The Prohibited Telecommunications Equipment Clause, codified as FAR 52.204-25, is a mandatory contract clause that prohibits the use or acquisition of certain telecommunications and video surveillance equipment or services in federal contracts. This clause reflects national security policy aimed at preventing foreign adversaries from gaining access to sensitive government networks and information through embedded technologies.
It applies to nearly all federal contracts, including those under GSA Schedule programs, and has wide-reaching implications for both prime contractors and subcontractors.
Legal Origin and National Security Context
FAR 52.204-25 was introduced in response to Section 889 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year 2019. This legislation was enacted due to growing concerns about the risk posed by foreign-controlled telecommunications providers, particularly those connected to the governments of China and other strategic competitors.
Section 889 is divided into two parts:
- Part A: Prohibits federal agencies from procuring or obtaining covered equipment or services
- Part B: Prohibits federal contractors from using covered equipment or services in any part of their operations that support a federal contract
FAR 52.204-25 implements both parts through required flow-down provisions and compliance disclosures.
Who Is Affected by the Clause
The clause applies to all federal contractors, regardless of size or sector, and flows down to subcontractors at all tiers. This means that:
- Prime contractors must certify their non-use of prohibited technologies
- Subcontractors must also ensure compliance, especially if involved in performance, supply chains, or support services
- Offerors are required to provide representations during proposal submission via FAR 52.204-24 (Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment)
Failure to comply can result in bid rejection, contract termination, or other enforcement actions.
What Equipment and Services Are Prohibited
FAR 52.204-25 specifically targets certain entities and their affiliates. Prohibited items include:
- Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation
- Video surveillance and telecommunications equipment produced by:
- Hytera Communications Corporation
- Hangzhou Hikvision Digital Technology Company
- Dahua Technology Company
Also included are any services or components that substantially or essentially incorporate technology from these entities.
The prohibition applies regardless of the location of the contractor’s operations — global usage can trigger non-compliance.
Key Requirements of FAR 52.204-25
Contractors must:
- Avoid using or providing prohibited equipment or services in performance of the contract
- Flow down the clause to all subcontractors and suppliers involved
- Monitor and report any use or discovery of covered technologies
- Notify the contracting officer within one business day upon identification of prohibited use
- Submit a mitigation plan within 10 business days of notification
Contractors are expected to maintain ongoing surveillance over their systems and supply chains to ensure ongoing compliance.
Compliance Checklist for Contractors
To ensure compliance with FAR 52.204-25, contractors should:
- Perform a detailed supply chain audit
- Establish internal policies banning prohibited vendors
- Use contractual language with suppliers and subs to ensure flow-down
- Maintain documentation of all compliance measures
- Train procurement and IT staff on prohibited technologies
- Monitor for updates to the Covered List issued by the government
Compliance should be integrated into both acquisition processes and operational practices.
Penalties for Non-Compliance
Violations of FAR 52.204-25 can have severe consequences, including:
- Contract termination for default
- Suspension or debarment from federal contracting
- Withholding of payments or disallowance of costs
- Adverse performance ratings
- False Claims Act exposure if misrepresentations were made knowingly
The government takes Section 889 enforcement seriously, and contractors must treat compliance as a high-priority obligation.
Interaction With Other FAR Clauses
FAR 52.204-25 is part of a broader compliance framework. Contractors must also be aware of:
- FAR 52.204-24: Requires offerors to disclose whether they use covered equipment
- FAR 52.204-26: Allows streamlined representation if non-use is already certified
- FAR Subpart 4.21: Provides overarching policy and definitions for Section 889 implementation
These clauses work together to ensure the integrity of federal information and communications infrastructure.
Common Misconceptions
Several misunderstandings surround FAR 52.204-25:
- “The rule only applies to what we sell to the government.”
Incorrect. It also applies to any internal systems used to support a contract. - “If a subcontractor uses the equipment, it’s their issue.”
Incorrect. Prime contractors are responsible for flow-down and must ensure all tiers comply. - “This only applies to telecom providers.”
False. It applies across industries, including construction, IT, consulting, logistics, and more. - “We can report after the contract ends.”
No. Immediate reporting is required within one business day of discovery.
Understanding these realities is critical to managing risk.
Updates and the Covered List
The government maintains a Covered Telecommunications Equipment or Services List, which may be updated periodically to reflect new threats. Contractors should regularly review:
- GSA guidance on prohibited items
- FAR updates and class deviations
- Office of the Director of National Intelligence (ODNI) or DoD advisories
- SAM.gov notices and FAQs
Staying informed helps avoid unintentional violations.
Conclusion: A National Security Imperative
The Prohibited Telecommunications Equipment Clause (FAR 52.204-25) is a cornerstone of federal supply chain security policy. It reflects growing concerns about foreign surveillance risks and cyber intrusion threats embedded in globally sourced technologies.
For contractors, compliance is not optional — it is a fundamental requirement of doing business with the U.S. government. Through robust internal controls, supply chain monitoring, and proactive communication, businesses can align with the clause and continue to support secure federal operations.
