For IT and security teams in the retail sector, the National Defense Authorization Act (NDAA) has evolved from a federal procurement standard into a baseline requirement for enterprise risk management. It is no longer just about government contracts; it is about securing the network against known vulnerabilities and ensuring supply chain transparency. When technical evaluators review new video security infrastructure, the conversation often starts with a single, non-negotiable question: Is this system NDAA compliant?

The stakes for non-compliance are high. Beyond the risk of swift disqualification from federal funding or contracts, non-compliant equipment—specifically from banned manufacturers like Hikvision and Dahua—introduces documented cybersecurity risks. Backdoors in firmware and opaque supply chains create entry points for bad actors, turning physical security devices into network vulnerabilities. For retail organizations managing sensitive customer data, point-of-sale (POS) integrations, and distributed networks across hundreds of stores, maintaining a compliant security posture is essential for cyber liability insurance and operational resilience.

Modernizing retail security is not just about ripping and replacing hardware to meet a regulation. It is about leveraging compliance as a catalyst to adopt video AI agents that transform passive video data into active operational intelligence. By selecting the best ndaa compliant cameras and pairing them with a camera-agnostic AI platform, retail leaders can satisfy IT security requirements while delivering the loss prevention tools that operations teams demand.

Key terms to know

Before evaluating specific technologies, it is helpful to clarify the regulatory and technical terminology that defines the current landscape.

• NDAA Section 889: A specific provision within the 2019 National Defense Authorization Act that prohibits federal agencies and their contractors from procuring or using "covered telecommunications equipment" produced by five specific Chinese companies (Huawei, ZTE, Hytera, Hikvision, and Dahua) and their subsidiaries.
• Covered telecommunications equipment: Includes video surveillance equipment, telecommunications gear, and any components (such as chipsets) originating from the banned entities, even if packaged inside a third-party "white-label" brand.
• Edge processing: A computing architecture where video data is analyzed locally on the device or a local appliance rather than being streamed continuously to the cloud. This reduces bandwidth consumption and maintains functionality during internet outages.
• Camera-agnostic platform: Software that can ingest video streams from various hardware manufacturers via standard protocols (like RTSP or ONVIF), allowing organizations to mix and match compliant camera brands without vendor lock-in.

The hidden risks of non-compliant hardware

For IT directors and network engineers, the "ban" list provided by the NDAA is a proxy for cybersecurity trustworthiness. The concern is rooted in historical precedent. In 2014, and as recently as 2024, attackers exploited backdoors in Hikvision cameras to target critical infrastructure (Source). These incidents demonstrate that non-compliant equipment can serve as a vector for sophisticated cyberattacks, allowing unauthorized access to broader corporate networks.

The hurdle for retail IT teams is that banned components are often hidden. Many "white-label" cameras sold under generic brand names contain HiSilicon chipsets or other prohibited subassemblies. Installing these devices inadvertently compromises the network.

Risks associated with non-compliant video systems:

• Cybersecurity vulnerabilities: Unpatched firmware and potential backdoors create persistent threats to the corporate WAN.
• Insurance liability: Using non-compliant hardware can introduce risks that affect cyber-liability insurance coverage, as providers increasingly scrutinize hardware inventories as part of their risk assessments.
• Contractual disqualification: Retailers with any federal contracts, grants, or partnerships face direct termination risk if prohibited equipment is discovered on their networks.
• Operational disruption: Reactively replacing non-compliant systems after an audit or breach is significantly more expensive and disruptive than a preemptive, planned migration.

Evaluating the best NDAA compliant cameras and architectures

Transitioning to a compliant environment requires a systematic evaluation of hardware and architecture. The goal is to secure the perimeter without burdening the network or the helpdesk.

Trusted manufacturers and verification

The market has consolidated around reliable alternatives to prohibited manufacturers. Brands like Axis Communications (Sweden), Hanwha Vision (South Korea), and Bosch (Germany) are standard bearers for NDAA compliant security cameras (Source). These manufacturers provide supply chain transparency, ensuring that chipsets and firmware meet regulatory standards.

However, hardware is only half the equation. The architecture—how video is processed and stored—determines the impact on store bandwidth and IT resources.

Bandwidth management: edge vs. cloud

Retail locations often operate on limited bandwidth. A pure cloud solution that uploads continuous video from 20+ cameras can cripple a store's internet connection, disrupting POS systems and customer WiFi.

*Data synthesized from industry calculators (Crim Tech Hub).

For distributed retail environments, a hybrid approach is often the most efficient. Intelligent video recorders process data locally at the edge, ensuring that high-resolution footage does not consume WAN bandwidth unless a user actively views it. This architecture aligns with IT requirements for minimal network impact while providing Loss Prevention (LP) teams with centralized cloud access.

Turning compliance into operational efficiency

Compliance is the gateway, but operational efficiency is the goal. Once a secure, NDAA compliant video system is in place, the focus shifts to utilizing video AI agents to solve business problems. Modern platforms turn raw video into actionable data, acting as a force multiplier for LP and operations teams.

1. Combating organized retail crime (ORC)

ORC is a sophisticated threat that costs the industry billions. Reactive monitoring is no longer sufficient. Video AI agents act as an always-on AI Security Guard, detecting specific behaviors and attributes that indicate theft.

