WASHINGTON ― With the Trump administration poised to impose a government-wide ban on contractors using Huawei and other Chinese-made telecommunications equipment, trade groups say that companies, still reeling from the economic effects of the coronavirus pandemic, should get more time.
The administration plans to finalize regulations that would prohibit government contracting with companies whose supply chains contain products from five Chinese companies including Huawei, Reuters reported Thursday. The administration, confronting China on trade and a host of issues, has deemed Huawei an espionage threat.
“The danger our nation faces from foreign adversaries like China looking to infiltrate our systems is great,” Russ Vought, acting director of the White House’s Office of Management and Budget, said in a statement to Reuters.
“The Trump Administration is keeping our government strong against nefarious networks like Huawei by fully implementing the ban on Federal procurement.”
But leaders of the National Defense Industrial Association and the Professional Services Council have been calling for the deadline, now Aug. 13, to be moved. They argue the focus should be on recovering from the fallout caused by the COVID-19 crisis. And citing the far-reaching implications of the government’s rules, NDIA says companies should get a yearlong extension.
Ordered by a 2019 law, the new rule from the Federal Acquisition Regulatory Council would touch any company that sells goods and services to the U.S. government, requiring them to either obtain a government waiver or certify they do not use products from those companies, even though some of the banned telecommunications and surveillance equipment is among the top sellers.
“While it’s difficult to project the impact of a FAR rule that we haven’t seen, the potential impact under the statute could affect nearly every contractor and subcontractor across the entire federal government,” PSC President and CEO David Berteau said in an email to Defense News.
“Compliance with a complex rule, one with consequences that reach beyond prime contractors, could be confusing, complicated, and technically challenging. An extension of the deadline would actually strengthen U.S. security by ensuring better planning and execution of the statutory prohibitions.”
The Defense Department’s undersecretary of defense for acquisition and sustainment, Ellen Lord, told lawmakers last month that contractors need more time to comply with the governmentwide ban or risk throwing the defense industrial base into disarray.
“The thought that somebody in six or seven levels down in the supply chain could have one camera in a parking lot and that would invalidate one of our major primes being able to do business with us gives us a bit of pause,” Lord testified at a House Armed Services Committee hearing last month.
NDIA supports the aim of the regulation but argues it’s too broad for implementation. It’s asking for a legislative fix in the next tranche of coronavirus aid, likely to be passed this month, according to NDIA’s director of legislative policy, Kea Matory.
It’s so broad, Matory said, a government contractor with a sales office in India that uses local internet, for example, would have to know the manufacturer of every piece of telecommunications equipment. Likewise, she added, a trucking contractor traveling cross-country would have to know whether his or her mobile phone is interfacing with the banned gear.
“We all understand the intent of the law, and companies are not only supportive of national security interests but protecting their own intellectual property ― and no one wants that to be taken by Huawei or any bad actor,” Matory said. “It’s just the fact it’s not a workable law, as written, and especially not in this time frame.”
Joe Gould is senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry.