The Department of Defense has been granted a temporary reprieve from a law that bans the entire government from contracting with companies that use the technology of five major Chinese companies and their subsidiaries, including Huawei and ZTE.
The waiver, granted by the Office of the Director of National Intelligence, will allow DOD to continue to purchase basic “low risk, high volume items” from contractors whose supply chains may include tech made by the banned Chinese companies.
The law, Section 889, Part B of the 2019 National Defense Authorization Act, went into effect Aug. 13. It bars the government from contracting with any company that uses covered technology but has left many contractors still confused about how it will impact their business. Many questions remain as to what constitutes “use” of the technology and what specific affiliates from companies like Huawei are covered under the law.
The waiver is temporary, only lasting through September.
“We appreciate the waiver for low risk, high volume items as it will allow us to ensure the significant end of year activity can proceed without major interruption,” Jessica Maxwell, a DOD spokeswoman, told FedScoop. “As stated, the waiver is for low-risk systems, while for our most critical systems, we are providing a rigorous process with significant risk mitigation measures in place.”
The confusion around the implementation of the law caused several trade groups to ask Congress to mandate a delay of the law’s effective-date by at least six months. While Congress has yet to do so, Ellen Lord, the DOD’s top acquisition official, said she would try to give contractors a year to come into compliance with the law.
The Office of Management and Budget issued interim implementation guidance on the ban to agencies in July. So far, it has been unclear if or how any delays to compliance will be supported beyond the waiver DOD received for some of its purchases.
Defense News first reported news of the waiver.