Covered Telecommunications Equipment or Services refers to specific telecommunications and video surveillance equipment and services that are subject to federal contracting restrictions under Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 and FAR Subpart 4.21. The term does not apply broadly to all foreign telecommunications technology. It covers equipment and services associated with specifically identified companies and other entities meeting the criteria established in the FAR.
The restrictions are significant for federal contractors because they address both what contractors provide to the government and, under Section 889 Part B, certain technology that contractors themselves use. The rules can therefore affect a company’s products, internal systems, suppliers, subcontractors, and eligibility for federal contracts.
What Qualifies as Covered Telecommunications Equipment or Services?
The formal definition appears in FAR 4.2101. It identifies several categories of telecommunications and video surveillance equipment and services associated with specified companies or other entities connected to the People’s Republic of China, which the FAR defines as the “covered foreign country” for this subpart.
The definition includes:
- telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation, including equipment produced by their subsidiaries or affiliates;
- for specified public safety, government facility security, critical infrastructure surveillance, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company, including subsidiaries or affiliates;
- telecommunications or video surveillance services provided by those entities or using covered equipment;
- telecommunications or video surveillance equipment or services from an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or Director of the FBI, reasonably believes is owned or controlled by, or otherwise connected to, the government of the covered foreign country.
This definition is narrower than simply saying that equipment was manufactured in China. The FAR focuses on specified producers, providers, affiliates, and other entities meeting the regulatory criteria.
The restrictions also depend on how covered technology is used. FAR 4.2102 addresses equipment, systems, and services that use covered telecommunications equipment or services as a “substantial or essential component” or as “critical technology” within a system. A substantial or essential component is defined as a component necessary for the proper function or performance of equipment, a system, or a service.
For contractors, this means compliance requires more than checking the brand printed on a finished product. An integrated security, networking, communications, or IT solution can contain components from multiple manufacturers and providers. Contractors need enough visibility into those components to make accurate representations to the government.
Section 889 Part A and Part B
The current federal restrictions originate from Section 889 of the FY 2019 NDAA. The two principal prohibitions are commonly called Part A and Part B. They address related but different supply chain risks and became effective one year apart.
| Requirement | Effective Date | What It Generally Prohibits |
|---|---|---|
| Section 889 Part A | August 13, 2019 | Federal agencies procuring or obtaining equipment, systems, or services that use covered telecommunications equipment or services as a substantial or essential component or as critical technology |
| Section 889 Part B | August 13, 2020 | Federal agencies entering into, extending, or renewing contracts with entities that use covered telecommunications equipment or services as a substantial or essential component or as critical technology |
Part A is primarily concerned with what the federal government purchases. A contractor generally cannot provide the government with an equipment, system, or service that uses covered telecommunications equipment or services in the prohibited manner unless an applicable exception or waiver applies.
Part B reaches further into the contractor’s organization. FAR 52.204-25 states that the prohibition applies to an entity’s use of covered telecommunications equipment or services regardless of whether that use occurs in performance of a federal contract. A company therefore cannot assume that the restriction matters only for products it directly sells to an agency.
For example, a company may offer a service that contains no prohibited telecommunications technology while separately using covered technology in its corporate operations. Part A and Part B require these situations to be considered separately.
The distinction is particularly important for companies entering the federal market for the first time. Their commercial procurement practices may never have required them to identify the manufacturers and service providers behind every relevant telecommunications or surveillance system used across the organization.
Reasonable Inquiry and Contractor Representations
Section 889 compliance relies heavily on contractor representations. FAR 52.204-26 requires an offeror to make representations concerning whether it provides covered telecommunications equipment or services to the government and, after conducting a reasonable inquiry, whether it uses covered telecommunications equipment or services or equipment, systems, or services containing them in the prohibited manner.
The FAR defines a “reasonable inquiry” as an inquiry designed to uncover information in the entity’s possession about the identity of producers or providers of covered telecommunications equipment or services used by the entity. Importantly, the definition expressly states that a reasonable inquiry does not require an internal or third-party audit.
A practical reasonable inquiry can require a contractor to examine areas such as:
- telecommunications and networking equipment used by the company;
- video surveillance and physical security systems;
- relevant equipment manufacturers and service providers;
- procurement and inventory information available to the company;
- technology incorporated into products or solutions offered to federal customers;
- information received from suppliers and subcontractors.
Offerors are also instructed under FAR 52.204-26 to review the excluded parties information in SAM for entities excluded from receiving federal awards for covered telecommunications equipment or services.
Representations should be based on the information uncovered through the required inquiry rather than assumptions about where equipment was purchased. Buying a product through a U.S. distributor, reseller, or integrator does not by itself establish that the underlying equipment is outside the definition of covered telecommunications equipment.
Contractors should also distinguish between the manufacturer and the seller. A surveillance camera may be sold under a reseller relationship or incorporated into a larger security solution. What matters for Section 889 analysis is whether the equipment or service falls within the regulatory definition and whether its use triggers the applicable prohibition.
Exceptions, Waivers, and Reporting Requirements
Section 889 is broad, but FAR Subpart 4.21 includes specific exceptions. Contractors should distinguish an actual regulatory exception from a business judgment that a particular use seems minor. Only the circumstances provided by the applicable rules can support treatment as an exception.
FAR 4.2102 states that the prohibition does not prevent agencies from procuring or contractors from providing a service that connects to third-party facilities, such as backhaul, roaming, or interconnection arrangements. It also provides an exception for telecommunications equipment that cannot route or redirect user data traffic and cannot permit visibility into user data or packets that the equipment transmits or otherwise handles.
The FAR also contains waiver procedures. A waiver is different from an exception because it requires specific government action and is subject to the conditions established in FAR 4.2104. Contractors should not treat the possibility of a waiver as permission to ignore covered technology during proposal preparation or contract performance.
FAR 52.204-25 also establishes reporting requirements when covered telecommunications equipment or services are identified during contract performance. If a contractor discovers affected equipment or services used as a substantial or essential component of a system or as critical technology, the contractor must report specified information to the contracting officer, unless the contract establishes another reporting procedure.
The clause sets a short reporting timeline. The initial report is generally required within one business day after identification or notification, followed by additional information within ten business days. The follow-up includes information about mitigation actions taken or recommended and efforts to prevent recurrence.
These obligations make Section 889 compliance an ongoing responsibility. A representation made during proposal preparation does not eliminate the need to respond if covered equipment or services are discovered later.
What GSA Contractors Should Check
Section 889 is particularly relevant to GSA contractors because Schedule offerings can include IT equipment, telecommunications products, security systems, cameras, networking hardware, cloud and managed services, and other solutions that rely on complex technology supply chains. GSA has implemented Section 889 requirements across its contracting programs, and contractors can encounter the applicable FAR provisions and clauses in solicitations, contracts, and orders.
A contractor should establish a repeatable process rather than conducting an informal review each time a representation is required. The process should identify who is responsible for Section 889 compliance and how information about manufacturers, suppliers, subcontractors, and corporate technology is collected.
Useful compliance steps include:
- Review FAR Subpart 4.21 and the applicable solicitation provisions and contract clauses.
- Conduct and document a reasonable inquiry using information available to the company.
- Check relevant equipment manufacturers, service providers, subsidiaries, and affiliates.
- Review SAM information concerning entities excluded for covered telecommunications equipment or services.
- Examine both technology offered to federal customers and relevant technology used internally.
- Maintain procedures for investigating newly discovered covered equipment or services.
- Report covered technology discovered during performance when required by FAR 52.204-25.
Companies with large product catalogs may need additional controls because manufacturer and supplier relationships can change over time. A product added to a GSA catalog after the original contract award should receive the same level of Section 889 review as products included in the initial offer.
Subcontractor relationships also matter. FAR 52.204-25 requires contractors to insert the substance of the clause, including the reporting requirements, in subcontracts and other contractual instruments, including subcontracts for commercial products or commercial services.
For GSA contractors, the safest way to understand the term “Covered Telecommunications Equipment or Services” is as a defined federal procurement category rather than a general label for risky telecommunications technology. Whether equipment or a service is covered depends on the FAR definition, its producer or provider, its role within a system, and the applicable Section 889 requirements. Maintaining visibility into these factors helps contractors make accurate representations, respond appropriately to solicitations, and avoid introducing prohibited technology into federal contracts.
