Federal Contractors Face August Deadline for Banning Certain Foreign Technology
The Federal Register has published action items relating to implementation of Section 889 of the John McCain National Defense Authorization Act (NDAA) for Fiscal Year 2019 (FY2019). The interim rule implements a prohibition on contracting with entities using certain telecommunications and video surveillance services and equipment effective August 13, 2020.
The interim rule targets technologies provided by Chinese telecommunications and surveillance companies such as Huawei, ZTE, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company, and any subsidiary or affiliate of those entities.
The rule enacts the prohibition for solicitation issued on or after August 13 and resultant contracts and for solicitations issued before August 13 provided the award of the resulting contracts occurs on or after August 13.
The rule calls upon contracting officers to modify existing indefinite delivery contracts to include the new prohibitions for any future orders.
According to the interim rule, the assumed cost of implementing the prohibition is $11 billion in the first year and just over $2 billion each subsequent year.
Under the rule, agencies are allowed to seek a temporary waiver from the ban, but would need to provide evidence for the waiver’s necessity and receive a security briefing from the Office of the Director of National Intelligence.
Some agencies, such as the Army, have already begun “leaning into” the coming August deadline. The Army Procurement Deputy Assistant Secretary Rebecca Weirick reportedly explained in a panel discussion that the Army has begun developing guidance for its contractors ahead of the prohibition deadline and before the Federal Register rules becomes formalized.
The interim rule allows interested parties to submit written comments to the Regulatory Secretariat Division within 60 days of the interim rule’s posting to be considered in formation of the final rule. The deadline for comments is September 14, 2020.
