As of Aug. 13, every federal contractor, whether a one-person operation, or a multi-billion dollar corporation, must certify that they and their extended supply chains, do not use, contain, install or sell covered telecommunication and video security equipment or services that are produced by Huawei, ZTE, Hytera, Hikvision, and Dahua and their subsidiaries.
Section 889 (“Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment”) is part of the Fiscal Year 2019 National Defense Authorization Act (NDAA) where the intent is to limit the exposure of critical federal infrastructure to Chinese threats.
A recent acquisition.gov statement explained “…The federal government alone experiences hundreds of thousands of digital assaults every day. Malicious actors are persistent, usually well-funded and constantly changing their tactics. They often exploit technologies from the identified Chinese companies to do so. The Administration shares Congress’ strong commitment to addressing insidious threats to the Nation’s national security and intellectual property.”
There are two prohibitions in the NDAA legislation, Part A addressing federal agency issues and Part B, addressing businesses serving as government contractors, and their supply chains. Part A, relating to federal agencies, became effective August 13, 2019 and prohibited the government from obtaining the covered equipment and services.
Part B, effective Aug. 13, is specific to contractors and their supply chain. It specifically states that the government is prohibited from contracting with any entity that uses the covered telecommunications equipment or services produced by the noted entities.
This is critical for companies to realize that their own telecommunications and security systems, and those of their supply chain are included, not just new products provided to the government customer.
The prohibition applies regardless of whether or not the usage is in performance of work under a federal contract and applies to every sector and every dollar amount. Companies are required to conduct a reasonable inquiry and legally certify whether they do or do not use prohibited equipment or services.
Part B has been added to the Federal Acquisition Regulation (FAR) at FAR subpart 4.21.
“Federal contractors must now identify hundreds of prohibited entities across their extended supply chains and continuously monitor those supply chains to ensure prohibited companies don’t re-enter them over time,” said Jennifer Bisceglie, CEO of Interos (interos.ai). “The real concern for businesses here is that this level of compliance will be impossible without a technology-based solution, manual processes just won’t be able to cut it. The Government has said as much in the Federal Register. It will cost the private sector to do 889 compliance right – but it’s a cost well worth bearing to help everyone do the right thing.”
The General Services Administration (GSA) is planning a live webinar September 10, 2020 to discuss how the agency’s leaders are implementing Section 889 in their specific business lines. To register for this no-cost webinar visit: https://gsa.zoomgov.com/webinar/register/WN_hQ6tHTRDR-mMNnRRxJy22Q.
Gloria Larkin is president and CEO of TargetGov, American Express Procurement Advisor and a national expert in business development in the government markets.