Section 889 Part B Redux: What Are Contractors’ Compliance Obligations in 2021?

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In July 2020, the Federal Acquisition Regulation Council published the interim final rule implementing Section 889(a)(1)(B) of the National Defense Authorization Act for Fiscal Year 2019, which prohibits federal government agencies from doing business with entities that use any equipment, system, or service that uses (i) covered telecommunications equipment, or (ii) services from specific Chinese companies or their affiliates as a substantial or essential component of any system, or as critical technology as part of any system. The interim rule provided contractors just one month to comply with Section 889 Part B before its August 13, 2020 effective date.

As we approach the one-year anniversary of Section 889 Part B taking effect, it is important for contractors to keep in mind that compliance with the interim rule is not a one-time effort. The interim rule identified specific actions that the FAR Council expected contractors to incorporate into their compliance programs within the first year, and contractors would be wise to revisit their reasonable inquiries, follow-up activities, and representations to the Government to confirm that they have addressed each item on the FAR Council’s list.

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