New FAR Council Rule Limits Federal Acquisition from Chinese Providers

On Friday, July 10, the Federal Acquisition Regulation (FAR) council, alongside the Department of Defense and the National Aeronautics and Space Administration, issued an interim rule restricting federal agencies from using products and services from Chinese companies like Huawei or ZTE.

The rule, “FAR Case 2019-009; Interim Rule; Prohibition on Contracting with Entities Using Certain Telecommunications and Video Surveillance Services or Equipment,” implements section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232). In doing so, federal agencies are prohibited “from entering into, or extending or renewing, 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 critical technology as part of any system on or after August 13.”

The move comes as part of a larger set of U.S. efforts to restrict Chinese telecommunication providers internationally. The Washington Post reports that the United Kingdom is also set to block Huawei from its 5G networks, and in May, the Commerce Department banned foreign firms selling computer chips from working with the telecom giant.