The Defense Department wants the flags it flies to be born entirely in the United States, and it wants Chinese, Russian, Iranian, and North Korean seafood off commissary shelves. Both changes ride on a single DFARS proposed rule published in the Federal Register on June 25, 2026 (DFARS Case 2024-D013, document 2026-12825). The rule implements three consecutive National Defense Authorization Act directives and tightens the domestic-sourcing rules that govern how the Pentagon spends procurement dollars on textiles, flags, and food.
Background
The proposed rule stitches together provisions from three NDAAs. Section 832 of the NDAA for Fiscal Year 2024 amends the Berry Amendment, codified at 10 U.S.C. 4862, which generally requires the Defense Department to buy certain categories of goods — food, clothing, textiles, and specialty metals among them — only when they are grown, reprocessed, or produced in the United States. Section 843 of the NDAA for Fiscal Year 2025 and section 831 of the NDAA for Fiscal Year 2026 supply the remaining pieces.
The Berry Amendment has long carried carve-outs that soften its reach. One is the simplified-acquisition exception: purchases below a dollar threshold escape the full domestic-production requirement. Another is the commissary-resale exception, which lets the military buy goods for resale to service members and their families without applying the strictest sourcing limits. The June 25 rule rewrites both exceptions — narrowing the dollar carve-out for flags and closing the commissary door on seafood from a defined set of adversary nations.
Key Details
Section 832 adds flags of the United States to the list of items covered by the Berry Amendment. Under the proposal, the Defense Department would generally be required to acquire only flags produced entirely within the United States, capturing the full chain of production rather than final assembly alone.
The rule also redraws where the small-purchase exception kicks in for those flags. Today, DFARS 225.7002-2(a) ties the simplified-acquisition exception to a $150,000 threshold. The proposed rule replaces that figure for flags with a far lower trigger: the domestic-production requirement would apply to any flag acquisition exceeding $10,000. That change pulls a large band of routine small purchases — the kind of buys that today slide under the $150,000 line — into the full domestic-sourcing regime. For contractors who supply flags through small-purchase and micro-purchase channels, the practical reach of the Berry restriction expands sharply.
On the food side, section 831 narrows the commissary-resale exception found at 10 U.S.C. 4862(g) and DFARS 225.7002-2(i). Under current rules, that exception lets the Defense Commissary Agency stock its shelves from a wider sourcing pool. The proposed rule removes the exception for seafood that originates in a "covered country," defined as the People's Republic of China, the Russian Federation, Iran, or North Korea. In plain terms, seafood traced to those four nations would no longer qualify for resale in commissaries under the relaxed sourcing path.
Beyond flags and seafood, the rule expands sourcing requirements for American-source articles more broadly, consistent with the NDAA provisions it implements. The Federal Register notice opens a comment period, giving industry, trade associations, and the public a formal window to weigh in before any final rule takes effect.
What It Means for Contractors
The lowered flag threshold is the change most likely to ripple through everyday contracting. Vendors that sell U.S. flags to military installations, base exchanges, and unit supply offices often do so through small-dollar orders that today fall comfortably below the simplified-acquisition ceiling. Once the trigger drops to $10,000, those vendors will need to certify and document full domestic production for a much wider slice of their order book. Resellers and distributors that source finished flags — or flag components — from overseas suppliers will face a sourcing problem they did not have to solve before. Contractors should map their flag supply chains now, identify which products are produced entirely in the United States, and flag any items that depend on imported fabric, hardware, or assembly steps.
Seafood suppliers to the commissary system face a country-of-origin compliance test. Distributors that move product into the Defense Commissary Agency channel will need traceability sufficient to demonstrate that fish and shellfish do not originate in China, Russia, Iran, or North Korea. Because seafood supply chains are notoriously layered — caught in one country, processed in a second, repackaged in a third — vendors should expect to document origin further upstream than a final-packaging label alone would support. Companies that cannot trace origin cleanly risk losing eligibility for the commissary-resale path.
The rule also fits a broader 2026 pattern of tightening domestic-preference enforcement across federal buying channels, where origin claims are drawing closer scrutiny. Contractors that touch Berry-covered categories should treat "made in the USA" representations as a documentation obligation, not a marketing line. The comment period is the moment to surface practical concerns — thin domestic supply for certain flag materials, or seafood traceability burdens — while the rule is still a proposal. Once finalized, these requirements would flow into solicitations and contracts as enforceable clauses, and the cost of non-compliance shifts from a comment-period argument to a contract-performance problem.
Because the rule is a proposal, none of it binds contractors yet. But the underlying NDAA provisions are already law, so the direction of travel is fixed even if the precise regulatory text shifts after comments. Suppliers in the flag and seafood markets — and any vendor watching the Berry Amendment's expanding footprint — should read the Federal Register notice in full, calendar the comment deadline stated in the notice, and begin the supply-chain review that compliance will eventually demand.
