Time to Uncover Some Chinese Equipment
Recently, GSA sent a letter to contractors explaining the new FAR interim rule regarding supply chain security, which went into effect last month. The rule prohibits federal agencies from procuring, obtaining, extending, or renewing a contract to procure or obtain “any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system or as critical technology as part of any system.” (Acquisition.gov)
Covered equipment encompasses telecommunications and video surveillance products and services by Hauwei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hikvision Digital Technology Company, or Hahua Technology Company, or any company that the head of a relevant federal agency reasonably believes is controlled by the government of the Peoples Republic of China.
The interim rule:
- Prohibits contractors from providing covered telecommunications services/equipment unless an exception or waiver is granted
- Mandates every offeror represent whether it will provide covered telecommunications equipment/services as part of its offer, and if that is the case, the offeror must provide details about the covered equipment or services
- Requires contractors to report any covered equipment/services throughout the life of the contract. (ibid)
At the same time, the FAR interim rule went into effect, GSA issued a class deviation. This essentially takes a risk-based approach to the new FAR interim rule by limiting the representation requirement for GSA funded orders to the indefinite-delivery contract level. The deviation necessitates the following:
- At all times requires an order-level representation for acquisition vehicles that carry a “high risk” of including covered telecommunications equipment or services.
- Must have an order-level representation for all orders that could include information technology or communications technology under all GSA acquisitions.
- The creation of a GSA Acquisition Regulation (GSAR) representation clause, requiring the GSAR and FAR reporting clauses in all new and ongoing GSA contracts.
- Initiates GSA specific implementation targets for modification of existing contracts.
- Simplifies the application of Section 889 of the NDAA to other GSA program areas. (ibid)
The interim rule affects ALL contractors. As a contractor, you are responsible for determining whether covered telecommunications equipment/services will be provided under both new and existing contracts and orders.
Below is some fundamental information to help you prepare as GSA puts into place the interim rule and class deviation:
- FAS contracting activity will issue a mod requiring you to respond to incorporate FAR clause 52.204-25 and GSAR clause 552.204-70.
- Your mod response must delineate if you will or will not provide covered telecommunications equipment/services in the performance of any contract, subcontract, order, or any other contractual instrument.
- The substance of FAR clause 52.204-25 must be inserted into all subcontracts.
- You must report any covered telecommunication equipment or services you discover during the course of contract performance.
- For new GSA solicitations, you are required to represent at the contract level if you will or won’t provide covered telecommunications equipment/services to the Government in the performance of a contract or subcontract.
- Contract level solicitations will include FAR provision 52.204-24, clause 52.204-25and GSAR clause 552.204-70.
- In responses to solicitations and orders under indefinite-delivery contracts, representation of FAR 52.204-24 is required when there is a high risk of inclusion of covered telecommunications equipment/services. (ibid)
Wondering how all this might affect your current contract or upcoming bid? Give us a call.