FAR Councils Issue FAC 2019-05

Federal Acquisition Circular 2019-05 contains an interim rule that implements Section 889(a)(1)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (PL 115-232), which prohibits the head of an executive agency, on or after August 13, 2019, from procuring 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. Comments on the interim rule, identified by FAR Case 2018-017, are due by October 15, 2019.

Definition

The rule defines “covered telecommunications equipment or services” as: telecommunications equipment produced by Huawei Technologies Co. or ZTE Corp. (or any subsidiary or affiliate of these entities); for the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corp. Hangzhou Hikvision Digital Technology Co., or Dahua Technology Co. (or subsidiary/affiliate); telecommunications or video surveillance services provided by these entities or using their equipment; or telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of the People’s Republic of China.

Prohibition

This rule provides a new solicitation provision and contract clause. The provision at FAR 52.204-24 requires offerors to represent whether their offer includes covered telecommunications equipment or services and if so, to identify additional details about its use. The clause at FAR 52.204-25 prohibits contractors from providing 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, unless an exception applies or the covered telecommunications equipment or services are covered by a waiver described in FAR 4.2104. The contractor must also report any such equipment, systems, or services discovered during contract performance. The contractor must also flow down this requirement to subcontractors.

About George Gullo

George Gullo is an attorney editor in the Government Contracts group at Wolters Kluwer Legal & Regulatory U.S. George serves as the principal editor of Cost Accounting Standards Guide and supports all of the group’s print and electronic publications, as well as legal research tools, including the Government Contracts Reporter, Board of Contract Appeals Decisions, and the FAR and DFARS Matrix Smart Charts. With more than 25 years experience in the legal publishing industry, including more than 15 years in the government contracts area, George also has a background in legal and business transactions. He is a graduate of DePaul University College of Law and a licensed Illinois attorney.
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