The General Services Administration’s (GSA) Federal Acquisition Service (FAS) has failed to address prohibited telecom items offered on its Multiple Award Schedule (MAS) contracts, “putting customers at risk of unauthorized surveillance of foreign adversaries,” the agency’s watchdog said in a new report published on Monday.

In 2017 and 2018, Congress passed laws that prohibit the Federal government’s procurement of certain telecommunications and video surveillance services or equipment from certain named entities. FAS is responsible for ensuring regulatory compliance related to items that contractors include in its MAS contracts.

The GSA’s Office of the Inspector General (OIG) noted in its July 10 report that two of the primary methods that FAS relies on to ensure that MAS contracts do not include prohibited telecom items are contractor self-certifications in GSA’s System for Award Management and the Prohibited Products Robomod process.

“However, the self-certifications are inadequate and the Robomod process is insufficient to prevent contractors from including prohibited telecom items on their MAS contract price lists,” the report says.

GSA’s watchdog component found problems with FAS’s efforts to address prohibited telecom items offered on MAS contracts.

According to the report, FAS has failed to take adequate action against contractors that repeatedly violate the Federal Acquisition Regulation (FAR) restrictions on providing or using prohibited telecom items. FAS also does not have a process in place to notify customer agencies about their purchases of prohibited telecom items.

Finally, the OIG found that FAS did not initially comply with FAR requirements to include subsidiaries and affiliates of named entities in its efforts to identify prohibited telecom items on MAS contracts.

“Based on these findings, FAS should strengthen controls and take additional steps to minimize the risk of customer agencies procuring prohibited telecom items that foreign adversaries may use for unauthorized surveillance,” the 29-page report reads.

The agency’s OIG made five recommendations to FAS Commissioner Sonny Hashmi:

  • Strengthen FAS’s Robomod process to ensure that it identifies MAS contracts with prohibited telecom items;
  • Establish and enforce procedures and internal controls to ensure that contract modifications are issued promptly when FAS identifies prohibited telecom items on MAS contacts, and ensure that contractors promptly remove prohibited telecom items from MAS contract price lists;
  • Implement more stringent consequences for contractors that repeatedly attempt to offer prohibited telecom items;
  • Implement a process to instruct contractors that violate the FAR restrictions on the procurement of prohibited telecom items to notify and remit refunds to any customer agencies that purchased prohibited telecom items after the FAR was updated regarding named entities; and
  • Identify items offered from subsidiaries and affiliates of named entities and either cancel the subject contract or remove the prohibited items from MAS contracts.

FAS’s Hashmi – who concurred with all recommendations – responded, “FAS strives to create a thriving, innovative, compliant, and equitable marketplace. FAS has proactively resolved all of the issues identified in the report and has aggressively implemented additional internal controls to ensure our acquisition vehicles are safe for customers. As a result, FAS has established itself as a [supply chain risk management] leader in the Federal Government.”

This OIG report follows the release of the Federal Communications Commission’s (FCC) “Covered List” late last year, which bans the sale in the United States of telecommunications network equipment and services from several China-based providers – among other firms – because their use poses an “unacceptable risk to national security.”

According to the FCC, the ban on U.S. sales and imports will help helped protect the nation’s communications networks and build a more secure and resilient supply chain for communications equipment and services within the United States.

“The FCC is committed to protecting our national security by ensuring that untrustworthy communications equipment is not authorized for use within our borders, and we are continuing that work here,” FCC Chairwoman Jessica Rosenworcel said at the time. “These new rules are an important part of our ongoing actions to protect the American people from national security threats involving telecommunications.”

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Cate Burgan
Cate Burgan
Cate Burgan is a MeriTalk Senior Technology Reporter covering the intersection of government and technology.