By now, government contractors should be familiar with the Federal Government’s ban on government contractors both supplying and using covered telecommunications equipment and services.  Covered telecommunications equipment or services are:

• Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of these entities);
• For the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities);
• Telecommunications or video surveillance services provided by these entities or using such equipment; and
• Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

As part of the ban, contractors have to execute a representation regarding their compliance.  Currently contractors make this representation on a contract-by-contract basis through FAR 52.204-24(d), Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment.  At the time the first interim rule was published on July 14, 2020, the System for Award Management (SAM) had not been updated to permit an annual certification to be made electronically through contractors’ SAM registrations.

On August 27, 2020, the FAR Council issued a second interim rule amending the interim rule to permit contractors to make an annual certification.  85 FR 5312 (Aug. 27, 2020).  Effective October 26, 2020, contractors, after conducting a reasonably inquiry, will be able to make an annual representation in www.SAM.gov through FAR 52.204-26(c), Covered Telecommunications Equipment or Services – Representation or, for commercial item solicitations, FAR 52.212-3(v)(2), Offeror Representation and Certifications – Commercial Items.  

Contractors who make an annual representation in FAR 52.204-26(c) or FAR 52.212-3(v)(2) that they do not provide or use covered telecommunications or video surveillance equipment or services will not need to execute FAR 52.204-24(d) on a contract-by-contract basis.  However, if the contractor represents that it does either provide or use this covered equipment or services, the contractor will need to complete the applicable representations in FAR 52.204-24(d).

The second interim rule contains a reminder to contractors that a contractor’s failure to submit an accurate representation to the Government constitutes a breach of contract that can lead to cancellation, termination, and financial consequences.  While not noted in the interim rule, a knowing failure to submit an accurate representation also may lead to False Claims Act or False Statements Act liability.  The second interim rule also notes that it is important for contractors to develop a compliance plan that will allow them to submit accurate representations.

Anyone wishing to submit comments on the interim rule or second interim rule may do so via www.Regulations.gov under FAR Case 2019-009.  The FAR Council is interested in comments regarding the anticipated impact of the rules on affected parties.  Specifically, the FAR Council is seeking additional information or guidance on what is necessary to effectively comply with the rules and what challenges contractors anticipate facing in effectively complying with the rules.

*Mrs. Petrov is admitted in the State of Maryland only and is practicing under the supervision of DC bar members.