In recent years, the U.S. government has intensified its efforts to safeguard national security by addressing potential threats in the telecommunications and video surveillance sectors. One of the significant steps in this direction is Section 889 of the National Defense Authorization Act (NDAA) for Fiscal Year 2019. This section imposes stringent prohibitions on the use of certain Chinese telecommunications and video surveillance services and equipment. For federal contractors, understanding and complying with Section 889 is crucial to maintaining eligibility for government contracts. This blog post will guide you through the requirements of Section 889 and offer practical advice on ensuring compliance.
What is Section 889 of the NDAA?
Section 889 of the NDAA comprises two primary prohibitions:
Part A: Prohibition on Procurement
Part A prohibits federal agencies from procuring or obtaining, or entering into contracts with entities 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 covered equipment includes telecommunications and video surveillance products provided by Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company, as well as their subsidiaries and affiliates.
Part B: Prohibition on Use
Part B extends the prohibition to federal contractors, barring them from using covered telecommunications equipment or services, regardless of whether they are used in the performance of work under a federal contract. This broader prohibition aims to eliminate potential security risks from the supply chain.
Why Compliance Matters
Non-compliance with Section 889 can result in severe consequences, including termination of contracts, ineligibility for future contracts, and potential legal and financial penalties. Moreover, adherence to these regulations reflects a commitment to national security and responsible business practices, which can enhance a contractor’s reputation and competitiveness.
Steps to Ensure Compliance
1. Conduct a Comprehensive Inventory
The first step in ensuring compliance is to conduct a thorough inventory of your telecommunications and video surveillance equipment and services. Identify any covered equipment or services from the specified Chinese companies within your organization and supply chain.
2. Implement an Internal Compliance Program
Develop and implement an internal compliance program that includes policies and procedures for identifying and eliminating the use of covered equipment and services. This program should involve regular audits, employee training, and clear reporting mechanisms to ensure ongoing compliance.
3. Engage with Suppliers
Communicate with your suppliers to ensure they are aware of Section 889 requirements and confirm that their products and services do not include covered equipment. Obtaining certifications or attestations from suppliers can help mitigate risks.
4. Update Contracts and Agreements
Review and update your contracts and agreements to include clauses that address compliance with Section 889. Ensure that subcontractors and partners are also compliant and understand their obligations under the law.
5. Stay Informed and Seek Guidance
Stay informed about updates and changes to Section 889 and related regulations. Engage with legal counsel or compliance experts to navigate complex situations and ensure your practices align with the latest requirements.
Tools and Resources for Compliance
Several resources can aid contractors in understanding and complying with Section 889:
- Federal Acquisition Regulation (FAR): The FAR provides detailed guidance on the implementation of Section 889 and can be a valuable resource for federal contractors.
- GSA’s Acquisition Gateway: The General Services Administration (GSA) offers tools and resources to help contractors understand compliance requirements.
- National Institute of Standards and Technology (NIST): NIST provides cybersecurity frameworks and guidelines that can support compliance efforts.
Conclusion
Compliance with Section 889 of the NDAA is a critical responsibility for federal contractors, ensuring the security and integrity of the telecommunications and video surveillance sectors. By conducting comprehensive inventories, implementing robust compliance programs, engaging with suppliers, updating contracts, and staying informed, contractors can navigate these prohibitions effectively. For more guidance on federal contracting compliance and best practices, visit Capitol 50 and schedule a free 30-minute consultation with our experts.
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