On July 14, 2020, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) published in the Federal Register an interim rule [FAC 2020-08; FAR Case 2019-009; Docket No. FAR-2019-0009, Sequence No. 1] that amends the Federal Acquisition Regulation (FAR) to implement section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232) (“the Act”).
Paragraph (a)(1)(B) of section 889 prohibits executive agencies from entering into, or extending or renewing, a contract 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, on or after August 13, 2020 unless an exception applies or a waiver is granted.
To implement paragraph (a)(1)(B) of section 889, the provision at 52.204-24 requires all offerors to represent, after conducting a reasonable inquiry, whether covered telecommunications equipment or services are used by the offeror, and if so, to provide further information. The clause at 52.204-25 prohibits the head of an executive agency from entering into a contract, or extending or renewing a contract, 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, unless an exception applies or a waiver is granted. The contractor must report use of any such equipment, systems, or services discovered during contract performance.
This rule applies to all acquisitions, including acquisitions at or below the simplified acquisition threshold and to acquisitions of commercial items, including commercially available off-the-shelf items. It may have a significant economic impact on a substantial number of small entities. This interim rule is being implemented as a national security measure to protect Government information and information and communication technology systems.
The statute covers certain telecommunications equipment and services produced or provided by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of those entities) and certain video surveillance products or telecommunications equipment and services produced or provided by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of those entities). The statute is not limited to contracting with entities that use end-products produced by those companies; it also covers the use of 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.
Interested parties should submit written comments to the Regulatory Secretariat Division at one of the addresses shown in the Federal Register on or before September 14, 2020 to be considered in the formation of the final rule.
