Prohibition on Certain Telecommunications and Survelliance Equipment
What is the prohibition on certain telecommunications and survelliance equipment?
Section 889 (a)(1)(B) of the National Defense Authorization Act (NDAA) became effective on August 13, 2020. This provision of the act prohibits federal contractors from selling or using end products as well as all products and services that incorporate telecommunications or surveillance equipment or services produced by:
(1) Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company or any subsidiary or affiliate of those entities or
(2) any entity owned or controlled by or connected to the government of the People's Republic of China (PRC).
How have these prohibitions been implemented for federally funded awards?
The federal government has implemented these prohibitions through the Federal Aquistion Regulations (FAR) that are included in federally sponsored contracts and revision to the Title 2 to the Code of Federal Regulations (CFR) (Uniform Guidance) for federally sponsored research - these are discussed below.
Federal Contracts
Section 889 is implemented in Federal Acquisition Regulation (FAR) 52.204-24 and 52.204-25.
- This requires federal contractors to submit a representation with their proposal identifying any covered telecommunications equipment or services that will be provided under the contract.
- If a contractor provides covered telecommunications equipment or services, the contractor must identify the equipment or services and describe the proposed use under the contract.
- The federal agency will then determine if the equipment or service is substantial or essential. In rare instances, if the hardware is essential, the government may receive a limited one-time waiver.
- This disallows the federal government from contracting with entities that use "covered telecommunications equipment or services" as a substantial or essential component of any system or "covered telecommunications equipment or services" as "critical technology" as part of any system.
- This prohibition applies whether or not such equipment or services are used to perform the government's contract or as part of contractual deliverables provided to the government.
Federal Grants and Cooperative Agreements
The Office of Management and Budget (OMB) amended Title 2 to the Code of Federal Regulations (CFR) (Uniform Guidance)
Prohibition on certain telecommunications and video surveillance services or equipment was revised to prohibit contractors and subcontractors from using federal funds to enter into, extend or renew contracts for covered equipment, services, or systems that use covered telecommunications as a substantial or essential component of any system or critical technology as part of any system.
2 CFR § 200.471 Telecommunication and video surveillance costs.
Termination costs was added to clarify that the cost for any covered equipment or service described in 2 CFR 200.216 is unallowable.