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Understanding Federal Contractor Restrictions on Telecom Equipment
If you perform work under a sponsored award OR if you are involved in the purchase of equipment… any equipment… research-related or not,
READ THIS!
This Compliance Alert serves as a reminder to anyone working under a sponsored award and anyone who is involved in the purchase of equipment. Under the National Defense Authorization Act (NDAA), Fiscal Year 2019, Section 889, universities receiving federal funding are restricted from acquiring or using certain telecommunications and video surveillance equipment or services. Since NDAA Section 889 applies to sponsored projects, it may seem like only those individuals engaged in research or only those making purchases with federal funds need to pay attention to this. However, since the University of Vermont is the recipient of a significant amount of federal funding, we need to ensure that UVM does not acquire or use prohibited equipment whether it’s used for research or not.
Failure to do so jeopardizes the university’s ability to enter into future contracts, could result in a False Claims Act violation (which can lead to significant fines and penalties including treble damages), and could result in significant reputational harm. In order to remain in compliance, we must avoid acquiring or using telecommunications and video surveillance equipment or services from those companies specified by the federal government.
What is restricted?
The restricted list includes telecommunications and video surveillance equipment and services from Huawei (pronounced Wah-Way) Technologies Company, ZTE Corporation, Dahua Technology Company, Hytera Communications Corporation, Hangzhou Hikvision Technology Company as well as any subsidiaries or affiliates of these companies that the United States government designates. The list published by the Federal Communications Commission (FCC) can be found here.
Prohibited equipment includes all equipment, system, or service as well as substantial or essential components of any system, or critical technology as part of any system, from a company on the prohibited list.
How do I know?
Several years ago, we added a question to the technology contract Footprints that asks, “Are you purchasing telecommunications or surveillance equipment or components from a company identified as prohibited in the August 13, 2020 regulation NDAA Section 889?” There is a link included that provides additional information. A YES response stops the process and sends an email to the Director of Compliance Services and Chief Privacy Officer (DCS/CPO) for review.
If the purchase is being made directly using a purchasing card or personal funds, the purchaser needs to verify that the manufacturer of the equipment or a component of the equipment is not a prohibited company. If it’s not clear, ask the seller. If the seller doesn’t know, ask for help. Contact the Office of Compliance Services, Sponsored Project Administration, the Office of General Counsel, the Disbursement Center, or Purchasing and ask.
What do I need to do?
First and foremost, DO NOT PURCHASE equipment or services from any of the companies listed on the restricted list. This includes equipment intended to be used for any UVM business including, but not limited to, research. It also includes personal purchases if that equipment will be used on campus or in a UVM owned, leased, or rented facility or location. This prohibition also relates to any payment method such as a P.O., a Purchasing Card (PurCard), or a personal credit card.
If you did not purchase the equipment but you learn that existing equipment is from one of the prohibited companies, REPORT IT to your department leadership and to the Office of Compliance Services immediately. Compliance Services will report this to Research Integrity and General Counsel.
What are UVM's responsibilities?
If it turns out that the equipment is prohibited, the equipment must be removed and disposed of according to university policies. The Office of Compliance Services will work with the Office of General Counsel, Research Integrity, Finance, and the individual(s) responsible for the equipment to determine replacement options, if necessary.
What are the responsibilities of our subcontractors/subawards?
Employees managing federal contracts and grants must ensure subcontractors and other entities comply with these restrictions. Contact Research Integrity for assistance.
Where can I find more information?
The General Services Administration (GSA) Section 889 Policies can be found here.
The GSA’s Section 889 Flyer can be found here.
A full list of frequently asked questions can be found here.
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