Upcoming FAR Clause Will Ban Agencies Buying Huawei, ZTE

The Federal Acquisition Regulation will ban agencies from procuring equipment from five Chinese companies, including Huawei and ZTE, starting August 13, according to an interim rule published August 7.

The interim rule, published by the General Services Administration (GSA), the Department of Defense (DoD), and NASA will prohibit agencies from “procuring or obtaining, or extending or renewing a contract to procure or obtain” equipment from covered entities, as part of the implementation of the 2019 National Defense Authorization Act (NDAA).

The rule bans telecommunications equipment from Huawei and ZTE, and bans video surveillance equipment from Hantera, Dahua, and Hangzhou Hikvision. Agencies will be able to apply for individual waivers from the Director of National Intelligence.

The rule will also allow the Secretary of Defense to prohibit the usage of any technology from companies “reasonably believe[d] to be an entity owned or controlled by, or otherwise connected to” the Chinese government.

The clause will also require contractors to report any covered equipment they discover in their work, and prohibits them from providing services that include Huawei or ZTE equipment “as a substantial or critical component of any system, or as critical technology as part of any system.” Contractors will be able to report to the System for Award Management on whether they sell any covered technologies, and if so, will be required to provide an offer-by-offer representation for their contracts.

The ban applies to all purchases, including those below the micropurchase threshold.

“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,” the regulation states.

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