Georgia Tech Procurement Assistance Center

Complying with the government’s restrictions on foreign telecommunications equipment

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Government contractors are facing a significant compliance burden thanks to three new FAR provisions that impose restrictions on contractors who supply or use Chinese telecommunications equipment services.

Generally speaking, the new FAR provisions, 52.204-24, 52.204-25, and 52.204-26, are designed to ensure that contractors do not supply any covered equipment or services to the government (the “supply restriction”) or use any covered equipment or services in their business (the “use restriction”).  Covered equipment or services include any telecommunications equipment or services from companies linked to the Chinese government, such as Huawei (the world’s largest telecom manufacturing company) and ZTE, as well as any subsidiaries or affiliates of such companies.

Continue reading at:  JD Supra

Frequently asked contractor questions about section 889

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Have you a received Section 889 letter yet?  If not, you may soon.  The letters ask whether you provide or use “covered telecommunications equipment or services.”  They are part of the implementation of Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (the 2019 NDAA), which has two phases.  The first phase started in August 2019 but has a limited scope.  The second phase—which started in August 2020—is much broader and raises a lot more questions.  This article answers some of those questions and provides some tips on how to comply.

Keep in mind that Section 889 is still being implemented.  Much of this analysis is based on interim rulemakings at 85 F.R. 42665 and 85 F.R. 53126.  Final rules may change based on public comments.

Continue reading at:  The Contractor’s Perspective

DoD’s squeeze of Chinese telecom equipment continues

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At the end of 2019, the Department of Defense (“DoD”) took another step to limit the potential cyber risks posed by telecommunications equipment manufactured by Chinese companies (and potentially Russian ones too).  We previously have blogged on this topic here, here, here, here, here, and here, noting developments both in terms of general, government-wide regulations through the FAR Council, and those specifically emanating from DoD.  On December 31, 2019, DoD issued a Defense Federal Acquisition Regulation Supplement (DFARS) interim rule to further implement parts of the 2018 and 2019 National Defense Authorization Acts (“NDAA”).

Continue reading at:  Government Contracting and Investigations Blog

Interim rule banning Huawei and other Chinese equipment and services took effect August 13, 2019

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On August 7, 2019, the U.S. Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) released an interim rule implementing Section 889(a)(1)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (2019 NDAA).  The rule, which goes into effect on August 13, 2019, generally prohibits executive agencies from procuring telecommunications equipment and services from Huawei and other Chinese technology companies and imposes strict reporting and other requirements on U.S. government contractors.  Interested parties are invited to file comments on the interim rule within 60 days of its publication in the Federal Register.

As background, Section 889(a)(1)(A) of the 2019 NDAA prohibits executive agencies from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system, or service that uses “covered telecommunications equipment or services” as a substantial or essential component of any system, or as critical technology as part of any system.  The 2019 NDAA defines “covered telecommunications equipment or services” to include the following:

  • Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any of their subsidiaries or affiliates);
  • Certain video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any of their subsidiaries or affiliates);
  • Telecommunications or video surveillance services provided by such entities or using such equipment; and
  • Telecommunications or video surveillance equipment or services produced or provided by an entity owned or controlled by, or otherwise connected to, the government of a “covered foreign country,” which the interim rule defines as the People’s Republic of China.

Continue reading at:  Wiley Rein

Related Articles: 

Two deadlines for agencies, vendors to stop using Chinese telecom products quickly approaching (Federal News Network)

A ban on Chinese tech is on the books. Are feds ready? (Federal Times)

U.S. moves to ban Huawei from government contracts

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The Trump administration on Wednesday took a tactical step in its trade confrontation with China, by releasing a rule that restricts government agencies from doing business with Huawei, the giant Chinese maker of telecommunications equipment and smartphones.

The prohibition was mandated by Congress as part of a broader defense bill signed into law last year.  It covers direct purchases of telecom gear and video surveillance equipment and services.  And it extends to other Chinese companies that, like Huawei, have raised security concerns inside the American government, including the telecom equipment maker ZTE and Hikvision, which develops facial-recognition technology.

But Huawei, China’s largest telecom company, has been the main focus of attention for the White House and an on-again, off-again bargaining chip in the administration’s trade battle.

In a statement, Huawei said the White House move was “not unexpected” since it was required by the defense bill.  The Chinese company said it would continue to challenge the ban in court and called it a “trade barrier based on country of origin, invoking punitive action without any evidence of wrongdoing.”

Continue reading at:  The New York Times

Industry wants to know exactly what Huawei ban means for contractors

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Due to concerns of espionage and infiltration, federal agencies can no longer contract with companies that use technologies from two Chinese companies: Huawei and ZTE.  But exactly how that ban will impact the federal contracting community is still up in the air.

A provision in the 2019 National Defense Authorization Act prevents agency heads from signing contracts “with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.”

As federal agencies grapple with how to meet this directive, the Defense Department, General Services Administration and NASA held a forum Friday to hear from industry stakeholders and allow members of the Federal Acquisition Regulatory Council to ask questions.

Comments varied from nonplused to strongly concerned over how the legislation will affect ongoing federal business, including federal grants used for local public safety improvements.  Despite differences in perspective, all speakers agreed on one thing: The current language is ambiguous.

Continue reading at:  Nextgov

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