DHS Ordered DeepSeek Out of Civilian Agencies. The Order Also Covers Products 'Developed Using' It.

The first line under the title of DHS Exclusion and Removal Order #2026-01 reads “Original Release Date: July 24, 2026” [1]. The Federal Register notice telling the rest of us about it ran on October 20, almost three months later [1].

In between, the order was already in force. Wiley Rein’s contracts team says it took effect when it was issued [5]. If you sell software to a civilian agency and anything in your stack touches DeepSeek, you’ve been inside its scope since summer.

What the order says

Homeland Security Secretary Markwayne Mullin signed the order under the Federal Acquisition Supply Chain Security Act of 2018, after reviewing a recommendation from the Federal Acquisition Security Council (FASC), with OMB Director Russell Vought copied [1]. It applies to federal civilian executive branch agencies, except their national security systems and sensitive compartmented information systems, which belong to the Pentagon and the intelligence community [1]. It’s numbered #2026-01.

It does two things [1]:

1. Exclusion. Agencies must exclude DeepSeek, its affiliates and their products from procurement “effective immediately,” including agency-approved product lists, service provider equipment lists and e-commerce markets.
2. Removal. Agencies must remove products from DeepSeek and its affiliates, “and third-party products and services developed using DeepSeek implementations,” from their IT systems immediately, or seek an exception.

The risk section is short. It says DeepSeek’s servers are in the PRC, that its account process “collects personally identifiable information (PII) and may also track and digitally fingerprint users,” and that the prompt-and-response design “may result in the transfer of sensitive data to the PRC if used by U.S. government employees or vendors” [1]. Then a broader line: “The models themselves may contain malware or other security vulnerabilities” [1]. The footnotes cite, among other things, DeepSeek’s privacy policy, an April 2025 House Select Committee report, a 2020 DHS business advisory and a February 2025 NowSecure analysis of the iOS app [1].

Affiliates use the standard FAR control test: either one controls the other, or a third party controls both [1]. Agencies wanting out had to ask in writing within 60 days of issuance, with a “compelling justification” and proposed mitigations, and CISA reviews the requests [1]. By this column’s count, 60 days from July 24 was September 22, so that window closed before the public notice ran. Until removal is complete, agencies are encouraged to monitor traffic, add logging and tighten exfiltration controls [1]. DHS will review the order within a year and annually after that [1].

None of this came out of nowhere. GovInfoSecurity notes the Navy and NASA had already blocked the chatbot on their own, and Texas has kept it off state devices since January 2025, with New York and Virginia following [4].

How does the DeepSeek order reach contractors?

Through two older rules that most startups selling to government have never read.

The FASC’s 2021 rule says an exclusion order can require agencies to exclude a source “from being supplied by any prime contractor and subcontractor at any tier,” and a removal order can reach “an information system operated by a contractor on behalf of an agency” [3]. Before any order issues, the named source gets notice and 30 days to respond to the FASC [3]. After it issues, the source can seek judicial review within 60 days of being notified [3].

The 2023 FAR interim rule turned that into contract language. Clause 52.204-30, effective December 4, 2023, says contractors “shall not provide or use as part of the performance of the contract” any covered article or any product from a source named in an applicable order [2]. The clause also requires contractors to:

• search SAM.gov for the phrase “FASCSA order” and check it at least every three months during performance [2];
• run a “reasonable inquiry” when a new order could affect their supply chain, which the clause says doesn’t require an internal or third-party audit [2];
• report covered products to the contracting officer within 3 business days of finding them, and follow up on mitigation within 10 business days [2];
• flow the clause down to all subcontracts, “including subcontracts for the acquisition of commercial products and commercial services” [2].

One wrinkle: an order issued after a solicitation applies to that contract only once it’s added by amendment or modification [2]. In a contract that already carries the clause, though, the quarterly check and the reporting duty don’t wait for that [2]. Wiley Rein reads the clause the same way, and adds that the inquiry covers what your subcontractors provide [5].

The phrase that needs a definition

This section is opinion.

The order is easy to follow as far as DeepSeek and its affiliates go. They’re out, by name. Then come six words in the removal paragraph: “developed using DeepSeek implementations.” The order doesn’t define them. Footnote 13, attached to the procurement exclusion, stretches that half too, to “third party implementations of DeepSeek used to provide products and services to civilian agencies” [1]. That’s a restatement, not a definition.

Here’s what I can’t answer from the text:

• Self-hosted weights. You download an open DeepSeek model and run it on U.S. cloud infrastructure with no traffic to China. The order’s data-transfer rationale is about “DeepSeek-hosted instances” [1], which wouldn’t apply. The malware rationale is about “the models themselves” [1], which would. GovInfoSecurity reads the phrase as likely covering tools built on the open-weight models [4].
• Fine-tunes and distillations. Is a model trained from DeepSeek weights, or distilled from its outputs, “developed using” DeepSeek? The text gives no line.
• Routers. If your product can send prompts to a dozen models and DeepSeek is one of them, does turning it off for federal tenants fix it, or is the product itself covered?

Vague rules cost small teams most. A large contractor can ask counsel and its contracting officer. A five-person AI startup reselling through a GSA schedule holder gets the flowed-down clause and a 3-business-day clock. The reasonable-inquiry standard helps, since it covers only what’s already in your possession [2]. But you can’t report what you can’t define.

There’s also a drafting slip worth noting. The affiliate footnote defines affiliates of “DeepSeek AG” [1], while the order names the company as Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd. [1]. That probably doesn’t change anything. It’s still the kind of thing a challenger’s lawyer would point to.

If you sell into government

1. Inventory model lineage now. List every base model behind your fine-tunes, embeddings and agents, and every model your routers can call. That’s the record a reasonable inquiry will ask for [2].
2. Look for 52.204-30 in your contracts and subcontracts. If you’re a sub, your prime has to flow it down [2].
3. Put federal tenants on an allow-list. Until the phrase is defined, keeping DeepSeek-derived models out of federal deployments is cheaper than reporting them later.
4. Know who’s on the hook. Agencies ask DHS for exceptions [1]. A contractor facing a new order added by modification makes a waiver disclosure to the contracting officer [2]. They’re different processes.

What I’m watching

• A definition. Whether CISA’s FASCSA team publishes guidance on “DeepSeek implementations,” and whether it separates self-hosted weights from DeepSeek-hosted services.
• Contract modifications. How fast civilian agencies add the order to existing contracts and schedules, which is what turns it into a hard contract term for most vendors [2].
• A challenge. Whether DeepSeek seeks review under 41 U.S.C. 1327 [3]. Its 60 days run from notification, and the public record doesn’t say when that happened.