WASHINGTON ― The Trump administration is granting the Pentagon a temporary waiver of government-wide ban on contractors using Huawei and other Chinese-made telecommunications equipment, according to a memo obtained by Defense News.
The move offers a weeks-long reprieve, until Sept. 30, for firms doing business with the Department of Defense. The firms are among those still reeling from the economic effects of the coronavirus pandemic and who lobbied for more time to comply with new far-reaching regulations.
The original provision was to take effect Aug. 13. The administration had been finalizing regulations that would prohibit government contracting with companies whose supply chains contain products from five Chinese companies including Huawei, as mandated under of Section 889 of the 2019 National Defense Authorization Act.
The administration, confronting China on trade and a host of issues, has deemed Huawei an espionage threat.
Citing U.S. national security interests, Director of National Intelligence John Ratcliffe granted the Pentagon a temporary waiver to further assess a broader waiver request from DoD. The action came in a memo to Under Secretary of Defense for Acquisition and Sustainment Ellen Lord.
The temporary waiver Lord sought was so DoD could continue to execute procurement actions that would, in part, equip and feed troops.
“You stated that DoD’s statutory requirement to provide for the military forces needed to deter war and protect the security of out country is critically important to national security,” Ratcliffe said. “Therefore, the procurement of goods and services in support of DoD’s statutory mission is also in the national security interests of the United States.”
While considering the broader waiver, Ratcliffe asked Lord share more information about potential increased risks, mitigation measures and a plan to contract with alternatives to the banned Chinese companies.
Contractors had been confused over an interim acquisition rule, agencies cannot award new contracts, task orders or modify existing contracts to any vendor who doesn’t self-certify that they are not using products from Chinese companies like ZTE and Huawei, the Federal News Network reported this week.
Ratcliffe’s memo is a win, albeit a temporary one, for defense contractors and trade associations representing them. They had hoped for a legislative fix in a new pandemic relief package ― but larger bipartisan talks had broken down.
The leaders of the National Defense Industrial Association and the Professional Services Council had called for the deadline for 889 implementation to move. They argued 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 said companies should get a yearlong extension.
In May, Lord told lawmakers that contractors needed more time to comply with the government-wide 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.
Joe Gould is senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry.