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RISKS, REEFS, AND WRECKS: Charting a Course Through the Perils of Covered Telecommunications Equipment and Services
Like the sailors Like theofsailors old, the ofgovernment old, the government What Lies What Beneath Lies Beneath telecommunications telecommunications equipment” equipment” in in contracting contracting community community ventures ventures their operations. their operations. As is typical As isintypical the in the forth knowing forth knowing full well that full well danger that danger“Covered“Covered telecommunications telecommunications world of world federal ofprocurement, federal procurement, the the lies ahead lies – ahead although – although fortunately fortunately not not equipment,” equipment,” as currently as currently defined by defined by existing existing FAR definitions FAR definitions – and those – and those in the form in the of aform kraken, of aleviathan, kraken, leviathan, or or FAR 4.2101, FARincludes 4.2101, includes equipment equipment and and added inadded the Interim in theRule Interim to address Rule to address other mythical other mythical sea monster. sea monster. Rather, Rather, services services producedproduced or provided or provided by by the restrictions the restrictions of Section of BSection – do not B – do not these perils these andperils risksand are risks embedded are embedded Huawei Technologies Huawei Technologies CompanyCompany or ZTE ordictate ZTE precisely dictate precisely what a contractor what a contractor in sweeping in sweeping new regulations new regulations that, that, Corporation Corporation (or any subsidiary (or any subsidiary or affili- or affilimust do must in order do to in comply order towith comply the with the like an unseen like anreef, unseen will reef, be arriving will be arrivingate of those ate of entities) those entities) and certain andvideo certain video new prohibitions. new prohibitions. While theWhile Interim the Interim and taking and effect taking alleffect too quickly. all too quickly. surveillance surveillance productsproducts or telecommunior telecommuniRule establishes Rule establishes a definition a definition of what of what On July 14, On 2020, July 14, the2020, FAR Council the FAR Council cations equipment cations equipment and services and services constitutes constitutes a “reasonable a “reasonable inquiry” inquiry” publishedpublished a long-awaited a long-awaited (or (or producedproduced or provided or provided by HyterabyComHytera Comto be incorporated to be incorporated into FAR into 4.2101, FAR 4.2101, perhaps perhaps long-dreaded) long-dreaded) Interim Rule Interim Rule munications munications Corporation, Corporation, Hangzhou Hangzhou Definitions, Definitions, and FAR and 52.204–25, FAR 52.204–25, implementing implementing Section 889(a)(1)(B) Section 889(a)(1)(B) of of Hikvision Hikvision Digital Technology Digital Technology Company, Company, Prohibition Prohibition on Contracting on Contracting for Certain for Certain the National the National Defense Defense Authorization Authorization or DahuaorTechnology Dahua Technology CompanyCompany (or (orTelecommunications Telecommunications and Video and Video Act (NDAA) Actfor (NDAA) Fiscalfor Year Fiscal (FY)Year 2019 (FY) 2019 any subsidiary any subsidiary or affiliate orof affiliate those of thoseSurveillance Surveillance ServicesServices or Equipment, or Equipment, (Section (Section B). Effective B). Effective August 13, August 2020,13, 2020, entities).entities). The Interim TheRule Interim requires Rule requires in actuality in actuality the definition the definition is little more is little more Section BSection prohibits B prohibits executiveexecutive agenciesagencies contractors contractors to submittoasubmit representation a representation than a mirage than athat mirage provides that provides minimal minimal from “entering from “entering into, or extending into, or extending or orwith eachwith offer each that,offer afterthat, conducting after conducting a substantive a substantive guidance: guidance: renewing,renewing, a contract a contract with an entity with an entity“reasonable “reasonable inquiry,” covered inquiry,” telecomcovered telecomthat usesthat anyuses equipment, any equipment, system, or system, munications or munications equipment equipment or services or services Reasonable Reasonable inquiry means inquiryan means inquiry an inquiry service that service usesthat covered uses telecommucovered telecommuare not being are not used being by the used offeror. by the Like offeror. designed Like designed to uncover to any uncover information any information nicationsnications equipment equipment or services or services as a asallarepresentations all representations to the government, to the government, in the entity’s in thepossession entity’s possession about theabout the substantial substantial or essential or essential component component of theofrequirement the requirement on the surface on the belies surface belies identity of identity the producer of the producer or provider or provider any system, any or system, as critical or astechnology critical technology the threatthe of threat what’sofbeneath what’s beneath – a false– a false of covered of telecommunications covered telecommunications equip- equipas part ofasany part system.” of any system.” Unlike itsUnlike its or misleading or misleading statement statement concerning concerning ment or services ment or services used by the used entity by the entity counterpart, counterpart, Section 889(a)(1)(A) Section 889(a)(1)(A) covered telecommunications covered telecommunications that excludes that excludes the needthe to include need toan include an of the NDAA of the forNDAA FY 2019 for FY (Section 2019 (Section equipment equipment could have could catastrophic have catastrophic internal or internal third-party or third-party audit. audit. A), whichA), prohibits which prohibits agenciesagencies from from consequences, consequences, includingincluding but not but not “procuring “procuring or obtaining or obtaining equipment equipment or or limited tolimited contract to contract termination termination and the andRead the literally, Readthis literally, definition this definition is subjectis subject services services that use that covered use telecommucovered telecommuever-present ever-present specter of specter actions ofand actions and to infinitetointerpretations infinite interpretations as to what as to what nicationsnications equipment equipment or services or services as a asinvestigations a investigations under theunder Falsethe Claims False Claims an inquiryan“designed inquiry “designed to uncover to any uncover in- any insubstantial substantial or essential or essential component component or or Thus, Act. Act. it will Thus, be itcritical will befor critical contracfor contracformation” formation” would entail. wouldThe entail. definition The definition critical technology,” critical technology,” the restrictions the restrictions of of to act tors tors expeditiously to act expeditiously to ensuretothat ensureisthat similarly is similarly deficientdeficient in that it in fails that toit fails to Section BSection go far beyond B go farthe beyond immediate the immediate they havethey a clear haveunderstanding a clear understanding of the ofdescribe the describe what constitutes what constitutes “information “information contract contract between between the contractor the contractor and and Interim Rule’s Interim expansive Rule’s expansive requirements requirements in the entity’s in thepossession.” entity’s possession.” That said, That said, the government. the government. Instead, Section Instead,BSection – B including – including what is required what is required by the by thethe Interim theRule Interim does Rule provide doesthat provide the that the directs contractors directs contractors to discontinue to discontinue “reasonable “reasonable inquiry” that inquiry” eachthat contraceach contracinquiry: inquiry: any and all anyuse andofall covered use of telecommucovered telecommutor must tor now must undertake. now undertake. nicationsnications equipment equipment or services. or services. … includes … includes examining examining relationships relationships Even accounting Even accounting for the choppy for theseas choppy seas Considering Considering the potential the potential conse- conse- with any with subcontractor any subcontractor or supplier or supplier caused by caused the ongoing by the ongoing pandemic, pandemic, the the quences quences of noncompliance, of noncompliance, contrac- contracfor whichfor thewhich primethe contractor prime contractor has has exceedingly exceedingly broad scope broad ofscope Section ofBSection B of every tors tors of variety every–variety including – including a Federalacontract Federal contract and usesand the uses the promisespromises sharp, jagged, sharp,and jagged, uncharted and uncharted small businesses small businesses – must now – must now supplier or supplier subcontractor’s or subcontractor’s “covered“covered hazards to hazards contractors to contractors attempting attemptingpay closer pay attention closer attention to their own to their own telecommunications” telecommunications” equipment equipment or or to implement to implement compliant compliant policies and policies and operations operations and to supply and tochains supplytochains to services services as a substantial as a substantial or essential or essential procedures. procedures. ensure that ensure theythat are they not using, are not orusing, that orcomponent that component of any system. of any system. A reason-A reasonthey canthey swiftly canexcise, swiftlyall excise, “covered all “covered able inquiry ableisinquiry an inquiry is andesigned inquiry designed to to 16 | AUGUST2020
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