An interim Federal Acquisition Rule (FAR) detailing how the U.S. Federal government will implement a ban on government use of video surveillance products from Chinese manufacturers has been released just days before the August 13, 2019, deadline for the ban to take effect. The interim rule will take effect immediately; it notes there are "urgent and compelling reasons… to promulgate this interim rule without prior opportunity for public comment."
After the interim rule is published in the Federal Register, 60 days will be allowed for public comments to be submitted (tag comments and correspondence ‘FAR Case 2018-017’). The final rule will follow. The agencies issuing the interim rule are the Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA).
Banning Chinese video surveillance equipment
The interim rule provides details about implementation of Section 889(a)(1)(A) of the NDAA for fiscal year 2019The interim rule provides details about implementation of Section 889(a)(1)(A) of the National Defense Authorization Act (NDAA) for fiscal year 2019, which the President signed into law on August 13, 2018, to take effect a year later. It bans government uses of telecommunications and video surveillance equipment produced by Hikvision and Dahua, among other companies.
The interim rule also applies to telecommunications equipment produced by Huawei Technologies Company or ZTE Corp. (or any subsidiary or affiliate). Huawei manufactures HiSilicon chips widely used in video cameras.
The interim rule requires inclusion of a clause prohibiting the listed telecommunications and video surveillance services on solicitations and/or resulting contracts that occur on or after August 13, 2019. Contractors who identify covered equipment during the performance of a contract are required to report it within one business day; and to report mitigation actions within 10 business days. The requirement is included in contracts with subcontractors.
Identifying telecommunications equipment
The rule requires submission of a ‘representation’ with each offer (government bid) to identify any covered telecommunications equipment or services that will be provided to the Government. The interim rule states: “DoD, GSA, and NASA recognize that some agencies may need to tailor the approach to the information collected based on the unique mission and supply chain risks for their agency.”
The head of an executive agency can grant a one-time waiver on a case-by-case basis for up to a two-year period
There is an option for contractors to "represent annually whether they sell equipment, systems, or services that include covered telecommunications equipment or services." A ‘no’ answer then applies to any contracts during the year. If a contractor answers ‘yes’, they are required to specify that each individual bid does not include the covered equipment.
The head of an executive agency can grant a one-time waiver on a case-by-case basis for up to a two-year period. Waivers require a compelling justification, that the equipment be listed/reported, and that a phase-out plan is implemented. The Director of National Intelligence can also provide a waiver.
Prohibits purchase of COTS items
The interim rule also applies to purchase of commercial off-the-shelf (COTS) items: "Th[e] level of risk is not alleviated by the fact that the equipment or service being acquired has been sold or offered for sale to the general public... nor by the small size of the purchase." It prohibits ‘micro-purchases’ of covered products and services delegated by agency heads.
The interim rule covers the NDAA Section 889(a)(1)(A), which is the ‘Chinese ban’ provision. It does not cover the ‘blacklist’ provision [Section 889(a)(1)(B)], which was the subject of a public hearing in July. According to the interim rule: "The prohibition in section 889(a)(1)(B) is not effective until August 13, 2020, and will be implemented through separate rulemaking." The ban also applies to current government installations, and there are questions about whether agencies and departments will comply in time.