The government has near-absolute discretion over whom it contracts with, and no company has a constitutional right to be a federal vendor. Courts treat military technology decisions as core Commander-in-Chief functions subject to minimal judicial review, and the political question doctrine may bar second-guessing what the Secretary deems a security risk.
The supply chain risk statute grants broad, largely unreviewable national security discretion and doesn't require the threat to originate from a foreign adversary.
Finally, the First Amendment claim faces the problem that the government was responding not to abstract speech but to a concrete refusal to provide services on the military's terms, which courts are unlikely to treat as protected expression warranting judicial override of procurement choices.
Re: First Amendment claim
It goes much further than the "refusal to provide services" speech. By blacklisting them, they are blocked from doing any future business, which is prior restraint. Courts aren't very friendly to that.
Even if a law provides few guardrails to restrict how it's applied, courts care that applications of the law are not capricious.
While this suit has a weak basis, what you’re saying is not at all how government contracting and procurement works.
> The government has near-absolute discretion over whom it contracts with,
Not at all the case, procurement is dictated by a maze of Congressional acts and the FAR.
> and no company has a constitutional right to be a federal vendor.
Not constitutional but federal law actually dictates they do. Many companies actually have _more_ of a right to contracts than primes.
> Courts treat military technology decisions as core Commander-in-Chief functions subject to minimal judicial review,
Not at all the case there have been many disputes and it’s not uncommon to see a protest filed against procurement decisions in even innocuous cases. Many companies (eg Palantir) have sued the government on procurement and won.
> and the political question doctrine may bar second-guessing what the Secretary deems a security risk.
Sure, lowercase security risk, but uppercase Supply Chain Risk designation is an actual action subject to administrative procedure. There are many laws (eg Administrative Procedure Act) that allow judges to overturn this. The current basis of their suit is largely ideological but if they instead argued the designation was arbitrary the APA could very possibly be used to overturn it.