By Adam Turteltaub

“Section 889(a)(1)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 prohibits the Federal Government from procuring or obtaining, or extending or renewing a contract to procure or obtain, ‘any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.”

As Jonathan Aronie, partner at the law firm Sheppard Mullin explains, in practice that means the Federal Government is precluded from purchasing goods and services using technology from Huawei and four other companies.

While the issue may seem distant, it’s far closer for companies than many realize.

There are two parts of the legislation, Jonathan explains.  Part A already applies to regulations covering any technology from these companies in a product sold to the government and in a service performed for the government.  In August 2020, Part B kick in.  That covers the use of technology even if not in performance of a government contract.  It affects everything from laptops to phones to thermostats, even lab equipment and medical devices.

Government contractors are likely to bear a substantial burden, but so too will higher education, IT and telecommunications, as well as healthcare and financial services.

Listen in to learn more about the risk and what your organization should begin doing to comply with the regulation.