Issue: Section 889 Compliance

Section 889 of the annual National Defense Authorization Act (NDAA) for 2019 (Pub. L. 115-232) included government-wide prohibitions on the federal acquisition of, and funding for, telecommunications and video surveillance equipment and services provided by five specific Chinese companies.

SIA Position:

All federal contractors providing goods or services to the government should be aware of compliance certifications under “Section 889” that are required concerning certain Chinese video surveillance and telecommunications equipment and services. Likewise, recipients of any federal grant and loan funds are responsible for ensuring funds received are not used to purchase prohibited products or services. This statutory requirement is often – but not always – reiterated in notice of funding opportunity announcements and program-specific grant guidance.

Additional information:

Covered products:

  • Telecommunications equipment from: Huawei Technologies Company and ZTE Corporation
  • Video surveillance & telecommunications equipment from: Hangzhou Hikvision Digital Technology Company, Dahua Technology Company and Hytera Communications Corporation (for the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure and other national security purposes)
  • Includes such products from any subsidiaries or affiliates of these entities.

Section 889 prohibitions are divided into three distinct parts:

  • “Part B”: Restricts what contractors can use – Section 889(a)(1)(B).
    • Requires contract-holder certification to the government that they do not “use” covered products. For video surveillance equipment this means an entity’s own use of the listed equipment for any related purpose specified in the definition of covered equipment and services. See GSA guidance, and related materials on Acquisition.gov for more information.
    • Uses a “reasonable inquiry” standard for the certification regarding use, versus requiring an audit.
    • Implemented via interim final rule effective Aug. 13, 2020. See SIA’s preliminary analysis of the part B rule.
  • Grants & Loans:
    • Restricts what federal funds can be used to buy – Section 889(b)(1).
      • Recipients must ensure federal grant or loan funds are used only for allowable costs. However, no certification to the government regarding covered equipment is required from recipients or their contractors.
      • For more information see SIA’s page on Section 889 Grants requirements.
    • Directs agencies to prioritize available grant and loan funding to assist recipients in transitioning from covered equipment and services, and procuring replacement equipment and services – Section 889(b)(2)
      • For more information see SIA’s page on Section 889 and using grants for equipment replacement.
    • These provisions incorporated into the code of federal regulations effective Aug. 13, 2020.
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