The Director of National Intelligence issued a memorandum waiving the applicability of new prohibition of certain telecommunications for the Department of Defense (DOD) which will allow it to continue to contract with entities it would otherwise be prohibited from until September 30, 2020. The Interim Final Rule (IFR), often referred to as “Section 889 Part B,” prohibits federal agencies from entering into, extending, or renewing a contract with a contractor that uses any equipment, system, or service that utilizes certain Chinese companies’ telecommunications equipment or services as a component or critical technology of any system, unless an exception applies or a waiver is granted. The Department of Defense had previously issued a memo on this measure, explaining that federal contractors should expect change orders or other required affirmations of a contractor’s compliance with this prohibition. Although the waiver is temporary, it is unclear if other agencies will follow DOD’s lead. AGC has communicated the difficulty many contractors have had implementing these new requirements and the challenges that the rule brings. On July 1 and July 15, AGC, along with a coalition of stakeholders, called on Congress to extend the date of implementation and to make key changes to the rule.
For more information, contact jordan.howard@agc.org or (703) 837-5368.