Section 889: What It Bans and What You Must Report

Sep 13

6 min read

Compliance reviewed by Onur Oncer, SDVOSB Materials compliance lead.

Section 889 of the Fiscal Year 2019 National Defense Authorization Act carries two bans, not one. Paragraph (a)(1)(A) bars agencies from buying covered telecommunications and video surveillance equipment. Paragraph (a)(1)(B) bars them from contracting with any company that uses it anywhere in its own systems. SDVOSB Materials Technology & Supply LLC answers both on every federal technology bid.

Section 889 Bans Two Different Things

The Federal Acquisition Regulation (FAR) implements both halves at FAR Subpart 4.21. Since August 13, 2019, agencies may not procure, obtain, extend or renew a contract for equipment, systems or services that use covered telecommunications equipment or services as a substantial or essential component, or as critical technology in any system. Most buyers know that half.

The second half is broader. Since August 13, 2020, agencies may not contract with an entity that uses such equipment in any system it operates, and FAR 4.2102(a)(2) is blunt: the prohibition applies regardless of whether that use is in performance of work under a federal contract. A camera in your own warehouse, bought years before the solicitation existed, on a network that touches no government data, is in scope. That is where otherwise clean offers get pulled. Wider context sits in our federal IT infrastructure procurement guide.

Two exceptions sit at FAR 4.2102(b): services connecting to a third party's facilities, such as backhaul, roaming or interconnection, and equipment that cannot route or redirect user data traffic or see the packets it handles. A waiver path is described at FAR 4.2104.

What Counts as Covered Equipment

FAR 4.2101 defines covered telecommunications equipment or services in four parts, and the parts are not symmetrical.

Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation, or any subsidiary or affiliate. No purpose qualifier attaches here.
Video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company or Dahua Technology Company, or their subsidiaries and affiliates, when used for public safety, security of government facilities, physical security surveillance of critical infrastructure, or other national security purposes.
Telecommunications or video surveillance services provided by those entities, or provided using that equipment.
Equipment or services from an entity the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes is owned or controlled by, or connected to, the government of a covered foreign country, which the regulation names as the People's Republic of China.

Note the verb. The definition reaches equipment produced by those manufacturers, not equipment sold under their names. A recorder can carry an unfamiliar label and still have been built by a covered entity. A file that records brands does not answer the question the clause asks.

What "Substantial or Essential Component" Actually Means

FAR 4.2101 defines it as any component necessary for the proper function or performance of a piece of equipment, system or service. That is a functional test, not a value test. No percentage to calculate, no dominant-part rule to fall back on.

So an encoder module, a wireless radio or a chipset inside a third-party enclosure can pull the whole assembly into scope even when the assembler is not a covered entity. Critical technology is defined separately and reaches Munitions List and controlled Commerce Control List items.

Three Clauses Do Three Different Jobs

Section 889 usually appears as one solicitation line, so buyers treat it as one checkbox. It is three clauses. Each entry below names the clause, what it does, and when it lands.

FAR 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment. The detailed representation, completed only after an offeror answers "does" to a short question. With the offer.
FAR 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment. The operative prohibition, the reporting requirement and the subcontract flow-down. In the contract, and in subcontracts at every tier.
FAR 52.204-26, Covered Telecommunications Equipment or Services Representation. Two "does / does not" representations: whether you provide covered equipment, and whether you use it at all. In the System for Award Management (SAM); mirrored at FAR 52.212-3(v) for commercial items.

FAR 52.204-26 is where most offerors meet Section 889 first, and FAR 4.2103 lets contracting officers rely on a "does not" answer unless they have reason to question it. Read that twice. Nobody is obliged to verify your representation, which makes a wrong one a false statement rather than a clerical error.

Prohibited Source Is Not the Same Test as Domestic Content

These two get merged constantly, and merging them produces unenforceable specifications. Domestic content asks where a product was made and how much of its content originates where. Prohibited source asks who produced a component, and whether you use it at all.

They can disagree. A cable assembly can qualify as a domestic end product and still fail Section 889 because of a module inside it. A switch built overseas by a manufacturer named nowhere in FAR 4.2101 clears Section 889 and can still fail domestic content on the same solicitation. Country of origin, FAR Part 25 and the Trade Agreements Act are a separate conversation, covered in our post on the federal versus commercial structured cabling specification.

You Have One Business Day From Discovery

The reporting obligation lives at FAR 52.204-25 paragraph (d). If you identify covered equipment used as a substantial or essential component during performance, or a subcontractor at any tier notifies you, report to the contracting officer unless the contract sets other procedures. Department of Defense contractors report through dibnet.dod.mil.

Within one business day, that report carries the contract number, affected order numbers, supplier name, the supplier's unique entity identifier and Commercial and Government Entity (CAGE) code if known, brand, model number, item description and any readily available mitigation information. Within 10 business days after that, you owe further mitigation detail and what you will change.

One business day is not enough time to build a parts list. It is enough time to read one you already keep. That is this clause's real consequence, and it moves the inventory work to award rather than discovery. Paragraph (e) also requires the substance of the clause in all subcontracts, including those for commercial products and services.

Frequently Asked Questions

Does Section 889 apply to equipment we already own?

Yes, if it is covered equipment. Paragraph (a)(1)(B) reaches use in any of your systems, and FAR 4.2102(a)(2) applies it whether or not that use is in performance of a federal contract. Legacy cameras and radios on internal networks are the most common source of a surprise "does" answer.

Do we have to audit our whole network before answering?

No. FAR 4.2101 defines reasonable inquiry as one designed to uncover information already in your possession about the producer of covered equipment you use, and says it excludes the need for an internal or third-party audit. Ask your own records seriously. Commissioning an audit is not required.

Is a device banned simply because it was manufactured in China?

No, and specifying it that way will not hold. Section 889 names producers, plus entities identified under paragraph (4) of the FAR 4.2101 definition. Country of manufacture is a domestic-content question under a different clause set. Write the two requirements on separate lines, each citing its own authority.

Does the clause reach our subcontractors?

Yes. FAR 52.204-25 paragraph (e) requires the contractor to insert the substance of the clause in all subcontracts and other contractual instruments, including those for commercial products or services. A supplier who is not passing it down creates exposure at your prime contract, not at theirs.

Does Section 889 cover our cybersecurity requirements?

No. Prohibited source asks who produced a component. Cybersecurity requirements govern how you protect information once it is on your systems. Both appear in the same solicitations and neither satisfies the other. Those obligations are covered in our comparison of NIST SP 800-171 and CMMC subcontractor readiness.

Specifying a Federal Network or Video Package?

SDVOSB Materials Technology & Supply LLC scopes voice, data, video, audiovisual and security infrastructure through its technology infrastructure division, tracking producer at the model level because that is where the definition operates. It is a certified Service-Disabled Veteran-Owned Small Business, HUBZone small business and Small Disadvantaged Business under Small Business Administration programs. It does not hold its own General Services Administration (GSA) Schedule; GSA orders run through GSA-registered partner vendors. It holds The Interlocal Purchasing System (TIPS) contract 230701. UEI K39HBMPLN4B3, CAGE 7YX60, active on SAM.gov.

Need a bill of materials checked against FAR 4.2101 before the representation is signed? Reach us through our contact page or call (917) 216-9400, and we will tell you what needs producer-level confirmation.