Deadline looms for contractors to ditch banned Chinese equipment

Federal contractors face a late-summer deadline to ensure they’re not using banned Chinese equipment and services to fulfill their federal contracts, a top White House federal acquisition official stressed.

Federal contractors have until Aug. 13 to comply with Part B of Section 889 of the 2019 National Defense Authorization Act, Office of Federal Procurement Policy Administrator Michael Wooten said during a July 13 Professional Services Counsel (PSC) webcast.

That provision prohibits government contractors from using technology and services tied to Chinese equipment manufacturers that have been deemed cybersecurity threats by the U.S. government. Those companies include telecommunications gear-makers Huawei and ZTE, as well as video surveillance manufacturer Hikvision.

The Trump administration has worked to push Huawei and ZTE out of U.S. federal and commercial telecommunications networks, both domestically and internationally, deeming the companies’ close relationships to the Chinese government as a virulent cybersecurity threat.

Cybersecurity, Wooten said during the PSC conference, is now as integral to federal acquisition as the traditional “Iron Triangle” of cost, adherence to schedules, and performance considerations that are basic tenants of federal contracting. That triangle, he said, is now a “tetrahedron of trade-offs,” with security creating the fourth side, he said.

Part B of the NDAA provision goes beyond the simple use of the five companies’ gear in contractors' networks for federal contracts, extending to its use in any day-to-day operations, including domestic commercial and overseas operations. Companies that have the equipment won’t be able to sell to federal agencies after Aug. 13 without a waiver.

“There are hundreds of thousands of digital assaults” on federal networks every day, said Wooten. Those exploits, he added, leverage technology from Huawei, ZTE, Hikvision, surveillance camera-maker Dahua, and two-way radio-maker Hytera Communications. The Trump administration, said Wooten, is “leaning into” the ban, as cybersecurity threats from China increase.

Wooten said agencies can seek a temporary waiver to the section 889 ban process, but they have to back up their need with evidence and receive a security briefing from the Office of the Director National Intelligence.

The idea, said Jessica Salmoiraghi, associate administrator of the General Services Administration’s Office of Government-wide Policy and GSA's chief acquisition officer, “is to add sunlight to contractors’ supply chain.” GSA, along with other agencies, helped write the rule.

“This is going to be a big deal for you and for us,” said Deputy Assistant Secretary of the Army (Procurement) Rebecca Weirick in a panel discussion following Wooten’s remarks.

“The Army is leaning into” the coming August deadline, Weirick said, developing guidance for its contractors ahead of the date and before the rule becomes formalized in the Federal Acquisition Regulation.