DOD MAY POSTPONE CONTRACTOR BAN ON USE OF COVERED IT/TELECOM

Pentagon leaders stated recently that they will delay the enforcement of pending restrictions on contractor use of covered telecommunications and IT equipment.  Colloquially known as “Section 889 Part B” the provision bans contractor use of Huawei, ZTE and other technology anywhere in a contractor’s enterprise.  It had been scheduled to become effective in August.  An interim rule is thought to be held up in OMB’s Office of Information and Regulatory Affairs (OIRA).  Both Pentagon leaders and contractors were increasingly concerned about the lack of regulatory guidance on such a far-reaching statute with considerable implications not only for contractors, but their supply chains as well.  In addition to a delay, perhaps of up to a year, DOD leaders are also looking at applying a risk-based approach to implementing the rule when enforcement does begin.  That essentially means that compliance resources will focus most on critical systems and supply chains that support essential, tech-heavy missions.  To be clear, though, compliance with Section 889 Part B means that a contractor, and its subcontractors, cannot use telecommunications or IT equipment from Huwai, ZTE, their affiliates and other companies that a DOD panel may designate anywhere in their company.  This extends to items such as security cameras used as part of a warehouse security system, phones, computer monitors or any other tech from the listed companies and their affiliates.  It is also important to note that while DOD may focus most of their own resources on critical systems, whistleblowers will still be free to allege non-compliance.  Contractors and their subs likely have some extra time here to remove questionable equipment from company installations.  That should not be seen, though, as an indication that covered tech can stay in place if you’re not involved in DOD mission-critical projects