Key capabilities for ORC prevention:

• Vehicle recognition: Identify vehicles associated with past incidents using license plate recognition and attribute search (e.g., "red truck"), alerting staff upon entry.
• Loitering detection: Flag individuals or vehicles lingering in high-risk areas like loading docks or back entrances after hours.
• Real-time alerts: Dramatically reduce investigation times by notifying security teams instantly, eliminating the need for hours of manual review.

2. Enhancing point-of-sale security

Internal theft and administrative error contribute significantly to shrinkage. Integrating video intelligence platforms with POS data creates exception-based reporting that is verified by visual evidence.

POS integration use cases:

• Sweethearting detection: Flag transactions where items are passed around the scanner or manually discounted without authorization.
• Refund fraud: Automatically retrieve video clips for all refunds processed when no customer is present at the counter.
• Self-checkout monitoring: Detect "scan avoidance" where items move from the cart to the bag without a corresponding transaction event.

3. Operational optimization

Beyond security, the AI Operations Assistant helps standardize store execution. By analyzing foot traffic and queue lengths, retailers can optimize staffing and improve the customer experience.

Efficiency metrics:

• Queue management: Detect when lines exceed threshold lengths to deploy additional cashiers, reducing walkaways.
• Staffing alignment: Use people-counting heatmaps to align staff schedules with actual peak traffic hours rather than historical estimates.

Real-world impact: Silver Bay Seafoods

The transition to compliant, intelligent video has tangible business outcomes. Silver Bay Seafoods, a major processing operation, faced challenges with legacy, non-compliant camera systems that could not meet BRC food safety standards or government contracting requirements. Their existing infrastructure was decentralized, making it difficult to monitor operations across six facilities processing over 2 million pounds of fish daily.

By deploying a cloud-managed, camera-agnostic solution, Silver Bay achieved both NDAA and BRC compliance. The system allowed them to replace aging, non-compliant hardware with NDAA compliant cameras while centralizing access for remote monitoring. Beyond compliance, the operational impact was quickly apparent. The AI system helped reduce illegal dumping incidents that previously cost the company up to $5,000 per occurrence, proving that the right security investment protects both the perimeter and the bottom line (Source).

Selecting the right NDAA compliant system

For the technical evaluator, selecting a system involves balancing compliance, cost, and deployability. The ideal solution should integrate with existing infrastructure where possible ("brownfield" deployment) while providing a secure path for new hardware ("greenfield").

Key evaluation criteria for retail IT:

• Deployment speed: Can the system be deployed without new trenching or complex wiring? Solutions that support cellular or solar options offer flexibility for parking lots and remote gates.
• Hardware flexibility: Does the platform support camera-agnostic AI software? This allows IT to use existing compliant cameras or choose best-of-breed hardware from manufacturers like Axis or Hanwha, avoiding vendor lock-in.
• Cybersecurity features: Look for end-to-end encryption, Role-Based Access Control (RBAC), and Single Sign-On (SSO) integration to ensure data governance.
• Total cost of ownership (TCO): Evaluate storage costs. Tiered cloud storage can significantly reduce long-term archiving costs compared to traditional on-premise servers.

"The technology has to serve a purpose beyond just having AI for AI's sake. What we've found with Spot AI is a partner that helps us enhance our operations in meaningful ways. The value goes beyond traditional ROI metrics - it's about creating a safer, more secure environment while maintaining the trust we place in our team."
— Mike Tiller, Director of Technology, Staccato (Source)

See Spot AI in action and discover how a compliant, intelligent video AI platform can work with your existing infrastructure. Request a demo today.

Frequently asked questions

What are the best NDAA compliant cameras for retail?
Trusted manufacturers include Axis Communications, Hanwha Vision, and Bosch. These companies manufacture their chipsets and components in compliant regions (Sweden, South Korea, Germany), ensuring they meet Section 889 requirements.

How can AI enhance video surveillance in businesses?
AI transforms video from a passive recording into an active tool. It enables real-time alerts for specific threats (loitering, vehicles), accelerates investigations with attribute search (finding a "red truck" in seconds), and provides operational data like queue times and occupancy counts.

What is the importance of NDAA compliance in security systems?
NDAA compliance ensures that security equipment is free from prohibited components that may contain backdoors or vulnerabilities associated with banned manufacturers. It is essential for cybersecurity, eligibility for federal contracts, and maintaining valid cyber-liability insurance.

How can cloud video surveillance improve operational efficiency?
Cloud-managed systems provide centralized visibility across all retail locations from a single dashboard. They reduce the maintenance burden of local servers, ensure automatic software updates, and allow for scalable storage options that grow with the business.

Security that scales without the friction

NDAA compliance is the standard, but it shouldn't be the ceiling. By choosing a platform that combines compliant hardware support with advanced video AI agents, retail organizations can secure their networks while empowering their teams. Whether it is reducing shrinkage, optimizing labor, or simply ensuring that the perimeter is secure, the right technology acts as a force multiplier—delivering safety and efficiency in equal measure.

About the author

Joshua Foster
Joshua Foster is an IT Systems Engineer at Spot AI, where he focuses on designing and securing scalable enterprise networks, managing cloud-integrated infrastructure, and automating system workflows to enhance operational efficiency. He is passionate about cross-functional collaboration and takes pride in delivering robust technical solutions that empower both the Spot AI team and its customers.