In latest edition of The Wright Toolbox:
- New Interim Rules on the Government’s Ban on Tech From China – read now
New Interim Rules on the Government’s Ban on Tech From China
The National Defense Authorization Act for fiscal year 2019 at Section 889(a)(1)(B) (“Section B”) prohibits executive agencies of the federal government from entering into, extending or renewing, a contract with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. The Act defines ‘‘Covered telecommunications equipment or services,’’ as telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation. For the purpose of safety, security, surveillance and other national security purposes covered equipment includes equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company. The statute went into effect August 13, 2020.
To implement the Section B requirements, the DoD, GSA, and NASA published the First Interim Rule on July 14, 2020. The First Interim Rule required offerors to represent on an offer-by-offer basis if the offeror ‘‘does’’ or ‘‘does not’’ use covered telecommunications equipment or services, or use any equipment, system, or service that uses covered telecommunications equipment or services. If an offeror does use such equipment, the offeror is required to provide additional disclosures. On August 27, 2020, a Second Interim Rule implementing Section B was issued and will go into effect on October 26, 2020. The Second Interim rule allows an offeror that represents that it ‘‘does not’’ use such equipment to only be required to make such a representation to the System for Award Management annually, after conducting a reasonable inquiry, rather than on an offer-by-offer basis. As with the initial rules, if the offeror represents it “does” use covered telecommunications or services, or has not made any representation in response to FAR 52.204-26(c)(2) or 52.212-3(v)(2)(ii), then the offer-by-offer representation at FAR 52.204-24(d)(2) is required. There is no guidance in the Second Interim Rule as to what constitutes a “reasonable inquiry” for purposes of the Rule. Comments to the Second Interim Rule are due on September 14, 2020.