The bill would bar heads of federal agencies from entering into covered contracts with companies that are engaged in a boycott of Israel, starting January 1, 2026. Before contracting, the company must certify that it is not participating in such a boycott.
In addition to the certification, any covered contract would prohibit the company from engaging in a boycott for the duration of the contract. The act also requires agencies to insert notice provisions in solicitations, and creates a process to notify and terminate contracts if a boycott is detected.
The definitions cover what counts as a “company,” a “covered contract,” and what constitutes “engaging in a boycott of Israel,” and it preserves constitutional rights and does not prescribe any stance on final-status issues.
At a Glance
What It Does
The head of a federal agency cannot enter into a covered contract with a company after January 1, 2026 unless the company certifies it is not engaging in a boycott of Israel; the contract must include a prohibition on the boycott during its term.
Who It Affects
Federal agencies, contract officers, and any company with a covered contract (over $100,000) that does business with the federal government, including all affiliates of those companies with more than 10 employees.
Why It Matters
It establishes a procurement-based mechanism to deter participation in Israel-related boycotts, with built-in notice and termination provisions to enforce compliance, while preserving First Amendment rights and not taking a position on final-status questions.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill creates a procurement-driven framework to address boycotts of Israel in the federal contracting arena. Beginning in 2026, a federal agency head may not enter into a covered contract with a company that is engaged in a boycott of Israel unless the company first certifies that it is not engaged in such a boycott at the time of contracting.
In addition, every covered contract must include a prohibition against engaging in a boycott for the duration of the contract. The act requires agencies to include a notice of this prohibition in solicitations and establishes a process for handling findings of violation: the agency must notify the company and publish the determination, and, 30 days after the company receives notice of a violation, terminate the contract unless the boycott ends to the agency’s satisfaction.
The definition section clarifies who counts as a “company,” what a “covered contract” is, and what constitutes “engaging in a boycott of Israel,” including actions that limit business relations with Israel or that discriminate by nationality, national origin, or religion, or are not based on a valid business reason. The bill also preserves the right to appeal under established methods and states that nothing in the act infringes First Amendment rights or takes a position on final-status issues.
In practice, the act would affect federal procurement decisions, tighten eligibility criteria for bidders, and raise compliance requirements for any firm seeking or holding federal awards above a $100,000 threshold. Compliance programs, due-diligence processes, and supply-chain policy for multinational firms could see meaningful changes to stay aligned with federal rules.
The Five Things You Need to Know
The bill prohibits entering into a covered contract after January 1, 2026 unless the company certifies it is not engaging in a boycott of Israel.
A covered contract is defined as any federal contract exceeding $100,000.
Contracts must include a prohibition on the boycott for the contract term.
Agencies must provide written notices in solicitations and publish determinations of violations within 30 days, with contract termination 30 days after notice if the boycott remains.
Engaging in a boycott of Israel is defined to include actions intended to limit Israel-related business or actions that discriminate by nationality, national origin, or religion, or are not based on a valid business reason.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Prohibition on contracting with boycott-engaged companies
The head of a federal agency may not enter into a covered contract with a company after January 1, 2026 unless the company certifies that it is not engaging in a boycott of Israel at the time of contracting. The prohibition extends to new contracts and to the enforcement of the boycott across the contract term, creating a baseline standard for vendor participation in federal procurement.
Notices in solicitations
In every solicitation for a covered contract, the agency must include a clear written notice of the prohibition against engaging in a boycott of Israel. This ensures bidders understand the compliance expectations from the outset and provides a basis for evaluating certifications.
Notice upon finding of boycott
If the agency determines through a public report or congressional notice that a company violated the prohibition, the head of the agency must notify the company and make the notice publicly accessible on the agency’s website within 30 days.
Termination of contract for boycott
A covered contract must be terminated 30 days after the company receives the notice of violation unless the company ends the boycott to the agency’s satisfaction before that date.
Appeal process
The appeals process established under Chapter 71 of title 41, United States Code, applies to contracts subject to the provisions of this act, ensuring there is a formal mechanism to challenge determinations of violation or enforcement actions.
Definitions
Defines ‘company,’ ‘covered contract,’ and ‘engaging in a boycott of Israel,’ as well as what constitutes a ‘Federal Government entity.’ It also specifies the employee threshold for covered entities (more than 10 employees) and clarifies the scope of entities covered by the act (including affiliates and subsidiaries).
This bill is one of many.
Codify tracks hundreds of bills on Government across all five countries.
Explore Government in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Federal procurement offices gain a clearer framework for evaluating bidders and enforcing anti-boycott standards, reducing ambiguity in contract awards.
- Contractors that do not participate in boycotts and maintain clean compliance profiles can compete on a level playing field for federal work.
- Compliance-oriented firms can consolidate anti-boycott policies within their supply chains, reducing risk of bid loss due to political cues.
- Industry watchdogs and oversight bodies gain clearer reporting and posting mechanisms to track enforcement actions.
Who Bears the Cost
- Companies that engage in a boycott of Israel risk losing federal contracts through termination and future ineligibility.
- Affiliates and subsidiaries of culpable firms may face cascading contract-stripping consequences due to the broad definition of ‘company.’
- Federal agencies incur administrative costs to process notices, publish determinations, and manage termination procedures and appeals.
- Compliance-related costs for contractors, including due-diligence, certification processes, and supply-chain policy updates, to ensure continued eligibility for federal work.
- Small and mid-sized businesses with more than 10 employees may bear disproportionate oversight and reporting burdens as part of demonstrable compliance efforts.
Key Issues
The Core Tension
Balancing robust anti-boycott procurement protections with fair due process, supply-chain realities, and First Amendment considerations—enforcement needs must be strong enough to deter boycotts, while avoiding punitive outcomes for ambiguous or marginal conduct.
The bill’s approach creates a compliance-centric barrier to participation in federal procurement for companies that engage in a boycott of Israel. While it strengthens government leverage to enforce anti-boycott norms, it also raises questions about the potential for mischaracterizing a company’s actions through affiliates or across complex supply chains.
The enforcement design relies on third-party reporting and public notices, which could raise concerns about due process, timing, and the scope of what constitutes a “violation.” The 30-day termination window rewards rapid corrective action but may disrupt long-running projects and pose transition challenges for agencies and vendors. The interplay with First Amendment rights and how to reconcile wholesale procurement standards with political expression in business strategies remains a critical tension, even as the bill explicitly preserves constitutional protections and avoids taking sides on final-status issues.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.