Nearly every federal offer now involves a representation about covered telecommunications equipment and services. The requirement comes from Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, and because it reaches the equipment a company uses in its own offices, it is broader than many contractors assume. A mid-year compliance review is a good moment to separate myths from facts. This is general information; talk to a lawyer about your specific situation.
Myth: Section 889 only matters to companies that sell telecom equipment
Fact: The law has two parts. The first, effective in August 2019, generally prohibits agencies from procuring or obtaining covered telecommunications equipment or services as a substantial or essential component of any system. The second, effective in August 2020, generally prohibits agencies from contracting with an entity that uses covered equipment or services as a substantial or essential component of any system, whether or not that use relates to a federal contract. That second part reaches companies of every kind, including those that sell nothing technical at all.
Myth: It covers equipment from any foreign manufacturer
Fact: The prohibition is specific. Covered equipment and services generally include telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation; video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company or Dahua Technology Company, for certain purposes; services provided by those companies; and their subsidiaries and affiliates, along with entities the government may designate under the law. The definitions in the FAR clause control, so read them rather than relying on summaries.
Myth: A one-time answer in SAM.gov is the end of it
Fact: Contractors represent annually in SAM.gov whether they provide or use covered equipment or services, and solicitations include a provision that may require an offer-by-offer representation and further disclosure. The contract clause also requires contractors to report if they identify covered equipment or services during performance, within short deadlines the clause sets, and to describe mitigation steps. Representations must stay accurate as your equipment changes.
Myth: If we did not buy it directly, we are fine
Fact: Covered equipment can arrive indirectly, through security cameras installed by a building owner, routers supplied by a service provider or components inside other products. The FAR calls for a reasonable inquiry, generally an inquiry designed to uncover information in your possession about the producer or provider of the equipment and services you use. It does not require an internal or third-party audit, but it does require a genuine effort.
What a practical review looks like
- Inventory the network, phone, camera and surveillance equipment your firm uses, including in leased spaces.
- Ask your internet, phone and security providers to confirm in writing whether covered equipment is part of their service to you.
- Add a covered equipment check to purchasing for any new technology.
- Confirm that your SAM.gov representation reflects what you found, and recheck before each annual update.
- Flow the requirement down to subcontractors as your contracts require, and ask suppliers for representations.
Waivers have been available only in limited circumstances, granted to agencies rather than contractors, and they should not be assumed. The current provisions and clauses are in FAR Subpart 4.21 at acquisition.gov, and you can review your representations at sam.gov.