Supply Chain Rule Limits Fed Acquisition From Chinese Providers

A new Federal Acquisition Regulation (FAR) Council rule will ban U.S. agencies from buying products or utilizing services from companies such as Huawei or ZTE starting August 13.

Under the National Defense Authorization Act (NDAA) for Fiscal Year 2019, executive agencies were prohibited from entering in or extending/renewing contracts with entities that used any equipment, systems, or services that use covered telecommunications equipment or services. This new rule extends restrictions in acquiring equipment from covered providers, with one exception being that the agency secretary issues a contract waiver.

With this new rule, contracting officers will also have to modify any existing indefinite delivery contracts that will include the new FAR rule for future orders. “If exercising an option or modifying an existing contract or task or delivery order to extend the period of performance, contracting officers shall include the clause,” the council stated. “When exercising an option, agencies should consider modifying the existing contract to add the clause in a sufficient amount of time to both provide notice for exercising the option and to provide contractors with adequate time to comply with the clause.”

Additionally, the FAR rule “requires submission of a representation with each offer that will require all offerors to represent, after conducting a reasonable inquiry, whether covered telecommunications equipment or services are used by the offeror.” The FAR Council also said that it recognizes “that some agencies may need to tailor the approach to the information collected based on the unique mission and supply chain risks for their agency.”

While the rule takes effect Aug. 13, the FAR Council will be accepting comments on it for 60 days after release.

Jordan Smith
About Jordan Smith
Jordan Smith is a MeriTalk Staff Reporter covering the intersection of government and technology.

Categories

Recent