Federal agencies have less than a week to update their upcoming and in-process contracts to include provisions that prohibit telecommunications equipment or services — or components of equipment or services — that are produced by Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company or Dahua Technology Company.
The interim rule added to the Federal Acquisition Regulation Aug. 7 by the Department of Defense, General Services Administration and NASA notified agencies that they have until Aug. 13 to update their acquisitions to reflect the prohibition of products that are produced by companies with suspected links to the Chinese government.
The rule change is not unexpected, as the 2019 National Defense Authorization Act initially codified the prohibition on such acquisitions, but the new rule formally implements such requirements for federal agencies.
Government leaders must address the Chinese infiltration of telecommunications in light of the potential Sprint/T-Mobile merger.
The rule also applies to acquisitions at or below the simplified acquisition threshold and for commercial off-the-shelf items, which normally have limited applicability under new laws.
“The FAR Council has determined that it is in the best interest of the government to apply the rule to contracts at or below the SAT and for the acquisition of commercial items. The administrator for Federal Procurement Policy has determined that it is in the best interest of the government to apply this rule to contracts for the acquisition of COTS items,” the rule states.
“While the law does not specifically address acquisitions of commercial items, including COTS items, there is an unacceptable level of risk for the government in buying equipment, systems or services that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. This level of risk is not alleviated by the fact that the equipment or service being acquired has been sold or offered for sale to the general public, either in the same form or a modified form as sold to the government (i.e., that it is a commercial item or COTS item), nor by the small size of the purchase.”
Those interested in commenting on the rule have 60 days to submit comments via the federal eRulemaking portal or through mail to GSA.