ACEC Supports Delay of Looming Ban on Certain Telecommunications Equipment

ACEC News / Advocacy

July 16, 2020

ACEC Supports Delay of Looming Ban on Certain Telecommunications Equipment

By Dan Hilton

ACEC joined with others this week in a letter supporting efforts to prevent a burdensome regulation from taking effect. An amendment, offered by Rep. Virginia Foxx (NC) to the National Defense Authorization Act (NDAA) would delay by more than a year a looming restriction on certain telecommunications equipment due to take effect on August 13. In addition to the NDAA, the business community supports inclusion of a delay in a possible COVID-19 package currently bring negotiated in Congress.

The FAR Council finally published a long-awaited interim final rule (IFR) this week implementing Section 889 (a)(1)(B) of the John S. McCain NDAA for FY 2019. The IFR mandates that – beginning on August 13th — the Government cannot contract with an entity that uses telecommunications equipment or services produced by the Chinese state-owned companies listed below. Part B of the ban applies to every sector of the economy, including construction and professional services. The ACEC Federal Agencies and Procurement Advocacy (FAPA) Committee met with GSA in February, with the expectation that the rule would be published in March.

In addition to domestic operations, the IFR will impact operations overseas, such as internet service providers an individual may be using, as well as services such as carriers which may have partnerships with some of the companies below. [For example, DHL is known to have a partnership with Huawei].

The US Chamber and other business organizations have raised concerns over the IFR. Some of those include the cost to contractors, which is estimated to be almost $80 billion in compliance expenses. Such costs do not factor in contractors’ establishment of policies and tracking tools to conform to the regulation, possible removal and replacement of banned equipment and services, and development of waiver requests. While well-intentioned to protect national security, in light of the ongoing COVID pandemic, industry has shown that it is not ready for this regulation to take effect. 

“Covered telecommunications equipment or services” include telecommunications produced by Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company, or any other company, including affiliates and subsidiaries, owned or controlled by the People’s Republic of China.

Dan Hilton is ACEC Director Procurement Advocacy and International Affairs.

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