Federal agencies, particularly the General Services Administration (GSA), continue to publish guidance relating to the prohibitions of Section 889 of the FY 2019 National Defense Authorization Act (NDAA). As we have written previously, Section 889 prohibits the federal government from obtaining, and federal contractors from using, certain telecommunications equipment and services offered by Chinese companies, such as Huawei and ZTE. For your convenience, our previous posts on Section 889 are available here, here, here, and here.
More recently, GSA published a series of resources for federal contractors, including webinar slides and an updated Frequently Asked Questions (FAQ) guide to provide details regarding GSA's implementation of Section 889. These resources give federal contractors insight into GSA's strategy for implementing Section 889, and they help to resolve some of the ambiguities and administrative uncertainties contained in the interim rule. Here are some of the highlights from these resources.
- Section 889's prohibitions apply to micro-purchases ($10,000 or less) even though the representation provision at FAR 52.204-24 and the reporting clause at FAR 52.204-25 are not required for micro-purchases.
- The exception for "backhaul, roaming, or interconnection arrangements" applies only to the government's procurement of services that connect to the facilities of a third-party. This exception does not extend to an offeror's or contractor's use of covered telecommunications equipment or services.
- GSA Contracting Officers will follow prescribed Letter of Concern procedures if existing contractors refuse to accept a contract modification to include the updated reporting clause at FAR 52.204-25. GSA contractors should consider this process and its consequences when deciding whether to accept such a modification.
- GSA Contracting Officers will rely on an offeror's representations that it "will not" provide and "does not" use covered telecommunications equipment and services unless the Contracting Officer has an independent reason to question that representation. In such cases, GSA Contracting Officers are expected to engage with the Supply Chain Risk Management Review (SCRM) Board to determine whether a contractor is in compliance.
- A detailed explanation of the GSA and Office of Director of National Intelligence (ODNI) waiver processes are explained in the GSA FAQ guide. While waivers are considered a last resort, they are possible under certain circumstances.
- The GSA's efforts to identify and eliminate covered telecommunications equipment from existing Federal Supply Schedule (FSS) contracts are explained in its FAQ guide.
The implementation of Section 889 is a complex, multi-agency endeavor that will continue to evolve as the latest interim rule progresses to final rule status.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.