There is little disagreement among industry experts that the threat coming from Chinese companies ZTE and Huawei is tangible and needs to be addressed, with a rule in the Federal Acquisition Regulations as a first step in the solution to the problem of supply chain risk management.
But some industry associations say that the interim final rule that the FAR Council seemingly rushed out on August 13, immediately banning the use of ZTE and Huawei products in the federal supply chain, didn’t help much, and may have made things worse.
“It’s a complex rule for vendors and agencies to implement. It puts a burden on the vendors to exercise due diligence down through multiple levels of subcontractors. It’s not clear what will constitute reasonable due diligence given all the contracting levels and players that will be involved,” said Tom Sisti, executive vice president and general counsel at the Coalition for Government Procurement.