GSA MULTIPLE AWARD SCHEDULE AND NDAA 2018 SECTION 889 (a)(1)(B)

Section 889 just got SERIOUS!!  And is effective August 13, 2020

Where Section (a)(1)(A) prohibited the SALE of certain telecommunications and video surveillance equipment and services, Section (a)(1)(B) prohibits the USE of such technology IN THE OPERATION OF YOUR BUSINESS.  (https://www.regulations.gov/document?D=FAR_FRDOC_0001-1524)

Contract clauses will be updated to require representation regarding the above prohibitions, and contractors should understand the following:

  • Representation will require each contractor conduct a reasonable inquiry as to whether prohibited technology is utilized as a substantial or essential component of any system, or as critical technology as part of any system.
  • While Section (a)(1)(B) does not flow down to subcontractors, the “reasonable inquiry” should include examining relationships with any subcontractor or supplier for which the prime contractor has a Federal contract and uses the supplier or subcontractor’s “covered technology” equipment or services as a substantial or essential component of any system.
  • A reasonable inquiry is an inquiry designed to uncover any information in the entity’s possession – primarily documentation or other records – about the identity of the producer or provider of “covered technology” equipment or services used by the entity. A reasonable inquiry need not include an internal or third-party audit.

Contractors currently using prohibited technology must make an affirmative representation.

While the Government may request a waiver based on information provided by the contractor, contractors should understand that Contracting Officers have the discretion to only consider offers from contractors who can represent that they do not use any prohibited technology.  Waivers are transactional – good only for a specific procurement (contract or order), and will likely add substantial time to the procurement timeline.

In order to support the Government’s waiver request, the contractor must provide:

  • A “laydown” of the presence of covered equipment or services in the offeror’s supply chain; and
  • A “phase-out plan” to eliminate that covered equipment or services from the offeror’s systems.

Given the serious national defense concerns driving this Rule, contractors should expect waivers to be sparse and competitors to be vigilant in watching the playing field.

Contractors would be well advised to complete the “reasonable inquiry” assessment ASAP and, if any prohibited technology is identified, develop both a “laydown” and a “phase-out plan” as living documents to support the waiver request which would be required for any specific order or contract. Contractors should work expeditiously to replace prohibited technology with compliant technology in order to improve their competitive posture by eliminating the necessity for a waiver.  The Government will be looking for viable solutions not requiring a waiver.

Please contact your Gormley Group consultant for additional information and guidance.