On July 10, 2020, the interim rule implementing Section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. No. 115-232) was released by the U.S. Government’s Federal Acquisition Regulatory Council. Section 889 prohibits the U.S. Government from buying (as of August 2019)—or contracting with an entity that uses (as of August 2020)—telecommunications equipment or services produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities) or, in certain cases, telecommunications or surveillance equipment or services produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of those entities).  The interim rule addresses the new prohibition on “use” of the banned telecommunications equipment and services and clarifies the prohibition on buying such equipment that went into effect in 2019.  The rule is not limited to end products produced by those companies; it also covers most telecommunications components from those companies that are incorporated into end products.  The prohibition and the interim rule for Section 889(a)(1)(B) become effective on August 13, 2020.

This prohibition on use applies to all U.S. Government prime contractors, domestic and international, spanning a wide array of industries, including the health-care, education, automotive, aviation, and aerospace industries; manufacturers that provide commercially available off-the-shelf (COTS) items; and contractors that provide building management, billing and accounting, and freight services.  Comments on the interim rule are due on or before September 14, 2020.

Additional details on the interim rule and its impact on Government contractors are available in a Client Alert that we published on July 13, available here.

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Susan B. Cassidy

Ms. Cassidy represents clients in the defense, intelligence, and information technologies sectors.  She works with clients to navigate the complex rules and regulations that govern federal procurement and her practice includes both counseling and litigation components.  Ms. Cassidy conducts internal investigations for government…

Ms. Cassidy represents clients in the defense, intelligence, and information technologies sectors.  She works with clients to navigate the complex rules and regulations that govern federal procurement and her practice includes both counseling and litigation components.  Ms. Cassidy conducts internal investigations for government contractors and represents her clients before the Defense Contract Audit Agency (DCAA), Inspectors General (IG), and the Department of Justice with regard to those investigations.  From 2008 to 2012, Ms. Cassidy served as in-house counsel at Northrop Grumman Corporation, one of the world’s largest defense contractors, supporting both defense and intelligence programs. Previously, Ms. Cassidy held an in-house position with Motorola Inc., leading a team of lawyers supporting sales of commercial communications products and services to US government defense and civilian agencies. Prior to going in-house, Ms. Cassidy was a litigation and government contracts partner in an international law firm headquartered in Washington, DC.

Photo of Ryan Burnette Ryan Burnette

Ryan Burnette advises clients on a range of issues related to government contracting. Mr. Burnette has particular experience with helping companies navigate mergers and acquisitions, FAR and DFARS compliance issues, public policy matters, government investigations, and issues involving government cost accounting and the…

Ryan Burnette advises clients on a range of issues related to government contracting. Mr. Burnette has particular experience with helping companies navigate mergers and acquisitions, FAR and DFARS compliance issues, public policy matters, government investigations, and issues involving government cost accounting and the Cost Accounting Standards.  Prior to joining Covington, Mr. Burnette served in the Office of Federal Procurement Policy in the Executive Office of the President, where he worked on government-wide contracting regulations and administrative actions affecting more than $400 billion dollars’ worth of goods and services each year.