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Update on Section 889 restriction on government contractors use of Chinese-made telecommunications equipment and services

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Last week, we advised government contractors in this article about the new restrictions imposed by an interim rule and revised Federal Acquisition Regulation clauses that require contractors doing business with DoD, GSA, and NASA to certify they do not use “covered telecommunications and services” from Huawei and other Chinese companies. 

We’ve learned that the Director of National Intelligence has responded to a request from DoD by issuing a memorandum that waives the application of the new restriction through 30 September 2020.  The delay will allow consideration of a broader waiver requested by DoD to delay or revise the restrictions while the Defense Industrial Base focuses on recovery from the COVID-19 pandemic. 

The DNI memo has not been made publicly available. The waiver does not appear to address GSA or NASA contracts at present.  Also, the waiver applies only to the “use” prohibition and does not impact the restriction against providing covered telecommunications equipment to the government.  Congress is reportedly considering a legislative fix to delay or revise the restrictions as part of the next pandemic relief package.

Notwithstanding the delay, federal contractors should take advantage of this temporary reprieve by conducting a reasonable inquiry into whether they are using any prohibited equipment and services. 

Many companies already received modifications to contracts adding the new FAR clauses prior to the waiver being announced.  We expect those modifications should be administratively canceled.  In light of the recent DNI waiver, contractors should inquire with their contracting officer.

Government contractors should consult with their counsel for guidance.  Our Government Contracts team at Vandeventer Black is available to assist you.

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