Practical Applications on the Chinese Tech Ban

On 23 July, the Defense Department released a memo explaining requirements for companies and contractors when the ban of telecommunications equipment made by Huawei and other China-based companies goes into effect. (Federal Computer Week, July 27, 2020)

Beginning 13 August, no contracts will be issued or extended to contractors using technologies or services and equipment made by Hikvision, ZTE or those listed in section 889(a)(1)(B) of the National Defense Authorization Act (NDAA) for Fiscal Year 2019. Any contract, task/delivery order, and off-the-shelf items purchased after 13 August must include language invoking regulation for the ban. Additionally, indefinite delivery contracts are required to be modified. (ibid)

There is a waiver process, however, pursuable by agencies. According to Alan Dhvotkin PSC executive vice president and counsel, the waiver “will most likely begin with issues identified by the telecommunications provider to its federal agency customer. The federal agency then asks for an ODNI review, which will conduct a risk assessment.” A granted waiver lasts two years and may be requested at any time. (Federal Computer Week, July 22, 2020)

Have questions or need a waiver? Give us a call.

 

Government Contractor Aid

A recent study conducted by the National Defense Industrial Association (NDIA) found that over half of small business government contractors are losing money due to a reduction in billable hours as a direct result of stay-at-home orders. To assist, the DoD is adjusting approximately 1,500 contracts to aid with cash flow for those contractors suffering financial strain. (Federal News Network, March 30, 2020)

The Defense Contract Management Agency is administering a mass modification to increase the amount of money allowed to pay vendors who have not finished their work under their current contracts. These “progress payments” will be increased to 95 percent for small companies and 90 percent for large companies. (ibid)

Additionally, provisions for contractors that cannot telework due to the nature of their work were signed into law on 27 March 27 2020 under the Coronavirus Aid, Relief and Economic Security Act, aimed at supporting individuals and businesses struggling with the economic downturn,  as a result of the pandemic. (Government Executive, March 31, 2020)

For some contractors, agencies may “modify the terms and conditions of a contract or other agreement” to reimburse at the minimum applicable contract billing rates” up to an “average of 40 hours per week for any paid leave a contractor provides to keep its employees or subcontractors in a ready state” as stated under the Act. (ibid)

The National Defense Industrial Association and the Professional Services Council both commend the act. During the pandemic, the Act will assist in ensuring contractors are part of the economic relief efforts and kept in a ready state. The legislation runs through the end of the fiscal year, 30 September 2020.

Questions about your minimum billing rates or how to obtain reimbursement? Give us a call.

Network Security Big and Small

As many companies have discovered, the Pentagon has increased network security requirements. Small companies are having a tough time with the new rules, as expected, but it appears larger companies are having issues as well. (Government Executive, December 3, 2019)

Some big companies are providing too much data to small subcontractors, which in turn leaves them at risk to foreign hackers. Foreign hackers look at fifth or sixth tier subs to find information — where the biggest “holes” are. (ibid)

In 2016, hackers stole sensitive data on the F-35 Joint Strike Fighter. This is just one of the many cases that prompted the Pentagon to issue new rules for handling sensitive information. By January 1, 2018, all companies doing business with the Pentagon were required to have a plan in place to meet the new standards. (ibid)

In the past, companies needed to only self-certify that they had a plan in place. Unfortunately, no one checked the plans, hence the hacking ensued.

Multi-factor authentication and FIPS-validated encryption seem to be two areas where companies are having a great deal of trouble. Without these working properly, it is much easier for unauthorized access into secure systems.

The Pentagon warned contractors that they will lose business if they and their subcontractors do not meet the updated rules. However, full compliance does not make a company safe from hackers. Individual companies must have an unobstructed view into their own networks as well as ongoing, updated security measures from their subcontractors in order to stay ahead of hackers.

Wondering if you are meeting the Pentagon’s new security rules? We can help you figure it out, give us a call.

Matchmaking Money

The Department of Defense (DoD) is concerned that Chinese firms investing money into U.S. tech companies could provide the Chinese with a military advantage. A new effort to counter this effect, called the Trusted Capital Marketplace, is launching in upcoming weeks. At least 50, generally small, innovative tech companies without the sophistication to obtain capital seem to  fall under this umbrella. The Trusted Capital Marketplace will match these companies with capital investors, circumventing the “red tape” they’d normally go through to obtain the much-needed capital. (Government Executive, May 2019)

Over the next month, investment goals will be developed and put in place. The current plan is to set up a website infrastructure where providers of trusted capital can aggregate with those businesses looking for capital. (ibid)

Back in October of 2018, the Pentagon said they would invest in domestic manufacturing in an effort to keep the U.S. from relying too heavily on Chinese and other foreign made parts for American weapons. The next month,  Commerce officials released a list of “specific emerging technologies that are essential to the national security of the United States,” with the desire to keep these technologies based and “backed” by U.S. companies. The infrastructure should be in place by the end of June for these companies to receive the capital they need to work with DoD.

Questions about the Trusted Capital Marketplace and how your firm can obtain much-needed capital? Give us a call at 301-913-5000.