Defense contractors now have until September 30th to implement the ban on certain Chinese telecommunications products and services. The new rule comes from Section 889 of the 2019 National Defense Authorization Act (NDAA) and bans products from Huawei and ZTE Corporation, among others. The rule was supposed to take effect on August 13th. While the delay will give the defense industry more time to implement the ban, some contractors want clearer guidance.
“What I would really like to see and what industry would like to see is a true risk-based approach with consistent guidance,” Gordon Bitko, Senior Vice President of Policy at the Information Technology Industry Council, said. While contractors will not need to do a full audit of their systems to find banned products, the text of the NDAA does spell out that the head of an executive agency may not enter or renew a contract with an entity that uses any banned equipment, system or service. The lack of specificity, Bitko said, presents a problem for companies who have employees working from home and using network service providers that use the banned technology. Contractors under these circumstances may not know whether the network service providers they’re using present an issue. Undersecretary of Defense for Acquisition and Sustainment Ellen Lord has pushed for feedback from contractors on the new rule.
Pushing the ban’s start date back a few weeks will mean that contracts issued at the end of FY 2020 will not have the requirement. Bitko said Lord has advocated for a year-long delay in the rule’s implementation. Another factor complicating the matter is that the process to get a waiver is complex and might dissuade companies from filing for an exemption from the rule, Bitko said.
The first part of Section 889 was already implemented in 2019, and it banned the government from directly buying from corporations including Huawei and ZTE Corporation. The second part of the rule is broader and covers everything from large defense procurements to micro-purchases made with a government credit card, Bitko said. “It really touches on everything,” he explained. “This literally is affecting all government procurements.”