Companies working for or with the United States Government face new restrictions on the use of communications and electronic equipment produced by companies with ties to China.  Effective August 13, 2020, no executive agency of the United States Government may “enter into a contract (or extend or renew a contract) with an entity that uses any equipment, system or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as part of any system.”  (Section 889(a)(1)(B), National Defense Authorization Act for Fiscal Year 2019).

While the implementing regulations have not yet been issued, the Act expressly defines “covered telecommunications equipment” to include certain equipment produced by list of Chinese companies including:

• Huawei Technologies Co.
• ZTE Corp.
• Hytera Communications Corp.
• Hangzhou Hikvision Digital Technology Co.
• Dahua Technology Co.

(Section 889(f)(3), National Defense Authorization Act for Fiscal Year 2019)

In the wake of the COVID-19 supply chain concerns, companies working for or with the United States Government should be aware of the foreign made products used in their business operations.  The Trump Administration is continuing to encourage companies to “onshore” their supply chains by using more domestically produced products.  At the same time, the Administration is restricting the use on federally funded contracts of products from “any foreign adversary”.

If you would like additional information about efforts to promote domestic production or about restrictions on materials and equipment used on federally funded contracts, please contact Peter Crofton or Greg Smith.