October 28, 2021

Volume XI, Number 301

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DoD’s Squeeze of Chinese Telecom Equipment Continues

At the end of 2019, the Department of Defense (“DoD”) took another step to limit the potential cyber risks posed by telecommunications equipment manufactured by Chinese companies (and potentially Russian ones too). We previously have blogged on this topic hereherehereherehere, and here, noting developments both in terms of general, government-wide regulations through the FAR Council, and those specifically emanating from DoD. On December 31, 2019, DoD issued a Defense Federal Acquisition Regulation Supplement (DFARS) interim rule to further implement parts of the 2018 and 2019 National Defense Authorization Acts (“NDAA”).

Specifically, the interim rule implements § 1656 of the FY 2018 National Defense Authorization Act and § 889(a)(1)(A) of the FY 2019 National Defense Authorization Act. The new rule prohibits the procurement of any equipment, system, or service used in nuclear deterrence or homeland defense that uses “covered telecommunications equipment or services” as a substantial or essential component of any system, or as a critical technology as a part of any system. “Covered telecommunications equipment or services” include such products offered by Huawei Technologies Co., ZTE Corp., or any of their subsidiaries or affiliates, as well as any other entities that the Secretary of Defense reasonably believes to be owned, controlled by, or otherwise connected to, the governments of Russia or China.

The interim rule operates under a two-tier representation structure. At least once a year, contractors will need to represent in the System for Award Management (SAM.gov) whether they provide any covered defense telecommunications equipment or services. Those that do will have to provide offer-by-offer representations and make certain disclosures to allow DoD to determine whether it is prohibited from making an award to the contractor and/or whether a waiver may be in order. This two-tier structure reduces the burden on contractors that do not use covered equipment, by only requiring a representation from them once a year, rather than accompanying every offer.

As an interim rule, this rule took effect immediately, but is still open for comments, which are due to DoD March 2, 2020. DoD will consider all comments and modify the rule if it deems such a modification appropriate. Either way, the DoD likely will issue a final rule later this year.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 31
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About this Author

Jonathan S. Aronie, Government Contracts Attorney, Sheppard Mullin, law firm
Partner

Jonathan S. Aronie is the co-Managing Partner of the Washington, D.C. office and a partner in the Government Contracts, Investigations & International Trade Practice Group. Mr. Aronie counsels and represents large and small clients in some of the country's largest and most prominent classified and unclassified Government contracts matters, including bid protests, claims, self-disclosures, internal investigations, DOJ investigations, and False Claims Act Investigations.

Areas of Practice

Mr. Aronie’s...

202-218-0039
Jonathan E. Meyer, Sheppard Mullin, International Trade Lawyer, Encryption Technology Attorney
Partner

Jon Meyer is a partner in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Mr. Meyer was most recently Deputy General Counsel at the United States Department of Homeland Security, where he advised the Secretary, Deputy Secretary, General Counsel, Chief of Staff and other senior leaders on law and policy issues, such as cyber security, airline security, high technology, drones, immigration reform, encryption, and intelligence law. He also oversaw all litigation at DHS,...

202-747-1920
Townsend Bourne, Government Affairs Attorney, Sheppard Mullin Law FIrm
Associate

Ms. Bourne's practice focuses on Government Contracts law and litigation. Her experience includes complex litigation in connection with the False Claims Act, bid protest actions both challenging and defending agency decisions on contract awards before the Government Accountability Office and Court of Federal Claims, claims litigation before the Armed Services Board of Contract Appeals and the Civilian Board of Contract Appeals, investigating and preparing contractor claims, and conducting internal investigations. 

Ms. Bourne advises clients on a...

202-469-4917
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