First, under 41 U.S.C. § 4713, both the President and Secretary Hegseth have designated Anthropic to be a supply chain risk. Second, Secretary Hegseth has also designated Anthropic a supply chain risk under 10 U.S.C. § 3252. A brief look at the two statutory authorities and the regulations that flow from them is required.

41 U.S.C. § 4713

This is the organic FASCSA statute that gives the heads of certain executive agencies the power to determine that an IT service, system, device, software, or piece of hardware (collectively, “covered articles”) constitutes a supply chain risk, due to the covered article being susceptible to manipulation by bad actors seeking to harm the United States. To designate a covered article as a supply chain risk, the Secretary of Homeland Security (for civilian agencies), the Secretary of War (for DoW agencies), or the Director of National Intelligence (for the intelligence community) can issue a FASCSA order in accordance with 41 U.S.C. § 4713(b).

The following FAR clauses bear relevance on whether contractors are affected by a FASCSA order.

10 U.S.C. § 3252

This is the DoW-specific organic statute, implemented through DFARS 252.239-7017 (Notice of Supply Chain Risk) and DFARS 252.239-7018 (Supply Chain Risk) that differs from FASCSA. It reaches covered defense procurements involving national security systems. The statutory definition is narrow: the risk that “an adversary” may sabotage, maliciously introduce unwanted function into, or otherwise subvert a covered system.

Status of Litigation

Currently enjoined:

  • The President and Secretary Hegseth’s social media designations of anthropic as a supply chain risk.
  • The 10 U.S.C. § 3252 DoW designation of Anthropic as a supply chain risk.

Still active risks for contractors:

  • The official FASCSA designation under 41 U.S.C. § 4713

At this time, compliance is contract specific.

FASCSA orders issued under FAR 52.204-30 are not self-executing. The FASCSA prohibition does not attach to your company simply because a FASCSA order exists somewhere. It attaches because the clause is in your contract, either incorporated before the contract was executed during the procurement or added afterward by modification.

Contractors are not required to comply with a press release stating that Anthropic products and services have been banned. Nor are contractors required to comply with the Secretary’s statement that no partner may conduct any commercial activity with Anthropic. A contractor with a dozen DoW contracts may well find that the prohibition attaches to four of them, that two more carry the Section K representation but no incorporated prohibition, and that the rest carry neither.

Practical takeaways:

  • For DoW contracts, contractors must comply with: (1) the DoW FASCSA orders listed in SAM when a Solicitation was issued or; (2) additional DoW FASCSA orders not in SAM.gov but “identified” in the Solicitation.
  • As of the date of this blogpost, DoW has not put the DoW FASCSA order in SAM.gov.
  • Contractors must check SAM.gov for the entire time period preceding submission of proposals. To check, on SAM.gov’s homepage, click and download the Excel file:

  • The Excel file will list all companies currently under a FASCSA order (Acronis is currently the only company under a Government-wide FASCSA order issued by the DNI):

  • “A FASCSA order issued after the date of solicitation applies to [a] contract only if added by amendment to the solicitation or modification to the contract.” FAR 52.204-30(b)(4).
  • Carefully review all modifications. Read mods for clause changes, not just for funding and period-of-performance actions.
  • Do not forget task orders under IDIQs. The representation and prohibition mechanics operate at the order level as well as at the base level. An IDIQ contract awarded before the designation may be clean while an order placed under it last month is not. Do not assume the base contract answers the question for every order beneath it.
  • If the contract is affected by the FASCSA order, conduct the reasonable inquiry required by the FAR, and document it. An inquiry you cannot evidence is, functionally, an inquiry you did not conduct.
  • FAR 52.204-30 defines a reasonable inquiry as “an inquiry designed to uncover any information in the entity’s possession about the identity of any covered articles, or any products or services produced or provided by a source. This applies when the covered article or the source is subject to an applicable FASCSA order. A reasonable inquiry excludes the need to include an internal or third-party audit.”

Steps DoW has taken to implement the FASCSA order.

DoW began requiring removal of Anthropic products from contractor systems in early July 2026, with a Department-wide removal deadline of September 29, 2026. Individual components have moved faster and on their own paper.

For instance, the Air Force Research Laboratory (“AFRL”) issued a memorandum on July 9, 2026 which is probably the clearest example of what contractors should expect. It functions as a “Mandatory Compliance Notification”, meaning it formally notifies contractors of the requirement to remove all products and services provided by Anthropic, and it set a component-level deadline ahead of the Department-wide date. The Mandatory Compliance Notification requires contractors to state their current level of Anthropic usage.

Before a contractor fills out a notification like AFRL is currently requesting, it should ask answer four questions:

  • Which contract or contracts does the notification identify?
  • Which clause does it rely on: FAR 52.204-30, DFARS 252.239-7018, or neither?
  • Is that clause actually in the identified contract, and if so, as of what date?
  • Does the scope of the notification match the scope of the clause, or is it broader?

If the notification is broader than the clause, say so in writing to the contracting officer, and comply with the clause.

What to do if the FASCSA order does apply to your contract?

If it turns out your contract is actually covered by the FASCSA order, you must first figure out what “use as part of the performance of the contract” means. Ask the contracting officer and try to get their opinion in writing. While direct use is easy to spot, indirect use is going to be litigated, and where reasonable people are already disagreeing.

Sort your uses into three buckets:

  • direct contract performance;
  • indirect business systems support, and
  • purely commercial activity with no connection to a covered contract.

Do not let a certification form collapse these three categories into one. Where the answer is genuinely unclear, raise it with the contracting officer and get the interpretation in writing before you certify.

Remember that a modification is a change order, and a change order may support an REA or a claim. If the government adds FAR 52.204-30 to an existing contract by modification, and that addition increases your cost of performance or delays you, you are looking at a change under the Changes clause. Ripping a tool out of a working development pipeline mid-performance is not free. There is license cost, replacement tooling, retraining, revalidation, schedule impact, and in some cases rework of completed effort.

  • Document the removal effort contemporaneously: labor, licenses, and schedule all slip while it is happening. Not at the end.
  • Notify the contracting officer of the impact within the timeframe the Changes clause requires.
  • If a contracting officer or program office directs removal without issuing a modification, that direction may be a constructive change. Say so in writing and ask for a written modification.
  • Then evaluate an REA, and a claim under the Disputes clause if the REA goes nowhere.

Keep in mind, if the clause was in your contract at award, you likely bought the risk and there is no change to price. Additionally, expect the government to raise the sovereign acts doctrine, the argument that the designation was a public and general act of the sovereign rather than a contractual one. That defense has real force where the government’s act is genuinely general. It has considerably less force here, because DoW has not put the FASCSA order in SAM.

The consequence is significant and underappreciated. An order that is not published as an applicable FASCSA order in SAM does not operate as a general, governmentwide prohibition that every contractor is on constructive notice of. It operates specifically through the contracts into which the clause has actually been incorporated, and through directives issued to identified contractors on identified programs.

Finally, if the order applies to your contract, make sure you work with your subcontractors as you would on any flowdown in a contract.

The bottom line.

The broadest version of this prohibition in Secretary Hegseth’s announcement is not the version you have to comply with. The § 3252 designation is enjoined. The FASCSA designation is live, but it has been implemented contract by contract rather than published as a general order in SAM. What binds you is the clause in your contract, and what that clause prohibits is providing or using covered products and services as part of the performance of *that* contract.