Made in the U.S. vs. NDAA compliance

April 27, 2021

The term “NDAA compliant” is widely used in the drone industry to refer to drones that are “safe to use” by government agencies and enterprises. However, this does not mean that drones made in the U.S. are automatically ok to be used by the U.S. government. Much more important than where the drone is made is who is making it and what kind of technology is being used. We will guide you through the confusing constraints.

There are three sets of constraints that are relevant for federal agencies and enterprises:

  • The National Defense Authorization Act (NDAA) which defines what the Department of Defense can buy (and is used by other agencies as implicit guidance)
  • The Executive Order 13981 advising against purchasing and using Chinese and Russian* drones and “smart” components in all federal agencies
  • The so called Entity List, which prevents named companies from acquiring U.S. technology or know-how

The drone industry has settled on the term “NDAA compliant” for some or all of these constraints and we will shed some light on what this means in practice. The effect of these is not only being felt by Government drone users, but the entire U.S. drone industry, as an increasing number of commercial drone users are now searching for NDAA compliant products due to a growing concern around data privacy.

As a result drone buyers are now being bombarded with a “Made in the U.S.” marketing message from many drone companies wanting to replace DJI. But is “Made in the U.S.” the same as NDAA compliance? What actually solves the problem Government and commercial drone operators have when purchasing drone products since the new regulations came into effect?

What is Executive Order 13981?

An executive order is not a law, but a federal directive used by the President of the United States who manages operations of the federal government. The executive order 13981 orders a risk assessment of all “covered UAS” (see definition below) in use at U.S. Government Departments. Based on this assessment, the President will be presented with a risk mitigation strategy, that might include discontinuing all federal use of “covered UAS”. The full order is outlined here and came into effect on January 18, 2021.

Below outlines how the order defines “covered UAS”:

(b) The term “covered UAS” means any UAS that:

(i) is manufactured, in whole or in part, by an entity domiciled in an adversary country;

(ii) uses critical electronic components installed in flight controllers, ground control system processors, radios, digital transmission devices, cameras, or gimbals manufactured, in whole or in part, in an adversary country;

(iii) uses operating software (including cell phone or tablet applications, but not cell phone or tablet operating systems) developed, in whole or in part, by an entity domiciled in an adversary country;

(iv) uses network connectivity or data storage located outside the United States, or administered by any entity domiciled in an adversary country; or

(v) contains hardware and software components used for transmitting photographs, videos, location information, flight paths, or any other data collected by the UAS manufactured by an entity domiciled in an adversary country.

As a result, Government entities and their suppliers started searching intensively for alternatives for their “covered UAS” as defined in the executive order. The search of alternatives turned out to be more difficult than expected, because drones assembled or even “Made in the U.S.” do not automatically meet compliance, as components used in their products could still be sourced from covered entities. The executive order does not advise against the use of “passive” parts such as resistors, capacitors and other “non-smart” components, but it does advise against the use of microprocessors and software (or assemblies, like flight controllers, containing them).

What impact is this having on the drone industry?

The race to provide compliant drones is on

For DJI, the drone manufacturer who has led the drone industry in supplying 80% of all drones, it became more difficult to supply U.S. Government Departments. Furthermore, the Entity List prohibits export of technology (and technology know-how) from the U.S. to DJI without a license from the Department of Commerce. This has presented an opportunity for U.S. based and Western drone manufacturers to supply drones to the U.S. Government and commercial operators servicing the U.S. Government. In order to step into the void left by DJI, drone manufacturers need to adapt manufacturing processes and existing supply chains to meet NDAA compliant standards (like using NDAA compliant components like our Skynode).

Being compliant takes a deep level of understanding

Because of the opportunity NDAA presents, many domestic drone companies are marketing their drones as being “Made in the U.S.”. But some of them still might be accidentally use covered components to build their drones. Some provisions of the Executive Order are complex to understand. E.g. a flight controller manufactured in the U.S. but with designs owned by entities in China or Russia is not “NDAA compliant”.

The recent policy changes have effects beyond government agencies

Enterprise drone buyers are increasingly following the same guidelines out of concerns for data privacy and are making internal policies to only purchase U.S. made, compliant drones. This is becoming commonplace with Utilities, Energy and Oil and Gas companies who manage and maintain critical infrastructure.

The key takeaways

Just because a flight controller or a complete drone is made in the U.S., it doesn’t automatically mean it is compliant with the executive order or to use the slightly overloaded industry term, “NDAA compliant”. If you are looking for compliant products it is a good idea to clarify with potential suppliers that they are up-to-date with the latest regulations and are willing to certify not just that their drone is assembled in the U.S., but that it is compliant with the full language of the executive order.

Be proactive and follow regular federal news. These regulations are currently changing regularly – we will try to keep this blog post up-to-date.

Here are the drones and products that are part of the Auterion ecosystem and are NDAA compliant:

Flight control systems and hand controllers:

Complete drones and systems:

Read next

What is the U.S. Government’s Blue sUAS Architecture?

* The full list of affected countries is defined in section 6 of the Executive Order